Review: Daniel Garodnick’s Saving Stuyvesant Town: How One Community Defeated the Worst Real Estate Deal in History

Reviewed by Kevin Ritter

Saving Stuyvesant Town: How One Community Defeated the Worst Real Estate Deal in History
By Daniel R. Garonick
Cornell University Press, Three Hills, 2021
384 pages

Stuyvesant Town, a middle income housing development on Manhattan’s East Side, has been a consistent site of conflict and controversy in New York City since its creation in the 1940s. Dan Garodnick’s new book, Saving Stuyvesant Town: How One Community Defeated the Worst Real Estate Deal in History, covers the story of the development from its origins as a postwar housing development built on top of the former Gashouse District, which had been cleared of its residents through eminent domain, to 21st century real estate dealings that threatened to displace many of the property’s rent stabilized tenants in favor of new market-rate residents.

The original sin of Stuy Town, of course, is that MetLife insisted that the property be exclusive to white residents, barring potential Black residents from renting apartments there. The city’s mayor at the time, Fiorello La Guardia, ultimately allowed MetLife to continue with a segregated Stuy Town over the objections of many politicians and civil rights leaders like Adam Clayton Powell Jr. A small number of white Stuy Town residents soon organized protests against MetLife’s discriminatory policies, including hosting Black veterans as houseguests and holding an around-the-clock vigil outside of MetLife’s Madison Avenue offices. These efforts were met with hostility by MetLife, which launched a smear campaign against the organizers of the protests and attempted to evict them. The company’s efforts were rightfully frowned upon by public officials, and ushered an official end to MetLife’s stated policy of segregation. Even though its outright racist leasing policies were gone, Stuy Town was still barely integrated. In 1960, eight years after those rules were taken off the books, only 0.2 percent of Stuy Town’s residents were Black.

Garodnick opens his book with a re-telling of these desegregation efforts as an introduction to the long history of tenant organizing in Stuyvesant Town and nearby Peter Cooper Village. Most of the book focuses on the work that was undertaken during Garodnick’s tenure on the New York City Council between 2006 and 2017. During this time MetLife, which had come to be seen by some tenants as a benevolent maternal entity (“Mother Met”), placed the properties up for sale. Tishman Speyer purchased the properties for 5.4 billion dollars, the largest residential real estate transaction in history.

Tishman Speyer’s road to a profitable Stuyvesant Town-Peter Cooper Village hinged on rapid turnover of rent-stabilized tenants. Tishman Speyer projected twelve-fifteen percent annual turnover in stabilized units, even though evidence pointed to five percent being a more realistic, though still rosy, rate in Stuyvesant Town, where residents were known for sticking around. To achieve these high turnover rates, Tishman Speyer surveilled their rent-stabilized tenants, hoping to find evidence that some apartments were not primary residences, therefore making the residents not eligible for rent stabilization. They sent Golub notices[1] claiming that legitimate tenants were not full-time residents, telling them that they would need to vacate or provide mountains of documentation proving otherwise. The scale of this operation was wide-reaching; thousands of tenants received these notices, including the head of the Tenants Association.

In what New York magazine would later call an “epic blunder,” Tishman Speyer defaulted on their loan following the 2008 financial crisis, largely as a result of the faulty economic thinking undergirding their purchase.[2] Tishman Speyer’s default was disastrous for tenants, throwing them into years of confusion over the property’s ownership and management. But it also had economic ripples far beyond New York City. Pensions in California and Florida had been invested in the Tishman Speyer-Stuyvesant Town deal, essentially making retirement funds contingent upon the exploitation of rent-stabilized tenants in another state. After years of uncertainty, in 2015 the Tenants Association successfully worked with the Blackstone Group to design a plan for the corporation to purchase the property with provisions for affordable housing for the next twenty years.

Saving Stuyvesant Town lays out many of the organizing and activist strategies that led to the preservation of middle-income housing at Stuyvesant Town-Peter Cooper Village. Some of the activism takes the form of collective action and mutual aid — especially the lifesaving services that residents and activists provided to homebound seniors following Hurricane Sandy. But the work to preserve middle-class affordable housing also takes place in smaller circles, and the key moments of the book often occur over email, on phone calls, in windowless government conference rooms, and in midtown restaurants. These interactions involve only a handful of tenants, those serving on the Tenants Association, and a range of real estate, government, and finance professionals.

In these closed-door interactions, we can see the extent to which the complex’s status as middle-income housing enabled this successful form of activism. Garodnick and the Tenants Association regularly call upon neighbors with specialized knowledge of real estate law and finance. One of the pivotal moments of the Blackstone deal comes not as the result of collective tenant action, but when John Sheehy, a member of the Tenants Association, speaks to his next-door neighbor at his second home in the Hamptons, who happens to be a senior managing director in the Blackstone Group’s real estate division. The deal that Blackstone arrived at was almost certainly enabled by the professional and personal connections of Stuyvesant Town and Peter Cooper Village residents.

In the book’s conclusion, Garodnick acknowledges some criticisms of the Blackstone deal. For example, he notes that the affordability component of the deal expires in twenty years, potentially causing a similar crisis a few decades down the line when Blackstone is able to significantly hike rents or sell to another company that will. Garodnick’s answer to this is that MetLife’s original agreement only guaranteed twenty-five years of affordability, which was then renewed for an additional twenty. The Blackstone deal was certainly a hard-won victory for the residents of Stuyvesant Town, ensuring continued affordability in the near term, but solutions engineered in collaboration with real estate companies will never radically shift power structures enough to ensure long-term affordability.[3]

Saving Stuyvesant Town paints Blackstone as a fairly benevolent company, willing to work with tenants to achieve a deal that works for all parties. Garodnick even calls Jon Gray of Blackstone “as good [a landlord] as any I can imagine, [if tenants have to have a landlord.]” But Blackstone is interested in its own profits, not in tenants’ financial wellbeing. In 2019, the United Nations highlighted Blackstone’s role in creating the global housing crisis by hiking rents and charging exorbitant fees for repairs on units.[4] Even in Stuyvesant Town, in 2020, just five years after the deal covered in the book, Blackstone attempted to raise rents on some units by five percent, well above the 1.5 percent allowed by a state law passed in 2019, bitterly promising to fight the new law in court.[5]

While Saving Stuyvesant Town paints an inspiring story of tenants working together to mobilize government officials and large investment companies to preserve affordable housing, it also does open the question of the extent to which these investment companies can be trusted to keep tenants’ interests in mind. Despite the views some tenants had of a benevolent “Mother Met,” MetLife designed Stuyvesant Town as a racially segregated enclave in Manhattan in the 1940s, and in 2005 rejected an offer organized by Stuyvesant Town residents in favor of a larger bid from Tishman Steyer that hinged on pushing out rent-stabilized tenants. The Blackstone Group, even though it designed its deal with residents on the basis of maintaining affordability, has been eager to move units out of rent stabilization and draw larger profits. Saving Stuyvesant Town paints a rosy picture of tenant negotiations in an iconic Manhattan affordable housing development, and we should celebrate these victories for preserving a significant amount of middle-income housing. But behind this rosy picture is a reality that, in the absence of large-scale governmental intervention in the housing market, affordable housing will continue to be a landscape of half-measures dictated by large companies that do not have tenants’ best interests in mind.

Kevin Ritter is an urban planner and writer in Brooklyn, New York. His writing has appeared in Hyperallergic, the London School of Economics Book Review, and Hunter College’s Urban Review, where he served on the editorial board. He currently serves as the Convening Technology Producer for Common Field.

[1] A Golub notice is used to notify residents that they may be evicted from their rent-stabilized unit because they are not using it as a primary residence, unless. Residents might be living in a different home or sub-letting out their apartment. In the case of Tishman Speyer and Stuyvesant Town, many, if not most, of the Golub notices issued were given to residents who truly did live in their apartments full time.

[2] Gabriel Sherman, “Tishman Speyer's $3.4 Billion Stuyvesant Town Mistake,” New York Magazine (December 18, 2009), https://nymag.com/realestate/features/62880/.

[3] One legislative action that might help residents ensure long-term affordability might be passing Tenant Opportunity to Purchase legislation similar to Washington, DC, where when a building is put up for sale, tenants have the opportunity to match the selected offer and take control of the property themselves, often in collaboration with a non- or for-profit real estate entity.

[4] Patrick Butler and Dominic Rushe, “UN Accuses Blackstone Group of Contributing to Global Housing Crisis,” The Guardian (March 26, 2019), https://www.theguardian.com/us-news/2019/mar/26/blackstone-group-accused-global-housing-crisis-un.

[5] Alexandra Alexa, “Tenants at Stuy Town Sue Blackstone in Anticipation of Rent Increases This Summer,” 6sqft, March 5, 2020, https://www.6sqft.com/tenants-at-stuy-town-sue-blackstone-in-anticipation-of-rent-increases-this-summer/.