Housing rental is a global issue that will occupy a large part of the agenda in 2025. We appeal to evidence. For example, in Madrid this year there are already tenants who agree to pay 1,400 euros (although the average price is 1,600), in Hong Kong people live in a few square meters, in the USA they let artificial intelligence rule the market and so we can continue with stories that will keep you from sleeping in any way . For that reason, and because tenants often lose out, what happened in New York this week is historic.

Unpublished compensation. Blackstone, one of the largest real estate investment companies on the planet, must pay nearly $15 million to more than 100 tenants of Parker Towers, an apartment complex in Queens, New York.

Why? That amount, which included damages of up to $100,000 per home, settled a class-action lawsuit filed in 2018 against former owner Jack Parker Corporation and Blackstone, which purchased the building the same year. Tenants claimed that they were overcharged on the rent bills of the flats, which should have been regulated within the scope of the rent stabilization system for which they signed contracts.

The context of a historic decision. Parker Towers, which has more than 1,300 apartment units, benefited from tax breaks through the J-51 program, which requires rent adjustments to units following renewals with tenants. That is, the price of the agreed monthly payment could not be increased.

But an investigation conducted by the Housing Rights Initiative found the opposite. Apparently many of the apartments did not comply with these rules, leading to a class-action lawsuit. While Blackstone did not admit guilt, he acknowledged “previously excessive accusations” and was determined to solve the case. The company also underlined its commitment to tenants and announced that it invested $70 million in the improvement of the complex.

Effect and validity of the agreement. Aaron Carr, director of the Housing Rights Initiative, emphasized in the New York Times that the agreement they reached not only represents unprecedented fairness for tenants, but also significant economic relief in one of the most expensive cities on the planet.

As they explain, the case is one of the largest settlements of its kind in the history of New York State and the United States, and highlights the challenges tenants face in trying to hold landlords accountable in the stable New City rental system. York.

How does “stable income” work? This system is a regulation implemented in cities such as New York and designed to protect tenants from excessive rent increases. This is intended to ensure housing affordability and generally applies to certain residential buildings built before 1974, placing annual limits on rent increases that landlords can impose, as determined by the rent regulation board.

It also offers additional rights to tenants, such as automatic lease renewal and protection against unfair evictions. In this way, property owners who benefit from public supports such as tax incentives or renovation programs are often forced to keep these units (apartments) within the system.

System difficulties. With nearly one million apartments under this system representing nearly half of rents in New York City, this type of regulation is critical to ensuring affordable housing. Problem? Tenants are often unaware of their rights or how to investigate irregularities. Although New York’s Department of Housing and Community Renewal has recovered $13.2 million in overcharges over the past five years, many experts believe the state should be much more proactive in investigating them.

Lessons of the case. As the Times explains, the agreement highlights the evasive practices of some landlords and the importance of informing tenants about their apartment’s rental history in the first place. If you like, the case also shows that sometimes it is possible to hold owners accountable and get rights back. In fact, Blackstone had paid out more than a million dollars to the complex’s existing tenants in 2019, and the new compensation covers past and current residents calculated based on length of stay and amount of additional fees.

In short, a case that sets a historical precedent in the fight for transparency in the stable rent system and reinforces the need to protect tenants in a very expensive city where housing prices never stop rising.

Image | PXHere

in Xataka | Rental prices in the USA have not decreased. They discovered that housing is in the hands of algorithms

in Xataka | A startup wanted to revolutionize mortgages with artificial intelligence. Now facing a series of lawsuits