As Mayor Zohran Mamdani told the crowd at his inauguration ceremony outside City Hall about his ambitious plans to make life better for renters, Nadege Romulus was miles away in Brooklyn feeling, as she does every day, frustrated with her cracked-tiles, pipes-rusting apartment.
Ms. Romulus, 48, lives in a Flatbush studio with two young adult sons, a teenage daughter and the children’s father. Their rent-stabilized unit, which costs $965 a month, is owned by the Pinnacle Group, which declared bankruptcy in May after years of being dogged by complaints of disrepair and poor maintenance.
Ms. Romulus said she cries every day about neglect in her home. A pipe in the bathroom is rusting. The kitchen and bathroom floors are cracked. Recently, she said, a chunk of ceiling plaster fell onto her daughter while she was lying in a top bunk covered in stuffed animals.
“They’re always calling me for rent money, and I say, ‘Y’all have a ceiling about to fall on my daughter’s head,” Ms. Romulus said. “I feel like this place is not a home anymore.”
On Thursday, not long after Mr. Mamdani delivered his inauguration speech, he visited Ms. Romulus’s building, at 85 Clarkson Avenue, and announced that the city would dive into the legal battle between Pinnacle and its tenants at that property and others. The landlord has racked up more than 5,000 violations and 14,000 complaints in 83 buildings, the mayor’s office said. Now, Pinnacle has put more than 5,000 of its rent-stabilized units up for auction as part of the bankruptcy case, which the city said it would intervene in to protect its interests and the tenants’.
The bankruptcy and auction put tenants in a risky position, uncertain who the new owner will be and whether that owner will deal with the decrepitude.
The auction is set for Thursday, and the deadline for objections to the winning bid is Jan. 11. Summit Properties USA has already bid more than $400 million for the units. Cea Weaver, the director of the newly revived Mayor’s Office to Protect Tenants, said the city planned to ensure that whoever buys Pinnacle’s portfolio treats the needed repairs as a priority and complies with rent-stabilization laws.
The units are “in a precarious situation,” said Ms. Weaver, a tenant organizer who is a member of Mr. Mamdani’s inner circle.
A representative for the Pinnacle Group declined to comment.
The Pinnacle bankruptcy, detailed in legal documents, offers a window into some of the complex and delicate trade-offs that Mr. Mamdani will encounter as he tries to fulfill his promise of making living in New York more affordable, especially by protecting renters while striving to increase the city’s housing stock.
Pinnacle’s owners argue that they have been squeezed by the rising cost of maintenance, utilities and interest-rate adjustments while being hamstrung in making those costs up from rent because of rent-stabilization laws, especially changes adopted in 2019. Pinnacle reported having “no cash on hand” when it filed for bankruptcy in May.
But court documents suggest Pinnacle has not been transparent about its finances during the bankruptcy, including by possibly prioritizing spending on administrative and legal fees over addressing problems at its properties.
“Debtors do not detail the basis or rationale for the budget, nor the necessity or benefit or reasonableness of their proposed expenditure,” wrote Judge David S. Jones, of the Southern District of New York. “Both experts observed that debtors’ reported payroll expenses are unusually high.”
Ms. Weaver said it was unfair for Pinnacle to blame rent-stabilization laws for the disrepair.
“Pinnacle has a long track record — far before 2019 — of egregiously treating renters in their buildings,” she said, adding that the company’s business model “relied on pushing people out of their homes and rent hikes that were untenable when you consider the affordability challenges that our city has.”
At the time that Pinnacle said it was being financially squeezed, its tenants were reporting more and more neglect. In at least two Pinnacle properties, Con Edison cut off power in common spaces this fall. At 1296 Pacific Street, a six-floor building in the Crown Heights section, the elevator stopped working for months; one older tenant said he called the Fire Department to carry him up and down the stairs.
Cornelius Velpry, 49, a flight attendant who lives in the same building as Ms. Romulus, said his hot water was so often not working that coming home from a flight and taking a shower felt like flipping a coin as to whether he would be warm or freezing cold. He said he had stopped paying rent in June, fed up with tiles falling off the bathroom wall and holes in the floor. He felt uncomfortable courting legal trouble, but felt it was his last resort.
“Maybe at some point I can explain, ‘Hey, judge, this is how my bathroom looks,’” he said.
Tenants of Pinnacle’s buildings have been organizing against the landlord for more than a decade. Many are original members of the larger Crown Heights Tenant Union, which started in 2013. But when Pinnacle’s bankruptcy was announced in May, tenants began to coordinate more closely on withholding rent and sharing information. Residents of Pinnacle buildings officially formed a union, the Union of Pinnacle Tenants, in September, and began telling Mr. Mamdani’s housing advisers of their worries about the bankruptcy auction.
They put up fliers in building lobbies to inform everyone that the auction should not interfere with their rent stabilization and protested the ConEd cutoffs.
Mr. Mamdani said on Thursday that Steven Banks, his nominee to be the city’s chief lawyer, would lead the efforts to intervene in Pinnacle’s bankruptcy. Mr. Banks, a former social services commissioner who also used to run the Legal Aid Society, recalled that in the 1980s and 1990s he represented tenants in a bankruptcy involving two shelter buildings, both of which became permanent, affordable supportive housing buildings.
Ms. Romulus, the Pinnacle tenant at 85 Clarkson Avenue, greeted the mayor’s promises with cautious excitement. She said she did not vote in the mayoral election because she was tied up with doctor’s appointments that day. When she heard from a tenant organizer that the mayor was going to stop by and tour her apartment, she wasn’t sure whether it would be former Mayor Eric Adams or Mr. Mamdani, who she didn’t realize had taken office that day.
Her children were nervous to have the mayor tour their home. “I said, ‘Listen, we have to do what we have to do,’” Ms. Romulus said. “I’ve been living here for 21 years like this.”
Emma Goldberg is a Times reporter who writes about political subcultures and the way we live now.
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