NYC, NY – New York City landlords routinely get away with lying on applications for construction projects that can push out vulnerable tenants, a watchdog group’s analysis has found.
The Department of Buildings approved more than 10,000 work permit applications in two and a half years on which landlords stated the impacted building had no rent-regulated units when they in fact existed, according to the review the Housing Rights Initiative released Monday.
That suggests the city is sitting on its hands while developers skirt oversight rules meant to protect rent-stabilized tenants, said Aaron Carr, the group’s executive director.
“At its core, the story is less about real estate fraud than it is about a broken enforcement system that has opened the floodgates for real estate corruption,” Carr said.
The data indicates a violation reportedly committed by the Kushner Companies — the real-estate developer once led by senior Trump administration advisor Jared Kushner — is much more widespread.
Carr’s group found this spring that the companies had falsified more than 80 permit applications across 34 buildings, violations for which the DOB has reportedly issued hundreds of thousands of dollars in fines, he said.
City Councilman Ritchie Torres (D-Bronx) proposed legislation Monday to close what he called an “enforcement loophole” that lets developers such as the Kushners get away with these systemic falsifications.
“The city can no longer afford to stand by passively while developers like Kushner Companies (play) Russian roulette with the safety of New Yorkers living in affordable housing in periods of construction,” Torres said during a news conference outside the Kushner Companies’ Midtown headquarters.
The Housing Rights Initiative reviewed about 20,000 work permits from January 2016 to June 2018 and cross-checked them with rent-stabilization records kept by the Department of Finance to determine which ones contained falsifications.
The work permit application asks the building’s owner whether there are any rent-regulated units there. Saying yes can lead to increased scrutiny from the city to protect against tenant harassment, Torres said.
But the Buildings and Finance departments don’t share relevant information that could indicate the landlord is lying, Carr said. The city has also struggled to collect fines from the landlords it does catch making false statements, Torres said.
Torres plans to introduce legislation that would require the DOB to use Department of Finance data to check whether applications are being falsified.
The bill would also require that the DOB audit landlords caught lying and refer false statements to other authorities, including the state attorney general and local district attorney. Filing a false legal instrument is illegal under city and state laws, Torres said.
The DOB, though, said it can access rent-stabilization information regularly through a data-sharing deal with New York State Homes and Community Renewal.
The department noted the advocates’ findings only encompassed 3 percent of all construction permits issued in the relevant time frame. The DOB said it works to determine whether proposed work is safe and that tenants are protected through its plan examinations and audits.
“(C)hecking the wrong box on a permit application does not mean that any improper work happened,” the department said in a statement. “DOB thoroughly reviews and audits permit applications to protect residents, whether or not the landlord checks the rent-regulation box on our forms.”