More Trouble in Stuy Town

The firms that bought Stuyvesant Town and Peter Cooper Village will miss a $16 million debt payment due today.

Stuyvesant Town and Peter Cooper Village were built in the 1940s to house World War II veterans and their families. For decades it allowed middle and working class New Yorkers to live and work in Manhattan.

My mother grew up in Stuyvesant Town, and when I was growing up in Yonkers, N.Y., we would travel to the city to visit my grandmother in the apartment my mother grew up in. It was a spacious one bedroom and if they had known then what we know now about the city’s real estate market, my parents would have urged her to stay there and buy the place rather than move to Yonkers. It was where I watched the first space shuttle launch on television and went on the first Easter egg hunt that I can remember.

Even before it was bought by the real estate speculators in 2006, these complexes had gone back on their pledge to keep rents affordable, but the big buyout at the height of the real estate bubble was an exercise in the worst aspects of both real estate speculation and private equity excess. The only way the buyers could make back their money would be to turn these former middle class enclaves into luxury apartments. It was an exercise in financial hubris.

Despite these problems, Manhattan tenants are still going to lose out in the end. The creditors who may get some or all of the properties if the owners have to declare bankruptcy will certainly want to recoup as much money as possible, and that isn’t made renting to good-hearted working folks like you and me. Rents may not go up as much as previously thought across the city, but they’re not going down anywhere; that’s one thing that doesn’t change.