Urban America Charging Eastwood/Roosevelt Landings Residents Up To $1000 In Monthly Submetered Electric Bills - Can That Be Right?

Image of Eastwood (Roosevelt Landings) from Bridge and Tunnel Club

In 2007, during the height of the commercial real estate bubble, the NY Observer reported that Urban America, together with the Fisher Brothers and the City Investment Fund, purchased a portfolio of formerly Mitchell-Lama subsidized building for $940 million dollars. Included in this portfolio was the Roosevelt Island Eastwood building which Urban America purchased for $189 million (according to the NY Observer) and renamed Roosevelt Landings.

At the time, many of the residents of these buildings as well as local political representatives such as Assembly Member Micah Kellner, expressed great concern and worry that the need to recoup the new owners investments would soon make these buildings unaffordable to the people who have lived in their apartment for many years, particularly since NY State and City pension fund money was used to fund the portfolio's purchase.

Another concern of the Eastwood/Roosevelt Landings residents, as well as Assembly Member Kellner, State Senator Serrano and Council Member Jessica Lappin expressed in this excerpt from a letter sent to Urban America by Roosevelt Island's elected representatives, has been the plan by Urban America to install electric submetering for the building.

As elected officials representing Roosevelt Island, we write to express our strong concern with the plan set forth by Urban American to begin submetering of the electricity at the Eastwood housing complex. While we understand that submetering can promote more efficient use of energy in residential buildings, we believe that given the particular circumstances at Eastwood, going forward with submetering at this time would expose tenants there to an unacceptable degree of risk.

... We are particularly concerned because the building is old, poorly insulated, and its heating system is electric. Many of its residents are seniors and people with disabilities, on fixed incomes, who often spend a great deal of time at home in their apartments. The transition to submetering raises the prospect that these tenants will be unable to afford to heat their own apartments.

As reported in this earlier post, the first sample submetered electric bill have been received by the Eastwood/Roosevelt Landings residents and their worst fears have been realized - montly electric bills of up to $1000 for a 3 bedroom apartment and $500-$600 for a two bedroom apartment. In response, I received the following message from the Roosevelt Landings Residents Association dated February 3, 2009:

Subsidized, elderly and physically challenged tenants of Roosevelt Landings didn’t sleep well last night. They’re petrified that they will lose their homes! Newly sub-metered, last night 1,003 families, most of them subsidized and low income, received their first sample electric bill for their apartments. The stipend DHCR provided, to cover those costs, barely pays a fraction of their bill- many of which exceeded $1,000. Bills of $500 and $600 were common for 2 bedroom apartments, while the stipend provides only $149 for those units.

The landlord, the Eisenberg family, owners of Urban American, as well as the City Investment Fund, and the former owner, Jerome Belson, allowed the building to waste electricity for years. Instead of curbing the flow of electricity that coursed non-stop through inefficient baseboard heaters, whose effects were mitigated by poorly insulated walls, the owners turned to the State of New York’s sub-metering mandate to foist their appliances’ excesses onto the backs of their tenants. For their own electric usage, the owners cut the heaters in the hallways off years ago, forcing tenants to walk through cold passages, and creating cold common walls that tenants have to shoulder the cost of heating on the inside.

The owners evade “energy efficiency” by re-circulating old, out-dated appliances without energy-star ratings and flaunt the spirit of conservation by palming off the costs for their failure onto tenants who can ill afford the expense and have no say in the maintenance or replacement of the equipment.

Adding insult to injury, for many tenants, the landlord, whose property is located on NY State land and provides homes to economically disadvantaged tenants, has never applied for the New York Power Authority (NYPA) discounted electric rate that was extended to the Gristedes Grocery located just steps down their street.

The building exited from the Mitchell Lama system in 2005. Part of a portfolio of 6 buildings, Morgan Stanley and City Controller, Bill Thompson were responsible for landing the buildings into the hands of several state and city pension funds, including the pensions of NY State and NY City. Originally sold for approximately $300 million, the portfolio was purchased by its current owners for just short of one billion dollars barely 1 year later. The landlord has applied to sub-meter 5 of the 6 properties.

Tenants in the portfolio buildings, 3333 Broadway, Schomburg Plaza, Metro North, Roosevelt Landings and UPACA I and II, with over 4,000 units located both on Roosevelt Island and in Harlem, suspect that a “predatory equity” situation exists in their buildings. Because of the considerable increase in the debt service for their building’s FNMA financing, and based on what they project to be the building’s operating expenses and income, it is uncertain how the buildings can be carried without eroding reserves and possibly going into default. In a meeting last week between tenant representatives, Dina Levy of the Urban Homesteading Assistance Board, (UHAB), and Douglas Eisenberg, speaking for the owners, Mr. Eisenberg refused to provide a statement of financial condition that would put tenants’ minds at ease. The fact that the landlord has taken the extreme measure to dump their electric load onto the backs of its tenants without replacing the out-dated electric heaters or conducting an engineering study to determine the possible problems with the building’s electric consumption, adds to their concerns.

Geraldine Gauthier of the Public Utilities Law Project (PULP) indicates that the state legislation the landlord is acting under was put into effect to cut consumer consumption by 23%. Even employing the most arduous steps, it is unlikely that the tenants of Roosevelt Landings could possibly reign-in their consumption to comply with their stipends. Ms. Gauthier is immediately responding to NY States’ review of the process to implement sub-metering in multiple dwellings that is currently being conducted in a 4-year plan for all multiple dwellings through the Public Service Commission.

There will be an emergency meeting of the Roosevelt Landings Residents Association on Saturday February 7, 2PM at the Good Shepherd Community Center. The Residents Association asks that you bring your sample electric bill and write the number of bedrooms in your apartment and whether you face north or south and where in the corridor your apartment is situated.

UPDATE - 2/9 - In NY Times article concerning Roosevelt Landings electrical submetering problems, Urban America responds:

... Douglas F. Eisenberg, the chief operating officer for Urban American, which owns Roosevelt Landings, said the sample bills allowed residents to see how much electricity they were using and to make adjustments.

“I think that changing one’s habits is a difficult thing to do, and this really takes people being proactive about saving energy,” Mr. Eisenberg said. “A lot of these residents have lived in this building a long time. They haven’t been responsible for their electric bills. Now they are. I think at the end of the day, I feel pretty good that we’re doing the right thing here.”

A reader points out that the article also stated:

Tenants’ bills varied widely. For three-bedroom apartments, they ranged from $79.26 to $1,050.43, and for four-bedrooms from $147.97 to $974.11. Mr. Eisenberg said the readings were accurate, and added that if tenants had concerns about faulty heaters, the management was eager to correct the problem. “I assure you that this office is pretty responsive,” he said.

The reader comments:

According to the article in the NY Times from Feb 8th the electricity charge varied quite a bit. $80-$1050 for 3BR apts and $150-$975 for 4BR apts for example. I am sorry, but this really looks like this is a matter of attitude and habit adjustment. Time to wear those sweaters and sweat pants at home now. Like pretty much everybody else in this country.