Two Trees Hit With Suit Over Rent Hikes at Fort Greene Tower

Two Trees Management raised rents on stabilized units at its 300 Ashland Place tower in Fort Greene by billing tenants the full legal rent instead of the lower preferential rate they had been paying when leases came up for renewal, according to a class-action lawsuit filed by the law firm Newman Ferrara with the nonprofit Housing Rights Initiative, as reported by Gothamist.

Why it matters

The suit ties the leasing practice at the 379-unit tower, completed in 2016, to the 421a tax break Two Trees receives in exchange for keeping units rent-stabilized. Gothamist reported that when stabilized tenants renewed leases, Two Trees applied increases to the full legal rent rather than the preferential rent tenants had agreed to pay, a practice the complaint argues breaks the stabilization terms attached to the abatement. Two Trees Managing Director David Lombino called the lawsuit “entirely without merit” and said the company expects to vigorously defend against the claims. The filing lands months after state lawmakers extended a separate 421a benefit to cover Two Trees’ River Ring project on the Williamsburg waterfront, a 1,200 unit development the company will not finish construction on before the 2031 tax break deadline.

The numbers

Tenants allege Two Trees overcharged them a total of $30M over the past five years at 300 Ashland Place, a 379-unit tower, per Gothamist’s review of the complaint. The suit cites one unit where the gap between the full legal rent and the preferential rent tenants had been paying amounts to a 20% increase once the preferential rate lapses. New York’s Rent Guidelines Board has not approved a stabilized lease increase above 3.25 percent since 2021.

What’s next

Two Trees has not filed a formal court answer, and the company disputes the claims. The American Developer will track the case’s index number as it is docketed and any response Two Trees files, along with how the suit intersects with the company’s River Ring 421a extension. More New York multifamily coverage is at the New York market hub.