Following our research on Gentrification, we found it to be a historic-socioeconomic force that displaced lower-income residents as the line of gentrification pushed through an area—which, eventually, through rent prices rising exponentially, even the pioneer gentrifiers could no longer afford to stay. With this in mind, we’ve crafted a proposal comprised of five points that seeks to stop or at least abate the displacement caused by gentrification moving into the Crown Heights area. Working off of the types of plans and proposals being offered by tenant organizations, we’ve crafted our plan with the aims of these organizations in mind, namely: keeping people in their homes.

Although it sounds too simple of a strategy to counteract an issue that is currently affecting thousands of families, the principle behind it, if executed correctly, could be just as significant as the effect of gentrification on the Crown Heights community. Organization. As previously defined by G. Shepherd, this concept could be seen as a hierarchy in which, two or more people carry out processes consciously in an organized and planned manner. This definition is relevant, because people in Brooklyn have began to officially organize themselves to speak up against this “force of displacement”. We, as humans, have learned to acknowledge the importance of unanimously organized efforts. Consequently, people directly affected by this issue have founded groups like “FUREE” (Families United for Racial & Economic Equality), “Right to the City”, “Fifth Avenue Committee”, “Good Jobs New York”, and “Pratt Area Community Council”. All with the exception of “Good Jobs New York” have been founded by Brooklyn residents and over the years they’ve had numerous accomplishments even though it hasn’t been enough for every single Brooklyn resident to keep his or her home. However, all of these organizations have been able to provide workshops educating people about their rights, politics, the costs and benefits of subsidy deals, informing them about other agencies that can potentially help them out. The ”Pratt Area Community Council” specifically constantly modifies its mission to adapt to the changing needs of society. Over the years, they have fought to keep people in their homes—for instance, in the 80’s while the house abandonment epidemic was happening, they were working to reverse its effects. In 1988, they acquired a building in Quincy Street and renovated it for low-income families. Today, they continue to offer financial, homeowner, and business workshops, provide loans and grants to those in need, prevent foreclosures, amongst other accomplishments. This is just an example of what could be done if these efforts remain persistent and more people join these organizations. They would be able to speak up against political injustices as well as advocate for other alternatives, either through lobbying and/or protesting, topics that will be discussed in the remaining pages of this report.

Point two of the plan pushes for a ten-year rent freeze on all apartments in Crown Heights, as well as for these apartments to be treated as rent-controlled buildings after the freeze is over. One of the major issues facing current tenants in the area is that they aren’t secure in their housing situation; the landlords have been trying to remove Crown Heights residents in order to make room for the wealthier individuals moving in. In a news article released August last year, one tenant describes her experience being offered $65,000 by her landlord to move out of her rent-stabilized apartment, the downside being that she would not have been able to afford living in a new apartment in Crown Heights. She refused the money, but she was also one of the lucky individuals in a rent-controlled building; residents of market-rate housing have been progressively pushed out. As the rent increases at a dramatic rate (between 2013 and 2014, the average rent of Crown Heights increased by 17.5%), they are unable to afford living in the area.

A ten-year rent freeze in the neighborhood would ensure that current tenants could continue living in Crown Heights, despite the rapidly gentrifying surroundings. With pressures of stable housing removed, gentrification would be slowed and the area’s residents would have time to acclimate to the transforming neighborhood. Even more beneficial is for the apartments to be treated as rent-regulated buildings after the fact. This is because tenants of market-rate housing “have less legal protections regarding the right to a lease renewal and evictions” and the landlords of these buildings are allowed to raise the rent whenever they feel. With landlords being enticed to raise the rent because the incoming gentrifying individuals can afford it, this has been a huge issue in Crown Heights as of late.

Converting apartments into rent-stabilized housing could be employed all across New York City, as it provides control to the whims of landlords and protects residents from unprovoked rent hikes. According to the Metropolitan Council on Housing, rent stabilization “protects twice as many tenants as all other affordable-housing programs in New York combined.” This could ensure that tenants city-wide would be in a fair living situation. In neighborhoods threatened with an influx of richer individuals, a temporary rent freeze would slow the rate of gentrification and allow for current residents to adjust.

Point three of our plan involves the creation and maintenance of new public housing properties in Crown Heights converted from vacant land. Vacant land is a bane to the existence of New York City. As outlined in projects like 596 Acres or Uneven Growth, vacant land comprises a substantial percentage of the developable land in New York City—land that could be used to house people is instead sitting there, empty, for purposes of investment, Airbnb, and real estate speculation. In a report published by the Picture the Homeless foundation, in a count that only  included one third of all of New York City, there were enough vacant lots and apartments to house nearly 200,000 people—and this was a private count done with publicly-available material, with a governmental count even more vacancies could be found (Picture the Homeless). And according to Living Lots NYC, there are at least 20 vacant lots in the Crown Heights area—even more in the area immediately surrounding:

Noticed on the map is the absence of privately-owned vacant land, which can be found on various land-for-sale websites. If all of this land could be turned into public housing, kept at affordable rates, the lower-income residents of Crown Heights would have places to turn to in the event of their displacement. If the vacant land already has housing-ready buildings on the lot, conversion could just be gutting and rebuilding the inner structure of a building; if the land is undeveloped, complexes as large as allowed could be constructed for maximum possible service. There are two main concerns with this point: how this will affect Crown Heights residents, and how to avoid the kind of situation Pruitt-Igoe set in stone for the American populous’ view on public housing. The first concern could be addressed by having the public housing be with preference to those displaced from their homes in Crown Heights, acting as a safety net for people being driven out of the gentrifying area because of disinvestment designed to make them move from their homes or because of rising rent prices. The second concern would have to make the maintenance of these public housing facilities a top priority once people are moved into them—but as Picture the Homeless points out, housing is a job-making opportunity, and in this case it would include not only contractors and builders but maintenance staff. Bringing this building plan to the larger scope of all of New York City could potentially solve not only the crisis of gentrification and displacement, but homelessness as well.

Point four of this proposal is to provide tax incentives for landlords who will keep apartments rent stabilized. Currently there are tax incentives for building owners, depending on the year they were built/gut renovated. Specifically, 43% of apartments for rent in Brooklyn are rent stabilized apartments. (NYC Rent Guidelines) There are 2 major rent laws in New York City that determine whether or not apartments can be rent stabilized. Firstly, the J-51 law states that building built before 1974, with 6 or more units, is allowed to receive tax benefits for rehabilitation work. This period usually lasts for around 12 years, but even if the period is over, the apartment can still be regulated. But, if the building had been renovated or newly built since 1974, apartments in it can be deregulated when the tax break period expires. This fact must be stated in the tenant lease/lease renewal agreement because if it is not, the tenant has the right to renew the apartment as rent stabilized, and thus the apartment remains rent stabilized until the tenant moves out. (Fact Sheet #41) The second law concerning rent stabilization is the 421-a law. This law concerns buildings built after 1974, which do not have to be rent stabilized, but because building owners choose to get tax exemptions (property tax breaks), they must agree to rent stabilizing some portion of their building. (Understanding the NYC). These exemptions can last from 10 years all the way up to 25 years, depending on where the building is and which plan options the owner is provided with. Once again, the apartment will be destabilized when the tax benefit period expired, but it had to be stated in the lease/lease renewal agreement for it to actually happen. However, buildings built after June 30, 2008, apartments labeled as “affordable” must stay rent stabilized for 35 years (even it a tenant leaves). Once again, the tenant must be notified of when this stabilization will end, otherwise the destabilization will not be valid. (Fact Sheet #41)

The existence of these laws help to make rent stabilized homes a reality, but they could be improved upon to make even more homes affordable. For example, in the J-51 law, there are many concerns about dates about when the building was built or gut renovated. It would make everything simpler and efficient if a single date was created, so all building could be encompassed into that. Moreover, the 421-a laws have even more “loopholes”, so to speak. First and foremost, depending on if the building is located in Manhattan or in the outer boroughs determines how long tax benefits will last, which in turn determines how long apartments will be rent stabilized. The longest tax benefit time frame so far is 35 years and is located in outer boroughs only on apartments labeled as “affordable”. (Fact Sheet #41) this could easily be fixed by labeling a certain percentage of all apartments in the 5 boroughs as “affordable” and thus making rent stabilized apartments more accessible and available. Also, the smallest time frame is 10 years, which in housing standards is quite small. Time frames should be larger, such as in 25-year increments. Also, houses from earlier on should be included in the 421-a law, instead of mainly those from after 2008. This would allow more rent stabilized housing to stay on the market, after each tenant has moved on. Also, it would be helping building owners too because they would be receiving an extended tax break and/or be included in the tax break.

Overall, the two major laws determining whether or not apartments will be rent stabilized is a very important step to ensuring a larger percentage of these apartments in NYC. However, gaps or areas “left to interpretation” in the law allow many apartments to go without rent stabilization. If these laws were corrected to include buildings made in other years or increase the time frame of these tax breaks, I believe the number the number of rent stabilized apartments will go up. It is large endeavor and will face great protest from building owners and lawmakers, I’m sure, but in the long run, it is the best thing to do for a city struggling to house so many people.

Transfer tax refers to the excise levied when property is transferred from one individual to another, in which the grantor (seller) receives nothing or less than full value, in return, from the grantee (buyer). Currently, the New York State Department of Finance and Taxation levies a real estate transfer tax “on conveyances of real property or interests therein when the consideration (the benefit that each party gets or expects to get from the contractual deal) exceeds $500.” Currently, for each $500, two dollars of transfer tax is collected. For real estate sales where consideration (benefit) is equal to or more than one million dollars, one percent of the sale price is collected as tax, nicknamed the the “mansion tax”. Comparatively, one percent of a million dollar real estate sale may sound like a small sum but as explained in the  New York Times article “How Transfer Taxes work “ a “$1.5 million purchase could yield $64,250 in taxes for the city and state.”

Raising the transfer tax rate on big ticket real estate sales may deter some small real estate firms from purchasing buildings in gentrifying areas if they cannot afford to pay the additional sixty plus thousand dollars in taxes. If this proposed tax rate increase failed to deter reinvestment in the area, the measure should generate additional tax revenue which could be used to in construction of public housing and repairs of existing public housing complexes.

An even higher tax rate should be levied against those grantors/sellers who attempt to make a profit off shortly after acquiring and rehabilitating the property. The longer a new owner holds onto their property, the lower the rate of the transfer tax when they decide to sell. This measure would seek to minimize to the number of times a building in a gentrified building transfers hands so residents experience less change that comes with each new owner. This also allows for residents to better organize and protest a long-term owner than a series of short-term ones.

The introduction of a higher transfer tax and incentives for long-term property ownership would ideally foster a sense of security and stability for the native residents of Crown Heights. Residents would be happy to know that they won’t face a new set of regulations and possible harassment each time property ownership changes hands. If however, they were unhappy they were unhappy with current living conditions, they could address the issue with the the same owner over decades rather than having to bring the issue to the attention of each new owner.

In the future, Crown Heights real estate will not be sold for an excessive amount of profit, if taxes go up the higher the real estate sale.

Overall, as one can tell from these five points, our aim is to plan out strategies to establish a more stable Crown Heights. This greater stability would not only counteract the effects of gentrification but also unify the residents of the area to fight for other causes. This leads to the previously discussed idea of organization to accomplish, not only successful protesting, but also things such as the ten-year rent freeze, tax incentives for landlords, and raising of transfer tax on big ticket real estate sales, or just buyers and sellers in general. It’s time to accomplish more, but first and foremost, the necessary planning must be done, which is sort of the purpose of our report. We are aware of the fact that not every point will be as easy to carry out as the others, however, we think that they are all worth a try and/or further their implementation.

Works Cited

1. “Fact Sheet #41: Tax Abatements.” Fact Sheet #41: Tax Abatements. N.p., n.d. Web. 23 Apr. 2015.
2. “NYC Rent Guidelines Board.” NYC Rent Guidelines Board. N.p., n.d. Web. 23 Apr. 2015.
3. “Understanding the NYC “421-a” Property Tax Exemption Program.” Pratt Center for Community Development (n.d.): n. pag. Web. 23 Apr. 2015.
4. Cleis Design. “Living Lots NYC.” Living Lots NYC. 596 Acres, n.d. Web. 25 Apr. 2015.
5. Picture the Homeless. 2012. “Banking on Vacancy: Homelessness and Real Estate Speculation.”
6. Smith, Neil. 1996. “Mapping the Gentrification Frontier”, “Class Struggle on Avenue B: The Lower East Side as Wild Wild West.”  The New Urban Frontier.
7. “Fact Sheet #41: Tax Abatements.” Fact Sheet #41: Tax Abatements. N.p., n.d. Web. 23 Apr. 2015.
8. “NYC Rent Guidelines Board.” NYC Rent Guidelines Board. N.p., n.d. Web. 23 Apr. 2015.
9. “Understanding the NYC “421-a” Property Tax Exemption Program.” Pratt Center for Community Development (n.d.): n. pag. Web. 23 Apr. 2015.
10. Shepherd, Geoffrey. “Public Organizations: What makes them work? How are they changing? How can the Bank support reform?.” Flagship Course on Governance and Anticorruption World Bank. , . 1 Dec. 2003. Lecture.