Blackstone has halted all improvement works at the 11,000-unit Stuyvesant Town and Peter Cooper Village complexes, citing new rent-regulation laws that prompted the move.
It is the most significant step taken by a landlord yet as a reaction to the new rent laws that New York state passed last month. The new laws, which dealt an unexpected blow to the real estate industry, eliminate multiple controls given to landlords to increase rent, including the vacancy decontrol provision that allowed a landlord to increase rents by as much as 20 percent when a tenant left an apartment.
Blackstone purchased the 80-acre site in 2015 for $5.3 billion with Ivanhoe Cambridge. A spokesperson for Blackstone told Crain’s that “in light of the recent legislation, we are in the process of evaluating capital investments at Stuy Town.” Citing sources, the outlet reported that urgent fixes, like leaks or hot water service, would continue, but larger construction projects would cease.
The real estate industry was caught off guard by the introduction of the laws last month, which had prompted a failed last-minute scramble to sway Governor Andrew Cuomo to veto the legislation.
Blackstone played a key role in the lobbying effort against the laws introduction, and in May led talk with housing advocates to negotiate a compromise.
While landlords expressed shock at the ultimate decision, the finger-pointing started quickly, and last month Real Estate Board of New York president John Banks resigned. [Crain’s] — David Jeans