The tenants at Stuyvesant Town and Peter Cooper Village are rejoicing after development owner Tishman Speyer agreed to roll back rents for six months starting in the new year. In October, the Court of Appeals ruled that Tishman illegally raised rents of 4,400 former rent-stabilized apartments while still receiving tax breaks from the city.
Tishman Speyer bought the Manhattan complex, with over 11,000 apartments, in 2006 for $5.4 billion. But their revenue projections were too optimistic.. The NY Times notes, "The owners had planned to increase the net income at the two properties by renovating and deregulating vacant apartments, while raising rents substantially. The monthly rent for a deregulated two-bedroom apartment, for instance, would have risen to $2,961 from $1,530. But the owners’ plan fell apart when they were unable to convert the apartments as quickly as they hoped and the real estate market collapsed. Analysts today estimate the value of the two complexes at about $1.9 billion."
While tenants are happy with the decision, they would prefer some more immediate action regarding, as the Post puts it, "some $16 million in potential overcharges the landlords have collected and held in escrow since March." One tenant said, "I think people are going to be happy that they're getting their rent lowered in January, but not happy that they're not getting their [escrow] money back in time for the holidays."