Landlord's Demolition Application Denied

Landlord asked the DHCR for permission to terminate one rent-stabilized and four rent-controlled tenancies in order to demolish the building tenants lived in. Landlord claimed that the apartments were uninhabitable, that a new building it planned to construct on the site would contain 20 percent more units, that landlord couldn't presently earn 8.5 percent annual net return on the building's assessed value, and that landlord hadn't mismanaged the building. Tenants denied landlord's claims. The DRA ruled against landlord, who appealed and lost. Building vacancies increased from eight in 1990 to 18 in 2004 when landlord filed its application. This showed a pattern by landlord that contributed to the deterioration of the apartments. An auditor's report also had shown that the building could generate an 8.5 percent return in 2006. The DHCR found that landlord intentionally managed the building in a way that impaired landlord's ability to make the 8.5 percent return. 

890 First LLC: DHCR Adm. Rev. Docket Nos. ZJ420008RO et al. (4/26/14) [7-pg. doc.]