How a Lone Tenant is Holding Up a $70 million Condo Deal in NYC

[DCReid]

This article is behind the NY Times paywall and I am not a subscriber.
But, I was able to reading some of it on my smart phone, and apparently Manhattan renters that hold out on a building bought by a developer can make millions. The article said that one renter in the rental building that proceeded one of the the Central Park West billionaire towers got like $17 million and another top floor apartment in the same neighborhood with a Central park view.

https://www.nytimes.com/2022/04/16/r...west-side.html

[lio45]

Same article but no paywall:

https://www.seattletimes.com/nation-...on-condo-deal/

[Gresto]

Well, isn't that too fucking bad! Good for the tenant.

[Crawford]

Originally Posted by Gresto

Well, isn't that too fucking bad! Good for the tenant.

Why is that good for the tenant? What public policy is served by driving up the cost of construction and blocking new housing and tax revenue?

This happens all the time in NYC. The dude is probably gonna get an eight figure payout, and the resulting condos will be even more lavish and outrageously priced, to compensate for the delays and sunk costs.

[TempleGuy1000]

Originally Posted by Crawford

Why is that good for the tenant? What public policy is served by driving up the cost of construction and blocking new housing and tax revenue?

This happens all the time in NYC. The dude is probably gonna get an eight figure payout, and the resulting condos will be even more lavish and outrageously priced, to compensate for the delays and sunk costs.

Yeah, this is not a good thing or anything to be celebrated. There are intelligent individuals who absolutely abuse towns and cities that have tenant friendly laws in place.

If you want to watch an absolutely worst case scenario, watch the last episode of the new Netflix show 'Worst Roommate Ever'. It's a pretty horrifying show in general, but the last episode the guy knew the tenant laws very well and screwed over numerous people.

[mrnyc]

it's good because they can't push him around, they gotta pay him off.

no different that what needs to be done with the developers, inspectors, unions and construction companies.

i swear people act like there was nothing there at some of these redevelopment sites. well of course there was. and nyc isnt losing any tax money here. its assured that at least 75% of the future tenants are already from the metro. this ain't west london. anyway, based on the media they probably have to pay him off even more now. boo hoo. maybe the developer will plan ahead better next time.

[iheartthed]

A $30k buyout is downright insulting lol. The initial offer should've been 10x that at minimum.

Nevermind. It's not a rent-stabilized unit. Yeah, he would've been at the landlord's mercy without the pandemic. But the landlord could make this go away tomorrow by just writing a check. They have the power to end this whenever they want to.

[Crawford]

Originally Posted by mrnyc

iand nyc isnt losing any tax money here.

Of course NYC is losing huge tax revenue.

The current building produces no income. The future building will produce massive income. If this guy holds out for a year or two, that's probably eight figures in lost municipal revenue right there. And for what?

Even worse, the guy appears to have quit his job for this charade. Pre-pandemic, there wasn't a hold on evictions, but during the pandemic, unemployed New Yorkers can't be evicted. So this guy is refusing to work in the middle of a full employment/employee shortage, to preserve his apartment. The fact that this makes economic sense is public policy madness.

[mrnyc]

Originally Posted by Crawford

Of course NYC is losing huge tax revenue.

The current building produces no income. The future building will produce massive income. If this guy holds out for a year or two, that's probably eight figures in lost municipal revenue right there. And for what?

Even worse, the guy appears to have quit his job for this charade. Pre-pandemic, there wasn't a hold on evictions, but during the pandemic, unemployed New Yorkers can't be evicted. So this guy is refusing to work in the middle of a full employment/employee shortage, to preserve his apartment. The fact that this makes economic sense is public policy madness.

no it wont. as i said, but your cherry picking ignores, the vast majority of residents who would live there already live here.

and so who cares if he holds out or how he does it? i would too. covid or no, hes playing by the rules. this happens quite often, if not as extreme, because more often developers handle it earlier and better.

i refuse to take the developer side with this kind of issue, moreso because much more often its the owners and redevelopers harrassing and chasing the residents out via illegal tactics. publicity will probably save this guy from that.

[Shawn]

Originally Posted by mrnyc

no it wont. as i said, but your cherry picking ignores, the vast majority of residents who would live there already live here.

and so who cares if he holds out or how he does it? i would too. covid or no, hes playing by the rules. this happens quite often, if not as extreme, because more often developers handle it earlier and better.

i refuse to take the developer side with this kind of issue, moreso because much more often its the owners and redevelopers harrassing and chasing the residents out via illegal tactics. publicity will probably save this guy from that.

So instead you take the side of unemployed-by-choice people in non-rent controlled apartments angling for 8 figure buyouts and their lawyers like David Rozenholc, who specializes in tenant holdout cases and who collect one-third of the settlements? A third of 8 figures is guaranteed to be north of $3 million. Plus all those delay tactics to buy more residential time for his client? What a racket.

Ozsu can only do this because of the pandemic renter-relief program, which was not intended for instances such as what we have here.

Maybe developers more often than not screw over the little guy as you claim. But that doesn't appear to be what's happening in this case.

[iheartthed]

Originally Posted by Shawn

So instead you take the side of unemployed-by-choice people in non-rent controlled apartments angling for 8 figure buyouts and their lawyers like David Rozenholc, who specializes in tenant holdout cases and who collect one-third of the settlements? A third of 8 figures is guaranteed to be north of $3 million. Plus all those delay tactics to buy more residential time for his client? What a racket.

Ozsu can only do this because of the pandemic renter-relief program, which was not intended for instances such as what we have here.

Maybe developers more often than not screw over the little guy as you claim. But that doesn't appear to be what's happening in this case.

I'm pretty sure the landlord is using intimidation tactics to coerce him out. Creating noise with the fan is a classic tactic that is used by landlords in NYC to get tenants out of rent-stabilized units without paying them to leave. Is the tenant exploiting a loophole? Yes. Is he wrong to do so? No, not really.

[dchan]

Originally Posted by Shawn

So instead you take the side of unemployed-by-choice people in non-rent controlled apartments angling for 8 figure buyouts and their lawyers like David Rozenholc, who specializes in tenant holdout cases and who collect one-third of the settlements? A third of 8 figures is guaranteed to be north of $3 million. Plus all those delay tactics to buy more residential time for his client? What a racket.

Ozsu can only do this because of the pandemic renter-relief program, which was not intended for instances such as what we have here.

Maybe developers more often than not screw over the little guy as you claim. But that doesn't appear to be what's happening in this case.

Yes and no.

True, Mr. Ozsu would normally not be entitled to such tenant protections as a renter of a non-stabilized apartment. And he is taking advantage of the rent relief program's protection to its maximum.

And it's true that the world has plenty of unemployed (or not - https://www.complex.com/pop-culture/...rent-28-months) who take advantage of NY's liberal tenant protection laws and courts to their maximum.

But it doesn't appear to be the case here, at least not to an extreme extent:
1. Mr. Ozsu was let go from his job due to the pandemic, and is now working. He is a long-time rent-paying resident of the building since 2006, and would have continued to pay the rent were it not for the pandemic shutdown in 2020.
2. Crawford mentions the fact that the city is losing property tax revenue from the potential condo development, all over one tenant holding out. But is that really an uneven tradeoff?

Think about it.

On the one hand, there is less revenue generated from the jobs created to design & construct this building, along with the tax revenue to be collected yearly from each condo.

On the other hand, there would only be 11 condo units in this building, many of which would likely be investment properties or pied-a-terres for the wealthy. And what is it replacing? A rental building with 128 units, occupied by working class people who now need to search for new apartments in a city with short housing supply.

So really, is the health of the city improved by the design/construction jobs, doorman/maintenance/building super jobs, and property tax revenue created by the new 11 story condo? Or would it be better with 128 apartment units being maintained within a city that has a housing shortage? You decide.

[dchan]

Yes, 30-40+ units is a much more reasonable number than 11. I would wager that number would be an even higher, since there's a fairly limited market for expensive 2000-3000 SF apartments (that's 3-4+ bedrooms). I would figure there would be some 600-900 SF one bedrooms or studios, plus some 1000-1500 SF two bedrooms available as well.

[Crawford]

Yeah, 86th/Madison is an A+ location. The Broadway site is an A- location, so prices will probably be about half. And units will be big, but not gigantic.

Also, the 86th/Madison building has a very small footprint relative to the Broadway site. So 30-40 units is probably a conservative count. Madison Ave. attracts master of the universe types, Broadway attracts merely rich locals. The Broadway location will be big with Jewish professionals with younger children, given all the good nearby schools and tons of Jewish amenities nearby (Manhattan JCC, lots of schools, synagogues and kosher places).

The 86th/Madison building already had a $67 milllion sale, as two of the penthouse units were combined.
https://www.mansionglobal.com/articl...on-01635959945

I doubt the Broadway penthouses will go for more than $10-$15 million.

[Gantz]

The 86th/Madison building is only 1/3 the size and has commercial space on the first floor. It also has 12 units, not 11.

[Crawford]

Here's a list of available units in a newer construction building on Broadway about 10 blocks north.

https://2505broadway.com/availability/

It's a cheaper location, so the prices are lower. But it's a similar building footprint and same zoning rules. And both buildings would attract the same types of families. And these units aren't huge. So maybe it will be more like a 50-100 unit building.

[Crawford]

Taller, thinner buildings provide more sunlight than shorter, bulkier buildings, but NIMBYs are always advocating for the shorter, bulkier option. So obviously "lack of sun" is just another thing they're throwing out to see if it sticks.

Also, what's wrong with shadow? I prefer walking on a shadowed street as opposed to sidewalk with direct sunglare.

NIMBYs prefer the same. There's a funny pic of NIMBYs protesting a new building on the Upper East Side on the pretense that it will "take away sunlight". Meanwhile their protest was deliberately moved to a shady portion of the sidewalk, due to the shading presence of a large, bulky building.

[dchan]

Originally Posted by Gantz

This shouldn't be up to the city to decide. Let the property owners decide themselves if these conversions are worth their time and money. I think you'd be surprised.

I'd be ok with that, but there are so many long narrow lots in this city with barely any side yards in the outerboros (not to mention plenty of attached buildings all over). Unless they used daylight tube lighting, I have no idea how they could possibly meet the light & air requirements unless the DOB waives them (which I doubt will happen).

Originally Posted by Gantz

Buildings can be constructed in such a way that lets sunlight through, as you mentioned, setbacks. Regardless, sunlight should not be a reason why zoning regulations exist. It is a fairly trivial reason that not at all one of the determining factors for most people's QOL. And frankly, such people to whom the sun is THAT important, probably shouldn't be living in NYC to begin with, but maybe consider Arizona instead. Cloudy skies certainly contribute a lot more than any zoning regulations.

Yes, and guess what these setbacks you gave as an example are dictated by? ZONING. These setbacks don't exist because building owners think they make the building look prettier and more distinct. They exist because the zoning text dictates setbacks from the street for a certain distance from the curbline, and setbacks at different heights in order to comply with the sky exposure plane.

So the zoning text is clearly concerned about sunlight. If it were up to the owners & developers, they would maximize building over the entire lot with zero yard space around the building (side yards, back yards, front yards). You say "sunlight should not be a reason why zoning regulations exist", but you probably lack the imagination to see a city full of tall rectangular monoliths crowding up to the narrow sidewalks on both sides of a street if zoning didn't exist. Or you don't care, except to meet your high population density desires. Not sure.

Originally Posted by Crawford

Taller, thinner buildings provide more sunlight than shorter, bulkier buildings, but NIMBYs are always advocating for the shorter, bulkier option. So obviously "lack of sun" is just another thing they're throwing out to see if it sticks.

Also, what's wrong with shadow? I prefer walking on a shadowed street as opposed to sidewalk with direct sunglare.

NIMBYs prefer the same. There's a funny pic of NIMBYs protesting a new building on the Upper East Side on the pretense that it will "take away sunlight". Meanwhile their protest was deliberately moved to a shady portion of the sidewalk, due to the shading presence of a large, bulky building.

Except for the fact that these taller thinner buildings exist due to zoning regulations. They are required to build on setback on top of a shorter podium (which itself is set back from the streets). Without zoning regulations, you don't get a bunch of tall skinny towers. You get a bunch of shorter massive highrises that crowd entire blocks and loom over narrow sidewalks.

[Gantz]

Originally Posted by dchan

Yes, and guess what these setbacks you gave as an example are dictated by? ZONING. These setbacks don't exist because building owners think they make the building look prettier and more distinct. They exist because the zoning text dictates setbacks from the street for a certain distance from the curbline, and setbacks at different heights in order to comply with the sky exposure plane.

So the zoning text is clearly concerned about sunlight. If it were up to the owners & developers, they would maximize building over the entire lot with zero yard space around the building (side yards, back yards, front yards). You say "sunlight should not be a reason why zoning regulations exist", but you probably lack the imagination to see a city full of tall rectangular monoliths crowding up to the narrow sidewalks on both sides of a street if zoning didn't exist. Or you don't care, except to meet your high population density desires. Not sure.

Except for the fact that these taller thinner buildings exist due to zoning regulations. They are required to build on setback on top of a shorter podium (which itself is set back from the streets). Without zoning regulations, you don't get a bunch of tall skinny towers. You get a bunch of shorter massive highrises that crowd entire blocks and loom over narrow sidewalks.

I think we are talking about two different things. Setbacks only exist in NYC in areas with very relaxed zoning, that allows very high FAR. Areas with very strict zoning in NYC have very short squat buildings with no setbacks whatsoever. In majority of NYC, setbacks are not practical precisely due to zoning regulations.
I do not lack imagination either. I just happen to travel to other megacities around the world and see how they build things. Most of your objections about sunlight, mononliths crowing up sidewalks, etc are completely unfounded and demonstrably false. The worst type of urban fabric I encountered is actually masterplanned Le Corbusier tower in the park, NYCHA/commieblock developments and parking podium highrise among nothingness and highways.

[dchan]

Originally Posted by Gantz

I think we are talking about two different things. Setbacks only exist in NYC in areas with very relaxed zoning, that allows very high FAR. Areas with very strict zoning in NYC have very short squat buildings with no setbacks whatsoever. In majority of NYC, setbacks are not practical precisely due to zoning regulations.

Not really. Zoning is zoning. It dictates how far a building is set back, the minimum yard space on all sides, the amount of parking, the FAR for the lot, the number of dwelling units permitted, etc. It defines these aspects differently for different zoning areas, but it defines them nevertheless.

For high density areas, zoning creates setbacks partly due to the sky exposure plane issue, and partly due to the maximum amount of dwelling units permitted on a lot.

And you are incorrect in stating that setbacks do not exist in very strict zoning areas (R1 & R2). It depends entirely on what the specific zoning text states for the area. Some restrictive zoning areas require a setback to comply with the "character" of the rest of the houses in the area.

Also, not sure what you mean by the last sentence. Can you explain? Thanks.

I do not lack imagination either. I just happen to travel to other megacities around the world and see how they build things. Most of your objections about sunlight, mononliths crowing up sidewalks, etc are completely unfounded and demonstrably false. The worst type of urban fabric I encountered is actually masterplanned Le Corbusier tower in the park, NYCHA/commieblock developments and parking podium highrise among nothingness and highways.

We might just have a difference of opinion on this issue here. I prefer sunlight, and you might not. For me, sunlight is the difference between a warmly lit apartment with southern exposure vs. a rather coldly dim apartment with only northern exposure.