March 19, 2018 By Tara Law
Jared Kushner’s real estate company turned big profits on three Astoria apartment buildings after falsifying construction records to hide that tenants were living in rent stabilized apartments, the Housing Rights Initiative has found.
Kushner Cos. filed paperwork to the Department of Buildings that stated that the company did not have any rent-regulated units at the Astoria apartment buildings. In reality, the company had as many as 94 when it purchased the properties in 2015, according to tenants’ rights watchdog Housing Rights Initiative and the City Council’s Oversight and Investigations Committee Chair, Councilmember Ritchie Torres.
Kushner Cos. purchased the Astoria properties, which the Housing Rights Initiative identified as 21-80 38th St., 23-05 30th Ave. and 23-15 30th Ave., in 2015.
The company bought the buildings for $18,250,000; $11,650,000; and $11,650,000, respectively, according to Department of Finance records, and invested in upgrades. The company then sold the buildings in 2017 for $23,000,000; $18,250,000; and $18,250,000.
The Housing Rights Initiative’s findings first came to public attention this Sunday, when the Associated Press reported on them.
Housing Rights Initiative founder Aaron Carr said that companies often falsify the number of rent stabilized tenants to avoid oversight from the Department of Buildings, which often looks into buildings with a significant number of complaints if many of the tenants occupy rent stabilized apartments. Falsely stating that there are not any rent stabilized apartments “decreases the likelihood of oversight and enforcement,” said Carr.
Tenants at the Astoria buildings saw their rents doubled and endured nonstop construction and heat cutoffs after the Kushner Cos. acquired their buildings, according to the Housing Rights Initiative.
“The Kushners appear to be engaging in what I call the weaponization of construction,” said Torres.
A review by the Housing Rights Initiative found that Kushner Cos. filed at least 80 falsified PW1: Plan/Work Applications for 34 properties across the city from 2013 to 2016. The company wrote on the applications that it had zero rent-regulated tenants, but tax documents revealed that there were upwards of 300 rent regulated units.
Carr said that in popular neighborhoods like Astoria, companies like the Kushner Cos. will often try to turn profits quickly to take advantage of growth in the market. Violating construction regulations enables companies to renovate buildings faster, as well as make conditions uncomfortable for lower paying tenants who are entitled to lease renewals.
“They are are trying to achieve an unlimited profit margin, which is impossible to achieve unless you push tenants out,” said Carr.
The Kusher Cos. responded to the AP report in a statement.
“Kushner would never deny any tenant their due-process rights,” the statement read in the AP report.
The company said that such documents were prepared by third parties, and are reviewed by an independent counsel.
“If mistakes or violations are identified, corrective action is taken immediately,” the company said.
Carr said that his organization, which currently employs only two people, did not need to dive very deeply to uncover the company’s falsification. Kushner Cos. are considered to be “predatory” landlords, said Carr, with a record of illegally hiking rents and poorly maintaining buildings. The Housing Rights Initiative compared tax documents to building records and immediately found a discrepancy.
“All one has to do is cross-check between one document and another document,” said Carr.
Carr also noted that the Department of Buildings has continued to approve the Kushner Cos.’ building applications.
Astoria Councilmember Costa Constantinides said in a statement that he will take action to help tenants.
“Falsifying records in order to increase profits while taking advantage of hardworking Astorians is despicable,” Constantinides said.
“Kushner Companies’ blatant disregard for our regulations simply to make a profit demonstrates disrespect of our community and our residents who have called this neighborhood home for years. Our office will research the possibility of strengthening these regulations by increasing penalties and opening up possible additional legal remedies for tenants. I will work with Council Oversight and Investigations Committee Chair Ritchie Torres as he examines this flagrant violation of our law.”
The Housing Rights Initiative is continuing to investigate to determine the extent tenants were affected by the form falsification, Carr said.