BED-STUY, BROOKLYN — A group of Bed-Stuy tenants filed a class action lawsuit against the landlord they accuse of hiking rents illegally despite receiving a hefty tax break from an expired controversial state program, court records show.
Residents of 27 Albany Ave. Last month accused their landlord Bedford Stuyvesant South One LLC of dodging rent stabilization laws by offering low rents as concessions that were only temporary, Manhattan Supreme Civil Court records show.
“[Owners] hoodwinked the building’s tenants,” the lawsuit contends, “by registering a legally regulated rent higher than the ‘monthly rent charged and paid by the tenant.'”
Neither the tenant’s lawyer nor the building’s registered head officer replied to requests for comment.
The lawsuit focuses on 421-a, a tax program that expired last spring, which offered massive breaks to buildings that pledged to set aside a number of affordable units.
The building at 27 Albany Ave. Received nearly $5 million in tax breaks for the current tax year from the 421-a program, which the city’s Comptroller reports cost New York an estimated $1.7 billion in revenue per year.
The Bed-Stuy tenants claim their landlords offered low rents as concessions then registered higher rents with the state, thereby meeting the rent requirements of the city but laying the groundwork for future rent hikes.
As an example, one tenant signed a $1,777-per-month lease in March 2021—even though the registered rent was $2,369—then saw her rent spike 33 percent when the lease expired in February, the suit states.
“All subsequent increases, such as vacancy increases and Rent Guidelines Board increases, were based off that higher, impermissible figure,” the suit contends.
The suit claims that the owners “engaged in similar misconduct at many, if not all, of the apartments at the Building.”
This isn’t the first class action suit to be filed on behave of tenants who claimed they were “hoodwinked” by owners who benefited from the 421-a program.
Three other class-action lawsuits were filed by tenants across the city in this case, according to City Limits, including a 443-unit building in Bushwick, all with similar claims of preferential rents being used to evade rent regulations.