Housing Rights Initiative has helped bring a class-action lawsuit against AvalonBay Communities over alleged illegal rent overcharges involving rent-stabilized tenants at three Downtown Brooklyn apartment buildings.
The lawsuit, filed Sept. 28 in New York State Supreme Court in Kings County by Newman Ferrara LLP, targets properties at 343 Gold St., 100 Willoughby St. and 214 Duffield St. HRI conducted its investigation with support from State Sen. Andrew Gounardes and City Council Member Lincoln Restler.
The organization estimates that alleged overcharges could exceed $40 million and affect hundreds of tenants.
“AvalonBay took more than $100 million in tax breaks in exchange for following New York’s rent stabilization laws, only to turn around and overcharge the very tenants those laws were designed to protect,” said Aaron Carr, founder and executive director of Housing Rights Initiative. “You don’t get to take the public’s money and then treat the public’s laws as optional.”
The case centers on how rent concessions were applied to rent-stabilized apartments. According to the lawsuit and HRI, AvalonBay used temporary concessions to reduce tenants’ effective rents and later increased rents beyond the limits permitted under New York’s rent-stabilization rules.
In one example, a listed monthly rent of $4,627 was reduced through a $9,254 credit to an effective rent of $3,855.83. After the concession expired, the rent was increased to $4,696, according to the lawsuit.
The allegations are significant for Brooklyn tenants because the properties benefited from the 421-a tax incentive program. HRI says the properties received more than $101.9 million in 421-a tax benefits since 2020, while participating properties were subject to rent-regulation requirements.
The lawsuit seeks financial relief for affected tenants, including recovery of alleged overcharges, as well as properly regulated leases and rent reductions where applicable. The case also puts renewed attention on enforcement of New York’s rent-stabilization laws and the resources available to protect tenants.
The litigation will now proceed through the courts, where the allegations against AvalonBay will be tested. HRI is also calling for greater enforcement capacity and additional resources for the New York State Division of Housing and Community Renewal.
