STOP GOTHAM’S MISUSE OF 421-A RIDERS AND PROTECT AFFORDABLE HOUSING TENANTS

Gotham West developers are misrepresenting housing programs, pressuring tenants to sign unlawful lease riders, and undermining long-standing affordability protections — all while continuing to collect millions in public subsidies.

Tenants report that Gotham is inserting income-restricted 421-a lease riders into renewal packages for apartments that were already governed by LIHTC/HFA affordability and rent-stabilization protections at original lease-up.

These riders shorten affordability periods, remove rent-stabilization safeguards, and impose unlawful rent increases — directly contradicting the regulatory agreements tied to these homes.

This is not a paperwork mistake.

This is a systemic practice affecting vulnerable tenants and public housing funds.

WHAT'S HAPPENING

 1. Misuse of 421-a Income-Restricted Riders
Tenants in apartments leased before Gotham’s 421-a Final Certificate of Eligibility — including both LIHTC units and market-rate units governed by HFA regulatory agreements — are being pressured to sign 421-a riders that do not match their lease-up program.

These riders:

• End affordability protections up to 15 years early
• Replace permanent rent-stabilization protections with temporary tax-benefit terms*
• Contradict the regulatory agreements in effect at move-in

2. Imposition of Unauthorized Rent Increases

The 421-a riders impose automatic 2.2% annual rent increases beginning in 2026.

These increases:

• Are not authorized under Rent Guidelines Board rules
• Are not required under LIHTC/HFA regulatory agreements
• Result in nearly 20% compounded rent hikes by 2034

3. Removal of Rent-Stabilization Protections

Original affordable leases include a renewal protection clause “notwithstanding income,” which preserves rent-stabilization rights for the life of the tenancy.

The 421-a riders:

• Remove this clause
• Create a pathway to future deregulation
• Directly conflict with state rent laws and federal affordability covenants

4. Lease Withholding and Coercion

Tenants report that Gotham has:

• Refused to countersign renewal leases
• Delayed or withheld completed lease agreements
• Issued 15-Day Notices to Vacate* to tenants who declined the inapplicable rider

This creates pressure to self-evict and is consistent with retaliatory landlord conduct.

5. Digital Manipulation of Lease Renewals

Through DocuSign and electronic delivery, tenants report that:

• Riders are embedded between pages
• Riders are hidden behind signature screens
• Tenants often do not see the full rider language until after signing

This raises serious concerns about informed consent and deceptive lease practices.

6. Unlawful Removal of Utility Allowances

 Many tenants’ original leases included a utility allowance credit as part of the regulated rent structure.

Gotham unilaterally removed this credit, increasing tenants’ effective rent.

Under the Rent Stabilization Code, renewal leases must remain on the same terms and conditions. Removing a utility allowance is an unlawful rent overcharge.

WHY THIS MATTERS

Gotham continues to receive substantial taxpayer subsidies while:

• Undermining affordability agreements
• Pressuring tenants to surrender rights
• Collecting unlawful rent increases

This harms seniors, disabled tenants, and working families who depend on these protections to remain housed.

Over the next decade, these practices could amount to tens of millions of dollars in unlawful rent and subsidy abuse.

SYSTEMIC PATTERN ACROSS GOTHAM PROPERTIES

Gotham’s lease practices are not limited to a single building. Tenants at other Gotham properties — including The Nicole and Atlas — have reported similar patterns involving:

• Pressure to sign riders that conflict with original affordability or rent-stabilization terms.
• Confusion created by inconsistent program labeling in lease and registration documents.
• Renewal irregularities and unexplained changes to long-standing lease terms.

This indicates a broader portfolio-wide pattern, not an isolated administrative error. When the same lease tactics appear across multiple developments operating under different housing programs, it raises serious concerns about systemic noncompliance with regulatory agreements and rent-stabilization law.

WHAT EACH AGENCY MUST DO

DHCR (Division of Housing and Community Renewal)

• Correct improper Initial and Annual Registrations
• Ensure registrations reflect the true governing regulatory program

HCR Tenant Protection Unit (TPU)

• Investigate improper lease riders
• Enforce Rent Stabilization renewal requirements
• Address retaliation and coercive lease practices
• Stop unlawful deregulation attempts

HPD (Housing Preservation & Development)

• Conduct a full audit of program classification at Gotham West
• Issue written unit-level determinations
• Prevent owner “self-corrections” without agency oversight
• Enforce compliance with Inclusionary Housing and regulatory agreements

HFA (New York State Housing Finance Agency)

• Enforce the HFA Regulatory Agreement governing Gotham West
• Confirm in writing that units placed in service under LIHTC/HFA remain subject to those affordability and rent-stabilization protections
• Review whether lease riders being imposed are consistent with HFA financing documents and regulatory covenants
• Require the owner to correct any practices that conflict with HFA program rules or long-term affordability obligations*
   

New York State Attorney General

• Investigate deceptive practices and subsidy misuse
• Enforce consumer protection and housing fraud laws

LEGISLATIVE ACTION NEEDED

For six years, the New York State Senate has passed Bill S450. The Assembly’s companion bill, A659, has repeatedly stalled.

These bills would close the loophole that allows landlords to insert deceptive riders into regulated leases.

Assembly Member Linda B. Rosenthal, who represents District 3 — where Gotham West is located — and serves as Chair of the Assembly Housing Committee, is in a key position to help move A659 forward this legislative session.

We call on the Assembly to bring A659 to the floor for a vote so S450/A659 can finally become law and protect tenants across New York State.

ACCOUNTABILITY BEFORE NEW SUBSIDIES

Gotham is currently a finalist for a billion-dollar redevelopment project on West 57th Street expected to include affordable housing.

Before awarding new subsidies, New York must require Gotham to honor the affordability obligations it already accepted at Gotham West.

SIGN THIS PETITION TO DEMAND:

• Immediate investigation of Gotham’s lease practices
• Restoration of unlawfully removed utility credits
• Enforcement of affordability agreements
• Passage of S450/A659 to stop deceptive lease riders statewide

Tenants should not be forced to sign away their rights to keep their homes.*