This article first appeared in the April 2015 issue of The Lo-Down’s print magazine.
There’s nothing new about clashes between New York City tenants and property owners. On the Lower East Side, in particular, an affordable-housing bastion for generations, the battles have been especially fierce. But in the past year, the well documented struggles between the two groups came into sharper focus as the city’s real estate market sizzled.
The difference today may be in the size and influence of the new landlords. In the past five years or so, several big players have descended on the neighborhood, snapping up hundreds of tenement buildings from the East Village to Chinatown, transforming large numbers of previously rent- stabilized apartments into luxury housing. Tenant activists see their arrival on the scene as part of a well orchestrated strategy to drive low- and middle-income residents from their homes.
The names have become familiar. Prolific owners such as Larry Marolda, Steven Croman and Jared Kushner have all been treated to unflattering portrayals in the press during the past year. Most recently, a smaller operator concentrated in the blocks below Houston Street, Samy Mahfar of SMA Equities, has taken his turn in the spotlight. Mahfar, who now owns well over a dozen buildings on the Lower East Side, was taken to housing court in February by the tenants of 113 Stanton St., a four-unit property with ground floor retail space he purchased last fall for $5.2 million.
Aided by the Cooper Square Committee, a neighborhood advocacy organization, and the Urban Justice Center, the residents accused SMA Equities of exposing them to toxic dust kicked up during building renovations. Attorney Garrett Wright asked the court to stop “illegal construction,” which he said was “creating a hazardous environment and endangering (the tenants’) health and safety.” He cited a Feb. 3 inspection by the Department of Health that found debris had been removed unsafely, creating conditions “dangerous to human life.” According to an inspector, unsafe amounts of lead were found in 11 of 12 samples collected throughout the building.
A lead mitigation plan had been given to tenants in the building’s three occupied apartments, but the lawsuit alleged that Mahfar “violated every single health and safety protocol” in the plan. It also stated that heat and hot water have repeatedly been turned off without any warning. The work, Wright argued, is not just careless but part of a “campaign of harassment in order to make the building so uncomfortable and unsafe that tenants will vacate their rent-stabilized apartments.”
Mahfar responded through a public relations firm, saying the lawsuit is “riddled with inaccuracies and false allegations.” He asserted that tenants have “refused to cooperate with management” and that SMA Equities was ready “to make any necessary repairs, while the Petitioners have denied access to their apartments.” The statement added that the firm had “no violations on record” for lead safety, heat or hot water issues in the building. Mahfar said he’s using EPA-certified contractors, as well as a top environmental consulting firm and that they have remedied any problems cited by city inspectors in an “extremely expeditious manner.” Mahfar concluded, “SMA Equities takes great pride in our commitment to health and safety of all of our tenants and to improving the quality of life in the Lower East Side.”
But tenants and affordable housing advocates believe Mahfar’s actions at 113 Stanton St. are part of a pattern seen throughout the neighborhood. “We believe that Samy Mahfar is what is sometimes referred to as a ‘predatory landlord,’” said resident Sergio Alarcon. “Mr. Mahfar’s standard ‘predatory’ business model is to buy buildings occupied by rent-regulated tenants and then immediately begin hazardous and extremely disruptive gut-renovation/construction projects on units while conducting regular building-wide shutdowns of heat and water, etc. We believe this is in an effort to create such substandard living conditions in his buildings that rent-regulated tenants eventually give up, maybe accept very low buyout offers, or simply leave.”
In the past year, local elected officials have become increasingly vocal about landlord-tenant issues. In October, State Sen. Daniel Squadron, Assemblyman Sheldon Silver (then Assembly speaker) and City Council member Margaret Chin released a letter sent to Mahfar critical of him for lead remediation efforts at 102 Norfolk St., another SMA Equities property. In December, City Council member Rosie Mendez chastised an employee of the real estate firm for videotaping tenants during a news conference outside 210 Rivington St. “That to me is a form of harassment,” said Mendez in an angry confrontation with the employee. “All of the construction that has been going on is a form of harassment. You coming here on behalf of the landlord… and not asking whether you can videotape (tenants) just goes to prove that Samy Mahfar is a bad actor.”
Mahfar is by no means the only property owner in the hot seat. The state Tenant Protection Unit is going after Marolda Properties, which owns about 70 buildings citywide, including some on the Lower East Side and in Chinatown. Tenants accused Marolda of using a variety of unlawful and unethical tactics to drive them from their homes, including refusing to renew leases, initiating inappropriate eviction proceedings and pressuring tenants to accept low buyout offers. The state attorney general last year opened an investigation of Steven Croman, another LES property owner accused of various illegal tactics, including the use of a private investigator to intimidate tenants.
Advocacy organizations say city and state agencies often fall down on the job, failing to properly monitor problem landlords. In response, state Attorney General Eric Schneiderman and Mayor Bill de Blasio announced several weeks ago the creation of an inter-agency task force to coordinate enforcement of existing laws. Meanwhile, both affordable housing activists and real estate interests are gearing up for a big battle in Albany, as the state’s rent laws are up for renewal in June. Proposals are on the table to strengthen anti-harassment provisions and to end vacancy decontrol, which allows certain apartments to exit the rent-stabilization system.
The stakes are high. On the Lower East Side and Chinatown, more than 40 percent of all rental apartments are rent regulated, while 27 percent are market-rate. Thousands of apartments have entered the open market in the past decade. It is a foregone conclusion that this trend will continue in the years ahead, but the outcome of the debate in Albany, as well as the building-by-building battle locally, will help determine how quickly the transformation occurs.
If you ask Samy Mahfar, he will tell you SMA Equities is helping to improve the quality of housing on the Lower East Side. Many of the tenements purchased by his company are in terrible condition and in desperate need of rehabilitation, Mahfar says. He believes the renovations have preserved a sizable number of historic properties for years to come, strengthening the local community.
Advocacy groups, however, decry a strategy that they say leaves the people of the Lower East Side behind, displacing longtime residents with newcomers who can afford to pay $4,000, $5,000, even $6,000 a month for a restored tenement apartment.
Residents have created the “Mahfar Tenants Alliance” as a united front to represent their interests. Brandon Kielbasa, Cooper Square Committee’s lead organizer, says, “Mahfar has now been put on notice that we are going to throw everything we have at him… The Mahfar Tenants Alliance is a great group and they are not afraid to take things to the next level.”