Luis Ferré-Sadurní

Another real estate agent warned a white homebuyer about gang violence in a mostly minority neighborhood, but she appeared to steer a black buyer with a comparable budget toward homes in that neighborhood.

All told, real estate agents treated people of color unequally 40% of the time compared with white people when they searched for homes on Long Island, one of the most racially segregated suburbs in the United States.

Those were among the findings of a three-year undercover investigation published this past weekend by Newsday, a Long Island newspaper, which exposed widespread evidence that discriminatory, and potentially illegal, home-selling practices are helping to keep the area’s neighborhoods segregated.

Newsday did the sort of undercover testing that government agencies and nonprofit groups are supposed to do to enforce fair-housing regulations meant to prevent disparate treatment based on racial and other factors.

The newspaper recruited a diverse group of people, some of them actors, to pose as first-time homebuyers, outfitting them with hidden cameras to capture their interactions with real estate agents. It is legal in New York to record a conversation or phone call if the person making the recording is a party to the conversation.

Over 16 months, the would-be homebuyers conducted about 100 tests. They got help from housing experts and recorded 240 hours of video that the newspaper turned into a 13-article series and a 40-minute documentary. More than 50 reporters, producers, editors and other Newsday employees worked on the project.

The newspaper contacted 93 real estate agents at some of the area’s biggest firms. Two testers — of different races, but of the same gender and about the same age, with similar income and housing preferences — would independently approach the same agent to test whether they were treated differently based on their race.

The results were startling, even though Long Island is a part of New York where redlining, zoning regulations and other forces have long perpetuated racial divides.

“Black testers experienced disparate treatment 49 percent of the time — compared with 39 percent for Hispanic and 19 percent for Asian testers,” Newsday reported.

In some cases, agents did not show listings to black testers if they had not been preapproved for a mortgage. The same agents would accommodate white testers who did not meet that condition.

The federal fair-housing law, passed in 1968 as part of the Civil Rights Act, prohibits discrimination in housing based on race, religion and other factors.

The Department of Housing and Urban Development is responsible for enforcing the law, mostly through its regional offices and through grants to nonprofits to investigate complaints, conduct tests and educate buyers and renters.

In New York, state agencies also enforce the law, with the state’s 133,000 licensed real estate brokers and agents responsible for abiding by fair-housing standards.

The enforcement process, which can be slow, starts mostly with complaints, but undercover tests are often the most effective way of proving disparate treatment. Newsday found that tests were used only sporadically because they are time-consuming and expensive.

Records show few examples of the state imposing heavy penalties, like fines, on agents found to have discriminated, Newsday found.

Government officials said they were examining what Newsday had uncovered.

“We are reviewing this report, but make no mistake: Every complaint received is thoroughly investigated and we urge any New Yorker who believes they have been the victim of housing discrimination to contact us immediately,” Richard Azzopardi, a spokesman for Gov. Andrew Cuomo, said in a statement.

Olga Alvarez, a spokeswoman for the federal housing department, said that the agency was examining Newsday’s findings.

“Combating housing discrimination is at the forefront of our department’s enforcement priorities,” she said.

Ken Zimmerman, a distinguished fellow and fair housing expert at New York University’s Furman Center, said that Newsday’s findings were a “modern manifestation of what has gotten in the way of the legal mandate and policy aspirations of the Fair Housing Act.”

“There needs to be more investment in uncovering intentional discrimination, as these tests reflect,” he added.

Real estate agents are barred from talking to clients about the backgrounds of people who live in neighborhoods and they are required to provide equal guidance about areas in which they may want to live.

Newsday found that agents ignored those rules repeatedly.

Agents overwhelmingly directed white buyers to Merrick, a hamlet in Nassau County where most of the residents are white. When discussing Brentwood, a predominantly black and Hispanic hamlet where gangs like MS-13 are active, an agent told one black tester that residents there were the “nicest people.”

The same agent emailed a white tester to “please kindly do some research on the gang related events in that area for safety.”

White customers were often given more listings than minority testers, Newsday found. And in a quarter of the cases, agents appeared to unlawfully steer buyers to different communities based on their race or ethnicity.

“This investigation brought to light what too many people of color in our state know already,” Sen. Kirsten Gillibrand, D-N.Y., said in a statement, “that discrimination is real and targeted, and rears its head in every aspect of their lives.”

This article originally appeared in

What Happens When Black People Search for Suburban Homes

One Long Island real estate agent told a black man that houses in a predominantly white neighborhood were too expensive for his budget. But the same agent showed houses in the same neighborhood to a white man with the same amount of money to spend.

That, at least, is according to a 62-page audit released Friday by the city’s comptroller, Scott M. Stringer, whose office found the city has wasted millions on roof repairs that should have been free, and systematically failed to conduct maintenance to prevent leaks, mold and mildew.

“At a time when every penny counts, NYCHA is essentially lighting money on fire by investing millions in roof repairs when it doesn’t have to,” Stringer said during a news conference at the Ingersoll Houses in Brooklyn.

NYCHA, the largest public housing system in the country, is under strict oversight after a federal lawsuit accused the agency of cover-ups, chronic mismanagement and squalid living conditions, including pervasive mold and exposed lead paint.

Earlier this week, Bart M. Schwartz, the independent monitor who oversees the housing authority, also issued a damning report that shed light on the agency’s flawed inner-workings, culture of dysfunction and lack of accountability.

Schwartz, who was appointed in late February, found NYCHA fails to adequately clean up lead paint, uses imprecise internal data and is not adequately staffed to deal with a pest infestation so bad that rats are known to clamber up clogged garbage chutes to 14th-floor apartments.

Taken together, the reports offer a bleak picture of housing conditions for 400,000 low-income residents and the daunting road ahead for the agency’s new chairman, Gregory Russ, who will assume his role in August.

Lack of maintenance and millions wasted on roofs

Leaky roofs are a well-documented and seemingly intractable problem at the housing authority’s 325 developments. Because leaks can lead to mold, a severe health hazard, the city recently allocated more than $1 billion to replace hundreds of roofs.

The housing agency typically hires contractors to install roofs, which generally have a warranty of 20 years, during which time a private vendor can cover most repairs for free.

But the comptroller’s audit found the agency almost never uses its roof warranty coverage to make fixes, instead spending taxpayer money on repairs. The audit examined 700 roof-related work orders over a decade and found NYCHA used its warranty coverage only nine times.

A lack of maintenance can void warranties, burdening NYCHA with the cost of repairs, but the agency has failed to adequately perform such maintenance. The comptroller’s office inspected 35 roofs in 13 developments and found deficiencies — from cracks to pools of water — in 88% of them.

NYCHA has also failed to keep track of basic roof-related records — like copies of warranties and monthly inspection reports — and workers are rarely trained to ensure warranty standards are met.

As a result, the auditors found 19 damaged roofs that could cost $24.6 million in public funds to repair.

Chester Soria, a spokesman for the agency, said in a statement that the comptroller’s audit and recommendations were consistent with what NYCHA “has been aware of and addressing through new systems we are already implementing.”

“In our July 17 response, NYCHA agreed with many of his proposals, such as with our roof inspection and quality assurance process, and our record-keeping enhancements were underway before today’s report,” Soria said.

Rat infestations

In his first quarterly report released Monday, Schwartz, the monitor, found that NYCHA was unlikely to meet deadlines to reduce its rat population and backlog of pest complaints.

NYCHA employs only 108 pest exterminators, which means each exterminator is responsible for about 1,400 apartments.

Twelve more exterminators were expected to be hired, but the report said NYCHA needed almost 1,000 exterminators to meet the Aug. 1 deadline stipulated in the agreement struck by Mayor Bill de Blasio and the federal government to address pest complaints.

Schwartz was particularly struck by the rat epidemic at the Washington Houses in Harlem.

In a letter to NYCHA, the tenant association described residents feeling like “hostages in our own homes at night” because of rats spilling out of elevators and stairways, and workers refusing to enter compactor rooms “for fear of being attacked by rats.” Rats began to climb up the stuffed garbage chutes.

The letter went ignored by NYCHA, the 81-page report said, until the monitor’s team pressured the agency into addressing the problem.

Lead paint

For years, the housing authority lied about its failure to conduct lead paint inspections, which put thousands of young children at risk and led federal prosecutors to investigate the agency.

Those cover-ups forced the city to agree to the appointment of Schwartz to ensure the agency complied with lead regulations. But Schwartz said the city lacked a comprehensive strategy to address lead paint, and NYCHA has conceded it is not in compliance with lead paint rules.

For example, the agency does not have a count of how many children under age 6, the population most vulnerable to lead paint, live or frequently visit NYCHA apartments, the report found. Many lead paint cleanups are being conducted inadequately, the report said, and the agency is waiting on hundreds of laboratory results of lead paint tests.

“These first few months of our work have revealed NYCHA as an organization fraught with serious problems in structure, culture and direction and perhaps even worse,” Schwartz wrote. “No one needs a monitor to be appointed to figure that out.”

This year, 18 cases of young children with elevated levels of lead in their blood have been reported to the federal government by NYCHA.

‘Putrid liquid’ and lack of accountability

On an unannounced visit to the Polo Grounds Towers in Upper Manhattan, the monitor’s team discovered a large pipe “cascading putrid liquid” from the ceiling into a laundry room. A worker, who was trying to stem the flow with a mop, said the problem had persisted for two months.

That was because a superintendent had decided scaffolding was necessary to repair the pipe; workers were waiting for an order of wood, a carpenter and then a plumber to fix the issue. Then a secretary inexplicably closed out the work order for the leak.

After the monitor’s team told the agency about the leak, it was repaired in three hours with only a plumber and a ladder.

That example, Schwartz wrote, was emblematic of an inefficient bureaucracy with little accountability and oversight.

“The main problem here is NYCHA’s failure to take action to solve a problem that needed immediate attention,” he wrote. “NYCHA must learn how to identify and fix these problems expeditiously without getting bogged down in layers of bureaucracy or a ‘check the box’ mentality.”

This article originally appeared in <a href="https://www.nytimes.com/2019/07/26/nyregion/nycha-rats-roof-repairs.html" id="d692723a-93be-3266-aa30-e125516ed39f">The New York Times</a>.

'Lighting Money on Fire' as Mold and Rats Persist in New York Public Housing

NEW YORK — The New York City Housing Authority, known as NYCHA, spent almost $4 million to replace eight roofs at a Staten Island housing project — 10 years before the expiration of their warranty, which would have covered repairs for free.

For years, Republicans controlled the state Senate, and stymied Democratic efforts to strengthen laws affecting about 1 million rent-regulated apartments in the city.

But with a newfound monopoly over the state Legislature and governor’s mansion, Democrats have wasted little time introducing a cadre of bills aimed at protecting tenants.

Amid an affordable housing crunch and a spike in homelessness statewide, housing activists see the next few months as a crucial opportunity to pass previously unimaginable reforms now that elected officials have signed off on a state budget and the current rent laws are set to expire in mid-June.

But the real estate industry — which demonstrated recently that it still had sway in Albany — is also bracing for the upcoming clash, warning that the proposed changes could hurt landlords.

Small building owners in particular are fretting over changes to laws that allow them to raise rents when they make building repairs, cautioning they could worsen living conditions for tenants.

A push for ‘universal rent control’

You may have heard of “universal rent control” over the past few months from the new wave of progressive lawmakers in Albany or because Oregon recently passed legislation that would limit rent increases across the state.But what does it mean in New York?

It’s shorthand for a bevy of renter-friendly reforms that a large coalition of tenant groups is lobbying for.

Democrats in both chambers have introduced legislation aimed at curbing homelessness and tenant harassment, and closing loopholes landlords use to hike rents and lift affordable apartments out of rent regulation.

There are also ambitious proposals to shield tenants who are unprotected from eviction and to expand rent stabilization to other counties beyond New York City and its suburbs.

“There is a sense that this is a big moment of opportunity to change some stuff that should have changed a really long time ago if it wasn’t for the power of the real estate lobby,” said Benjamin Dulchin, the executive director of the Association for Neighborhood &amp; Housing Development.

Halting the loss of rent regulated apartments

A top priority of tenant groups is to abolishvacancy decontrol, a provision that allows landlords to deregulate apartments and convert them into units with market-rate rents when they become vacant and their rent surpasses a statutorily set threshold; currently it is $2,774.77.

For years, Democratic lawmakers unsuccessfully pushed to eliminate the provision — which has led to the deregulation of more than 155,000 units since 1994 — facing resistance from Senate Republicans.

But with the backing of an all-blue legislature, Gov. Andrew Cuomo vowed to end vacancy decontrol earlier this year.

A bill would also eliminate the so-called vacancy bonus for rent-stabilized apartments, which allows landlords to raise rents by up to 20 percent whenever a tenant moves out.

In 2017, there were more than 966,000 rent-stabilized apartments, typically located in buildings built before 1974, with six or more units, and also constructed or renovated since then with special tax benefits.

Every year, a city board decides the allowable rent increases for these apartments; increases have ranged from 0 to 2.5 percent in the past few years.

Solidifying preferential rents

For about one-third of all rent-stabilized tenants, landlords charge a preferential rent — a discounted rent lower than the legal regulated rent. Landlords might set a preferential rent if, for example, they’re having trouble filling an apartment.

But they can legally charge the higher regulated rent when a tenant renews their lease, sometimes resulting in steep rent increases, according to advocates.

Legislative proposals would make preferential rents permanent.

Take the case of Winsome Pendergrass, 60, who moved into a two-bedroom, rent-stabilized apartment in Flatbush, Brooklyn in 2010.

Pendergrass said she was attracted to the apartment because of its $1,200 monthly rent, but she didn’t know it was a preferential rent at the time. She was surprised when her landlord increased the rent to $1,400 when she renewed the lease two years later.

By 2018, her rent had shot up to $2,100, partly as a result of improvements made to the building’s roof and windows, she said.

“It was a big, whopping leap,” said Pendergrass, who juggles two jobs as a nursing assistant and a home-care aid for older adults.

She ended up moving farther east to Brownsville, also in Brooklyn.

“A lot of us, my color people, are being pushed back to God knows where and living somewhere I don’t want to live in,” said Pendergrass, who is black and a member of New York Communities for Change. “It’s displacement.”

Uncoupling rent and building repairs

Another bill would eliminate a provision known as major capital improvements, which allows building owners to pass on some costs of buildingwide improvements, like elevator or roof repairs, to tenants through permanent rent increases.

A similar policy allows rent increases when apartments are renovated, but tenant groups say a lack of state oversight leads landlords to inflate costs.

Advocates argue that unscrupulous landlords use the provision to push out tenants to raise rents beyond the limits established by the Rent Guidelines Board every year.

Much of the debate will likely focus on whether to keep, reform or entirely scrap these provisions.

And what do landlords say?

Real estate trade groups said the Rent Guidelines Board over the past few years has approved only modest rent increases that have not kept pace with the mounting costs — from higher property taxes to water and sewage charges — of maintaining residential buildings.

Without the slate of provisions that allow landlords to raise rents, they won’t have an incentive to make improvements to aging buildings, said Frank Ricci, the director of government affairs at the Rent Stabilization Association, which represents 25,000 building owners.

“It’s going to have a pretty dire impact on buildings,” Ricci said. “Not immediately, but over time it’ll take its toll on the conditions of buildings in New York City.”

He said it made no sense to repeal vacancy decontrol because it was unreasonable to protect a renter who can afford to pay more than $2,700 in monthly rent.

The repeal of the provisions in question could lead to lower property values and a loss of up to $2 billion in annual property tax revenues, according to a joint analysis by the Real Estate Board of New York, an industry group, and HR&amp;A; Advisors, a real estate consulting firm.

Christopher Athineos, 49, runs a family business that owns and manages nine buildings, most of them in Bay Ridge, Brooklyn. About half the 150 apartments are rent stabilized.

“We’re hands-on property owners,” he said. “We take pride in our buildings. But if they pass a lot of these proposals, I don’t think we’d be able to maintain my buildings in the manner my tenants are accustomed to having them maintained.”

Athineos said he routinely installed new kitchens and plumbing not necessarily to raise rents, but to prevent higher maintenance costs down the road in his buildings, which are more than 90 years old on average.

Without the incentives, he said, he would likely put off renovations.

“These politicians know nothing about running housing. These are the people running NYCHA,” he said referring to the dismal conditions of the New York City Housing Authority.

Are changes likely?

If real estate insiders and housing activists agree on one thing, it’s that Democratic-control of the legislature — for only the third time in more than half a century — all but ensures state rent laws will be revised this year.

But it’s too early to determine what the changes might look like.

Many activists and left-wing lawmakers have grown wary after the most recent budget cycle, which they said failed to deliver on key progressive policies. Others remain skeptical of Cuomo, who has raised millions of dollars from the real estate industry.

As Cea Weaver, the campaign coordinator of Housing Justice for All, a statewide coalition of tenant groups, put it: “I wouldn’t take anything for granted in Albany.”

This article originally appeared in <a href="https://www.nytimes.com/2019/04/17/nyregion/ny-rent-laws-regulation.html" id="fe77ba4f-1b05-3a6f-a7c6-399413aa3a1e">The New York Times</a>.

Has the moment finally arrived for housing activists seeking more robust rent laws in New York City?

Tenants May Get More Protections in New York City, After Decades of Battles. Here's Why

For years, the half-acre of green grass and leafy trees, tucked in between Spring and Prince streets in Manhattan, has been a lush backdrop for fashion shows, photo shoots, games of hopscotch and quiet afternoons.

But the city plans to sell the land soon to build a seven-story, 123-apartment elevator building for low-income seniors.

The plans have spurred a clash in the neighborhood, turning the garden in Little Italy into a quintessential New York City power struggle that pits two of the city’s scarcest resources — affordable housing and green spaces — against each other.

On Tuesday, a coalition of the garden’s supporters filed a lawsuit against the city in an attempt to halt the project.

“We need affordable housing in the community and all around the city, but it shouldn’t be coming at the expense of community green spaces, especially something unique and iconic as Elizabeth Street Garden,” said Joseph Reiver, executive director of a volunteer-based nonprofit that manages the upkeep of the land, which the city owns but has leased to his father for decades.

The fight is a familiar one in the city: As the amount of available land dwindles, the real estate market booms and the demand for housing increases, green spaces become easy targets for new construction.

In a city where an estimated 200,000 seniors are on the waiting list for an affordable apartment, supporters of the project see the garden as a palatable sacrifice in order to house older adults on fixed incomes who are burdened with high rents or isolated in walk-ups. Opponents say the garden is the last green space in Little Italy and SoHo, and that it’s an integral part of the neighborhood’s character, attracting more than 100,000 visitors each year.

The lawsuit is the latest salvo in a yearslong feud that has fueled petitions and raucous meetings held by Community Board 2, a group of residents who weigh in on land use issues in the neighborhood and which recently condemned the project. Councilwoman Margaret Chin, who represents the district where the garden is, supports the project, which is undergoing the city’s public review process.

It is expected to win the approval of the City Council — which gives great deference to the position of the local Council member — and be built by 2021, unless the lawsuit succeeds.

“I feel that people are upset and it pains me that I have to disagree with people that are so committed to their point of view,” Chin said. “But there are seniors that don’t have affordable housing and they helped build up our city. They helped build up our neighborhood.”

Chin, who chairs the Council’s committee on aging, said that about 5,000 seniors are on the waiting list for affordable units in her district, which also includes Chinatown, Tribeca, the Financial District and parts of the lower East Side.

Half of the units at the development, named Haven Green, will be reserved for seniors who live in the area and 37 apartments will be allotted to homeless seniors. Pennrose, one of the developers, will also lease four retail spaces and RiseBoro Community Partnership will offer support services for tenants and neighbors.

“It’s easy to oppose change and the loss of something, but if we could put 123 very low-income and currently homeless seniors in front of you now, I think they would tell you a very different story,” said Karen Haycox, chief executive officer of Habitat for Humanity New York City, which will be headquartered on the ground floor and cellar of the development. “We feel a very strong passion to speak on their behalf.”

The development would preserve around 6,600 square feet of outdoor green space — about one-third of the garden’s current size — which the developers say will be open to the public.

But opponents of the project said that’s not enough.

They argue that the garden’s educational, artistic and eco-gardening programs make it a cultural cornerstone of the community. They have proposed building the development on a city-owned gravel lot about a mile away on 388 Hudson St. that could fit five times as many units, as well as more open space.

Matthew Creegan, a spokesman for the Department of Housing Preservation and Development, said the city is exploring building affordable housing there, too, in addition to the proposed development on Elizabeth Street.

Emily Hellstrom, a board member of Friends of Elizabeth Street Garden, a community group that supports designating the garden as parkland, said her group is filing a separate lawsuit against the city this week.

“The mayor when he was elected said he would listen to grassroots communities,” said Hellstrom. “People here want to have faith that their institutions are listening to them.”

Elizabeth Street Garden became regularly accessible to the public about six years ago, around the same time the development plans for the site became known. It was previously the site of a public school that was demolished in the 1970s, which sparked a contentious debate over what to build on the vacant lot.

In 1981, a 151-unit building of federally subsidized apartments was built on one end of the parcel. But the remaining 20,000-square-foot lot languished for a decade until the city leased it for $4,000 a month to Joseph Reiver’s father, Allan Reiver, owner of an adjacent gallery. He transformed it into a garden and outdoor showroom for architectural garden ornaments.

Cherry and Bradford pear trees were planted, the grass was manicured and the whole space was dotted with marble columns and sculpture fountains, giving it a Narnia-esque feel. The garden was fenced off, but open to visitors at the gallery’s discretion.

In 2012, Chin, while negotiating the neighboring Essex Crossing development, obtained a commitment from the Bloomberg administration to build senior housing on the garden site. The city would sell the land for $1 to the developers in exchange for the affordable housing.

About a year later, a group of neighbors mobilized to save the green space and worked with Reiver to open the garden to the public seven days a week, organizing volunteers to supervise the front gates.

It soon became an escape for tourists and neighbors alike, and a venue for art exhibitions, live music, yoga classes and gardening plots. Supporters have garnered thousands of signatures and raised money to hire Norman Siegel, a well-known civil rights attorney and former executive director of the New York Civil Liberties Union, to represent them.

The lawsuit filed Tuesday alleges, in part, that the city failed to adequately consider the environmental impact of the garden’s possible disappearance. The lawsuit further points out that the city seeks to apply a state law intended to facilitate improving “slums or blighted areas," which would make tax incentives available to the developers.

“How can you argue this garden is a slum?” Siegel said. “This issue is not just about Community Board 2 and Elizabeth Street Garden. If they can take your space away in Little Italy, they can take it away in your neighborhood, too.”

Critics argue there are other green spaces just two blocks away from the garden, like the Liz Christy Community Garden and the expansive Sara D. Roosevelt Park. And the well-funded campaign to save the garden, by residents of a predominantly white and gentrified neighborhood, has been portrayed by some as a classic case of the not-in-my-backyard, or Nimby, attitude.

“We are in a crisis of housing and I don’t think that the desires of a small group of collectively well-off people, some of whom own homes, can really determine the future for a desperate need here,” said Kathleen Webster, 65, a community gardener and Little Italy resident. “Everyone keeps saying build it on Hudson Street.”

Since 2014, only 93 units of affordable housing have been built in Community Board 2, which also includes Greenwich Village and the West Village.

Joseph Reiver, who has ambitious plans to build a greenhouse and community compost in the garden, denied that characterization.

“We shouldn’t be pitting senior affordable housing against community green spaces,” he said. “We don’t have to divide the community.”

This article originally appeared in <a href="https://www.nytimes.com/2019/03/07/nyregion/garden-little-italy-senior-housing.html" id="e0026fb3-bd73-3dec-a64f-0df1e44ca873">The New York Times</a>.

NEW YORK — The Elizabeth Street Garden’s paved paths meander around a granite balustrade from the early 20th century, limestone lion statues, benches and beds of roses and daffodils.

A Lush Urban Garden or Senior Citizen Housing: Which Would You Choose?

“Beautiful Loft Prime Tribeca 4BR/2BA Sleep 10,” read the listing on Airbnb for one apartment there.

Two of the three apartments in the building were popular with tourists looking to stay in one of Manhattan’s most desirable neighborhoods — at $600 a night each, they were a bargain for a large group.

But they were also illegal — part of an elaborate real estate scheme to make millions by circumventing state and local laws and Airbnb’s own rules.

The building, on Greenwich Street, was part of a larger enterprise that made more than $20 million in revenue by unlawfully renting 130 Manhattan apartments to almost 76,000 guests through Airbnb, city officials said.

The plot was geared toward getting around city regulations that are intended to keep blocks of apartments from being turned into makeshift hotels that avoid lodging taxes and oversight.

The crackdown on the empire last month was a milestone in the escalating battle between Airbnb and New York City — the company’s largest market in the country. Airbnb condemned the exploitation of its platform, but the scheme showed how the home-sharing site has given opportunists a new kind of hustle.

Interviews and documents offer a glimpse at how the New York scheme worked. According to the suit, the ring used multiple misleading identities to dodge Airbnb’s rules, text tourists and book apartments to budget-minded travelers. Addresses were fudged to avoid scrutiny.

In all, more than 100 Airbnb host accounts and 18 corporations were created to run an illegal hotel business that stretched north from Tribeca to SoHo, Gramercy, the Upper East Side and Harlem, according to a lawsuit brought by the city.

New York regulations are supposed to keep apartments from being pulled out of an already tight rental market to cater to the tourist trade. They specify that it is illegal to rent an entire apartment in most buildings for fewer than 30 days unless the permanent tenant is present while the renter is there.

Posting a unit that should not be listed on Airbnb is a civil offense, not a criminal one, and the city typically issues violations that can result in fines of thousands of dollars; lawsuits are filed in the most egregious of cases. In this lawsuit, the city is seeking more than $20 million from the defendants.

At the center of the scheme was Max Beckman, 35, a former real estate broker, according to the lawsuit. Beckman, who moved to the United States 18 years ago from Israel, was one of five people accused. There has not been a verdict, and the case is continuing.

Beckman agreed to be interviewed, making clear that he believed that he did nothing wrong.

“We’re not criminals,” he said at his lawyer’s office.

In 2012, Beckman, in his own telling, was struggling to make it as a real estate broker. He said he had a dismal credit score and $100 to his name when he used that money to pay the application fee for a one-bedroom on the Upper East Side.

He began renting it out, short term, to tourists through Airbnb and pocketed the difference after paying rent. It was a simple business model he would go on to replicate.

“It took off, and I made more money, and then I got another one,” Beckman said. “I couldn’t stop.”

In 2015, Beckman quit his job as a real estate broker for Metropolitan Property Group, a brokerage firm in Manhattan, to devote himself full time to his Airbnb venture.

He persuaded two friends who were also brokers at the firm to become his partners, he said. The men, Alon Karasenty and Simon Itah, were also sued by the city. They did not respond to multiple requests for comment.

By the end of the year, the trio was managing dozens of listings on Airbnb, including large spaces in some of the city’s most sought-after neighborhoods, according to court documents.

“We made money, we lost money, we learned,” Beckman said.

The lawsuit alleged that Beckman’s former employer, Metropolitan Property Group, and its chief executive officer, Sami Katri, along with his wife, Shely Katri, were also involved.

Some of the 18 corporations that received payouts from Airbnb had been registered using Metropolitan Property Group’s office addresses. The suit also claimed the Katris’ names were linked to two Airbnb accounts and the utility bills for two apartments at 200 E. 116th St. in East Harlem, where all seven units were on Airbnb.

But Beckman said the addresses were used without the company’s knowledge and the Katris were not involved.

Douglas Pick, a lawyer for the Katris and the brokerage firm, also denied that his clients were involved and said the city has not provided any evidence that Airbnb had disbursed payments to them. He said the three men had stopped working for the firm by 2015 and had “began operating for themselves.”

Sami Katri, through his lawyer, said he had worked with Karasenty and Itah to legally lease apartments at the East Harlem building but was unaware they were rented out through Airbnb.

Yoram Nachimovsky, the lawyer representing the three men and their corporations, said the lawsuit was “a political move by the mayor.”

“Basically, the mayor is being sponsored by these hotel operators and he’s doing what’s in their best interest,” he said.

Christian Klossner, executive director of the Mayor’s Office of Special Enforcement, which led the investigation, said his office was “here to preserve housing for New Yorkers and to make sure both New Yorkers and visitors are kept safe and treated fairly.”

Airbnb has long said the majority of its hosts are everyday New Yorkers who rent out a spare bedroom or list their apartment while on a long vacation.

Still, the company has voluntarily taken down more than 5,000 commercial listings since late 2015. The city estimates that about one-third of listings on home-sharing websites are run by commercial operators; Airbnb disputes those numbers.

Under Airbnb’s “One Host, One Home” policy, New Yorkers can list only one apartment, with few exceptions.

But Beckman and his partners appear to have bypassed that policy by creating host accounts using different email addresses and multiple identities, including those of relatives and some with variations of the same name.

They also provided Airbnb with incorrect or incomplete addresses for apartments to avoid scrutiny, according to the city’s lawsuit.

Josh Meltzer, head of public policy for Airbnb in the Northeast, condemned the behavior and acknowledged the limitations of the company’s rules, which he said were intended as a short-term remedy.

“We’re talking about a very narrow set of actors that are working very creatively and very diligently,” he said. “That’s why we’ve supported what I would say is a very restrictive, comprehensive piece of legislation at the state level that would essentially require platform and government to work together to target this type of behavior.”

The city also sued five buildings for not cracking down on Airbnbs managed by Beckman and his partners despite violations issued by the city.

Abington Properties, owner of three of the buildings, did not reply to multiple requests for comment. A secretary for Helm Management, which runs an East Harlem building that became a de facto hotel, said the company did not comment on pending litigation.

Beckman said he intended to reach a settlement with the city, even if that meant paying a hefty fine. He said that, despite the lawsuit, he spoke to The Times because he thought the city had unfairly portrayed him as a criminal.

“There is nothing bad about us,” he said. “That’s why I’m happy to do this interview with you.”

This article originally appeared in <a href="https://www.nytimes.com/2019/02/23/nyregion/airbnb-nyc-law.html" id="665c3b2a-d5c5-37fc-aed1-dff3d43c6418">The New York Times</a>.

Rise and Fall of a New York Airbnb Empire

NEW YORK — From the outside, there was nothing especially notable about the small white building on the corner of a cobblestone street in Tribeca. But until recently, it was a crucial location in a sprawling empire.

Airbnb has clashed with other cities. Los Angeles, Amsterdam, Paris and Vancouver, British Columbia, have all passed laws restricting Airbnb rentals. In July, Palma de Mallorca became the first city in Spain to ban Airbnb.

Interviews and documents offer a glimpse at how the New York scheme worked. According to the suit, the ring used multiple misleading identities to dodge Airbnb’s rules, text tourists and book apartments to budget-minded travelers. Addresses were fudged to avoid scrutiny. A cadre of cleaners was apparently recruited through Facebook.

“We’re not criminals,” he said at his lawyer’s office, while puffing from a Juul he kept in a black leather pouch fastened to a chain around his neck. He shrugged: “I don’t own a yacht or a big penthouse.”

What he did have was an ambitious, though risky, idea.

Luis Ferré-Sadurní

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