Update: Appeal in Another Case Supports Our Lawsuit to Keep All Our Units Rent-Stabilized

The decision in an appeal of a recent lawsuit upheld a key argument in our suit against Blackstone to keep all Stuyvesant Town and Peter Cooper Village apartments rent stabilized.

On November 30, 2023, in Tuan Mai v. SP 1143 Second LLC, New York State’s First Appellate Division upheld the decision in State Supreme Court. The tenant in that case claimed that their apartment should be rent stabilized because it had been stabilized before the owner received the J-51 tax exemption and should have maintained that status when the J-51 expired. (In a residential building receiving a J-51, all units are rent stabilized for the duration of the benefit.) The owner’s position was that because the apartment theoretically could have been deregulated due to high rent but for the J-51, the apartment should be deregulated when the J-51 expired. Before the passage of the Housing Stability and Tenant Protection Act of 2019, apartments could be removed from regulation if the rent passed a certain threshold.

Why is that similar to our case?
STPCV’s owner received a J-51 tax benefit that expired on June 30, 2020. Blackstone intended to deregulate more than 6,200 units when the J-51 benefits expired on the theory that they would have been deregulated but for the requirements of the J-51 program.  This is the same issue argued in the Tuan Mai appeal.  

What changed?
The state legislature passed the Housing Stability and Tenant Protection Act of 2019 on June 14 of that year. The landmark law provided that any unit under rent stabilization on the date of passage remained regulated.

The Tenants Association takes action
In March 2020, the TA brought a lawsuit claiming that the ST and PCV apartments couldn’t be deregulated under the terms of the HSTPA. That is, the apartments should maintain their stabilized status even when the J-51 expired at the end of June 2020. Under the terms of the class action lawsuit Roberts v. Tishman Speyer in 2009, apartments here that had been illegally deregulated were restored to the protections of rent stabilization—so they were still rent stabilized on June 14, 2019.

One of Blackstone’s arguments in our case is that the apartments would have been deregulated but for the J-51 and so should be deregulated when it expired in 2020, despite the provisions of the 2019 law.

What’s happening with our lawsuit?
Although the Tuan Mai case was decided later in State Supreme Court than ours was, it reached the appeal stage sooner because Blackstone has been holding off on what is known as perfecting its appeal, perhaps hoping for the Tuan Mai decision to be overturned. That didn’t happen: the decision in favor of the tenant in that appeal now strengthens our case. 

We expect Blackstone to perfect its appeal in the next month or two, and we will defend our position. Whatever the ruling, it can be appealed to the Court of Appeals, the state’s highest court.

Why do these cases matter?
These lawsuits may have the effect of preserving not just a substantial number of apartments here but tens of thousands of affordable New York City apartments in buildings that received J-51 tax abatements.

A second issue 
A second issue (which is unique to our case) will also be raised in this appeal. Blackstone has taken the position that the Roberts settlement basically immunized the affected units from future rent regulations.  We successfully argued against that claim in New York State Supreme Court.  

Timeline
The appellate court has given Blackstone until February 20, 2024, to submit their brief. 

Our opposition will be filed by March 20. Their reply is due by March 29.

Arguments will be heard mid-April. We expect a decision in late May or June 2024.