A class-action lawsuit over rent calculations at 420 Kent Avenue puts the focus on whether renewal increases for rent-stabilized apartments were based on the rent tenants actually paid or a higher registered amount. The New York Times reported that tenants accuse Spitzer Enterprises of using the higher figure at the 857-unit Williamsburg development, contrary to state law.
The sum at issue is an estimate, not a court finding or an established debt. Aaron Carr, founder and executive director of the Housing Rights Initiative, estimated that tenants could be owed about $30 million, based on rent increases dating from 2020, The New York Times reported. Eliot Spitzer told the newspaper that the lawsuit had surprised him, that his company planned to contest it, and, “We’ll have to see how this plays out.”
How the rent dispute is framed
A preferential rent is below the legal rent registered for an apartment. The lawsuit concerns a leasing practice in which landlords offer free months while registering a higher rent, and alleges that Spitzer Enterprises used that higher rent to calculate later increases. The New York Times reported that the company offered between one and four free months on new leases for some of its stabilized units.
The Times reported that New York’s 2019 tenant-protection laws require increases to be calculated from the preferential rent for as long as a tenant remains in the apartment. Spitzer told the newspaper that before those laws took effect, landlords commonly offered concessions and based increases on the full rent. Whether the calculations alleged in this case violated the law remains for the court to determine.
Similar claims and the legal backdrop
The dispute is part of a wider set of lawsuits concerning rent calculations. Tenants at Blackstone’s 898-unit 8 Spruce Street tower filed a separate suit alleging overcharges, as Hoodline reported in its coverage of the case. In August, tenants at the 761-unit American Copper Buildings sued Black Spruce Management, seeking more than $20 million and alleging that reduced concessions at renewal led to rent increases above applicable limits, according to The Real Deal. The cases concern other properties and do not establish the allegations against Spitzer Enterprises.
The article’s original reporting also identifies Chernett v. Spruce 1209, LLC as a case addressing how temporary rent concessions are treated in registered rents. The broader legal dispute is how those concessions affect rent calculations and the increases landlords may apply.
The development and its affordable housing
420 Kent includes affordable housing. The development set aside 20 percent of its 857 apartments as affordable, according to 6sqft. 6sqft reported lotteries for 65 and 121 apartments; the 121-unit lottery was for households earning 60 percent of area median income.
Spitzer bought the 2.8-acre Williamsburg waterfront site, formerly home to Kedem Winery, for $165 million in August 2014, The Real Deal reported. The project cost roughly $700 million, according to Commercial Observer. Spitzer Enterprises later obtained a $398 million debt package led by Citigroup in November 2020, and in March 2024 sold Meadow Partners a minority stake of less than 50 percent in a deal valuing the complex at more than $650 million, according to Commercial Observer.
