Blackstone Ends Rent Stabilization Fight at Stuy Town

Blackstone is bringing an end to its efforts to lift rent stabilization ordinances at Manhattan’s largest apartment complex Stuyvesant Town-Peter Cooper Village.

The private equity firm ended its attempts to challenge a court ruling on the status of the property, Gothamist reported. The decision ensures the approximately 11,200 apartments in the complex will remain rent-stabilized, meaning the landlord can only raise rents by a limited percentage each year, determined by a city panel.

The firm has owned the complex since 2015, when it purchased Stuy Town for $5.4 billion. At the time, Stephen Schwarzman’s firm planned to lift more than half of the apartments out of stabilization in a deal brokered by the city.

That became more difficult after the passage of the 2019 rent laws. Stuy Town’s apartments were slated to become unstabilized by June 2020, but tenants sued Blackstone under the protections afforded to them by the recent changes to the rent laws.

Early last year, a state court judge ruled in favor of the complex’s tenants, arguing the changes in the rent law meant Blackstone couldn’t deregulate some 6,200 apartments in a decision with sweeping implications for other properties that received J-51 tax benefits.

Blackstone appealed the decision, before ultimately ending the challenge this weekend.

A spokesperson for the firm said the legal battle was a way of “preserving our options” for the future and that it “did not ever have plans to change how we treat rent-stabilized apartments at Stuy-Town.”

“Blackstone has consistently displayed an unwavering commitment to the Stuy Town community,” a spokesperson for the firm said in a statement. “In 2015, we voluntarily preserved 5,000 units as affordable housing, and since then have invested more than $375 million into the property and materially improved resident satisfaction.”

The “voluntary” move was part of an agreement with the de Blasio administration that netted Blackstone a $144 million, low-interest loan from the city.

Blackstone’s decision this week to end its rent stabilization fight came after the Supreme Court last week rejected two petitions to review New York’s rent stabilization law, months after it declined to consider another challenge from the Rent Stabilization Association and Community Housing Improvement Program.

Gov. Kathy Hochul said she was “relieved” by the court’s rejection of the three rent law challenges, vowing to protect the laws and likely thwarting CHIP’s renewed focus on getting legislative relief for landlords from the rent law.

This article has been updated with a statement from a spokesperson for Blackstone and details of the firm’s 2015 agreement with the de Blasio administration.

— Holden Walter-Warner