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Downtown Tenants and Landlords Skirmish Over Rent Reset

(THE CITY) September 20, 2019

After 12 years in the same building, Bruce Hackney and Tim Smith thought it was finally time to move on.

Steep rent increases in the years after a 2011 ownership change at their downtown complex, 10 Hanover Square, made the writing on the wall clear: Their $4,700 one-bedroom that had always cost the art industry professionals dearly would soon be entirely unaffordable, they said.

Then, as they started searching for a new place last week, a letter arrived: This year, the couple would be eligible for a rent-stabilized lease.

And in a New York miracle, their rent was actually going down — by about $500 a month.

“I thought, that can’t possibly be correct,” Smith said.

The couple’s landlord, UDR, did not respond to a request for comment. But given a recent court ruling affecting thousands of units in Lower Manhattan, the new stabilized lease offer makes sense.

Hackney and Smith’s building is one of dozens of properties that received a tax break known as 421-g, a 1990s-era abatement and exemption lasting up to 14 years and created to spur the conversion of downtown office buildings into residential apartments. The 493-unit Hanover Square building was once home to Goldman Sachs.

And because the 21-story property received the 421-g break, its tenants are legally owed rent-stabilized leases — and possibly back rent, under a six-to-one ruling in June from New York’s highest court.

via Downtown Tenants and Landlords Skirmish Over Rent Reset.