New York Attorney General Letitia James and New York State Homes and Community Renewal (HCR) Commissioner RuthAnne Visnauskas have announced the return of 263 apartments to rent stabilization and a reduction in rent for an additional 43 apartments across New York City. The affected units, located in Central Brooklyn, Upper Manhattan, and Queens, were previously deregulated or subjected to illegal rent increases by former owners affiliated with Sentinel Real Estate Corporation.
Attorney General James secured $4 million from these owners in August 2022 to preserve affordable housing. Following this settlement, a compliance program was developed by the Office of the Attorney General (OAG) and HCR to work with new property owners to reduce rents in over 300 apartments, including the reregulation of 263 units.
“Rent-regulated apartments make it possible for countless New York families to find a safe and affordable place to live,” said Attorney General James. “The previous owners of these buildings broke the law... Because we were able to return these units... more than 300 families will be able to access the affordable housing they deserve.”
Commissioner Visnauskas added, “Thanks to the strong partnership between Attorney General James and our Tenant Protection Unit, we are recovering illegal profits... This case demonstrates very clearly that we will do everything in our power...”
Before June 2019, landlords could increase regulated rents through Individual Apartment Improvements (IAIs). Some property owners exploited this system by inflating renovation costs to deregulate units and convert them into market-rate rentals.
Sentinel affiliates used two now-defunct property management firms – Newcastle Realty Services, LLC (Newcastle) and Highcastle Management, LLC (Highcastle) – which falsely inflated IAI costs. For instance, Newcastle and Highcastle reported renovation expenses that allowed them to deregulate units despite nearly identical renovations costing different amounts.
In August 2022, OAG secured $4 million for Attorney General James’ Affordable Housing Fund with HPD. An audit followed this settlement on remaining properties owned by settling landlords while another audit targeted properties no longer owned but affected by prior deregulation schemes.
The compliance program covers 27 buildings:
Brooklyn:
- Various addresses including Washington Avenue
Manhattan:
- Various addresses including Riverside Drive
Queens:
- Various addresses including Metropolitan Avenue
State Senator Cordell Cleare emphasized the ongoing challenge of escalating rents forcing residents from their homes. State Senator Robert Jackson called it a "pivotal victory" for housing justice while other legislators like Kristen Gonzalez expressed pride in securing more affordable housing units.
Assemblymember Al Taylor highlighted how critical affordable housing is for community stability. Manny De Los Santos praised the commitment shown by OAG and HCR while Assemblymember Inez Dickens commended their meticulous work.
Council Member Shaun Abreu noted that restoring rent stabilization reflects dedication towards tenant rights while Council Member Shahana Hanif criticized unscrupulous landlords manipulating laws.
Council Member Lynn Schulman remarked on the significance of returning rent-stabilized units within her district as a win for local residents.
This matter was managed by Senior Enforcement Counsel Rachel Hannaford with assistance from Legal Assistant Cecily Mills under Housing Protection Unit Chief Brent Meltzer. The Division for Social Justice led by Chief Deputy Attorney General Meghan Faux oversees this unit under First Deputy Attorney General Jennifer Levy.