“THE KUSHNER LOOPHOLE”

October 03, 2018 at 5:00 am

A new report claims over 10,000 landlords have used  the “Kushner loophole” in the city permit process, all in an effort to drive out low rent residents.

Aired on October 2, 2018.

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>> DOES YOUR LANDLORD TELL YOU
THE TRUTH?
A SHOCKING NEW REPORT RELEASED
BY THE HOUSING WATCH DOG DOCUME
WERE NO RENT REGULATED TENANTS
IN THEIR BUILDINGS WHEN, IN
FACT, THERE WERE.
THIS ALL IN AN OFEFFORT TO PUSH
OUT THOSE IN RENT STABILIZED
APARTMENTS.
NEW YORK CITY COUNCIL IS LOOKING
TO PUT A STOP TO THIS DUPLICITY
IN THE BILL.
THE CHAIRMAN ON OVERSIGHT AND
INVESTIGATIONS COUNCILMEMBER
RICHEY TORRES AND THE DIRECTOR
OF THE HOUSING RIGHTS
INITIATIVES.
GENTLEMEN, WELCOME TO YOU.
ALWAYS NICE TO HAVE YOU BOTH
HERE WITH US.
>>> I WANT TO START WITH YOU
FIRST, IF I REQCAN.
I WANT TO TALK ABOUT THE
INVESTIGATION.
HOW DID YOU COME UP WITH YOUR
FINDING?
>> THE ANALYSIS BY HOUSING
RIGHTS INITIATIVE IN PARTNERSHIP
WITH COUNCILMEMBER TORRES FOUND
THAT THE CITY FROM 2016 TO 2018
APPROVED OVER 10,000 FALSIFIED
WORK PERMIT APPLICATIONS FROM
HUNDREDS OF LANDLORDS ACROSS THE
FIVE BOROUGHS.
FOR A LANDLORD TO OBTAIN A
CONSTRUCTION PERMIT IN NEW YORK
CITY, THEY NEED TO DISCLOSE TO
THE GOVERNMENT WHETHER THEY HAVE
ANY RENT STABILIZED UNITS.
THIS REQUIREMENT EXISTS TO
PROTECT TENANTS FROM A NA TEAR
IOUS PRACTICE CALLED
CONSTRUCTION HARASS: IT IS A
DELIBERATE DECK 'NIQUE LANDLORDS
USE TO SYSTEMATICALLY HARASS
TENANTS OUT OF THEIR APARTMENTS
USING A LEGAL, DEE TRUCKTIVE AND
HAZARDOUS CONSTRUCTION.
>> ESSENTIALLY, I CAN'T GET YOU
OUT LEGALLY SO I'M GOING TO MAKE
YOUR LIFE SO UNCOMFORTABLE AND
DISRUPTIVE YOU'RE GOING TO WANT
TO LEAVE, IS THAT THE IDEA?
>> YES, IT'S A FORM OF MENTAL
AND PSYCHOLOGICAL TORTURE.
IT IS MEANT TO WEAR DOWN RENT
STABILIZED TENANTS TO GIVE UP
THEIR RIGHT TO AFFORDABILITY IN
THE MIDST OF AN AFFORDABILITY
CRISIS.
>> 10,000, THAT SOUNDS LIKE AN
ENORMOUS US IN.
>> IT IS AN ENORMOUS NUMBER.
>> HOW DZ THE GOVERNMENT WITH
WHATEVER
WHATEVER OVERSIGHT IT HAS, ALLOW
THAT TO HAPPEN?
>> YOU HAVE ONE FALSIFIED
BUILDING PERMIT, IT'S
SLOPPINESS.
BUT IF YOU ARE A DEVELOPER LIKE
KUSHNER COMPANIES -- 34
PROPERTIES IN THE SPAN OF FOUR
YEARS, THEN IT'S A SYSTEMIC
PROBLEM AND IT POINTS TO A
FAILURE OF ENFORCEMENT.
THERE IS A LACK OF COORDINATION
AMONG THE CITY AGENCIES.
KUSHNER COMPANIES WOULD TELL THE
DEPARTMENT OF FINANCE AS WELL AS
DHCR THAT IT HAD RENT REGULATED
UNITS IN ITS BUILDINGS AND THEN
TELL DEPARTMENT OF BUILDINGS IN
THE COURSE OF OBTAINING A
BUILDING PERMIT IT HAD NO RENT
REGULATED APARTMENTS IN THOSE
BUILDINGS.
THERE IS NO COMMUNICATION
BETWEEN THOSE AGENCIES, THE LEFT
HAND OF THE GOVERNMENT DID NOT
KNOW WHAT THE RIGHT HAND WAS
DOING.
WHAT WE CALL THE "KUSHNER
LOOPHOLE," THE PROCESS OF
FALSIFYING BUILDING PERMITS WITH
IMPUNITY BECAUSE OF INEFFECTIVE
ENFORCEMENT ON THE PARTS OF THE
CITY HAS BECOME A SYSTEMIC
PROBLEM ON THE PART OF OUR CITY.
>> AARON, WHAT IS THE ADVANTAGE?
YOU EXPLAINED THE PROCESS, TO
TRY TO DRIVE OUT TENANTS.
WHAT, THEN, IS THE ADVANTAGE FOR
THE LANDLORD IN GETTING THOSE
TENANTS OUT OF THE BUILDING?
>> MONEY.
>> A LOT OF MONEY TO BE MADE.
THIS IS A $1 TRILLION REAL
ESTATE MARKET.
RENT STABILIZATION LIMITS HOW
MUCH A LANDLORD CAN INCREASE THE
RENT EACH YEAR, OKAY.
THEY CAN STILL MAKE A GOOD
PROFIT, BUT IT IS LIMITING.
SO THERE IS AN INCENTIVE TO PUSH
THESE TENANTS OUT, RENOVATE
THEIR APARTMENTS AND THEN
REPLACE LOWER-PAYING RENT
STABILIZED TENANTS WITH HIGHER
PAYING NONRENT STABILIZED
TENANTS.
>> NOT MARKET VALUE TYPES OF
TENANTS.
>> IT IS NOT ACCIDENTAL.
IT IS PART OF A MODEL.
>> THEY ARE LOOKING INTO IT.
MISTAKES, IF THEY WERE MADE,
WERE INADVERTENT.
>> FALSIFYING BUILDING PERMITS
IS HARDLY INADVERTENT.
>> I IMAGINE THERE MUST BE
OTHER -- YOU'RE TALKING ABOUT
10,000 OTHERS.
WHAT ARE THE OTHER DEVELOPERS OR
LANDLORDS, I SHOULD SAY, SAYING
IN RESPONSE TO THIS ALLEGATION
THAT THEY HAVE INTENTIONALLY
FALSIFIED DOCUMENTS?
WHAT'S THE RESPONSE?
>> IT'S AN ACCIDENT.
THERE IS A MISTAKE.
>> WHICH RAISES A VERY
INTERESTING QUESTION.
WHEN DOES AN ACCIDENT TURN INTO
A SYSTEMATIC BUSINESS MODEL.
>> A SERIES OF ACCIDENTS.
>> A SERIES OF ACCIDENTS, NOT
JUST ONE OR TWO.
IN KUSHNER'S CASE 80 FALSIFIED
IN BLGSZ.
IT'S WHEN SMOKE TURNS INTO A
FULL FLEDGED FOREST FIRE.
>> WHAT HAPPENS IF I'M A
LANDLORD AND I TURN IN THIS
FALSIFIED DOCUMENT AND YOU CATCH
ME?
>> THERE IS A DISCONNECT BETWEEN
WHAT ACTUALLY HAPPENS AND WHAT
SHOULD HAPPEN.
>> FALSIFYING A LEGAL INSTRUMENT
LIKE A BUILDING PERMIT IS A
MISDEMEANOR UNDER LOCAL LAW AND
A FELONY UNDER STATE LAW SO
THERE SHOULD BE A REFERRING TO
THE PROPER AUTHORITIES FOR
CRIMINAL PROSECUTION.
>> HAS THERE BEEN?
>> THERE IS NO EVIDENCE OF
CRIMINAL REFERRALS.
SO I'M ENACTING, I'M INTRODUCING
LEGISLATION AIMED AT CLOSING THE
"KUSHNER LOOPHOLE" AND
PREVENTING WHAT I CALL THE
WEAPONIZATION OF CONSTRUCTION,
THE USE OF CONSTRUCTION AS A
WEAPON FOR DISPLACING PEOPLE
FROM THEIR HOMES.
ONE REQUIREMENT IS D.O.B.
UNCOFFERS EVIDENCE OF FALSIFIED
BUILDING PERMITS, IT MUST REFER
THOSE CASES TO LAW ENFORCEMENT
FOR CRIMINAL PROSECUTION.
>> IT MUST.
>> WE HAVE A MINUTE OR SO LEFT.
FINISH UP WITH THE PROPOSALS,
ASPECTS OF THE PROPOSED
LEGISLATION.
>> THE LEGISLATION WOULD REQUIRE
INFORMATION SHARING, AUTOMATED
INFORMATION SHARING BETWEEN THE
DEPARTMENT OF BUILDINGS AND THE
DEPARTMENT OF FINANCE.
SECOND, IT WOULD REQUIRE D.O.B.
TO BE PROACTIVE RATHER THAN
REACTIVE.
SO IF THERE IS A DEVELOPER WHO
FALSE IDENTIFIES A BUILDING
PERMIT, UNDER MY LEGISLATION THE
WHOLE REAL ESTATE PORTFOLIO OF
THAT DEVELOPER WOULD BE SUBJECT
TO AN AUDIT.
>> THE NUMBERS ARE ASTONISHING.
IT IS A FASCINATING
CONVERSATION.
OUR HOPE IS THAT WE CAN GET YOU
BOTH BACK IN HERE IF THIS MOVES
FORWARD AND YOU CAN BRING US UP
TO DATE WHAT'S GOING ON.
COUNCILMEMBER, GOOD TO SEE YOU.
AARON, GOOD TO SEE YOU ALSO.
BOTH BE WELL.

Mutual of America PSEG

Funders

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