When Debra Harris moved into Battery Park City, her goal was to move there with her daughter, who was commuting from Washington Heights to a Lower Manhattan elementary school at the time since Harris also worked in the neighborhood.
In 1997, she scored an affordable apartment at 225 Rector Place in the neighborhood; she had "struck gold," as she put it.
"Moving into Battery Park City...filled so many needs and so many voids for me as a teenage mother," said Harris, who had her first child in her late teens. "It was a goal that I set for myself to make a difference in my daughter's life and my son after that."
But more than two decades later, the affordability agreement is ending, just as NYC faces dual health and economic crises due to COVID-19.
Harris, 52, knew the deal—originally set to expire in 2005 and later extended to November 2019, April 2020, and now, the end of the month—would end. She lined up an apartment to sublease for her and her husband, which fell through after the pandemic spurred a "domino effect.”
"Trying to find another apartment after the sublet fell through was impossible, because everything was shut down. Everything," said Harris, who lives in a two-bedroom apartment set to by rise by nearly five times the current rent to $7,800 monthly come August 1st. "We're just trying to see if we can stay here another year.” Her hours as a transcriptionist have been reduced and her husband lost work in the tourism industry during the pandemic.
Ann Stenson, the tenant association leader who moved in when the building was first erected in the mid-1980s, said some tenants moved out in anticipation of the affordability program ending. About two dozen families remain. But the pandemic has changed everything.
"In one way or another, everyone's plans have been upended," said Stenson, 73. "People who signed a lease and had health risks and really didn't want to move. They just felt like there was too much risk involved in moving."
The apartment was stabilized at a below-market rent since 1985 with The Related Companies, which had developed the property with a loan from the New York State Housing Finance Agency. Under the deal, 20 percent of the apartments were to be kept affordable for families making less than 80 percent of the area median income, which today would be less than $81,920 for a family of three.
Stenson’s mid-1980s lease shows rents would increase at the same rate as apartments under rent stabilization laws. One tenant paid about $521 for a one-bedroom when the building first opened. Another paid $1,100 when they first moved in about 15 years later at the building in Battery Park City, once intended to be an emblem of affordability that has become among the priciest neighborhoods in the city.
In the 80/20 program the building was constructed under, the state's housing finance agency provides the tax-exempt financing to develop affordable apartments and, for some developers, property tax breaks through the 421a program. In New York State, about 93 developments across 6,600 units were earmarked as below market-rate rents under the program, mostly in Manhattan, as of September 2018, according to a state comptroller report. But like on Rector Place, when the incentives end, the apartments' affordability lifts.
Over the years, the affordable apartments in the building have dwindled after developer Yair Levy bought the building in 2005 to convert it into condos. He was later convicted of defrauding the building’s reserve fund and had to default on a $165 million mortgage. By 2012, Related had bought the property again, listing 181 condos for sale at the time.
But before the coronavirus pandemic, 20 rental apartments remained affordable. They were purchased in 2013 by real estate investment company Ven One, where landlord Neil Kukreja is a managing partner. He also owns another two units at the 23-story building on Rector Place near South End Avenue.
Kukreja extended the affordable leases three times since November, until the end of July, to account for stay-at-home policies during the COVID-19 pandemic, he said in an interview.
"I am losing $3,000 [on] every unit, every month in a negative cash flow from what I'm paying the common charges and what I'm paying for taxes to what they're paying me," he told Gothamist. "We knew we were gonna lose [money] until November 2019. We agreed to that. We made a business decision based on that. But we didn't agree to go forever."
The tenants, who formed the Rector Square Affordable Housing Group, are asking for their current affordable leases to be extended one more year to account for the risk of moving during the pandemic, especially for seniors and people with underlying health conditions. Cooper Square Committee, Mobilization for Justice, and Councilmember Margaret Chin are working with the group on its demands.
“With the coronavirus pandemic still raging, protest activities continuing, a moratorium in place and the difficulties with finding and moving into a new apartment with many businesses still closed, and a city wide housing crisis, we are hopeful that you will offer an extension of their leases further to July 31st, 2021 and set the rent increase according to the Rent Guidelines Board,” Chin wrote to Kukreja June 15th. “In the meantime, my office is working [on] exploring any rent subsidy programs or tax abatement that can apply to these units.”
Kukreja says all 22 apartments have been signed over to a new lease-holder for a corporate tenant, which will use the apartments for housing for employees.
Kukreja also questions whether all tenants should qualify for affordable housing. Five requested to stay in the building paying market rate, and two asked to purchase a unit for $725,000, according to Kukreja's count (the deals never came to fruition). He wrote in a letter to Chin’s office July 17th, “many of the current tenants have strong financials with good current job standing in senior management positions and have been working even during the pandemic.”
Chin, who represents Chinatown, Battery Park City, and Lower Manhattan, said in a statement, "My demand has been clear from the start: extend 225 Rector rent-stabilized tenants’ leases by at least a year."
"Seniors and 9/11 survivors with underlying health conditions shouldn't be forced out onto the streets in the middle of a global pandemic. The fact that these vulnerable residents are fighting tooth-and-nail just to stay in their homes to weather through this crisis shows how shamefully this public health emergency is being played down," Chin said.
Kukreja says the leases are not rent-stabilized and he has not benefited from any incentive to keep the apartments below market-rate.
Rents in the affordable apartments are all around $1,400 to $1,600. Market-rate studios to two-bedrooms range from $3,800 to $7,800 a month, according to a letter Kukreja sent to Stenson in November.
But Elda Luisi, 75, another tenant who’s lived in the building 18 years, says she can’t pay that much.
“When you’re in your 50s, you have no imagination about what’s going to happen in your 70s,” said Luisi.
She’s applied for the city’s affordable housing lottery dozens of times. She didn’t qualify for one apartment because she had too much in savings. Another was on the ninth floor with an elevator known for frequently breaking down. Now, she’ll have to put her belongings in storage and live with friends or family.
“I should’ve started earlier, but it never occurred to me that it was going to be this hard to find an apartment,” Luisi said. “It never occurred to me that it would be this dramatic because it has been two years that I’ve been applying, from 2017.”
The fight to keep these apartments affordable comes as NYC faces an economic crisis from the coronavirus that has put at least 1.2 million people in New York State out of work. According to one analysis, 46 percent of New York State renters are unable to pay rent, putting them at risk of eviction.
"I was all set to move at the beginning of May," said Daniel Stein, 76, who has various health conditions that put him at risk of coronavirus, including lung disease he attributes to 9/11. "I had arranged a storage unit and so on and then the pandemic happened, even before that. The place that I was going to go to is no longer able to [let me move in]."
"Without that in hand, I'm not sure where I'll go," said Stein, who moved to the building in 2003. "Right now, it's all up in the air."
Harris, the mother of two who moved to Rector Place in the late 90s, added that the affordable apartments house a higher share of people of color than is typical for the neighborhood.
“That has changed,” she said. “Overall, it would be a shame for Battery Park City overall to dismantle New York City being the melting pot that it has always been.”