In a significant move that impacts thousands of residents, Blackstone Group has ceased its legal challenges to modify rent stabilization laws at Stuyvesant Town-Peter Cooper Village, Manhattan’s most extensive apartment complex. This development was first reported by Gothamist and marks a pivotal moment for the roughly 11,200 apartments that will continue to be governed by rent stabilization. This policy caps annual rent increases to a percentage set by a city board.
Since acquiring the property in 2015 for $5.4 billion, Blackstone, led by billionaire Stephen Schwarzman, had intentions to transition a substantial portion of the units out of rent stabilization, facilitated by an agreement with the city. However, the enactment of stricter rent laws in 2019 complicated these plans. The property was on track for destabilization by June 2020, but tenant lawsuits under the new rent legislation halted these efforts.
A state court ruling last year favored the tenants, indicating that the 2019 rent law amendments prevent Blackstone from deregulating approximately 6,200 apartments benefiting from J-51 tax incentives. This ruling has broader implications for similar properties under tax benefit schemes.
Following an unsuccessful appeal, Blackstone decided to withdraw from further legal actions. A spokesperson for the company clarified that the legal initiatives were to keep future options open and reassured that there were no immediate plans to alter the treatment of rent-stabilized units within Stuyvesant Town.
Blackstone emphasizes its dedication to the community, noting its voluntary commitment in 2015 to maintain 5,000 units as affordable housing. This was part of an arrangement with the de Blasio administration, securing a $144 million low-interest loan for Blackstone. The firm also highlighted its investment of over $375 million in the property, significantly enhancing the living experience for residents.
This retreat comes in the wake of the Supreme Court’s dismissal of petitions to review New York’s rent stabilization law, following earlier rejections of challenges by the Rent Stabilization Association and Community Housing Improvement Program. This series of legal decisions underscores the judiciary’s stance on rent law challenges, with Governor Kathy Hochul expressing relief at the Supreme Court’s decisions and affirming her commitment to safeguarding tenant protections.
Blackstone’s decision not to pursue further legal action against rent stabilization laws at Stuyvesant Town-Peter Cooper Village underscores a significant moment in New York’s housing landscape, ensuring the continuation of protections for thousands of residents against steep rent increases.