Middle class may lose a home in NYC
It was true love when Arlynne Miller moved to Stuyvesant Town 30 years ago to live with a boyfriend.
The relationship failed, but Miller clung to something more valuable: a rent-stabilized apartment in the sprawling collection of World War II-era buildings peering over the East River.
The 110 red-brick buildings, stretching along 1st Avenue from 14th to 23rd streets, were constructed with government assistance in 1947 to house returning veterans.
And thanks to New York’s rent-protection laws, Stuyvesant Town has remained a middle-class bulwark shielding firemen, artists and teachers from the gentrification washing over the rest of the city.
“It’s like a world unto itself,” Miller said.
Perhaps no longer.
The insurance company that built and operated Stuyvesant Town and the adjoining Peter Cooper Village sold the properties to a prominent Manhattan real estate developer last week in a mammoth $5.4-billion deal.
The sale raised alarms among the complexes’ 25,000 residents and kindled a civic debate about the future of Manhattan’s tenuous middle class.
Strict rent laws make drastic near-term changes unlikely, but real estate experts say the deal makes financial sense only if the buyer, Tishman Speyer, slowly transforms the units to luxury rentals.
“They probably want to do something more than just keep the status quo,” said Andy Joynt, an economist at Property and Portfolio Research Inc., a Boston real estate research firm.
Rob Speyer, the firm’s senior managing director, said rent-protected residents have nothing to fear, but he would not elaborate on his company’s long-term plans. Market rates are two to three times what some residents now pay.
“The tenants who are rent-stabilized are going to remain rent-stabilized,” Speyer said. “We’re going to take great care of them and offer them great service.”
That does little to mollify Miller and some other residents.
Price stabilization protection melts away if an apartment rent hits $2,000 a month -- a number reached more quickly with increases tied to property improvements -- and when the tenants’ household income tops $175,000 in back-to-back years.
Owners also are allowed to pass on the costs of some capital improvements, so rents had been climbing as the former owner, MetLife Inc., undertook a variety of capital improvement projects, Miller said.
About one-quarter of the 12,232 apartments charge market rents, and scores more are expected to turn over in the next few years.
“Even people in rent-stabilized apartments are worried because they think [the new owner] is going to find a way around the law,” said Michael Shirey, 54, a mailman who has lived in Stuyvesant Town since 1999.
Nancy Park, a second-grade reading teacher who has been here for 20 years, isn’t worried about herself, but she notes that teachers today could not afford the market rates.
“They would not be able to move in now unless they moved in with 10 other second-grade reading teachers,” she said.
Richard Grossman, director of downtown sales at Halstead Property, a residential real estate brokerage firm in New York, said that Stuyvesant Town will still cater to the middle class but that the definition of middle class has shifted.
“Middle class has changed from being teachers and policemen to being white-collar sales and managerial junior-partner-type jobs,” he said.
“If you’re making $200,000 a year in New York -- and nowadays that’s middle class -- you can well afford to be paying $4,500 in [monthly] housing expense.”
Indeed, a Stuyvesant Town ad in a local paper -- exhorting tenants to come “for the lifestyle” -- lists rents as $2,725 for a one-bedroom and $4,850 for a three-bedroom.
That’s foreign to Miller, 56, who owns a home-organization business. She pays slightly less than $1,000 for a one-bedroom with parquet floors and views of the Chrysler Building as well as the massive MetLife (former Pan Am) building that looms over Grand Central Terminal.
But given that Tishman Speyer owns both properties, “now I get to look out and hate both those buildings,” Miller joked.
She’s disappointed that a bid by tenants to buy Stuyvesant Town and Peter Cooper Village was rejected.
“I know it’s an old story,” Miller said, referring to gentrification’s steady sweep across Manhattan. “It’s just a sad story.
“The wealthy can live anywhere,” she said. “Leave this enclave to us.”