As New York City gets ready to choose its new mayor, one community is watching the results with particular interest. Having recently seen a decade of tumult across two mayoralties, the residents of Stuyvesant Town and Peter Cooper Village understand that the occupant of Gracie Mansion matters to their safety and security.
Built by the Metropolitan Life Insurance Company as housing for veterans returning from World War II, Stuy Town (as I generally refer to Stuyvesant Town and Peter Cooper together) is the largest rental community in the United States and home to about thirty thousand mostly middle-class people on the East Side of Manhattan. A stone’s throw from the East Village, the Flatiron Building, and Gramercy Park, for nearly sixty years Stuyvesant Town and Peter Cooper Village stood as a beacon for middle-income New Yorkers, a place to enjoy a stable and affordable life in the heart of Manhattan. The redbrick buildings are uniform and pedestrian—to many outsiders, they resemble public housing. But under the care of “Mother Met,” as Metropolitan Life, or MetLife, was known to tenants, and protected by rent-stabilization laws that provided for stable and affordable rents, it was designed to resemble suburban living, where people could raise their kids, build a community, and grow old in peace. Residents tended to stay for decades.
I grew up in the neighborhood, an only child of a public school teacher and portfolio manager, and my formative years were spent in a two-bedroom apartment in Peter Cooper. My mother had moved into the community in the late 1960s, and once she married my dad they never seriously considered leaving, because it afforded them a reasonable and stabilized rent, beautiful grounds, and more space than they otherwise could get in Manhattan.
In July 2006, at the height of the real estate boom, MetLife announced that it would put it all up for sale. Its marketing materials emphasized the opportunity for a new owner to transform the drab and nondescript buildings into a luxury product, and the opportunity to own eighty acres in Manhattan caused the real estate world to go crazy. In October 2006, bidders from across the globe participated in a white-hot auction that bid the property over $5 billion—billions more than what experts had been predicting. To the real estate developers, Stuy Town and Peter Cooper had the potential to be the biggest residential deal ever consummated and a source of enormous profit for years to come. To the people who lived there—many for decades—the message was clear: their stable, middle-class community was on the brink.
Over the years, I developed a personal relationship with many of the people who now had a target on their backs. When I ran for public office in 2005, questions about Stuyvesant Town were mundane and focused on the routine conflicts between landlords and tenants in a city housing development—like brown water, or rent increases. Like me, the people of this community were invested in its stability as an affordable, middle-class neighborhood. The people who lived there—some had been there for the entire life of the community—were now subject to an uncertain future.
When the dust settled on the bidding in October 2006, Tishman Speyer Properties and BlackRock emerged as the winners, paying a record-shattering $5.4 billion in a deal that in fact went down in the books as the largest residential real estate transaction in United States history. Despite public pressure to do so, the new owners had no interest in making a commitment to the long-term preservation of affordable housing in Stuyvesant Town beyond what the law already required. To many in the real estate community, and even to Mayor Michael Bloomberg, that was more than enough. Unfortunately, it was clear to many of us that a sale of this magnitude could only be justified with a business plan that would seek to drive up rents and drive out existing tenants.
Almost immediately, residents’ fears were confirmed. Tishman Speyer wasted no time in attempting to usher in a new era of luxury to this largely middle-class community. The new owners hung “luxury rentals” banners on the sides of the redbrick buildings. They closed the local supermarket and replaced it with a gym. They offered new amenities—for a fee—that could attract younger tenants and hosted rock concerts in the middle of Stuyvesant Oval. But most significantly, Tishman Speyer tried to push out existing tenants in order to increase rents on new tenants who moved in. They had borrowed $4.4 billion to buy Stuy Town and had to find a way to generate more revenue from the property to pay back their enormous debts.
My family and our neighbors—my constituents—were being treated as an afterthought by corporate titans, and, as the sale and its aftermath unfurled, they banded together to fight back. Over the course of a decade, the newly energized Stuyvesant Town Peter Cooper Village Tenants Association and I—as the community’s New York City Council Member—used every ounce of leverage that we could find. We assembled our own competitive bid to buy the property on behalf of the tenants themselves—and did it twice. We defended the interests of residents who found themselves subject to baseless legal claims, we litigated and won the biggest tenant victory in the New York Court of Appeals in a generation, and we were courted by nearly all the major real estate players across the globe. Ultimately, we put ourselves in a position to strike a deal that would preserve thousands of units as affordable housing for the next generation of residents.
Our fight to save Stuyvesant Town faced significant obstacles, however, and not just from the real estate world. Mayor Bloomberg viewed the transaction as purely private in nature, and despite the city’s direct history of involvement in the creation of the community, he didn’t believe there was a continued role for the public to play in the sale. We were constantly challenged by Tishman Speyer and, when they defaulted, by a special servicer called CWCapital. We worked to navigate the shark-filled waters of New York real estate, with many viewing the Tenants Association as an active foe. Some residents also objected to the plans that the Tenants Association was advancing, either because they focused too much, or too little, on the long-term affordability of the community.
Moreover, public sentiment was not always on our side. Though MetLife historically had imposed a minimum income requirement for incoming tenants, there was no income cap for any resident. Accordingly, though most of the members of the community were middle class, some had more means, and all were paying below market rate for their units. If you are paying less than a third of your income in rent, the housing is, by formal definition, affordable to you. By 2000, the median household income in Stuy Town was $68,422, and the median monthly rent was $1,000. Those households were paying only about 18 percent of their income for rent, well below a third of the median income, making Stuy Town “one of the few bargains left in Manhattan.” To many, this appeared to be a relatively well-off community enjoying affordable housing while many others throughout the city struggled to make ends meet.
However, others wisely saw the value of preserving a middle class in a city where the divide between the very rich and the very poor was growing. New York City in 2006 had the lowest percentage of middle-class residents of any of the hundred largest metropolitan areas in the United States. That posed risks for New Yorkers of all income levels. A Brookings study revealed that the absence of middle-income neighborhoods limits opportunities for upward mobility, making it tougher for lower-income people “to move up the property ladder, to buy into safer neighborhoods, send their children to better schools and even make the kinds of personal contacts that can be a route to better jobs.”
While many middle-class people who started out in New York City were ultimately priced out, the people who lived in Stuy Town generally were able to stay. Thanks to affordable prices and a stable, quiet community, they were able to work and raise their families in the heart of New York City, contributing to its vibrant nature. My own building when I was growing up included multiple public school teachers, a furrier, a literary agent, an accountant, a truant officer, and a former NYPD detective. Like my own parents, these were people who likely would have left the city but for the housing in Stuy Town and Peter Cooper that was affordable to them.
The 2015 deal we struck in Stuyvesant Town—the preservation of 5,000 units for middle-class New Yorkers for the next generation—was the largest affordable housing preservation deal in New York City history. It also was the first time that people had to prove a maximum income in order to become eligible for an apartment in the community. And we did it in direct partnership with Mayor Bill de Blasio and his senior team, which added considerable weight to our effort.
While the mayoral campaign of 2021 properly focused on renters at the lowest end of the income spectrum, it is worth remembering that it is also in the interest of all New Yorkers for the middle class to survive. Having a healthy middle class is critical for economic growth and the prosperity of any city. This group relies on public services—like infrastructure and schools—and has an interest in demanding results that improve outcomes for residents of all income levels. Indeed, the Stuy Town tenants used their power and energy to fight back against landlord excesses, to strengthen rent laws, and as a result created benefits for tens of thousands of New Yorkers. The story of Stuy Town reminds us that the mayor can, and should, play a key role in advancing the interests of tenants, and that the security of the middle class is directly linked to the long-term health of the city.