'Preposterous': A Landlord Is Trying to Deregulate a Building Based on Decades-Old Renovations

A Brooklyn company is attempting to deregulate a rent-stabilized building based on renovations that took place in 1985, and tenants fear they’re going to be pushed out by sky-high rents.

The application’s approval is not a sure thing and a city agency would have to make a decision based on the landlords’ documentation, but there is no statute of limitations that bars the landlord from making the somewhat audacious request.

The four-story multi-family apartment was erected in the 1910’s and is home to multiple generations of tenants, according to residents Motherboard spoke to, including Black American, Caribbean, and Vietnamese immigrants whose families have been there since the 1960’s and 1970’s. Nondescript among rows of brownstone apartments, it is a rare pocket of affordable housing in upscale Park Slope, where homes routinely sell for millions of dollars. 

The building was once rent-controlled and is now rent-stabilized, or subject to rent increases by the NYC’s rent guidelines board, which also oversees applications to deregulate it. A 34-year tax break that a previous owner obtained elapsed in 2022, raising the costs of the current landlord, Nelson Management. 

That tax break, under a now-defunct program called J-51, also prohibited the building from being removed from rent stabilization, though the expiration of the tax break does not immediately deregulate the building. Nelson Management is now applying to deregulate the apartment under a decades-old loophole meant to incentivize substantial renovations and apartment improvements of mostly-empty buildings. Tenants are outraged that renovations made decades ago could potentially warrant deregulation under such a loophole. 

“What was going on 40 years ago? Ronald Reagan was president, milk cost $1.35, gas was 96 cents a gallon, the last episode of MASH aired,” State Senator Zellnor Myrie said at a Tuesday press conference, flanked by tenants in front of 214-218 Prospect Place. “It is alleged that a repair and upgrade that was made forty years ago justifies a rent increase for our tenants today. That is preposterous,” Myrie said.

“It's not about repairs. Give me a break. 40 years ago! This is about money, period. And while they're thinking about their pockets, the people in these buildings are being pushed out,” Myrie said.

Myrie sent a letter to the Division of Homes and Community Renewal asking for an extension so that tenants can put together a response to the landlord’s application. The agency had given tenants until September 11, but members of the 214-218 Prospect Place Tenants’ Association said they needed more time. 

“The renovations were of a nature and scale that would not warrant the removal of the building's rent regulated status. Further, it appears that the building was not ever 80% vacant, as required by law to contemplate deregulation,” Myrie wrote in the letter.

In July 2023, residents of 214-218 Prospect Place received a letter from their landlord, Nelson Management saying an application was submitted to the Division of Homes and Community Renewal (DHCR) to review the building’s rent stabilized status. The landlord said it was “the start of a lengthy review process that will likely take up to 24 months to complete.”

The management company’s letter said that “many significant building-wide renovations made to the property between 1985-1987, have, in our opinion, rendered the property exempt from rent regulation, based on the Rent Stabilization Law in effect when the work was completed.” The landlord wrote that if the building is deregulated and tenants can’t afford market rate rents, “We are committed to ensuring that all residents of the Property will have affordable options elsewhere if remaining as a tenant in the property is not possible.”

In Nelson’s application, which was viewed by Motherboard, the landlord asked for exemption from the Emergency Tenant Protection Act—the 1973 law that established rent stabilization in New York City—on the basis that “apartments in buildings completed or substantially rehabilitated as family units, on or after January 1, 1974.” It includes an affidavit from an architect, Michael Gadaleta, who was hired by Nelson Management to review the building, and who said that 75 percent of building-wide and individual apartment systems had been replaced. The company does not have the original work orders, instead pointing to a J-51 tax abatement form from 1999 that it says “would not have been approved without the review of the supporting documentation for the work performed.” 

Motherboard spoke to five tenants who were living in the apartment at the time the alleged rehabilitation happened. None of them remember a time when the building was close to 80 percent vacant.

One tenant who spoke to Motherboard, Wendy Taitt, said she has lived in the building since 1969. She says she was paying $69 for her 1 bedroom unit, back when the building was rent-controlled, rather than rent stabilized. She said the dumbwaiter was replaced and “they gave us a new floor,” citing a beautiful mahogany floor that was replaced with marble during those renovations.

“A lot of those things were not upgrades, they were repairs,” said James Frederick, another longtime tenant. “The water was leaking down the stairwell, they made the repairs. And then after a while it started leaking again. So they had to come back and make more repairs. But those were not improvements, they were repairs, and they're holding us accountable for those.”

Tenants said any repairs conducted in the 1980’s are not relevant to the building’s current condition, which includes ongoing maintenance issues they say their landlord has been neglecting.

“I had wastewater in my tub. I complained about it for a whole week. The drains are not draining as designed. And I came home Friday and I had three inches of waste in my tub,” said Williams. He also said he had to replace his own floor and do his own painting and plastering.

Tenants also alleged jammed windows, roach infestations and plumbing that doesn’t work. They said it’s difficult to get the landlord and property management to address these problems. 

The city’s Department of Housing Preservation and Development (HPD) shows that the building has 5 open violations, including trash piled up in front of the building, broken or defective doors, bathroom leaks and peeling plaster.

“Any of the tenants’ memories from 35 years ago are not a substitute for facts. It’s all a matter of public record,” Russ Colchamiro, a spokesperson for Nelson Management told Motherboard in an email.

“The City of New York, through the New York City Department of Housing Preservation and Development (HPD) and the New York City Department of Buildings (DOB) affirmed in 1987 – by reviewing contracts and canceled checks and inspecting the property -- that the previous owner completed the necessary and extensive renovations and building-wide capital improvements to achieve the 75 percent threshold to remove the property from rent stabilization,” he said. (The city’s rules for a J-51 tax break do not require a 75 percent rehabilitation for approval, so that particular document on its own would not prove the landlord’s case.)

“As the new owner, Nelson Management is following the law, and looks forward to continuing to operate a financially stable, well-maintained property for years to come,” the spokesperson said.

Regarding reports of maintenance issues and building violations, Colchamiro said they were “minor maintenance issues” and wrote, “let's be clear that in any building anywhere in the world, minor issues pop up. There's not a single building in the world that operates at 100 percent efficiency 24/7. Things happen, and they're dealt with.”

A spokesperson for the DHCR, which oversees rent stabilized apartments, said, “HCR continues to ensure the laws governing rent regulation are strictly enforced; that includes proactive audits, investigations, and other enforcement activities to protect nearly one million tenants and New York’s rent regulated housing stock. We have received the Senator’s letter, but cannot comment further on pending administrative procedures.” 

Ed Winstead is a more recent resident who moved into the building a few years ago. He’s a member of 214-218 Prospect Place Tenants’ Association who is helping to organize a response. He says an extension is crucial for tenants to make their case. 

“Even with the short extension to September 11, we have precious little time to organize, fundraise, and develop a substantive response, without which Nelson's filing would be taken at its word and without contest, despite it being riddled with errors, omissions, and incorrect information,” he said.

“That of course is why Nelson sent a letter right after we received the DHCR documents, suggesting that this whole process was nothing to worry about and would take years—in the hope that we would sit on our hands until it was too late. Of course this initial response period is, however long the whole review process takes, the only opportunity we have to contest Nelson's claims.”

For long-term tenants who will find scant affordable housing to move into if they are priced out, the stakes of the landlord’s application are very high. “Repairs have been made decades ago, a long time ago, and now we're being asked to pay for it, having our rents increase,” said James Frederick. “We've been here for years. Some of us grew up here, raised our families here. It's just not fair to create a system to push us out.”