Related Companies labels luxury rentals "affordable housing" for tax break
It is not breaking news that Related Companies has been cracking down on Airbnb.com, a social networking site that allows individuals to find roommates or sublet their apartments via the internet. Related Companies has sued Henry Ikezi in a New York City Housing Court for profiteering from his "rent stabilized" apartment through Airbnb.com, but as will be demonstrated on appeal Related Companies and its attorneys, Borah Goldstein, have failed to sustain their burden of proof. The fact is that Mr. Ikezi's tenancy in the MiMA Building was terminated a mere twenty (20) days after the commencement of his lease merely because of an account he maintained on Airbnb.com -- an account that Mr. Ikezi testified he opened some six (6) months before his tenancy commenced.
At trial, none of Related Company's witnesses could testify how many unauthorized guests Mr. Ikezi hosted, how much he charged these guests, how long they stayed, or even their identity. None of these guests were called as witnesses at trial. The testimony of Related's witnesses was conveniently self-serving but insufficient to prove Related's claims of profiteering. The MiMA building, while technically rent stabilized because of a 421-a tax abatement, nevertheless charges its tenants rent at or in excess of fair market value. Related could charge upwards of $9,000.00 a month for Mr. Ikezi's apartment. Related charged Mr. Ikezi a "preferential rent" of about $6,000.00 a month, not because the law requires that figure, but because the $9,000.00 legal maximum is likely in excess of market value. If someone were willing to pay $9,000.00 per month for Mr. Ikezi's apartment, Related could legally charge $9,000.00 per month while still calling the apartment "rent stabilized" in order to maintain its 421-a tax abatement. Todd Nahins, Esq., of Borah Goldstein touts his victory as a "landmark decision", but the fact is the decision rendered in Housing Court is not binding precedent and is under appeal. Mr. Nahins styles himself as some sort of crusader who protects the integrity of rent regulation and affordable housing in New York City, yet nothing could be further from the truth. Instead, Mr. Nahins' clients grotesquely profit from a property tax loophole. This loophole allows one of the largest of real estate concerns in the City to label luxury high rises as "affordable housing" for a generous tax abatement, all while charging rents at or in excess of fair market value.
The records of the New York City Housing Court Clerk demonstrate that Mr. Nahins' firm aggressively commences evictions in the MiMA building under the slightest pretext, and every time a new tenant is placed, MiMA takes a 18% or 20% vacancy increase allowance permitted under the NYC Rent Stabilization Law. Thus, the legal regulated rent for Mr. Ikezi's allegedly rent stabilized apartment increased from about $6,000.00 in 2011 to about $9,000.00 in 2014. The real profiteer is Related Companies. Even by New York City standards, the MiMA Building can scarcely be characterized as "affordable housing."