Time running out for loft tenant protections

Josh Wright, a photographer based in Bushwick, lives together with six other artists in a 3,400-square-foot loft, each paying between $800 and $1,000 and change.

The common area has a kitchen, some couches, and a nook storing lighting and shades for the resident photographers. Near the entry stand sawhorses that display the current projects of one of the artists who shares the space.

It sounds like a sweet situation, but Wright — and many other loft residents in New York — has a dilemma.

Going legit: This Bushwick loft now has a shot at permanent conversion to living space. Photo: Annaliese Wiederspahn

Going legit: This Bushwick loft now has a shot at permanent conversion to living space. Photo: Annaliese Wiederspahn

Loft tenants in buildings that are not up to code are running out of time to get protection from eviction and officially legalize their apartments, under a New York State law intended to help turn converted industrial buildings into legal, rent stabilized work/live spaces.

Landlords and tenants who want to be covered have until Tuesday, March 11, to file an application for coverage under the law.

The decision whether to apply for Loft Law protection isn’t always easy. There are no guarantees that an apartment will pass muster — and in the meantime, tenants risk antagonizing properties’ owners, who may not embrace the obligations that come with owning rent-regulated apartments.

Wright is a case in point. In spite of the uncertainty created by living in an illegal unit, Wright remains unsure if he will seek protection under the Loft Law. He says he has a good relationship with the building’s landlord.

The owner appears to have an asset already in high demand. The top three floors of the four-story building are occupied by residential units with 13-foot ceilings, exposed columns and warehouse windows, while construction work is underway for offices on main floor. Thanks to Bushwick’s artsy renaissance the old factory is quickly becoming prime real estate on a rapidly gentrifying street full of indie coffee shops and restaurants.

“I remember sleeping in here when the only interior walls were framing studs,” Wright said.

The commercial building Wright lives in used to house a die cutting factory on the first floor but that went out of business. The exterior displays signs for cheap storage along with a phone number, but inside there is no storage to be found.

Heather Troy, a Greenpoint loft resident and volunteer community organizer at NYC Loft Tenants Housing Clinic, warns that tenants who miss Tuesday’s application deadline “miss their opportunity to have rent stabilization and have a say on how their unit is brought up to code and miss out on tenured lease.”

She acknowledges encountering occupants in Wright’s uncomfortable position. “Tenants are concerned about upsetting a landlord,” Troy said.

While a building goes through the legalization process, a tenant’s rent rolls back to June 2010 levels, with three one-time increases as the landlord reaches certain milestones in the process. After the building is up to code and has received a certificate of occupancy, it will enter into the city’s rent stabilization system.

Wright is also uncertain about whether he wants to take on years of paperwork, negotiations and legal action, because he said he doesn’t know whom to trust to help him with a process that might take as long as five years.

Tenant attorney David E. Frazer says the predicament is not uncommon.

“Some tenants are more diligent about that process than others,” Frazer said of the careful documentation that goes into making a loft legit.

Tenants must first prove that they are eligible for protection by showing that three or more units were occupied as residences for more than a year in a commercial or factory building between January 2008 and December 2009 and that the building does not have a residential certificate of occupancy. The loft units have to have at least one window, measure at least 400 square feet and be located at street level or higher.

After completing the application and proving their building meets the necessary criteria, tenants work through a mediation with their landlord, the Loft Board and the Department of Buildings.

That’s where things can get sticky. If tenants, the landlord and the city cannot agree about construction changes required to bring the building up to housing code, parties can file alternative plans for consideration. In the event of an impasse, the ultimate decision-making power lies with the city’s Office of Administrative Trials and Hearings, known as OATH.

Frazer ventures that a formal residential conversion is often a good deal for landlords, especially in hot neighborhoods like Bushwick and Fort Greene that include both residential and industrial areas.

“It can be a windfall for some of these landlords in industrial zones,” said Frazer. “For some of these landlords it is an end run around the zoning resolutions without having to get a variance. They will be saddled with rent stabilized-tenants, but for many that’s a small price to pay.”

Not everyone in industrial areas is welcoming the loft conversions as they get underway.

Leah Archibald, executive director at the East Williamsburg Valley Industrial Development Corporation, which assists manufacturers seeking space in north Brooklyn, warns that the conversions spell the end for many formerly industrial spaces that were illegally made residential by their owners.

“Landlords who did the wrong thing are getting rewarded,” Archibald said. “They rented to tenants illegally; they knew what was going on. They are going to reap a windfall when these units are legalized and they can charge a market price.”

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