Despite some of the most extensive rent regulation laws in the nation, a bureaucratic entanglement is leaving New York City tenants at the mercy of developers’ illegal and unpunished abuse of tax breaks, according to a report.
The developers and landlords of several glassy new luxury condo towers have been swindling residents out of thousands of dollars each month by illegally increasing rents beyond regulated caps, found a new investigation by ProPublica and WNYC.
In luxury apartment buildings like Williamsburg’s The Driggs, pictured above, generous 421-a abatements give property owners massive tax cuts in exchange for designating a certain number of those apartments rent-stabilized. The Driggs received a 93 percent property tax reduction this year through the program, from $678,000 to $47,000, according to ProPublica.
The city hands out more than $1 billion in tax breaks every year through 421-a, yet ProPublica found many developers are not carrying through with their part of the deal. The government does little to ensure landlords are not overcharging tenants, the report said.