Making a quick return on New York investment properties with numerous rent-regulated tenants is difficult to accomplish, largely due to laws around forcing such tenants out and raising rent prices.
But the Associated Press published a report Sunday detailing just how White House senior adviser Jared Kushner's family company was able to do just that: by pretending those rent-controlled tenants didn't exist.
In the three years that Kushner was CEO of the family business, Kushner Cos. falsely reported having zero rent-regulated tenants dozens of times in paperwork filed with the city.
In all, Housing Rights Initiative found the Kushner Cos. filed at least 80 false applications for construction permits in 34 buildings across New York City from 2013 to 2016, all of them indicating there were no rent-regulated tenants. Instead, tax documents show there were more than 300 rent-regulated units. Nearly all the permit applications were signed by a Kushner employee, including sometimes the chief operating officer.
Kushner did not sign any of the documents himself, but the practice sheds light on the ethics of the president's son-in-law's business.
"It's bare-faced greed," said Aaron Carr, founder of Housing Rights Initiative, a tenants' rights watchdog that compiled the work permit application documents and shared them with The Associated Press. "The fact that the company was falsifying all these applications with the government shows a sordid attempt to avert accountability and get a rapid return on its investment."
In a statement to the AP, the company indicated that it outsources the handling of such paperwork and "if mistakes or violations are identified, corrective action is taken immediately."
"Kushner would never deny any tenant their due-process rights," it said, adding that the company "has renovated thousands of apartments and developments with minimal complaints over the past 30 years."
But tenants the AP spoke with had plenty of complaints, from noisy construction at odd hours to rat infestations -- and their grievances are corroborated by documentation showing frequent complaints in Kushner buildings across New York City.
[C]urrent and former tenants of the Queens buildings told the AP that they were subjected to extensive construction, with banging, drilling, dust and leaking water that they believe were part of targeted harassment to get them to leave and clear the way for higher-paying renters.
"All of a sudden, there was drilling, drilling. ... You heard the drilling in the middle of night," said one of the rent-regulated tenants, Mary Ann Siwek, 67, who lives on Social Security payments and odd jobs. "There were rats coming in from the abandoned building next door. The hallways were always filled with lumber and sawdust and plaster."
Had the Kushner Cos. disclosed those rent-regulated tenants, it could have triggered stricter oversight of construction crews by the city, including possibly unscheduled "sweeps" on site by inspectors to keep the company from harassing tenants and getting them to leave.
Kushner Cos. is far from the only developer in New York using such tactics, but currently there is little in place to sufficiently deter such companies from using deceptive means to push out poorer tenants.
While technically it is against the law to submit false documents and could result in fines up to $25,000, the rules are often broken without meaningful consequence.
New York City Council member Ritchie Torres, who plans to launch an investigation into permit applications, said: "The Kushners appear to be engaging in what I call the weaponization of construction."
"There is a lack of tools to go after landlords who harass tenants, and there is a lack of enforcement," said Seth Miller, a real estate lawyer who used to work at a state housing agency overseeing rent regulations. Until officials inspect every construction site, "you're going to have this incentive for landlords to make life uncomfortable for tenants."