Knickerbocker Village Tenants File Lawsuit to Stop Sale to L+M
A group of Knickerbocker Village residents is suing to stop the multimillion-dollar sale of the affordable complex to L+M Development Partners.
The organization, Concerned Tenants of Knickerbocker Village, fears that L+M, which reached a memorandum of understanding with the tenants association in February, will try to displace low-income tenants in favor of wealthier renters; and also allege that the sale will violate rent protections under Knickerbocker’s Article IV protection.
These are some of the allegations behind the lawsuit against the state’s Division of Homes and Community Renewal, filed two weeks ago, as reported by the Real Deal.
The publication hashed out the nitty-gritty…
For almost 90 years, the state has set rents for Knickerbocker’s 1,590 apartments on a per-room basis, according to the suit. Under L+M’s plan, rent for current tenants would remain $264.34 per room. But the developer would fill units that become vacant at one of three price tiers based on incoming tenants’ income — generating profit for L+M but violating the state’s Private Housing Finance Law, the dissenting tenants claim.
Their suit alleges the new pricing plan would incentivize L+M to replace residents with higher-paying renters, as 40 percent of the units would go to households earning up to 130 percent of the area median income — about $156,000 for a family of three — and another 40 percent to households at 100 percent of AMI. The remaining 20 percent would be for low-income tenants.
Under the housing finance law that governs Knickerbocker Village, there’s no cap to rent increases, but the state sets rents to cover the development’s operational costs. Before the recent uptick in inflation, the state estimated that rents could rise between 8 percent and 12 percent in each of the next two years.
Here are some of the agreed-upon terms between the tenants association and the developer as part of the sale MOU:
- In accordance with the signed MOU, 100% of the units will remain permanently affordable rentals under HCR supervision under Article IV in perpetuity;
- Residents will no longer be subject to unpredictable rent increases. Rent for existing residents will be frozen for 3 years and a maximum rent increase cap of 2.5% will be effective thereafter. Rent has increased on average 3.1% each year over the last 20 years;
- New residents will be subject to a range of low- and moderate-income restrictions with an average affordable rent of 80% of area median income;
- L+M will invest $50 million for critical repairs such as the roof, plumbing, and facade without additional rent increases for residents. Future work will not increase resident rent;
- L+M will address handicap accessibility on the Monroe Street entrance and activate the playground/courtyard open space;
- Secured 397 project-based rent vouchers from HUD for eligible residents to reduce rents for the lowest income residents of Knickerbocker Village.