Two months after Stuyvesant Town and Peter Cooper Village were sold by MetLife to Tishman Speyer for a record-breaking $5.4 billion, an epic review of the deal by Charles Bagli of the NY Times ties up loose ends and brings several underlying issues into sharper focus. Reading between the lines:

The purchase is highly speculative. "Financial leaps of faith" about StuyTown's future value inflated the bidding well above a more soberly estimated price tag of $3.5 billion derived from existing cash flow. The grounds for such bold speculation? The new landlord's potential profits hinge upon the accelerating erosion of rent-regulated units over the coming years. 2007_01_stuytown-snow2.jpgWhile Tishman Speyer has pledged "no radical changes" to StuyTown, current trends and policy structures will play to their advantage. Rent-controlled apartments can revert to market rate whenever a tenant leaves or begins to earn above $175,000 over two years. Since the original 6% profit cap expired in 1972, MetLife had already deregulated about 27 percent of the units in this manner, instantly transforming $2000/month units into $3500-4000/month units . Today, as more of the early tenants die off, move away, or earn higher incomes, Tishman Speyer may enjoy "seemingly endless potential for rising rents."

With affordable housing given new impetus by the City Council's recently revised 421-a rule, one notes a glaring weakness in the city's capacity to preserve or create affordable housing within existing buildings. Hypothetical new apartment buildings in the vicinity of StuyTown would have to reserve 1 in 5 units for lower-income tenants (earning less than 80% of local median income), but the 110 existing buildings of StuyTown and Peter Cooper Village could theoretically become 100% market rate. That's why one envious rival to the victorious bidders told Bagli, “There’s nothing like the 11,200 units sitting over there. It doesn’t take a genius to figure out: that’s the plum; go after it.”

2007_01_stuytown-MarianneOLeary4.jpg The 25,000 residents of StuyTown and other civic advocates have so far been unable to leverage any bargaining power vis-a-vis the corporate landlords on the question of rent regulation. A tenant-led bid to purchase the property was rejected in October, as was the City Council Speaker's request to meet with MetLife to discuss the sale. “The commitment [MetLife] once had to New York City is gone,” declared Speaker Quinn in the Times article. It's worth recalling, however, that StuyTown residents and other activists in the 1940s-50s launched and won a bitterly contested campaign to remove the whites-only policy imposed by MetLife.

Update: Thanks to sharp readers who pointed out the original caption's erroneous mention of a Stuyvesant Oval "skating rink."