The Real Deal New York

Rabsky abusing preferential rents at the Driggs: report

Developer denies claims it skirted stabilization rules at Williamsburg building

November 05, 2015 10:06AM

Driggs Williamsburg

The Driggs at 205 North 9th Street in Williamsburg

UPDATED, Nov. 5, 5:15 p.m.: The Rabsky Group is raising rents at the Driggs in Williamsburg faster than the law allows, overcharging tenants and flouting its obligations under 421a rules, according to an investigation.

The landlord charged the first tenant at the building “preferential” rent below the affordability limit imposed as part of the building’s 421a tax abatement, and then allegedly proceeded to raise the rent more quickly than stabilization rules allow.

Behind the story:
Rabsky Group

The building’s first tenant, Julie Renwick, was quoted a rent of $2,875 per month. But she signed her lease, she found her “legal” rent set at $3,400, the maximum initial rent allowed under the affordability provisions of 421a, ProPublica reported.

Renwick’s rent was then increased by 9 percent and 7 percent over the next two years, exceeding the 4 percent limit set by the city for rent-stabilized apartments.

The city’s caps apply to rents “charged and paid,” ProPublica reported, seemingly rendering the increases illegal.

“I’m a smart, educated person, and to feel swindled by these people — it’s embarrassing as well as maddening,” Renwick told the website.

A spokesperson for Rabsky disputed the practices as illegal to The Real Deal, saying, “We are well versed in New York City rent law would never take rent from a tenant that was not according to New York City rent laws and regulations. We did not at any time break any law and everything was done strictly under New York City rent law guidelines.”

As information of rental rates is only available to landlords and tenants, it’s difficult to say how many tenants citywide have been allegedly overcharged in this way.

Enforcement of the rules is, in practice, spotty. Landlords who flout rent stabilization rules can have their 421a tax benefits revoked, but such actions are rare, occurring only twice in the last three years, according to city officials.

Rabsky, one of Brooklyn’s biggest developers, completed the Karl Fischer-designed Driggs, at 205 North 9th Street, in 2011. Earlier this month, the firm bought a DoBro development site from Forest City Enterprises for $158 million.

The Real Deal profiled the Rabsky Group and co-founder Simon Dushinsky in its March issue. [ProPublica]Ariel Stulberg