47 EAST THIRD STREET TENANTS FIGHT MASS EVICTIONS--The SHADOW: Issue #53

AFTER GENTRIFICATION: ARISTOCRATIZATION?
NY State Supreme Court Upholds Total Eviction of Lower East Side Tenement for Landlord's "Personal Use" As Five-Story Mansion
By A. Kronstadt

[July 15, 2008] Unable as yet to bring about the abolition of New York City's rent regulations by normal political means, the real estate interests that dominate all public life here continue to try legal end runs enabling them to evade the original intent of these laws that protect tenants from unreasonable rent hikes and evictions.

The case of the tenants of 47 East Third Street on New York's Lower East Side is provoking particular paranoia among New York's 2.5 million rent-regulated tenants because it demonstrates how delicate the layer of legal protections for tenants is turning out to be in the hands of judges who are little more than cronies of the New York City-hating upstate Republican politicians who have been trying to get rid of the rent laws for decades.

The "Owner Occupancy" section of the New York State Rent Stabilization Law contains wording allowing a landlord, upon taking ownership of a rent-regulated building, to take "one or more dwelling units" for "personal use." This has been interpreted to mean that a landlord may take one or several units and combine them into a single unit to serve as a primary residence. During periods of inflated real estate values, when buildings have been turning over repeatedly as they have in recent years, this exception to tenant eviction protection has severely reduced the stock of affordable housing in the city.

The owners of 47 East Third Street, Alistair and Catherine Economakis, are testing the limits of the "personal use" provision in an attempt to evict all of the tenants from that 15-apartment tenement, allegedly to convert the building into a six-story mansion for themselves and their two children.

As reported in detail in SHADOW #52 [<http://shadowpress.org/third_st_tenants.52.htm>], in 2003, residents of 47 East Third Street began being served with Notices of Non-renewal in an effort to remove them from their apartments. The Economakises evicted two tenants living there on the grounds of illegal subletting. The apartments were turned over to friends of the Economakises, who agreed to leave when the Economakises wanted to take over their units at a later date. Two more apartments were lost through attrition, in one case after one tenant's death from AIDS. Two other tenants with children who hired their own lawyers moved out after settling with the Economakises. This leaves nine tenants fighting for their residences at 47 East Third Street.

Although the Economakises are clearly abusing a law that was intended to give landlords a reasonable, but not necessarily absolute opportunity for personal use of the buildings that they own, they have found a sympathetic ear in the State Supreme Court, which, on June 3, 2008, unanimously upheld a previous Appellate Court ruling that interpreted the meaning of "one or more" units to mean any number of units that the owner intends to occupy "in good faith." [See Pultz vs.Economakis at <http://www.nycourts.gov/reporter/3dseries/2008/2008_04900.htm>–Ed.]
In addition, the state's highest court ruled that the Economakises do not need permission from the state's Division of Housing and Community Renewal in order to remove the building entirely from the rent regulation system.

With the Third Street tenants already drowning in legal bills, the case is now back in Housing Court, where the burden of proof is upon the Economakises to show that they intend, "in good faith", to live in the entire building that they are claiming for their personal use.

The Economakises have created their own Web site [<http://economakis.com>], where they present themselves as ordinary people looking for a home for their growing family, but in fact, they are the proprietors of a large real estate corporation, Granite International Management, that owns more than fifty apartment buildings throughout the Lower East Side, Chelsea, Harlem, Brooklyn, and Queens. The company acquired 47 East Third Street in a foreclosure proceeding, then turned the building over to Alistair Economakis and his wife, apparently for free. One of the SHADOW's legal advisors notes that in order to claim primary residence of an apartment occupied by a tenant, the building's title must be in the name of a person as opposed to a corporation. "The mortgage was in a limited liability corporation," building resident Honey West told the SHADOW. She added: "The corporation transferred the deed to one person; now the individual owner can claim owner occupancy."

Lawyers for the Third Street tenants plan to challenge the "good faith" argument coming from the Economakises, who are major real estate speculators specializing in purchasing, emptying and then selling apartment buildings. The law only requires that a landlord occupy the apartment in question for three years in order to make the "personal use" claim legal. After that time, there is nothing to stop the Economakises from renting out or even flipping all or part of 47 East Third Street. The question then is, what are the real, long-term intentions of Alistair and Catherine Economakis in their attempt to evict the remaining tenants?

"Good faith" is apparently a nebulous concept. In earlier proceedings, the Housing Court ruled that it is not admissible to bring up the Economakises' ownership of their other buildings, and that documents related to their real estate holdings are not subject to discovery motions, meaning that the tenants' lawyers cannot demand to see them. The "good faith" test is thus heavily biased in favor of the owners.

As this case waits to be heard, the New York State Assembly has passed a bill introduced by Rep. Vito Lopez of Brooklyn that would limit personal use evictions to one apartment unit per building. The bill will, however require action by the NYC-hating Republican-controlled New York State Senate in order to become law, so the bill is now stalled in the Senate. Some tenant activists place hope in the possibility that Democratic victories in the coming November elections will eliminate the narrow majority that the Republicans currently hold in the State Senate, thereby making it possible to pass legislation closing the deadly loophole allowing personal use evictions.

Meanwhile, the Urstadt Law, passed by Albany Republicans as an amendment to rent control and rent stabilization laws, prohibits New York City from independently passing stricter rent regulations than what Albany dictates, essentially allowing the State Legislature to make life and death decisions about New York City housing. Other localities in the state that have rent regulations, including upstate and Long Island counties, allow landlords to take only one apartment for personal use, and exempt people who have lived in their apartments for more than 20 years from personal use evictions. However, the Legislature has specifically eliminated these protections for New York City tenants.

"Real Estate is the new heroin. It's about making sure that the community gets destroyed," Honey West told the SHADOW, describing the intentions not only of real estate moguls like the Economakises, but of the politicians who back them. She quoted one real estate developer as stating that "the ideal tenant stays two to three years."

West also told the SHADOW that "The positive thing is the support that we have been getting from the community. People are realizing that if it's happening to us it can happen to them. The support shows that the community is not gone yet."

[Editor's Note: Honey West is a pseudonym assumed by one or more 47 East Third Street tenants who have provided information to the SHADOW, eager to get out their story but trying to avoid being singled out by their landlords. For up-to-the-minute news about 47 East Third Street, see the tenants' web site: <http://47e3.org/> As the tenants deal with mounting legal bills, your financial support or contribution of any kind is much needed.]

[For more on the plight of the residents of 47 East Third Street, as reported by the SHADOW, see <http://shadowpress.org/third_st_tenants.52.htm>. Also see "Lower East Siders Say "NO" To Mass Evictions" at: <http://shadowpress.org/mass_evictions.53.htm>]

[Artwork on this page by Eric Drooker]

[NOVEMBER 11, 2008 UPDATE: On November 10, 2008, as they were about to go to trial against the Economakises, the eight remaining residents of 47 East Third Street accepted a buy-out offer from their landlord and have agreed to abandon their legal battle and vacate their apartments. See <http://shadowpress,org/third_st_tenants.54.htm> for the entire story]