The Pinnacle Group, one of the city’s most notorious predatory-equity landlords, has agreed to settle a class-action suit brought by tenants who claimed that it harassed them and illegally raised their rents.
Under the settlement, announced in early September, Pinnacle will pay $2.5 million to groups helping tenants sue for damages. It also has to follow stricter rules for raising rents or commencing evictions, and it may still be liable for damages.
The company spent more than $1 billion buying up buildings during the mid-2000s real-estate boom, mostly “undervalued” buildings in working-class neighborhoods on the frontiers of gentrification. It now owns about 15,000 apartments.
Pinnacle tenants and housing advocates called its business model “predatory equity,” as it relied on trying to force out rent-stabilized tenants in order to raise rents. It sent out 5,000 eviction notices to tenants in the 21,000 apartments it owned. At the Dunbar complex in Harlem, 45 percent of the 550 tenants moved out during the five years Pinnacle owned it.
Some housing advocates praised the deal. Benjamin Dulchin, head of the Association for Neighborhood and Housing Development, told The New York Times that the settlement “seems to be a significant admission of wrongdoing by Pinnacle.”
Some Pinnacle tenants were more critical. Kim Powell, a tenant leader who was a plaintiff in the suit, told the Times she was “totally disappointed,” as the settlement did not specify which tenants would be eligible to receive damages.