The owner of at least 50 mostly rent-stabilized buildings in northern Manhattan has stopped making mortgage payments on some of its properties, leaving residents in limbo as they demand better conditions and immediate repairs.
Tenants in more than two dozen of the buildings are organizing to push the management company to mend long-standing problems and to have a say in their living arrangements as politicians suggest a nonprofit could take over down the road.
About 80 residents across at least 27 buildings packed a Harlem community center late last month, describing similar experiences in their apartments owned by Sugar Hill Capital Partners or run by its affiliate Tri-Hill Management: fired supers, yearslong gas outages and broken front doors among them.
“There's an African saying: working together, the ants move the elephant,” said Donna Chandler, a former government worker who has lived in her Washington Heights apartment for 72 years.
But the elephant, Sugar Hill Capital, appears set to move on. Court records show that the company stopped making mortgage payments on some of its buildings and faces multiple foreclosures on properties it purchased just five years ago.
Sugar Hill Capital bought buildings throughout northern Manhattan just months before tenant protection laws limited its ability to raise rents and deregulate stabilized apartments. Less than three years later, a company official was ranked as New York City’s worst landlord, with buildings accounting for hundreds of housing code violations.
It’s not an uncommon situation. Companies routinely bought rent-stabilized buildings with a plan to revamp units, raise rents and eventually deregulate apartments to make a profit. But then came 2019 tenant protection laws that reduced landlords’ ability to raise monthly rates on stabilized units and spoiled the business model.
Residents now face the challenge of getting repairs done as ownership is in flux and the future of their buildings is uncertain. At the meeting last month, local elected officials introduced another twist that came as a surprise to tenants: A nonprofit may be taking over some of the buildings in the future.
“That night should have been about ‘What do we want and how are we going to get it?’ and not what deals are being made in other rooms we can’t get into,” said Adam Blazej, an adjunct professor and rent-stabilized tenant in Inwood who has led the organizing push.
New laws, cut costs
Tri-Hill Management, which now runs 40 Sugar Hill Capital buildings, blamed delayed repairs and a lack of capital improvements on the 2019 laws. But they disputed the tenants’ characterizations of the problems in the buildings. In an email, the company said it closed out 97% of work orders last year and resolved nearly 1,500 housing code violations “despite ownership’s cash constraints.”
Sugar Hill Capital declined to comment for this story. But in the past, company officials have said they were forced to cut costs after the 2019 laws prohibited them from raising rents on vacant units or lifting apartments out of stabilization and onto the open market.
Other real estate firms and landlord trade groups have spent the past four years asking the state to adjust the laws to allow landlords to cover the rising cost of repairs, maintenance and operations while clearing a profit.
“Basically, expenses are exceeding incomes. It’s as simple as that,” said Rent Stabilization Association Vice President Frank Ricci, who cited surging insurance costs, rising property taxes and unpaid rent during the pandemic.
But the arguments don’t move Blazej, who said tenants are the ones suffering from a big company’s bad bet.
“Rather than adapt to those changes, what they did is they've essentially abandoned dozens of buildings, hundreds of apartments they've abandoned and left to deteriorate,” Blazej said at the meeting.
The group is pushing for concrete, short-term action, like fixing gas lines or removing scaffolding that’s been up for a decade.
Moulaye Diagne wants his water fixed.
Diagne, a ride-hail driver, has lived in his Harlem apartment for close to 30 years and says things have gotten noticeably worse in the past three.
“It's like never before,” he said. “Especially for the kids, for the young ones, these are some basic stuff that should be provided for your tenants. Like hot water when the weather is extremely bad.”
Diagne spoke with Gothamist inside the West 116th Street apartment he shares with his wife and three children. A bicycle with a GrubHub delivery bag stood in a long hallway leading to the living room, which was sparsely decorated aside from Islamic art above a red sofa.
Diagne, a ride-hail driver, has lived in his Harlem apartment for close to 30 years.
Diagne said he moved from his native Senegal to Harlem in 1995 and soon found the two-bedroom apartment. He said he now pays around $1,200 a month.
In 2018, Sugar Hill Capital bought the building as part of a large portfolio just north of Central Park. At the time, the company’s former chief creative officer, Jay Solomon, told The Real Deal that Sugar Hill felt a “responsibility to our neighbors and the local community to steward these buildings with great care for years to come.”
But Diagne and his neighbors said poor conditions soon worsened after the management company fired and evicted live-in superintendents in 2019.
He said the consequences are clear, pointing to the cases of bottled water he keeps near the kitchen and uses for cooking and flushing the toilet when the water shuts off.
His neighbor Joyce Pinckney, a 30-year building resident, described similar problems during the organizing meeting.
“Every weekend, every Friday there’s no hot water,” Pinckney said, before listing a litany of additional problems. “Heat. A rodent came through my window. Management constantly changes. Intercom is broken. Doors don’t work. You can’t get in the building … It’s ridiculous.”
At 655 West 160th St., tenants are going on eight years without gas, according to resident leader Stephanie Edwards. She said fed-up residents communicate regularly in a WhatsApp thread and frequently call 311 to file complaints.
Her neighbors across the street sued Tri-Hill Management and David Schorr, then a Sugar Hill executive, for repairs in 2021. They must now seek fixes through a new property owner after the bank took back the deed and resold the building earlier this year.
The city's Department of Housing Preservation and Development said it is aware of the problems at the buildings and has issued violations, but added that state legislation to finance repairs and revive a tax break program is needed to address the root cause of the problems.
“Action from Albany will strengthen all of these solutions and ultimately improve the lived experience of New Yorkers,” said HPD spokesperson William Fowler.
The State Division of Homes and Community Renewal, which oversees rent-stabilized properties, said tenants could file complaints about their utility outages and apply for a rent reduction. A spokesperson pointed to a past statement from Commissioner RuthAnne Visnauskas about the agency’s commitment to ensuring the rent laws “are strictly enforced.”
Housing without profit?
To progressive activists and elected officials, the problems at the buildings underscore the need for tenants to have more control of their housing.
Comptroller Brad Lander discussed legislation aimed at empowering residents during the tenant meeting.
“A silver lining can be that those buildings are then transferred out of the hands of investors who, in their greed, got out over their skis,” Lander said.
A package of City Council bills includes one measure that would give community groups a chance to purchase for-sale buildings, with the blessing of tenants. A bill before state lawmakers called the Tenant Opportunity to Purchase Act would give existing residents a shot at buying their units with financing from the state.
The model has already been established in Washington, D.C. and is far from a new concept in New York. Four decades ago, the city frequently took over distressed properties from absentee landlords and turned them over to tenants as permanently affordable Housing Development Fund Corp. cooperatives, or HDFCs.
And last year, tenants of a building in the South Bronx purchased their apartments after a long fight with a landlord trying to deregulate their units.
That sounded like a good idea to Tay Raymond, who works in online sales and has lived in her West 116th Street apartment for 30 years.
Raymond said she and her neighbors want a voice in what happens next to their homes.
“I just want to live in safe conditions,” Raymond said. “I think someone else has to come and take over ownership of these buildings, or they have to give us ownership of them in some way.”
