Bill targets 'Kushner loophole' allowing false filings
By BERNARD CONDON, AP Business Writer
NEW YORK (AP) — A New York City councilman plans to introduce a bill to close the “Kushner loophole” that fails to check up on landlords if they file false documents with the city.
The move follows an Associated Press report earlier this year that Jared Kushner’s family real estate company filed dozens of false documents with the city claiming it had no rent-regulated tenants in many of its buildings. That allowed it to avoid strict oversight of construction that critics say was used to drive out low-paying tenants.
Councilman Ritchie Torres says his bill would require the city’s buildings department to check with tax records to validate such claims. If any false submission is discovered, the landlord’s entire portfolio of buildings would be subject to an audit.
“We refuse to stand by idly while real estate companies like the Kushner Cos. play Russian roulette with the safety of the residents and the affordability of rent,” Torres said. “Kushner Cos. is a poster child for a systemic problem.”
The AP story in March, based on a study by tenant watchdog Housing Rights Initiative, showed the Kushner Cos. filed at least 80 such false construction-permit applications in 34 buildings over a three-year period when the company was being run by Jared Kushner, who is President Donald Trump’s adviser and son-in-law.
The permit applications stated there was not a single rent-regulated tenant in any of the buildings when, in truth, there were hundreds.
A landlord with rent-regulated residents can face extra city oversight during construction including “tenant protection sweeps” by buildings marshals to make sure noise, dust and off-hour work are not used to push out low-rent tenants so they could be replaced with higher paying ones.
The city fined the Kushner Cos. $210,000 last month for 42 of the false filings. The family company says it plans to fight the charges in court. It says any mistakes in its documents were made by third parties and errors were quickly corrected, and says it has not used construction to harass low-paying tenants.
Housing Rights Initiative founder Aaron Carr says the practice of submitting false permit applications is widespread in the city. He says a new study he conducted of applications from the start of 2016 through June this year shows that the buildings department approved over 10,000 applications falsely claiming there were no rent-regulated tenants in hundreds of buildings throughout the city. He says he checked the application claims against tax records at the city’s Department of Finance, which showed there were plenty of such residents.
Carr says details of the study will be released at a news conference Monday when Councilman Torres will also announce his proposed bill.
The bill would also require the buildings department to alert the city council, a state tenant protection unit and the city investigations agency of any false applications. And any landlords that had corrected false claims more than five times in “amended” filings would also be subjected to an audit of all its buildings.