Now that Special Counsel Robert Mueller has turned his attention to the business ties of President Trump and his family members, reporters and investigators have been scrutinizing the Trump Organization’s business history, as well as that of the Kushner Companies, the real-estate firm once run by Trump son-in-law Jared Kushner.
And in what at first appears to be a bombshell report – but is later revealed to be much more mundane – the Associated Press is reporting that the Kushner Cos. lied about the number of rent stabilized tenants in three buildings it purchased in the rapidly gentrifying neighborhood of Astoria – and more broadly in 34 buildings it owned across NYC.
While none of the fraudulent paperwork bore Jared Kushner’s signature, he was in charge of the organization when the alleged abuses were happening. And while Jared was at least nominally in charge of the company during the period in which these false claims were made, the seriousness of the infractions is debatable.
For the three Queens buildings in the borough’s Astoria neighborhood, the Kushner Cos. checked a box on construction permit applications in 2015 that indicated the buildings had zero rent-regulated tenants. Tax records filed a few months later showed the company inherited as many as 94 rent-regulated units from the previous owner.
In all, Housing Rights Initiative found the Kushner Cos. filed at least 80 false applications for construction permits in 34 buildings across New York City from 2013 to 2016, all of them indicating there were no rent-regulated tenants. Instead, tax documents show there were more than 300 rent-regulated units. Nearly all the permit applications were signed by a Kushner employee, including sometimes the chief operating officer.
Had the Kushner Cos. disclosed those rent-regulated tenants, it could have triggered stricter oversight of construction crews by the city, including possibly unscheduled “sweeps” on site by inspectors to keep the company from harassing tenants and getting them to leave.
Instead, current and former tenants of the Queens buildings told the AP that they were subjected to extensive construction, with banging, drilling, dust and leaking water that they believe were part of targeted harassment to get them to leave and clear the way for higher-paying renters.
“It was noisy, there were complaints, I got mice,” said mailman Rudolph Romano, adding that the Kushner Cos. tried to increase his rent by 60 percent. “They cleaned the place out. I watched the whole building leave.”
Tax records show those rent-regulated units that numbered as many as 94 when Kushner took over fell to 25 by 2016.
It’s an unfortunately common practice among New York City developers: Buy up units in rapidly gentrifying neighborhoods, then do everything they can to make the living conditions as inhospitable as possible. That can include having construction crews working late into the night, or early in the morning, or doing unnecessary renovations on rent-controlled units that make them almost unlivable. In recent years, the city has started cracking down on developers who do this.
According to one rent-stabilized tenant, a mysterious man showed up at her door one day and offered her $10,000 to leave her home. She refused, and sued the Kushner’s instead – winning one year of rent.
Housing advocates have a term for this type of behavior: They call it, “the weaponization of construction.”
In Kushner buildings across the city, records show frequent complaints about construction going on early in the morning or late at night against the rules, improper or illegal construction, and work without a permit.
At a six-story walk-up in Manhattan’s East Village that was once home to the Beat poet Allen Ginsberg, the Kushner Cos. filed an application to begin construction in late 2013 that, again, listed zero rent-regulated tenants. Tax records a few months later showed seven rent-regulated units.
“All of a sudden, there was drilling, drilling. … You heard the drilling in the middle of night,” said one of the rent-regulated tenants, Mary Ann Siwek, 67, who lives on Social Security payments and odd jobs. “There were rats coming in from the abandoned building next door. The hallways were always filled with lumber and sawdust and plaster.”
A knock on the door came a few weeks later, and an offer of at least $10,000 if she agreed to leave the building.
“I know it’s pretty horrible, but we can help you get out,” Siwek recalls the man saying. “We can offer you money.”
Siwek turned down the cash and sued instead. She said she won a year’s worth of free rent and a new refrigerator.
New York City Council member Ritchie Torres, who plans to launch an investigation into permit applications, said: “The Kushners appear to be engaging in what I call the weaponization of construction.”
Of course, the Kushners weren’t the only NYC developers engaged in this type of aggressive and borderline illegal behavior. As the Associated Press admits, a combination of minimal penalties, lax enforcement and the sheer profits that can be made from flouting NYC’s rent-stabilization laws make this an enticing strategy for developers – particularly when a few dozen long-time rent-stabilized tenants are getting in the way of an eight-figure payday.
Rent stabilization is a fixture of New York City that can bedevil developers seeking to make money off buildings. To free themselves of its restrictions, landlords usually have to wait until the rent rises above $2,733 a month, something that can take years given the small increases allowed each year.
Submitting false documents to the city’s Department of Buildings for construction permits is a misdemeanor, which can carry fines of up to $25,000. But real estate experts say it is often flouted with little to no consequences. Landlords who do so get off with no more than a demand from the city, sometimes a year or more later, to file an “amended” form with the correct numbers.
Housing Rights Initiative found the Kushner Cos. filed dozens of amended forms for the buildings mentioned in the documents, most of them a year to two later.
“There is a lack of tools to go after landlords who harass tenants, and there is a lack of enforcement,” said Seth Miller, a real estate lawyer who used to work at a state housing agency overseeing rent regulations. Until officials inspect every construction site, “you’re going to have this incentive for landlords to make life uncomfortable for tenants.”
New York City’s Department of Buildings declined to comment specifically on the Kushner documents but said it is ramping up its monitoring of construction, hiring 72 new inspectors and other staff under laws recently passed by the City Council to crack down on tenant harassment.
“We won’t tolerate landlords who use construction to harass tenants — no matter who they are,” said spokesman Joseph Soldevere.
Exactly how much money the Kushner Cos. earned from the buildings mentioned in the documents is unclear. Of those 34 buildings, only the three in Queens and a fourth in Brooklyn appear to have been sold. The company also likely made money by reducing the number of rent-regulated tenants and bringing in those who would pay more.
Some tenants, like a mailman who lives in one of the Queens buildings, were able to fight back by hiring a lawyer. Others chose to leave. Aside from forcing the company to file more “amended” permits for its construction work at the buildings, it’s unlikely that this report will have any lasting repercussions…
However, Kushner’s political opponents will no doubt scramble to paint these lapses as part of a pattern of behavior that includes the infamous omissions he left in his security clearance application.
…And, to be sure, the multiple probes into the family’s finances, including the possible abuse of an investor visa program should be of much greater concern to Kushner than his treatment of a few dozen rent-stabilized tenants.
via RSS http://ift.tt/2FTXjd9 Tyler Durden