Affordable housing landlords among city’s most active evictors

Widely cited eviction data does not account for large number of “evicted” tenants who remain in home

By Adam Pincus

The emotionally wrenching elements of an eviction are so powerful and so self-evident — it’s the agony of losing one’s home — that the narrative of evictions in New York City has drifted away from the reality of evictions.

The simple narrative is that greedy landlords evict tenants to replace them with higher-paying tenants, therefore all evictions are unjust. The narrative is as simple and self-evident as the pain of being evicted. We all see that rents have surged in Bedford-Stuyvesant, Fort Greene, neighborhoods in the Bronx and elsewhere in the city, all are seeing gentrification and subsequent increases. There are demonstrably landlords who harass tenants with the intent of evicting them.

And the accounting of evictions, a crucial element of the narrative, is for the first time available easily on the city’s Open Data portal and related websites. We can see in hard statistics that residents of more than 18,000 homes were evicted last year.

But one problem with that narrative is that many — for some landlords most or all — evictions are justified in the sense that the tenant has not or will not or cannot pay the rent or has broken the law or is a nuisance to other tenants. And many of those landlords like Omni New York, L+M Development Partners and Atlantic Development Group and of course the New York City Housing Authority, have a mission to provide affordable housing and in nearly all cases don’t benefit from an eviction. Yet they carry them out, because they have to make money to support themselves financially. So it stands to reason that other other landlords carry out evictions for legitimate reasons as well.

And the other problem with the narrative is a data problem. It turns out that many of those evictions don’t actually result in the tenant losing the home, instead they result in a payment plan to remain. So the accounting of evictions provided by the city last year at approximately 18,000, is off by 10 or 20 or 30 percent. Some unknown amount because those who remain in their homes are not tracked as such, leading to an eviction overcount.

MOST ACTIVE EVICTORS NYC

Real estate owners at the forefront of providing affordable housing to city residents have some of the highest numbers of evictions within their portfolios, an analysis by PincusCo Media of city and private data found.

NYCHA, Omni, L+M Development, and Atlantic Development, all have a mission to provide affordable housing and in nearly all cases see no benefit from an eviction, yet are among the top 10 most active landlords for evictions.

But not only do they carry out evictions, some have eviction rates — the number of evictions per unit of housing owned — higher than most of the large landlords of rent-regulated properties who are often criticized in the media for their high numbers of evictions and aggressive management styles.

The accepted narrative and the numbers used within the public conversation are the essential tools needed to debate the public policy issues surrounding evictions. If the general discussion excludes the evictions carried out by affordable housing firms that have no benefit in an eviction and only look at the “bad” landlords frequently criticized by advocates and the press, the understanding of the causes of evictions are distorted and all evictions are viewed as the work of bad actors.

In addition, using eviction data that is incomplete and imprecise without acknowledging its faults also distorts the debate and the policy remedies that should be enacted.

While the legal system allows for evictions to happen, all evictions are violent and unjust. — Susanna Blankley, Right to Counsel NYC

There should be no debate that there is an eviction crisis in New York City. Whether all 18,000 families were evicted or just half that, it’s a disruption or a disaster for those families. The loss of a job, a bogus Housing Court claim, the loss of a home because a parent or other member of the family was committing a crime or any other cause of an eviction is a crisis.

One of the central problems of the debate is lack of common ground. Some housing advocates do not accept that there are any legitimate evictions.

In an email, Susanna Blankley, a spokesperson for Right to Counsel NYC Coalition, a leading advocate for stronger anti-eviction measures, wrote that, “While the legal system allows for evictions to happen, all evictions are violent and unjust.”

That conflicts with the landlord’s need to obtain money from tenants to support the business, the upkeep and in some instances, make a profit.

“Most landlords are in the rent collection business, not the eviction business,” Kenneth Fisher, a partner with the law firm Cozen O’Connor and a former city council member, said in an email. He represents the large landlord the Pinnacle Group.

“No one wants somebody to lose their home, and the city should do more to help people keep them, but it’s not fair to the other tenants who do pay their rent, and could get better service if everybody else did too, to say that no eviction is justified.”

Pinnacle is not among the top 10 firms analyzed, but with about 6,000 units is one of the largest rent-regulated landlords in the city and a frequent target of housing advocates.

The New York City Housing Authority, the city’s largest landlord by a factor of of approximately 10, had the most evictions, according to the analysis of city marshal statistics on Open Data and an analysis of that data published by the website Worst Evictors NYC.

NYCHA had 809 evictions, within a portfolio of about 170,000 units it owns and manages, resulting in a relatively low eviction rate of .48 percent.

NYCHA declined to provide eviction figures for this report, but an article in the New York Post last year gave a much lower number for 2017, 322, and the first five months of 2018, pegged at 164. The discrepancy may be caused by the distinction between an “executed eviction,” as reported by the marshals, and a tenant actually being removed or forced out of the premises. The issue of a possible eviction overcount is discussed below.

The next highest evictor was the LeFrak Organization, one of the largest landlords of all assets in the city, which owns LeFrak City, a massive post-war development in Queens with approximately 4,600 units. The company, led by Richard Lefrak, had 189 evictions within a portfolio of nearly 13,000 units overall, for an eviction rate of 1.5 percent.

Next was Ved Parkash, a Jamaica, Queens, landlord who owns a mid-sized rent-regulated portfolio with buildings throughout the city but a heavy concentration in the Bronx. The firm is often targeted as overly aggressive, and its eviction figures appear to bear that out. The firm had 181 evictions in 2018 within a portfolio of about 4,482 units, yielding an eviction rate of 4 percent, far higher than the 1.7 percent average of the top 20 landlords (excluding NYCHA).

Parkash, through a spokesperson, provided a written statement saying in part that, “the reporting omits the most significant point — that an eviction proceeding takes place only when a tenant has either failed to pay rent or violated their lease and/or housing regulations. That does not equate to a landlord being overly aggressive, but rather to a landlord having tenants who fail to pay their rent or breach their lease.”

It’s not fair to the other tenants who do pay their rent, and could get better service if everybody else did too, to say that no eviction is justified. — Kenneth Fisher, spokesperson for Pinnacle Group

The next two landlords have built or rehabilitated thousands of units each over the years with city financing, and are championed as important pieces of the affordable housing marketplace.

Atlantic Development Group, a firm founded by Peter Fine, had 166 evictions last year within a portfolio of about 5,800 units, resulting in an eviction rate of 2.9 percent. In fifth place was Omni New York, a firm created with the express purpose of providing affordable housing, and an example of a firm that does not benefit from evictions because its rents are tightly circumscribed by government agreements.

Nevertheless, the firm has tenants who are unable to pay rent or who have broken the law and are thus subject, following the court process, to eviction, the firm said. Omni had 137 evictions in a portfolio of about 6,400 units, resulting in an eviction rate of 2.1 percent. However, according to Omni’s records, the true number of families evicted was not 137 families, but in fact 119 because 18 families were restored to possession.

“For Omni, eviction is a last resort. We work closely with many agencies to assist tenants with rent arrears, and often allow tenants to pay their arrears through a payment plan. Unfortunately, in certain situations we are forced to evict tenants for non-payment of their portion of rent or for significant adverse behavior,” said Ronn Torossian, a spokesperson for the firm.

The other top evictors are A&E Real Estate Management, led by Douglas Eisenberg, with 124 evictions and a rate of 1.2 percent; L+M Development Partners, led by Ron Moelis, with 122 and a rate of 1.2 percent; and Stellar Management, founded by Laurence Gluck, with 101 and a rate of 1.3 percent. Next was Chestnut Holdings with 99 and a rate of 1.6 percent and in 10th place was Sam Applegrad, with 96 and a rate of 6.7 percent.

BATTLING EVICTIONS

As the number of evictions ballooned in 2013, pegged that year at 28,849, elected officials and advocates began seeking strategies to reduce them. One idea was to provide legal aide to lower-income tenants under threat of eviction, legislation dubbed Universal Access. This was championed by many organizations including Right to Counsel NYC Coalition, which pushed for such a law. That landmark bill was passed in 2017 and now tenants in 20 selected Zip codes have a right to counsel, and the program is set to expand to the entire city by 2022.

Before the bill’s passage, in 2013 just 1 percent of tenants were represented by counsel in Housing Court, according to a report from the city’s Office of Civil Justice. As of mid-2018 more than a third of tenants in Housing Court had representation. The law is widely seen by the city, legislators and advocates as a success that has evened out the playing field between landlords and tenants.

Overall, the number of evictions citywide is down 37 percent from 2013 to 2018, to just over 18,000. But the decline last year, from 2017 to 2018, was modest, from about 18,700 unique evictions to about 18,000 evictions, according to a PincusCo analysis of the marshal’s data.

Overall, the city has poured funding into tenant legal services. The city’s Human Resources Administration budgeted $104 million in fiscal year 2019 for those legal services, up from $77 million during the prior year.

Some landlords were skeptical that the counsel law was the central factor for the continued decline in evictions, even as some studies have shown that it has improved the flow of cases because both sides have professional counsel.

Steven Finkelstein, a landlord with about 4,300 rent-regulated units in the city, believed the decline should be credited to the financial assistance which has surged to keep tenants in place, from nonprofits such as Catholic Charities, as well as programs such as the HRA’s One Shot Deal which provides emergency funds, including to prevent homelessness.

His company, Finkelstein, Timberger, East Real Estate, was not among the top 10 firms with evictions. It had 77 evictions within a portfolio of about 4,300 units, yielding a rate of about 1.8 percent which he described as “100 percent” rent regulated.

“I think the counsel is [only] a little part of it,” Finkelstein said.

The number of evictions remains stubbornly high, however, and legislators in Albany have introduced a bill that would generally severely limit rent increases in market-rate housing and then prohibit evictions without “good cause” such as not paying rent, being a nuisance or otherwise violating a lease.

Another flashpoint between landlords and tenants and advocates is how eviction filings are used in the larger management of the portfolio.

From the point of view of the tenant advocate, an eviction is simply the result of a barrage of unwarranted litigation.

“To the tenants who experience eviction, a really important piece of the story is how often they are threatened, not just the number of times a landlord wins,” Right to Counsel NYC’s Blankley said in an email.

“Because the threat of an eviction is demoralizing, terrorizing and produces an incredible amount of anxiety. It also has everything to do with folks understanding that evictions are part of a business model instead of just being isolated to the ones that are executed, and that they should know their rights and fight back,” Blankley said.

The landlords who responded to PincusCo said they were not filing evictions as part of a harassment strategy, but simply trying to force tenants to pay the back rent.

A spokesperson for Ved Parkash said in a statement, “Legal proceedings are the only recourse available for owners to deal with tenants who fail to pay their rent or breach the terms of their lease. Evictions just don’t happen; there is a legal process in which a judge has to sign a judgment or order and the court issues a warrant of eviction. Parkash’s number of eviction proceedings, all justified, is a small percentage of its entire portfolio.”

The landlords said the eviction process was costly. Even following an eviction, Finkelstein said his financial interest was to keep the tenant in place and arrange for them to pay the arrears. “Remember, there is no advantage to losing $10,000 or $15,000,” he said, noting his estimated average loss for each evicted tenant who does not remain.

Evictions are part of a business model [they are not] isolated to the ones that are executed — Susanna Blankley, Right to Counsel NYC

Several of the 24 firms contacted for this article provided a breakdown of the causes of the evictions. The most complete breakdown was provided by Omni New York, which reported that of the evictions in its portfolio in 2018, 85 percent were for non-payment and 15 percent were for holdovers, including criminal activity, being a nuisance or a squatter, etc. The figures could not be independently verified.

“We have never evicted a tenant with the goal of increasing rent. Whenever we engage in an eviction we lose as a company, as we lose months of rent, incur significant legal fees and then replace said tenant [with] someone paying the same rent,” Torossian said.

Kenneth Fisher, speaking on behalf of the Pinnacle Group, said the bulk of the firm’s evictions were for nonpayment.

“A couple of the evictions were because the tenants were deceased and that’s how you get legal possession if no one has authority to surrender it. One was requested by the [district attorney] because of alleged drug dealing. Almost all of the rest were for nonpayment, and most were tenants who had a history of non-payment — as many as a dozen prior cases for the same thing — and only after months in the courts. And virtually all of the units are still stabilized,” Fisher said.

EVICTION OVERCOUNT

An eviction is a long and rigidly choreographed process, designed that way with the intent to protect both the landlord and the tenant from unscrupulous actors trying to game the system.

Despite that, it’s still an inexact procedure that is constantly interrupted by new court filings, side deals to leave or stay or other actions. The result is that the data used to analyze the process is not precise, either.

We have never evicted a tenant with the goal of increasing rent. Whenever we engage in an eviction we lose as a company. — Ronn Torossian, spokesperson for Omni New York

To begin with, 98 percent of “executed evictions” as reported by the city marshals on Open Data and the City Council’s website are not actually evictions in the common understanding. Instead, about 2 percent are bona fide evictions, in which the residents and their personal property are ejected from the unit.

The other 98 percent are “possessions,” according to an analysis of data from the New York State Unified Court System, in which the city marshal changes the lock but the tenant’s possessions remain inside the apartment. That may sound like a distinction without a difference, in that the landlord in either case now has control of the unit, but in fact it’s consequential.

It’s consequential because with the belongings still in the apartment, there is an opportunity for the tenant to return, if the tenant can pay the arrears. 

And according to several landlords, many tenants do pay the arrears and stay. Residents in as many as 50 percent of eviction cases stay following the executed eviction, landlords said.

A handful of the 24 landlords PincusCo contacted for this article provided analyses of the evictions reported on their properties. While the data submitted to PincusCo was self-reported and generally anonymized, the data indicated that somewhere between 10 percent and 50 percent of their “executed evictions” did not result in a tenant being displaced. Instead, the tenant returned into possession of the unit.

Torossian, the Omni spokesperson, said 18 tenants within the total of 137 evictions were restored to their units, resulting in a restoration rate of 13 percent for 2018.

The Pinnacle Group, one of the city’s frequently criticized landlords, said the rate of restoration was higher.

“About a third of the tenants are still in their apartments after paying arrears or entering a payment plan,” Fisher said.

Others said their rate even higher. Finkelstein put his restoration figure closer to 50 percent.

“My rate per unit does not take into account that more than half are put back in the apartment,” through funds supplied by nonprofits or other sources, he said.

Clarification: A clarification for Omni New York’s figures stating that 18 of their 137 evictions were restored to possession.