A quick-working New York City property group which scooped up dozens of apartment buildings in a few short years has settled with the state for nearly $2 million after an effort to defraud rent-stabilized units and push out tenants, some with more than three decades in their homes, the attorney general announced Friday.
Details in the $1.75 million settlement describe efforts by the group to deregulate affordable housing and make a significant profit selling the units near market rate. In order to flip the units, Attorney General Letitia James said the company worked to strategically force out tenants through buyouts, harassment and worsening living conditions.
Ink Property Group bought 32 building between 2014 and 2019, primarily in low-income communities of color, an investigation by James' office found. A number of tenants who tried to fight through these illegal tactics eventually vacated their homes because "they were no longer habitable," James said.
Employees working for Ink were offered hefty bonuses for successfully convincing rent-stabilized tenants to move out -- each buyout netted an employee $5,000.
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“As New Yorkers faced soaring rents and struggled to find affordable housing, Ink tried to get rich quick by preying on vulnerable tenants and their families,” James said.
The shady tactics didn't stop after the tenants were out, the attorney general said. Once Ink got their hands on the empty units, the company completed cosmetic updates and hiked the rents to the "highest rate the market out allow."
"Ink ignored the Individual Apartment Improvement (IAI) system set forth in the Rent Stabilization laws, instead treating every new vacancy as an unregulated unit, regardless of whether the renovations made met the criteria to achieve deregulation," James' office said Friday.
One tenant who lived in her rent-stabilized unit for more than 30 years, James said, repeatedly rebuffed the company's buyouts offers. As half of her neighbors left -- willingly or otherwise -- many of their units were allegedly left in disrepair and neglect to the point of impacting the woman's health and safety.
The property group had also been accused of delivery false income reports to banks in order to secure more favorable loans. A lengthy investigation by the attorney general's office uncovered false documents reporting inflated rents and false leases, some that referenced the names of family and friends.
In addition to the $1.75 million owed by Ink and earmarked for Attorney General James' Affordable Housing Fund, the company must also pay $400,000 in restitution to tenants pressured to vacate and $2,500 to each tenant forced to live in hazardous conditions. James said more than two dozen apartments will be reregulated.
“Lying and cutting corners to evade rent stabilization is one of the oldest tricks of the trade, but Ink’s years of exploiting our hardworking neighbors without consequences end here. These tenants organized and fought back, and because of their efforts, they will be compensated for the suffering they’ve survived," the attorney general said.
An attorney for Ink Property Group said the "early mistakes" of the company were in the past.
"We are proud of our record since that time as responsible custodians of both affordable and market-rate housing in diverse neighborhoods in New York City. Looking forward, we will be working hand-in-hand with a respected third-party management company to ensure that we continue our rise into the ranks of the best property owners in New York City," a statement read.