See if you can catch this contradiction:
A City Reporter article on June 8 said the FARE Act in its first year “created a flood of complaints about landlords not following the rules — and generated more than $15,000 in fees paid back to tenants so far.”
Perhaps this alternative lede will make it clear:
The FARE Act in its first year generated more than 2,000 complaints about illegal broker fees, but virtually no money was returned to renters.
The $15,500 reimbursed breaks down to about $7 per complaint. That doesn’t even buy two slices of pizza.
Yet Sam Levine, the commissioner of the agency responsible for enforcing the FARE Act, told the City Council last month, “A lot of these cases are moving through OATH and you are seeing the number of recoveries for consumers steadily rising.”
Steadily rising? In a city with nearly 2.4 million rental units, 20 recoveries in a year is effectively zero.
Put another way, only 1 in every 100 complaints resulted in money being returned to renters.
It’s possible that some cases stemming from those complaints are still pending, but it’s clear that recoveries are incredibly rare. Many complaints were probably from consumers upset because they were asked to pay a fee, but didn’t. So there was no money to recover.
The other problem with the City Reporter’s lede is that the 2,000 complaints were not all about “landlords not following the rules.” Most complaints were probably about brokers, not landlords.
We don’t know for sure, because the city hasn’t released a breakdown of complaints, according to the Real Estate Board of New York.
What we’re thinking about: The goal of the Community Opportunity to Purchase Act, bill sponsor Sandy Nurse told New York Magazine, “is to create an opportunity for mission-driven community organizations that provide housing to have a shot to compete in a very hot all-cash market.” Is there really a very hot all-cash market for distressed rent-stabilized buildings? Send your thoughts to eengquist@therealdeal.com.
A thing we’ve learned: There’s an Affordable Housing Hall of Fame. We learned this because one inductee just died: Michael J. Levitt, founder and chairman of The Michaels Organization, based in New Jersey, was 94. The business owns 41,000 affordable units, plus student and military housing and market-rate units — more than 75,000 in all. Thanks to The Real Deal’s Holden Walter-Warner for flagging this.
Elsewhere…
An East Village co-op has put a parking lot at 40 First Avenue up for sale, generating media coverage because some shareholders at the Mitchell-Lama feel the board cut them out of the process.
Rather than write about upset shareholders, though, I asked Wilson Parry of PropertyScout what could be built on the parcel.
To calculate that number, Parry first checked how much square footage the co-op apartment building was using on the portion of the lot zoned R7-2: 147,730. That leaves approximately 200,000 for the 110-space parking lot, which is zoned R8B.
A developer could also buy 159,000 square feet of air rights from the nearby NYCHA property. Add that, and you get 359,000 square feet.
Now the bad news: The height limit in R8B is only 95 feet. The NYCHA building’s landmark status allows for a 25 percent height bump, but even with that, a new building would not be able to fit 359,000 square feet within the maximum height. Not even close.
“R8B is terrible zoning because of the height restriction of 95 feet,” Parry said. “This massing here fits approximately 190,000 square feet.”
Absent a variance or rezoning, the height restriction will cost the city at least 240 apartments. It also means less money for the middle-income co-op, which is struggling with rising maintenance costs, and probably nothing for NYCHA, which needs every dollar it can get. All to prevent an East Village development from being a little bit taller.
This is no way to solve a housing crisis.
Closing time
Residential: The most expensive residential sale recorded Tuesday was $16.5 million for a 6,950-square-foot townhouse at 116 East 65th Street in Lenox Hill. Sabrina Saltiel of Douglas Elliman had the listing.
Commercial: The most expensive commercial transaction was $9.15 million for a 9,981-square-foot townhouse at 115 East 69th Street, also in Lenox Hill.
New to the Market: The highest price for a residential property hitting the market was $9.5 million for a 1,350-square-foot townhouse at 307 East 10th Street in the East Village.
Breaking Ground: The largest new building permit filed was for a proposed 61,139-square-foot, 99-unit project at 2112 Colonial Avenue in Pelham Bay. Nikolai Katz filed the permit on behalf of Steven Westreich of Westbridge Realty Group.
— Matthew Elo
