Stuy Town Owner Halts Upgrades Due to 2019 Rent Law
The Blackstone Group, owner of Stuyvesant Town-Peter Cooper Village, Manhattan’s largest apartment complex, is halting apartment renovations and other planned work at Stuy Town and Peter Cooper Village in response to the changes to the state’s rent-regulation laws passed by Albany legislators in June. The changes to the rent law include limits to rent increases owners can charge tenants to cover the costs of renovations and repairs. Blackstone purchased Stuyvesant Town and Peter Cooper Village for $5.5 billion in 2015.
Before the recent changes to rent regulations, owners could see returns from making individual apartment upgrades, and Blackstone would’ve relied on increasing rents in the valuation of the site. A roughly 20 percent rent increase could be added when a unit was vacated, and owners of buildings with more than 35 units could increase the monthly rent for an apartment by 1/60th the cost of its renovation and by 1/40th in buildings with 35 or fewer units. Building owners often used those increases to push up rents significantly and convert regulated apartments to market rate.
The new rent regulations terminated the 20 percent vacancy bonus and limit the amount of money that owners can spend on renovations to $15,000 in any 15-year period, dramatically limiting rent increases from apartment upgrades.