For decades, New York has owed a key part of its allure—its unwillingness to honor class divisions with geographic ones—to rent stabilization. Under the system, which governs rents for a million apartments in the city, wildly different tax brackets can be found sharing walls, watts, and water pipes. But is a rule that limits rent increases to prescribed percentages—and flies in the face of both soaring costs and a runaway market—still viable?
Not for MetLife, which is selling Stuyvesant Town and Peter Cooper Village, the fabled middle-class enclave where some 8,000 apartments still rent for about half the market price. Elsewhere, more than 200,000 units throughout the city have been deregulated since 1993, and virtually all new construction, promises of “affordable housing” aside, is betting the farm on luxury.
Economists have long debated the wisdom of rent stabilization. Tenants and landlords debate it, too—but at a much louder volume. In June, the Rent Guidelines Board’s vote on the size of the next increase incited protests so vigorous that the clamor, for the first time ever, temporarily shut down the process. In an atmosphere close to a Tammany-era riot, the board ushered in a hike of 4.25 percent.
Among the few landlords testifying before the board (to heckles of “Sell!” and “Get out of town!”) was Gail Stein Weinstein, a short, shy, bespectacled woman hardly fitting the cartoonishly villainous archetype. Many rent-stabilized buildings in New York are owned by companies with lots of holdings. Weinstein, who owns a few small buildings, was trying to make the case for a heretofore unnoticed third front in the landlord-tenant standoff: the small, dedicated property owner—buoyed on one side by the berserk market and beset on the other by skyrocketing costs.
To evaluate her claim, and those of others like her, we attempted a dissection of one of her properties, a 28-unit, six-story pile of red brick smack in the middle of the East Village. The building, typical in some ways but decidedly unconventional in others, has been around for 103 years, but its present identity and core cast of characters fell together in the early eighties, on the intersection of drugs, punk, art, and AIDS. Madonna lived on the fifth floor back when she was better known as D.J. Jellybean Benitez’s weird girlfriend. An alleged murderer was once its super. Tim Miller, a co-founder of P.S. 122, still performs a one-man piece about it—titled The Maw of Death. He exaggerates, but not by much.
As late as 1988, cabbies made their fares get off a full block to the west. Times changed; taxis are a popular complaint topic (they double-park in front of the entrance). The building’s tenants, however, even after a full decade of rampant gentrification, are a motley mix of Village vintages: a starving artist and a Disney artist, a carpenter and a caterer, an architect and a dancer.
We persuaded most of them to disclose their lease terms, and Weinstein to contribute some numbers of her own. What we saw was a uniquely New York kind of mess: Rents stuck in the Koch era and rents thrown at the market’s mercy; stylishly appointed units nestled next to appalling counterparts; lingering megacelebrity afterglow and a dose of murder most foul. And a landlord whose profits hinge almost entirely on her market-rate tenants.
In grand old New York City tradition, Apartment 1 belongs to the super. Or, in our case, the supers: Alberto Roman and Louise Boccanfuso. As befits their position, the couple knows everything there is to know about every tenant and are said to hold the errant ones on a short leash. Their dog, not so much: The tenants in apartment 23 claim to have been attacked and bitten by the couple’s free-roaming beast, and reported it to the ASPCA and the city. Whether this is true or not, Alberto and Louise are a clear improvement over one Jose Antonio Ramos, the building’s super in the late seventies. Ramos, currently serving a term in Pennsylvania for molesting two boys, is widely believed to be behind one of New York City’s most notorious child murders. Six-year-old Etan Patz, who disappeared blocks away in May 1979, sparked a media frenzy and became the nation’s first-ever face on a milk carton. As late as the summer of 2000, the police brought cadaver dogs to the building and dug up the basement in a fruitless search for the body. Patz’s parents won a wrongful-death civil case against Ramos in 2004. He was succeeded by a more amenable super, whose quirks were limited to keeping twelve dogs, practicing Santeria, and carrying a machete.
CURRENT TENANT: 4 years
RENT: about $1,400
RENT: about $2,200
See No. 19.
CURRENT TENANT: 1 year
RENT: about $2,200
Caterer Steven Hoertz shares this one-bedroom with his boyfriend. He moved in last June, after Weinstein had renovated the apartment and flipped it out of regulation. This can be done when the stabilized rent naturally reaches $2,000 a month or—landlords’ preferred method—by nudging the price up through renovations; the law allows 2.5 percent of those costs to be passed on to the tenant (which often leads to puffed-up contractor bills). Hoertz pays what he terms “the market price” and considers the deal to be fair. He asks not to divulge the exact rent for fear of jeopardizing his relationship with Weinstein. Hoertz is positively giddy about one particular legacy of his address: “We feel Madonna’s aura in the building.”
CURRENT TENANT: 24 years
The building’s longest-running lease is held by Fred Jorio, an Italian musician. Jorio used to know the young Ms. Ciccone through her brother, with whom he roomed; as for his own star encounters, he says drily, “She borrowed my hammer and never returned it.” Oddly enough, a decade later Jorio found himself remixing two of Madonna’s hits, “Secret” and “Bedtime Stories,” with D.J. Junior Vasquez. Jorio is also the building’s most spectacular beneficiary of rent stabilization. Weinstein says he started at $344.02 in 1982 and now, after two dozen years’ worth of maximum allowed rent increases, pays $568 a month for three bedrooms.
CURRENT TENANT: 23 years
RENT: About $590
CURRENT TENANT: 18 years
Seven (we’ll call the tenants who haven’t explicitly allowed us to use their names by their apartment numbers) moved into the building in 1988, when it was still, he says, “on the worst drug block in New York City.” He, his wife (also a painter), and their son share a small one-bedroom: about 400 square feet of twisting, angular space. In harder times, Weinstein would accept Seven’s paintings in lieu of rent. “She has a decent collection of my stuff,” he says sheepishly. In 1999, she converted her nearby office into the Philip Alan art gallery, a “tenant-landlord collaborative” named after Weinstein’s son, where artwork by the couple was frequently featured. Seven’s relationship with Weinstein has deteriorated recently, which he laments. He says he and his wife had to sue for damages in a surreal case wherein Weinstein and the combative dancer in No. 20 came to blows in the gallery, breaking his artwork in the process. To compare their rent with the price a more recent arrival pays for the exact same layout, see No. 12.
CURRENT TENANT: under a year
RENT: about $2,600
See No. 19.
CURRENT TENANT: 19 years
RENT: about $875
Michael Brunschweiler— a sad-eyed, soft-voiced lighting designer with the cautious manner of a disaster survivor—is another veteran of the building. He moved in on September 1, 1987 (he remembers the exact date). The rent ran $600 back then, split six ways between six young theater hopefuls. As the area gentrified, the apartment’s population dwindled. When I visited, Brunschweiler had just returned after a yearlong absence, and his last roommate had moved out in the meantime. “Three-bedroom” is actually an understatement: There are four rooms here, plus an honest-to-God antechamber. Destabilized, it would easily fetch north of $3,000 a month. This is, without a doubt, the most spectacular unit in the building: spacious, light-filled, with a bathroom done up in blue tile that wouldn’t be out of place in an Ian Schrager hotel. Since Brunschweiler did most of the renovations himself, he enjoys Weinstein’s good graces. “Whenever she needs to show someone an apartment,” he says, “she shows mine.”
CURRENT TENANT: 12 years
CURRENT TENANT: over 10 years
RENT: About $1,000
Tweed Theater Works began here in 1983 as a one-off private party for David, an Israeli-born male model and a friend of Kevin Malony’s (see No. 18) who died of aids in 1985. The current tenant is a thirtysomething manager of Blue Ribbon Bakery who couldn’t be reached for this story. Going further back in time, Weinstein’s archives reveal a yellowed lease from 1973—the year when the apartment went out of rent control and into stabilization—and one Rosa Diaz rented it for $135 a month.
CURRENT TENANT: under 2 years
Alexander Eiserloh spent his summer perfecting the likeness of Johnny Depp in pirate garb: He is a design director for Disney books. A year and a half into a two-year lease, he pays $1,570 a month. His one-bedroom barely qualifies for the term—the bedroom’s king-size mattress fits flush against all four walls. Still, he’s managed to turn the small space into something modern and loftlike. He’s had help from Weinstein, who chipped in for a stylish low fridge and new floors, no strings attached. “I think it’s a part of her business plan to hold on to a quality tenant,” says Eiserloh. He also confides that the re-flooring had a practical benefit: It cut off the steady immigration of cockroaches from No. 7 below. “I don’t know how they are raising a family in an apartment this size,” he says with a shrug, petting a long-haired chihuahua named Frather. “I can’t even imagine having a relationship here.”
CURRENT TENANT: 15 years
CURRENT TENANT: over 10 years
Fourteen came to the States in 1983 from what was then Czechoslovakia. A carpenter by trade, he partook of every misery the eighties-era East Village had to offer. “Look, there were a lot of temptations then,” says Weinstein. “But he eventually overcame them.” Thanks to a bit of matchmaking on her part, Fourteen, now clean but still gaunt, works for Twenty-four, who owns a fine-woodworking shop. When I saw Fourteen, he swung by the office to pay two months’ rent (in cash) and to inform Weinstein that he needed a new fridge. She offered him one for free. “No, I’ll pay for it,” he said grimly. “I damaged the old one.” Weinstein sighed. “Did you take an ice pick to it?” Fourteen hung his head. “Yup.” He also managed to get himself fined $100 for dropping a small plastic bag into the city trash bin. “I ran from the communists and now it’s the same here,” he murmured. Weinstein rolled her eyes and dialed a number. “Alberto, get the fridge from No. 27 and put it in No. 14.”
CURRENT TENANT: 10 years
RENT: About $1,300
CURRENT TENANT: 17 years
RENT: about $1,000
CURRENT TENANT: 18 years
RENT: under $700
CURRENT TENANT: 20 years
RENT: under $800
For the past twenty years, Kevin Malony has been running a theater out of this smart two-bedroom, with the living room as the office. Tweed Theater Works, which now stages high-profile camp extravaganzas starring Lypsinka and other drag luminaries, began in-house, so to speak, with a performance of the Dada classic The Gas Heart in No. 11. When Malony moved into the unit in 1983, heroin was hawked on the street openly, in rhythmical singsong: “H, works, Co-caine! H, works, Co-caine!” Malony was burglarized eleven times in his first year here. The last robbery involved a child lowered by rope into the window. Malony’s fidelity to the apartment is paying off—his rent runs under $800 a month. “The bottom line,” he says, “is that Tweed—a well-known, acclaimed theater company—wouldn’t last a year if I had to pay $2,000 in rent.”
Weinstein’s son Phil occupies the apartment. Over the past six years, Phil has also lived in No. 3 and No. 8, both of which are now deregulated. This pattern aroused my suspicion that Gail was using an obscure loophole to wedge out entrenched stabilization cases: A landlord can break a tenant’s lease when an immediate-family member is moving in. In No. 3, for instance, the tenant immediately preceding Phil lived there for over twenty years, and his rent likely never made it out of three-digit territory. The current, post-Phil tenant pays top dollar. The rule, however, applies only to the buildings held in an individual’s name (Gail’s is owned by her company), and all the reshuffling appears strictly voluntary. Gail says Phil plans to remain in No. 19 for the foreseeable future.
CURRENT TENANT: 7 years
RENT: about $1,300
Twenty, a dancer-choreographer, has lived here for seven years, one of them spent in litigation with Weinstein. She went on a fourteen-month rent strike over a complaint about heat, which Weinstein says was later proved phony. (The Division of Housing and Community Renewal has no violations associated with the apartment on file.) Eventually, Weinstein tried evicting her for harassment. Twenty also played the starring role in the bizarre gallery fisticuffs (see No. 7). Like any good litigant, Twenty declined to comment.
CURRENT TENANT: over 18 years
RENT: under $650
CURRENT TENANT: 1 month
RENT: about $2,000
No. 22 is the famous Madonna unit. A few years ago, the pop star brought a film crew to the building for a Behind the Music episode, flirted with Puerto Rican boys on the stoop, but had evident trouble remembering the exact spot where she used to live. While several tenants in other units still reel from the Material Girl’s proximity, Chris Murray, a former Condé Nast editor who has just moved out of this place and up one flight to No. 27, never gave it much thought. “The only object left here from her times is probably the water meter,” he says diffidently. Murray’s move, incidentally, was a sweet deal for all parties concerned: He got a break on the rent for the daily bit of extra exertion on the way up, and Weinstein, after putting in new floors and closets, got to deregulate this apartment the second Murray’s last suitcase made it up the stairs. The current occupant, whom Weinstein describes as a “nice girl,” forks over $400 more a month than he did.
CURRENT TENANT: 6 years
Julia Pasternak, who sells photo-luminescent emergency lights, is the one who claims to have been bitten by the supers’ dog. She and friend, art dealer Bobbi Bennett, are generally dissatisfied with the state of the unit. When Julia shows me around, the apartment indeed looks shabby compared with its equivalents on other floors: The bathroom has a raw cement floor, and wall tiles are missing.
CURRENT TENANT: 15 years
RENT: about $1,100
Twenty-four, who declined to participate in this story, is Fourteen’s current employer (in an arrangement brokered by Weinstein).
CURRENT TENANT: 12 years
RENT: about $1,000
CURRENT TENANT: 15 years
RENT: UNDER $800
CURRENT TENANT: 1 month
Chris Murray from No. 22, who used to pay $1,600 a month there, is enjoying a lower rent here. His accidental benefactor was Ginger O’Neill, a singer-songwriter who has just shipped off to Niger with the Peace Corps. O’Neill and her appointed successor started out on a sour note: Murray would bang on the ceiling whenever she’d practice. But with Weinstein’s assistance, she says, “We kinda hit it off.” When O’Neill moved out, her plants found a new home next door, at No. 28.
CURRENT TENANT: 13 years
Alexander Stone Dale, a central-casting kind of cabbie (raconteur, autodidact, and conspiracy theorist), moved into his two-bedroom in 1993—“back when you’d call a real-estate ad and be the only guy answering it.” He started out at $495 a month split two ways with a roommate. He now pays $795, not without difficulty. His income—which, ironically, comes from New York’s other super-regulated sphere, livery—has been stagnant for seventeen years. Alexander confesses he has fallen as far as four months behind in rent, which Weinstein accepts with near-angelic patience. “Lately, I’ve been about a month and a half late,” he says, “which I consider a personal achievement.”
Three or four times a week, Weinstein drives 120 miles from her home outside Hartford, Connecticut, to her office in a building near this one. “My father wouldn’t think in a million years I’d be doing this,” she says in her soothing adenoidal New Yorkese. (Tenants, I noticed, tend to lapse into droll impressions of Weinstein when quoting her.) In 1988, when Donald Stein passed away, her initial impulse was to sell. Instead, over the past eighteen years, Weinstein steadily refashioned herself from a free-spirited daughter who had little interest in her father’s trade into the kind of landlord who earnestly frets about a tenant’s bird feeder. (“It’s out on the fire escape, which is illegal—but what am I going to do, ask her to take it away? It’s a bird feeder!”) She says her grandmother talked her out of the sale, insisting that the family had a commitment to the tenants and the neighborhood.
Several tenants have a different theory. They suggest Weinstein may have been driven by a guilty desire to erase a squalid bit of the family legacy. The paterfamilias went into real-estate management after a successful run in the shoe trade and was sometimes even credited with inventing the term “East Village.” The moniker, borrowing some Bleecker-and-Macdougal cachet for what was then an extension of the Lower East Side, first appeared in one of Stein’s company ads. Unfortunately, Stein also gained a certain infamy among his tenants. “Oh, he was a monster,” says Kevin Malony, the theater director in No. 18. “He came to suck people dry. It took Weinstein several years, but she turned things around. She is a true philanthropist, one of the few people who keep the fabric of the East Village alive.”
The weight of her father’s notoriety could explain Weinstein’s dedication. In the eighties, she was almost pathologically bent on keeping the building “clean,” at one point going so far as to hire a private security guard (an unheard-of thing back then). She stuck with the blighted neighborhood through two waves of landlord flight, the drugs, and the riots, and remains, with a couple of notable exceptions, beloved by the very people who hand her half of their monthly income.
How is Weinstein faring financially? She couldn’t be persuaded to disclose exact figures, but a combination of basic math and light sleuthing places her total rent roll at an average of roughly $1,100 per unit, or some $30,800 per month—with the newbies’ deregulated apartments evening out the veterans’ bargains. This makes for an impressive yearly revenue of $369,600. But once you subtract the costs, it’s another story.
In 1986, the real-estate tax on the building was $11,517.76; it is now $67,160, a 580 percent increase. This, of course, is fair enough, because the value of the property itself has skyrocketed, even while the rent rolls haven’t. The cost of oil heat, in 2002, set back Weinstein $14,540; by 2005, it ballooned to $51,250—a 350 percent increase. The water-and-sewer tax runs $13,000 a year, insurance adds another $14,000, and renovations to the deregulated apartments took up $50,000 last year. Electricity to light hallways and power boilers cost $3,000. Last but not least, everyday repairs and maintenance relieve the owner of another $55,000. Weinstein’s actual profit from the building, then, is about $116,000 a year.
Looking at this figure in the context of a market that’s minted more millionaires than oil, one can’t help but ponder the same thing tenant advocates yelled at Weinstein during the RGB hearing: Why not sell? According to John Cicero of Miller Cicero LLC, a real-estate appraisal and consulting firm, an East Village building like Weinstein’s could easily fetch up to $5.6 million, minus fees and taxes. If Weinstein, who has no mortgage on the property, were to succumb, she could live off a modest 5 percent interest on the full sale amount, earning $280,000 a year without breaking a sweat. But when I raise the prospect, she seems genuinely puzzled. “What would I do?” she says. “This is my job.”
“Plus,” she adds, “I missed the boat. The height of the market was last spring.”
Floor-by-floor rents in our case study, where a one-bedroom apartment costs four times as much as a three-bedroom.
No. 3 / two-bedroom / about $2,200
No. 2 / one-bedroom / about $1,400
No. 1 / two-bedroom / $0 (superintendent)
No. 8 / two-bedroom / about $2,600
No. 7 / one-bedroom / $769
No. 6 / two-bedroom / about $590
No. 5 / three-bedroom / $568
No. 4 / one-bedroom / about $2,200
No. 12a / two-bedroom / $1,193
No. 12 / one-bedroom / $1,570
No. 11 / three-bedroom / about $1,000
No. 10 / three-bedroom / $1,492
No. 9 / three-bedroom / about $875
No. 18 / two-bedroom / under $800
No. 17 / one-bedroom / under $700
No. 16 / two-bedroom / about $1,000
No. 15 / three-bedroom / about $1,300
No. 14 / three-bedroom / $850
No. 23 / two-bedroom / $1,780
No. 22 / one-bedroom / about $2,000
No. 21 / two-bedroom / under $650
No. 20 / three-bedroom / about $1,300
No. 19 / three-bedroom / undisclosed
No. 28 / two-bedroom / $795
No. 27 / one-bedroom / $1,309
No. 26 / two-bedroom / under $800
No. 25 / three-bedroom / about $1,000
No. 24 / three-bedroom / about $1,100