Arverne homeowners under investigation for illegal rentals
/
The Department of Investigation found that more than a dozen homeowners in the Arverne by the Sea development were in violation of a residency requirement. Photo via Jim Henderson/WikiMedia Commons
By Rachel Vick
A group of more than a dozen Arverne by the Sea homeowners are under investigation for illegally renting out their homes while collecting approximately $1 million in tax exemptions, the Department of Investigation said this week.
A Department of Investigation report, issued Feb. 8, includes 11 recommendations to expand city oversight and prevent violations following the investigation into a 2018 complaint.
The DOI found that there were 15 homeowners in violation of the primary residence requirement; eight used the properties as rentals or investment properties — one as a hotel that was registered with the city to collect occupancy tax — and four who each owned one property and used them as rentals instead of living there.
There were 11 homeowners with multiple Arverne by the Sea deeds.
According to the DOI, they “were in violation of primary residence requirements by illegally renting their properties while being unjustly enriched by tax exemptions meant for owner-occupied homes.”
The apartments were designated in the early 2000’s as an Housing Preservation and Development Urban Development Action Area Project with a 20-year property tax exemption to homeowners requiring they maintain the homes as their primary residences.
DOI pointed out flaws in the city’s oversight — largely at the hands of HPD, which allegedly failed to check whether Arverne by the Sea buyers previously purchased homes in the development.
“The Adams administration believes deeply in affordable homeownership as a powerful tool for stabilizing neighborhoods and helping low- and moderate-income New Yorkers build wealth,” a spokesperson from the mayor’s office told the Eagle. “We will never tolerate attempts to cheat government programs, and we are committed to thoroughly reviewing the recommendations in this report and making the changes necessary to ensure that the benefits of these important programs continue to serve hard-working New Yorkers.”
The DOI report suggested better interagency communication with related agencies like the Department of Finance, which they say had indications of multiple property ownership and other tax-specific information. DOF told DOI that it was “unaware that the tax exemptions for Arverne by the Sea properties had a primary residence requirement.”
“HPD and DOF have accepted or are considering accepting the recommendations in the report. HPD has expressed the need for additional resources to perform the expanded oversight recommended in this report,” a DOI spokesperson told the Eagle. “DOI encourages the City to direct appropriate resources towards this goal.”
The agency is currently aware of at least one current AirBnB listing at Arverne by the Sea, which has been referred to HPD and the Mayor's Office of Special Enforcement.
Recommendations include tracking HPD program homeowners to prevent multiple ownership, using reports from DOF of properties receiving tax exemptions, pursuing enforcement, mandating all homeowners in HPD programs requiring owner occupancy to submit an annual form attesting they are using the homes as their primary residence and sharing the lists with the Section 8 unit to prevent designated funds being given to those in violation.
They also suggest the inclusion of the definition of “primary residence” in purchase-related paperwork. Additionally, the report recommended there be a condition that entitlement to tax exemptions is contingent on compliance with program requirements, with noncompliance resulting in loss of tax benefits and recoupment of funds by the city.
According to the City Hall spokesperson, HPD is looking into implementing the recommendations put forward in the report and is reviewing ways to expand remedies available to the city when a homeowner does not live up to their agreements.
