No “White Bread Land”: A Fight for Affordable Housing in Tribeca

Jay-Z lives in Tribeca.

Gwyneth Paltrow lives in Tribeca.

John Stewart, Billy Crystal, Daniel Radcliffe, Kate Winslet, Meryl Streep — they live in Tribeca, too.

Housing costs have skyrocketed in the “Triangle Beneath Canal Street” since Robert De Niro opened Tribeca Grill on Greenwich Street in 1990. Upscale restaurants, boutiques, and celebrities flooded the area and transformed it into one of downtown Manhattan’s trendiest spots. In 2006, Forbes ranked Tribeca as New York City’s Most Expensive Neighborhood. Today, monthly rates for lofts, according to About.com, are “$5,500 –$15,500+.” (Jay-Z bought his penthouse for $17.5 million, so there’s unwritten emphasis on “+.” )

When landlord Lawrence Gluck decided to raise some of the rents in his Greenwich Street apartment complex eight years ago, a tenant named Diane Lapson told him that many residents would no longer be able to afford the climbing costs.

“You live in Tribeca,” he responded.

Diane continues to resent the irony. She moved into the 1,349-unit complex in 1975, the same year that it was built under an affordable housing initiative. For over a decade, she lived in a Tribeca that only gets passing nods in current real estate and travel guides: “once an industrial district, [Tribeca] is now studded with luxurious lofts, trendy boutiques, and fine restaurants,” says Zillow; “once a sea of deserted warehouses, [Tribeca] is one of New York’s livliest and hippest neighborhoods,” says one reviewer on StreetAdvisor.

 “Nothing was here when we moved in,” explained Steve Vorillas, a tenant in the apartment complex, called Independence Plaza North, for over 30 years. “It was the city’s butter and egg district. All the lofts used to be occupied by artists. Things were quiet. My kids would play out on the street on a Saturday afternoon and not see anyone for an hour.”

“It was like a sanctuary, like you were in the wilderness,” agreed Chai Song, another long term tenant. “It was a good area, affordable.”

De Niro didn’t open a restaurant in a ghost town, of course. The neighborhood’s sparse early residents banned together throughout the 70’s and 80’s to petition for traffic lights, schools, and paved streets to accommodate their isolated community of artists and low-income families. They grew a cheerful bohemian culture out of Tribeca’s gritty industrial framework, and wound up with a place so popular that they could no longer afford to live in it.

“I remember walking to the subway in the winter once with snow up to my knees,” Diane reminisced. “It was like the city didn’t even recognize that we lived here for a while. We had to get signatures just to force a landlord to build a supermarket. We made the neighborhood great so that other people wanted to move in.”

I met Diane and other locals last week at a press conference held outside the apartment complex. Diane is president of the Independence Plaza North Tenants’ Association, which is now in the middle of a prolonged legal battle against Landlord Gluck. According to the tenants, he has illegally revoked their rent stabilization. Manhattan Borough President Scott Stringer, State Senator Daniel Squadron, City Council Speaker Christine Quinn, and some Council members all showed up to speak their support.

“The fight for IPN is so important for Tribeca and for the city,” said Squadron to the crowd of residents and reporters that surrounded the press podium. “If it weren’t for the fight to maintain affordable housing, New York City wouldn’t be what it is today.”

The fight is complicated, however. Gluck removed IPN from the its state-subsidizing housing program, Mitchell-Lama, when he gained ownership of the complex in 2004. He began to push some of the apartments’ rents toward the market rate, but his company Stellar Management continued to receive tax breaks from a separate affordable housing program, the Department of Finance’s J-51, for two years. After the error was caught, Gluck said he was unaware his company had been getting abatements, and repaid the $7,550-a-year tax cuts with interest. The tenants, however, argued that he had no right to forsake their rents’ stability after he already had received benefits to secure them.

A lower courts judge ruled in the tenants’ favor in 2010, but the State Supreme Court’s Appellate Division reversed the decision last May. These latter judges said that the tax breaks were “merely the erroneous result of the [Department of Finance’s] failure to adjust I.P.N.’s tax liability.” The error, they argued, “did not create rent stabilized status for a development that was not otherwise subject to the rent stabilization law.” In other words, the tenants lost rent stabilization the minute IPN left Mitchell-Lama.

The tenants have one more shot at re-reversing the overturned ruling if the state’s Court of Appeals agrees to hear their case. At the press conference, the officials announced that they had filed three amicus briefs (unsolicited “friend of the court” documents) to convince the court to reconsider the legality – and future implications – of subjecting some of the tenants to the neighborhood’s extreme cost of living.

“We want the people who have made this neighborhood great to be able to stay in this neighborhood,” Christine Quinn assured crowd. “And I want to keep this city open to the next generation of creative people. I want New York to invite the next great novelist. IPN provides this opportunity.”

“When you see banners that say ‘luxury housing,’ ” City Council member Dan Garodnick said, “you know something has gone wrong.”

The tenants face a tough battle. Their argument for rent stabilization emphasizes their social and moral right to affordable housing in Tribeca, not their legal one. Politicians warn the court that it risks setting a precedent for allowing landlords to adopt and discard affordable housing at will through the J-51 program, but if Stellar Management’s tax cuts truly were a Department of Finance error, then, as Stellar Management’s lawyer contends, no precedent for J-51 rulings seems to be set at all.

The tenants’ case ultimately poses a question of obligation: do the tenants deserve to live in the community they created? Does the city owe these residents protection, and if so, to what extent should the law straddle the housing market to provide it? And who should bear the cost of defending them? — landlords? taxpayers?

Gluck asks for the freedom to pursue his own benefit, which rests in the wallets of whichever young movie stars are hunting for apartments in one of New York’s trendiest neighborhoods.

Diane, however, argues that keeping her fellow tenants around benefits everyone. “IPN is the diversity of Tribeca,” she told me outside the apartment complex following the press conference. “Without it, this would be white bread land. If you support diversity, then support the reason it exists.”

She lit a cigarette and watched pedestrians wander in and out of the restaurants across Greenwich Street. “The soul of Tribeca is in those who built it in the first place,” she added. “We’re not just units of real estate. We’re family.”