Queens tenants claim rent-stabilization laws violated by landlord. Here's Zara Realty's response.
NEW YORK -- Some tenants in Queens are fed up with their rent and are suing the state to try to fix it.
The tenants say their landlord abused rent-stabilization laws and a state agency allowed it to happen. They told their story on Friday to CBS News Investigates.
They live on not just any street in Jamaica. They rallied in that spot because it's right outside the entrance to the state's Division of Homes and Community Renewal.
They want the agency to hear their message, as do state lawmakers.
"They have allowed this landlord to continue to jack up rents," Sen. John Liu said.
"The rent keeps going up and people keep suffering!" Sen. Jessica Ramos said.
The tenants' claims
The tenants live in rent-stabilized apartments in Jamaica owned by Zara Realty, including some on 88th Avenue. They're accusing Zara of abusing the state's Major Capital Improvement program, which allows landlords to cover construction costs by increasing rent up to 2%, in addition to the increases approved by the Rent Guidelines Board.
"They inflated the cost of the work," Gladys Perez said through a translator.
Perez is a Zara tenant who said the work does not meet the standard for the rent increases.
"But of course the HCR didn't listen! And who's paying now? We are!" Perez said.
It's not the first time Zara has faced scrutiny
New York Attorney General Letitia James is suing the company, accusing it of violating rent-stabilization laws and harassing tenants.
DHCR partnered with James' office for that lawsuit and investigation, but tenants say the state has been too slow to decide on pending appeals of the rent hikes.
The DHCR told CBS New York Investigates it cannot comment on litigation.
"Zara tenants are fed up!" one tenant said.
Zara issues detailed statement
"Zara Property Holdings refutes baseless statements by the anti-landlord lobbying organizations as misleading the public once more. The fact is, NY State Department of Housing & Community Renewal (DHCR) inspects all major capital improvements (MCI) and requires extensive supportive documentation before approving projects. This process ensures that all improvements are necessary. The items the anti-landlord lobbyists are currently disputing were reviewed and approved between 2016-21 by DHCR, as being necessary.
"After losing on the merits, these lobbyists are seeking to subvert a lengthy review process that the State of New York already has in place. It is categorically false for these anti landlord lobbying organizations to claim otherwise.
"Zara invests heavily in modernizing building infrastructure. This includes updating building exteriors, roofs, elevator systems, HVAC systems, and security measures. Our efforts align with compliance requirements set by various state and city climate regulations, that our elected officials voted for including:
- New York State Climate Act
- Local Law 97 Greenhouse Gas Emission Reduction
- Local Law 84 Benchmarking Utility & Water Bills
- Local Law 87 Energy Audit and Commissioning
- Local Law 132 Lighting Upgrades and Submetering
"These mandatory upgrades are subject to state housing agency review and authorization, ensuring that improvements meet regulatory standards. Without the ability to invest in such critical infrastructure, buildings citywide would inevitably fall into disrepair.
"Let's acknowledge the significant economic burden of the many, new legislative climate mandates on coops, condo owners, homeowners and apartment building owners that have caused many to voice concern over the financial strain.
"In recent months even Mayor Adams, the City Council Finance Chair and others in public office are speaking up and seeking to readdress the costly but important climate mandates they legislated.
"Despite the rise in inflation and cost of construction, Zara and other landlords are limited to 2% increases, yet we will continue to invest so our tenants' homes are maintained at the highest levels.
"DHCR's process for MCI's at rent-stabilized buildings has long involved tenant input and state regulatory approval, prior to authorization. Then following agency approval, a landlords can only collect 2% of the cost in the rent annually. (If rent is $1,200 for a 4-room/2-BR unit, the MCI is capped at about $24/month spread over 14 years.) The landlord cannot increase rent or MCI without city or DHCR authorization.
"As mandated by recently enacted city and state climate laws that impact ALL city buildings, Zara has been proactive to get ahead of the 2025 and 2030 environmental requirements, actively working to decarbonize, solarize rooftops, and replace older heating systems with greener, energy-efficient models."
The tenants see all that differently, and they hope the state will agree with them.