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.

“This litigation commenced prior to our ownership and we are pleased to have resolved it,” Blackstone said in a statement. “We have invested nearly $70 million to improve the community and remain focused on delivering an exceptional resident experience.”

Residents filed a class-action lawsuit against the Jack Parker Corporation in 2018. When Blackstone acquired the 1,300-unit apartment complex for $500 million later that year, it became the primary defendant.

Jack Parker had received tax breaks through the city’s J-51 program to renovate apartments, which requires that units remain rent-stabilized while the benefits are in effect.

Aaron Carr’s Housing Rights Initiative investigated and found that rent increases had exceeded the limits allowed by the Rent Guidelines Board, prompting the class-action suit. A tenant alerted HRI, which led the watchdog group to look at property tax records and rent ledgers.

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

This article has been updated to include a statement from Blackstone and to clarify that the firm became a defendant in the lawsuit upon acquiring Parker Towers.