Developers Bend Rules and Screw Buyers
We’re supposed to be focusing on other things this week, but wanted to make sure everyone saw Sunday’s article about the C of O quagmire that the buyers of new condos on Spencer Street between Willoughby and Dekalb in Bed Stuy are now in. While this is a disaster for the purchasers who are the…
We’re supposed to be focusing on other things this week, but wanted to make sure everyone saw Sunday’s article about the C of O quagmire that the buyers of new condos on Spencer Street between Willoughby and Dekalb in Bed Stuy are now in. While this is a disaster for the purchasers who are the unwitting victims, we’re glad to see that developers are getting called to task for pulling a bait-and-switch tactic that we drew attention to back in July.
In our post on the South 3rd Street development in Williamsburg, we described how developers will apply to build extra square footage on the premise that it will be used to serve a community purpose (like housing for a religious or educational institution) and then when the project is built the community group will mysteriously not need the space anymore and the developer will sell it on the open market. This has been particularly prevalent in Williamsburg and its environs but obviously it has been happening elsewhere as well.
In this particular case, the villains are a group of developers including Mendel Brach, Moshe Oknin and Moshe Roth and their accomplice is architect Henry Radusky (who has won everyone’s respect and admiration with his pillaging of the South Slope). So now the buyers, who were able to close and get mortgages when the buildings received temporary C of O’s, are stuck in the strange position of being unable to sell their units because the DOB won’t grant permanent C of O’s. Personally, we think the developers should be forced to reimburse everyone for the purchase price plus other incurred expenses and hardship. Then they should be tried criminally. What scum bags.
Do people know of other specific incidents of developers pulling this crap? Let’s out them if we can. Maybe the papers will pick it up.
Caught in the Twilight Zone [NY Times]
South 3rd Street Development [Brownstoner]
More Trouble at Radusky Site [Brownstoner]
Work Officially Stopped on 15th Street [Brownstoner]
Developers are out to make a profit – nothing inherently bad or good about that.
In an Ayn Rand-ian, no holds barred scenario, if they can earn a profit by building substandard housing that shortchanges both buyers and the surrounding community, and not be penalized, what’s to keep them from doing it? For the buyer, often it’s not until a building is lived in that problems become obvious.
It’s the community’s job, not each individual developer’s, to help ensure that these needed new housing units will add to the neighborhood instead of becoming impossible-to-sell liabilities years down the road when the buying frenzy cools. Developers don’t live in or next to their own buildings, and I don’t see what’s wrong with making the rules apply to everyone equally.
This comments thread has so much potential. Not only does it feature the same ubercapitalist no holds barred players from great comment threads past(Hello Iceberg and Josh!) but it invites all the following classic tangents that you know will get played out til this thread hits…oh 85 comments or so.
Rent Stabilization Laws
Hasidic Jews
Yuppies
Gentrification
Housing Bubble
Greedy Developers
I don’t know how Blimpie’s is going to get thrown in there but someone give their best shot!
This wasn’t an isolated incident. These developers have done the same thing in the South Slope. There is a pattern here. Now they’ve gotten caught. Looks like major legal liability to me.
Anon 12:17 – the DOB said it approved *one* of the buildings in error. According to the article, the DOB did not approve the other 4.
JoshK – the bonus was not for a community facility, but rather for “faculty and student” housing. The developers provided a vague letter from a Williamsburg Girl’s school, which allowed them to build a larger building. They gamed the system and got caught.
So the developers boosted their profit by making claims they likely knew to be false, built poor-quality housing, and sold it to unsuspecting buyers who are now stuck in the middle with no CO and no marketable properties. You’re right, Iceberg, we need a more hands-off approach.
“The DOB is the one to blame, not the developer.”
I strongly disagree with this attitude. The developer deliberately deceived the DOB by saying the building was going to be used for School housing, while at the same time applying to sell condominiums. Just because the DOB got fooled shouldn’t mean that the developer should be free of any liability for violating the zoning code.
This is a serious problem and should be treated as such. It’s one thing to maximize what you can build within the zoning code, but this was a case of a developer outright disregarding the law. I hope the City cracks down hard on them.
I seem to recall that this kind of thing happened before — maybe in the 80s? — and that the developer in that case was required to take down floors of the building.
The developers did not do anything wrong. If you read the article, it says that the DOB approved everything but is now backtracking and claiming they made a mistake. The DOB is the one to blame, not the developer. It’s normal human behavior when conducting business to try to maximize profits. If the city screws up and allows legal loopholes, that’s its fault.
We looked at the Spencer too. The apartments are great. Nice finishes and the elevator opens right into the living room. Plus the price was right. But the buildings are grossly out of scale with the block. They loom over the narrow street and small frame houses on the block. Very claustrophobic. That sent up a red flag for us.
Anyone we know who has bought a condo has ended up suing the developers for shoddy construction and dangerous conditions (e.g the dangerous carbon monoxide levels in the Ansonia, the vents that go nowhere in the Graham Home, no exterior waterproofing in a building on 4th & 4th). I guess it’s buyer beware, but the city should apply much more stringent regulations and controls on the entire condo development process. Tax abatements are never quite what they promise either.
Even with these problems, people were able to re-sell at a tidy profit. By contrast, the situation at the Spencer is a travesty. Next thing you know the developers will declare bankruptcy to protect their assets and leave the buyers holding the bag. Spitzer needs to step up to the plate on this one.
I hope the burden falls not on the unwary buyers of this project but upon the developers who tricked them.
266 22nd Street and 408 15th Street — both Radusky developments — used the faculty housing rule, I beleive. I understand that the 15th Street development has been blocked since the building permit was issued in error, given that the faculty exemption is no longer in effect.