Blackstone Paying $15M After Alleged Rent Overcharges

Blackstone is paying out one of the largest settlements related to rent-stabilization overcharges in New York’s history.

The private equity firm agreed to pay nearly $15 million to resolve claims of overcharging rents at Parker Towers in Forest Hills, the New York Times reported. Some tenants will receive more than $100,000 in the settlement.

Residents filed a class-action lawsuit against the Jack Parker Corporation and Blackstone in 2018, the same year Blackstone acquired the 1,300-unit apartment complex for $500 million.

Jack Parker received tax breaks through the city’s J-51 program to renovate apartments while keeping them rent-stabilized.

Aaron Carr’s Housing Rights Initiative investigated the overcharges, prompting the class-action suit. A tenant alerted HRI to the building, which led the watchdog group to look at property tax records and rent ledgers, determining units weren’t rent-stabilized properly.

Blackstone tried to settle shortly after its acquisition of the complex, but failed to do so, leading to protracted litigation. In 2019, it agreed to pay $1 million to current tenants who were allegedly overcharged; the latest settlement involves both past and present tenants and was approved by a judge in September.

Blackstone didn’t admit wrongdoing in the settlement, though it acknowledged past overcharges. The sizes of the payouts to individuals depend on how long they lived at Parker Towers and how much they were overcharged.

This is not the first time Blackstone has been enmeshed in a controversy surrounding rent-stabilization in New York. The company tried in vain to lift rent stabilization ordinances at Manhattan’s largest apartment complex, Stuyvesant Town-Peter Cooper Village.

In February, Blackstone decided against continuing to fight a court ruling on the status of the property. That ensured the approximately 11,200 apartments in the complex will remain rent-stabilized, so the landlord can only raise rents by a limited percentage each year, determined by a city panel.

— Holden Walter-Warner