Adi Talwar

A loft building on Johnson Avenue in Bushwick

A four-story building at 538 Johnson Avenue in Bushwick came into the spotlight during the push for new loft tenant protections in Albany this spring, which led to an expansion of the Loft Law that was signed by Governor Cuomo late last month. At 538 Johnson Avenue, two of the floors are dedicated to commercial businesses while the other two floors have been illegally occupied as residential loft units.

According to advocates, the loft tenants at 538 Johnson Avenue are facing eviction. In 2012, the tenants applied for loft-law protection with the Loft Board on the basis that two attached structures on one zoning lot were two separate buildings (four-story and two-story buildings connected by a single stairway). In response, the property owner argued it was one whole property and the metal treatment and coating industrial business on the ground floor of the two-story structure constituted an incompatible industrial use. Tenants then asked for the four-story building to be recognized as an independent building so they could apply for Loft Law protection.

The tenants lost the case for their application in 2017 after a city Office of Administrative Trials and Hearings (OATH) judge ruled in favor of the property owners and found the two structures to be one whole property because both buildings were bounded by one zoning lot. The loft tenants at 538 Johnson were left with one hope: an update to the Loft Law that might open another avenue to saving their apartments.

It’s possible the bill passed by Albany in 2019 will offer a lifeline to the tenants of 538 Johnson. But this year’s update to the Loft Law has left a bad taste in everyone’s mouth from loft tenant advocacy groups with tenants on the brink of eviction, to North Brooklyn community groups worried about displacement and gentrification and elected officials who say they tried to craft a fair bill.

Another extension

The Loft Law concept was first introduced in the late seventies when the city was facing a deep fiscal crisis and the manufacturing industry left buildings sitting empty in industrial business zones across the city. Landlords welcomed artists looking for affordable, live-and-work spaces.

In 1982, the state legislature established the city’s Loft Board to administer regulations and compliance with state and city laws, and crafted the Loft Law itself which regulates the conversion of commercial and manufacturing buildings for lawful residential use. The Loft Law was essentially designed to force landlords to bring illegal living spaces up to safety codes.

The 1982 Loft Law version said if there were three or more loft units in a building which had been occupied for 12 months during the eligibility window of 1980–1981, then the landlord was required to come into compliance with city and state laws. Landlords could collect rent, in accordance with rent stabilization guidelines, while tenants had rights and were entitled to inhabit a safe, affordable loft apartment unit with heat and hot water. After 1982, similar versions of the bill would pass to give other groups of loft tenants some protections and legal status.

In 2010, then-Assemblymember Vito Lopez spearheaded a new and improved version of the Loft Law with a new window of eligibility, coverage in the North Brooklyn IBZ and parts of Long Island City in Queens and additional protections. Despite Lopez’s efforts, the Bloomberg administration folded in amendments which restricted the number of units eligible for coverage on a number of factors ranging from fire safety to putting 2014 sunsets on the new protections.

According to data Sen. Julia Salazar’s office obtained from the Loft Board, so far, an estimated 640 buildings have gained legal status since the law was established in 1982. In Salazar’s district there are currently 18 buildings. In the neighboring Senate District 26, which includes the Brooklyn waterfront and lower Manhattan, there have been 26 buildings. In other parts of Brooklyn, the data showed 31 buildings — totaling an estimated 106 buildings in Brooklyn alone. Salazar’s office says they expect the numbers to be much higher and the data they have does not include buildings in the process of becoming legalized loft residential buildings.

Since the last update to the law in 2010, loft tenants have said they fear their rights are always at risk of either expiring or changing altogether. And some unknown number of new illegal conversions have occurred, leaving a new batch of tenants on precarious ground.

Rookie legislator steps into a complex debate

An updated Loft Law to address those concerns had passed the state Assembly over the last couple of years but it never got past a Republican-controlled Senate.

After Salazar won election last year to represent the 18th Senate District (which includes the Brooklyn neighborhoods of Bushwick, Williamsburg, Greenpoint, Cypress Hills, City-Line, East New York, Bedford-Stuyvesant and Brownsville) she took on the task to update the Loft Law that her predecessor had sponsored.

According to the bill’s supporters, it was critical the bill pass so it could improve tenant safety by bringing loft units into compliance with fire and safety standards set by city and state laws. But most importantly, it gave loft tenants the rights they were denied because their loft apartments did not have a certificate of occupancy, such as protections against evictions or landlords raising the rent an unreasonable amount.

With a new Democratic majority in the Senate and amid the push for progressive state rent laws, the NYC Loft Tenants group saw an opportunity and advocated aggressivley for the bill.

With sponsors Salazar and long-time loft advocate Assemblymember Deborah Glick, it finally passed this year with 39 votes, 18 votes against the bill with four excused votes in late May in the Senate. In the Assembly there were 93 votes in favor and 47 votes against the Loft Law.

Under the revised Loft Law, tenants who occupy illegal lofts between January 2015 to December 2016 become eligible to petition the city’s Loft Board to bring the lofts under compliance with city and state laws.

Thanks to amendments added by Salazar and Glick this year, the law also includes a nine-month window for loft tenants residing in the North Brooklyn Industrial Business Zone (IBZ), to apply for the legalization of loft units. (The only IBZs included in the Loft Law are the North Brooklyn and Long Island City IBZ — expansions made under Vito Lopez in 2010. All other IBZs are exempt). It also expands the type of industrial use that is eligible to be declared a live-and-work space to include uses such as printing or publishing or textiles. The only use that remains off limits for that designation is heavy industrial work such as chemical manufacturing.

Salazar said the update was difficult to draft because of the lack of city and state data. Many loft tenants reside in illegal lofts that do not get reported to the city. The bill was based on claims provided by the NYC Loft Tenant, a loft tenant advocacy group, which said that an estimated 400 loft tenants could have been displaced if the Loft Law did not pass. Salazar tells City Limits the tenant groups refused to share their underlying data.

Long-time Bushwick resident and tenant advocate Assemblymember Maritza Davila, who supported the bill, told City Limits she did not want to be responsible for putting 400 families on the street and said tenant safety was a priority.

The two amendments, the nine-month application window for loft tenants in the North Brooklyn IBZ and the expanding definition of the type of live and work space that could be legalized, turned into points of racially charged contention between advocacy groups, elected officials and North Brooklyn residents, many of whom worked together in the past.

During a late June town hall to review the Loft Law bill after its passage, tensions rose and heated words were exchanged when both supporters and opponents of the bill showed up by the dozens to a panel featuring Salazar, Glick, Sen. Brian Kavanagh and Assemblymembers Joseph Lentol.

The issue in the North Brooklyn IBZ

Out of the 21 IBZs across the city, the North Brooklyn and Long Island City IBZs have remained exempt from residential use restrictions since 2010.

Before the passage of the Loft Law update, groups such as Los Sures and Churches United for Fair Housing (CUFFH) and Councilmember Antonio Reynoso connected with Salazar to share their hopes for the bill, which included capping the amount of loft units to the current number of existing, legal loft units and excluding the North Brooklyn IBZ from the Loft Law.

“The North Brooklyn IBZ’s inclusion in the Loft Law expansion bill is at odds with both of these objectives as the inclusion of the IBZ will threaten industrial workers and open the door to speculation, in turn accelerating land value and leading to displacement,” Reynoso has said.

Salazar said she thought the idea of carving out the North Brooklyn IBZ had potential. “I initially thought that sounds like a potential compromise and additionally it might address some of the safety concerns about people living in an active manufacturing zone,” she said. But when she took the idea back to Glick and the NYC Loft Tenants group, she was met with opposition against the amendment to exclude the North Brooklyn IBZ. During the townhall, Glick told City Limits that those lofts tenants had been residing in those buildings for decades and the bill restricted areas zoned for M3, a zoning district where heavy industrial manufacturing exists, which made up most of the IBZ and was happy with the outcome of the bill.

Salazar says she reached out to the de Blasio administration as well. While Salazar declines to describe those conversations in detail, she says the city was ambivalent “They weren’t vehemently opposed to a bill with those carve outs, but they definitely weren’t in favor either because tenant safety was a priority,” she says. The city’s Department of Housing Preservation and Development (HPD) told City Limits it did not have a position on the Loft Law and clarified that the housing agency has jurisdiction over legal residential units and would have to hand off an illegal loft matter to the Department of Buildings.

The bill’s opponents have sharply criticized the process. “Legislative action must be based on facts, not anecdotes,” said Reynoso at the recent town hall. “I was disturbed by how little information was available regarding the Loft Law and by the lack of nuance present in the conversation. Before passage, this bill, which undertakes significant land use actions, should have gone through a study of existing conditions as well as a review of projected impacts.”

Other town hall attendees reiterated Reynoso’s concerns about losing jobs and incentivizing landlords to create loft development leading to gentrification and rising rents. Some said they felt they were ignored during an important discussion about an issue that impacted their community.

Bushwick Community Board 4 Chair Robert Comacho and District Manager Celestina Leon said they wanted to put a cap on the number of loft tenants and then have the city conduct a study on loft tenants and spaces to decide what was needed, “I think that was a fair request for the community and the loft tenants,” says Comacho.

CUFFH believes elected officials dropped the ball, “I think the one thing I will say is that we’re really disappointed as an organization, as a community, that this was Senator Salazar’s bill and she could have introduced amendments. We could’ve had a more robust discussion. We could have had a debate and she chose not to,” said Alex Fennell, Network Director at CUFFH.

Tight space and high stakes

Evergreen Exchange, which supports manufacturing and industrial businesses in North Brooklyn, said an estimated 20,000 employees work in the over 1,000 businesses within the North Brooklyn IBZ. Leah Archibald, executive director at Evergreen Exchange, says industrial advocates were not invited to a seat at the table despite having hundreds of industrial business interested in setting up shop in the North Brooklyn IBZ.

“There is effectively zero percent space in the North Brooklyn IBZ. The city has turned a blind eye and if we continue to allow the erosion through intentional and unintentional rezonings—allowing residential [through illegal conversions]—then the net result will be loss,” she says.

Fennell said the Loft Law debate took a dark turn, especially on social media and it became vulgar and vicious and had racial undertones. She gave the example of Sen. Salazar being trolled on social media and being called a “prostitute.”

“Let’s be frank. Loft housing is not affordable housing. The constituencies we are serving in Bushwick for example, have an average income for a family of three is about $35,000 a year,” she says.

“I think throughout this entire process and negotiation, there was a real sense that as representatives of low income communities of color, we are very used to having to negotiate,” she says. “There was a real sense that one set of constituents mattered much more than another. And there was a real sense about the negotiations that we were asked to compromise. We were asked to swallow difficult, hard to swallow pills. We were asked to accept that we were going to get less than what we thought was right from the very beginning. And the loft tenants were never asked to accept anything less than the legislation that was tailor-written to serve their interests.”

They’re tenants, too

Loft tenants and their allies say their cause has labored against a false narrative: namely, that loft tenants are responsible for gentrifying changes in neighborhoods.

Michael McKee, a veteran tenant advocate and who is not a loft tenant but considers himself an “honorary” member of the NYC Loft Tenants group, says he is upset about the resistance loft tenant experienced despite their support for the campaign for stronger state rent laws. He denies that NYC Loft Tenants refused to share the data on loft tenants with Salazar.

“This became racially poisonous and the real problem was the rezoning [under Bloomberg] was a disaster,” says McKee. “This community has been screwed royally starting with the Bloomberg rezoning [of Williamsburg] and blaming loft tenants is like blaming immigrants for the loss of jobs. Loft tenants are not the problem.”

McKee says the loft tenants groups made three major compromises. The first was excluding M3 or heavy manufacturing zoning from the Loft Law. McKee argues that most of the North Brooklyn IBZ is zoned for M3, so the restriction effectively protects the bulk of the area from residential intrusion.

The second compromise was excluding the heavy industrial uses (Group use 18 in the zoning resolution) from the live-work provisions of the law. The recently passed Loft Law expands the options for live and work spaces, for Group Use 15-17 which range from light use such as woodwork to motorcycle repair, but not for the uses in Group 18, which is heavy industrial use such as chemical manufacturing.

The third compromise was the nine-month window for loft applications within the North Brooklyn IBZ. “You have nine months to apply. If you don’t apply, you will forever be in limbo and you will have no protection,” says McKee.

McKee said loft tenants have paid a price: During the wait to pass this bill, some loft tenants were evicted out of loft units which they had lived for decades. McKee lays the blame on Kavanagh and Salazar. McKee says the originally the bill was supposed to pass in January, separate from the state rent reforms, but was held up.

Kavanagh defended the timing and the final product. “There were negotiations, the Assembly bill was amended to its final form on March 20th and those amendments were intended to address some of those concerns. That’s when they added a provision in the bill that makes it clear that in the industrial business zone you only have nine months window in which people can apply. And after that the industrial business will be treated like any other industrial business zones in the city.”

Kavanagh said tenant protections was the driving force for the bill, “Under current law, if you aren’t in place by 2009 and 2010, then you’re not permitted to apply for coverage. And so the thrust of this bill is to reopen that period and allow people who were placed in 2015 and 2016 to apply. Overall, the bill has substantial protection, expansion of protection for loft tenants people who have no legal protection whatsoever.”

The future of the Loft Law

Salazar’s office said the Loft Law remains flawed with loopholes, such as landlords buying out loft apartments, and they expect to address those issues in the near future. Salazar’s Chief of Staff Boris Santos said they were looking into closing the Sales of Rights “loophole.” Santos says small amendments such as ending Loft Sales of Rights will protect the loft tenants from evictions and also mitigate the incentives for landlords to convert manufacturing buildings for residential use.

The Loft Board says it plans on discussing the rule changes regarding Loft Law coverage and legalization of units, but won’t be able to offer a timeline until the Board convenes. The most significant legal changes for which the board will be conducting rule-making include is a clarification that only the unit seeking coverage needs to meet eligibility requirements, rather than the entire building; the elimination of certain window and basement requirements; and the addition of a new “time window” for Loft Law coverage applications.

5 thoughts on “Loft Law Update Stirs Tensions Among Tenants, Housing Advocates, Pols

  1. “McKee said loft tenants have paid a price: During the wait to pass this bill, some loft tenants were evicted out of loft units which they had lived for decades. McKee lays the blame on Kavanagh and Salazar.”

    This is absolutely untrue. There was one tenant who may have been evicted — which even still is unlikely because a tenant can’t legally be evicted from their loft if the unit does not have a certificate of occupancy.
    See: Chazon, LLC v Maugenest
    https://caselaw.findlaw.com/ny-court-of-appeals/1602712.html

    But supposing he did get evicted, this tenant’s application had been dismissed with prejudice by a judge in 2012 because it was his art studio, not his primary residence, which he’d lied about on his application to the Loft Board. (Salazar’s office had also tried to help this fellow, but his attorney had told him that sharing any information about his case would scuttle the bill…)

    There were no other evictions.

    It’s unclear why Mr. McKee would tell these lies. It’s also unclear why, after a long and celebrated career as an advocate, he felt that this was a hill worth dying on — so much so that he was willing to hold the (entirely unrelated) rent laws package hostage over it. Salazar wisely chose the rent laws.

    Hopefully, if any good comes out of this episode it will be the passage of legislation that strengthens protections for manufacturing tenants and zoning.

    • That’s right! Without protections for manufacturing the type of and number of relatively highly-paying jobs available to low and moderate-income households will shrink further, making overall housing affordability worse in the long run. It’s unfortunate that City Limits clearly has a bias in favor of housing preservation (and for that matter rent control but that’s an argument for another day). Same old, same old…..

    • Chazon V. Maugenest only applies to covered loft units, and prohibits landlords from bringing an action for non-payment in Housing Court without pleading and proving that they are current in their obligations under the Loft Law. A landlord can bring a commercial holdover case in State Supreme Court against an unprotected loft tenant. That is why the updated law was so important: to cover those tenants and protect them from eviction.

  2. So many errors in this article, including about 538 Johnson’s “basis for application” but I won’t even get into that.

    The biggest joke is that Salazar is becoming a mouthpiece for Evergreen Exchange: their goal in the IBZ is NOT to bring more industrial businesses into the area. The entire IBZ is and has been vacant for decades and it’s because the landlords are waiting on businesses such as WeWorks and Wholefoods—interest in this being created by the businesses that Leah Archibald represents, who are making Bushwick a center of night life and gentrification. The Brownfeld Opportunity Zone plan predates the proposed rezoning by DCP and exemplifies how communities of color are targeted for tax exemptions by the state, to bring in “technology” and retail with the help of people like Leah Archibald, who is falsely claiming Industry. Groups like CUFFH are buying into this false narrative, though when asked, provided ZERO proof that eliminating Bloomberg real estate favored exclusions to the loft law would eliminate a single industrial job. Salazar’s original bill left open the entire M3 zone to loft law coverage, something the tenants did not advocate for.
    Loft tenant income and rent burden has not only been inflated but flat out lied about. The average loft tenant makes minimum wage and are a diverse group. Their fairy tale “wait list” for locations for businesses to move into is simply not true. Reynoso is the one who made this “racially charged” and he should be one to talk about supporting his people—on what end of the cash register was he when his community was dealing with TPT scams, to steal housing due to tax burdens? He was voting in the affirmative. He could have invited loft tenants to the community rezoning plan but he purposefully chose not too.

    Robert Camacho of CB4 should talk to Edwin Delgado of CB4, and ask him why he applied for variances to turn his industrial space into a gentrified restaurant, while then turning around and spouting off as a defender of industry. I’m not surprised however, since “progressives” like Salazar’s office employ the sons of famous landlord lawyers, who pride themselves in evicting tenants. Just because one rich kid from the upper east side who works in your office and moves into a loft and tries to infiltrate a tenant organization doesn’t mean that kind of duplicity extends itself to the average loft tenant. Loft tenants were purposefully barred from conversation and then accused of the same—There is ZERO factual support for the idea that this bill poses any threat to existing industry. Protected occupants simply get in the way of those trying to cash in on the DCP/Evergreen/St. Nick’s plan to snatch “community designated spaces” for what turns out to be profit. We see you. Kudos to Davila, Glick, and eventually Kavanagh and Salazar for standing up for tenant rights in the face of misinformation.

    This whole thing stinks of hypocrisy and posturing.

  3. Alex Fennell of CUFFH states that they serve constituencies with an income of $35,000 for a family of 3, yet they carry water for developers whose “affordable units” require a minimum income of as high as $84,000 for a family of 2. Affordable to whom? Not to mention that most loft tenants are live/work, so the rents pay for housing AND studio/workshop space.

    The so-called affordable apartments rent for about $34 per sq ft per year. The average rent protected loft for less than $20 per sq ft per year. So yes, “let’s be frank,” Affordable housing supported by CUFFH is “not affordable housing.”

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