New York City Landlords Flout Rent Limits, but Still Receive Lucrative Tax Breaks

As gleaming new housing towers spring up around New York City, thousands of new rent-stabilized apartments are coming onto the market. And in return for following rent limits, developers get a share of $1 billion in property tax breaks handed out by the city.

But while developers bank the tax savings, an examination by ProPublica found that some renters are getting overcharged as government officials fail to enforce rent limits and tenants fail to grasp whether they apply to newer apartments.

Julie Renwick recently learned she’s among the tenants who should be paying significantly less rent.

In February 2012, Renwick viewed a one-bedroom apartment at The Driggs, a sparkling new luxury building in Brooklyn’s Williamsburg neighborhood with a doorman, gym, rooftop deck and more. The owners of the building, The Rabsky Group, benefitted from a 93 percent reduction in property taxes this year, owing only $47,000 of what would otherwise be a $678,000 tax bill.

When Renwick visited the apartment, she was quoted a rent of $2,875 a month. She figured she could afford it and applied to become the first tenant.

That $2,875 should have been a crucial benchmark. Under the rent stabilization law that covers New York City, all subsequent increases must be calculated against that initial number. But when Renwick sat down to review the lease, she noticed something strange: The rent listed was $3,400 per month.

 

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