Madison Capital, a real estate investment firm, bought two Chinatown tenement buildings for a total of $20 million in 2008, and according to the New York Times, it is pushing out rent-stabilized tenants to ensure a faster return on its investments.
Though no lawsuit was filed, and no comment was obtained from Madison, the Times alleges that Madison Capital stopped fixing leaks, cut the heat and even accused tenants of soliciting prostitution at 55 and 61 Delancey Street in an effort to push existing tenants out, including the subject of the story, Zhi Quin Zheng, in order to convert the units to market-rate apartments.
The tenants of the 45 apartments are mostly Chinese and Dominican people that pay about $1,000 per month. Newer arrivals, the Times said, pay close to $3,000. The Times cited analysts that believe Madison needs at least $6,500 per apartment to turn a profit. Madison has offered buyouts of more than $20,000 to rent-stabilized tenants.
The columnist, noting the increased gentrification in “the last blue-collar neighborhood in southern Manhattan,” speculates that Madison will replace the old walk-ups with glassy condos. In the meantime, Zheng is fighting to protect her apartment. “It is battles all the time here; lots of people are leaving,” she said through an interpreter. “I know my rights, but I am nervous.” [NYT]