These NYC condos near Millionaires’ Row cost $99K — but there’s a catch

For residents of Carnegie House, a once-sought-after co-op located across from Billionaires’ Row on 57th Street, life is about to get a lot more expensive — and a lot more unsafe.

Despite units in the building sometimes going for as much as $99,000, homeowners may soon be forced out as an impending lease renewal threatens to send their monthly costs skyrocketing, Crain’s reported.

Barbara and Lou Grumet, both 80 and longtime residents of the building, left their Riverdale home in 2011 for a two-bedroom co-op, drawn to the building’s location near Broadway and top-notch hospitals.

But now, they fear it will cost them abroad the country they have called home for more than a decade. “We use all three hospitals,” Barbara told the outlet, referring to Mount Sinai West, Weill Cornell and NYU Langone.

Lou added, “We also like to go to Broadway shows.”

The Grums and their neighbors aren’t just dealing with the rising cost of living that plagues all citizens of the Big Apple — they’re also caught up in a battle over the dirt their building sits on. Carnegie House is one of about 100 cooperatives with a rare arrangement in which the land beneath them has another owner.

Billionaire real estate investors Rubin Schron and David Werner, owners of Carnegie House’s ground lease, are seeking to increase the building’s annual rent from $4 million to $25 million. The current lease resets in March, and without an agreement, the co-op could go bankrupt.

Richard Hirsch, president of the building co-op’s board, put it bluntly to Crain’s: “We’re not billionaires, we’re millennials.”

And if residents can’t reach an agreement, they will lose their equity and potentially face unaffordable rent as renters rather than owners.

While the landlords are willing to negotiate, their offers – such as a 10% discount for tenants if the rent exceeds $25 million and a fund for lower-income residents – feel like a slap in the face to the housing people in the building 324 units.

“We are not talking about a 10% increase in the annual rent; we’re talking about a 6-fold increase that would likely displace most of us from our homes,” Hirsch told The Post. “Landowners continue to tell us they’re not interested in finding a compromise that keeps residents in their homes; their goal is to force us out of our homes to maximize their profit.”

“Instead of engaging in good faith discussions, the landowners have pursued a strategy of gamesmanship — simply giving the appearance of negotiations while working to drive Carnegie House into bankruptcy,” Hirsch said.

“They’re living virtually rent-free on Billionaire’s Row,” Schron said, allaying the concerns of residents, some of whom are retirees. He believes their rent should reflect the rising market value of the land, thanks to the construction of super-luxury towers nearby.

But the residents of Carnegie House are not backing down.

They have filed a lawsuit and garnered support from politicians like State Sen. Liz Krueger, who called the situation a “blatant hole” in New York’s housing protection laws.

“A ground rent co-op is like a treasury bond for a landowner: they just get a regular guaranteed check for ground rent and have no responsibility for maintenance, property taxes, maintenance, management, etc.,” he said. Hirsch. “Our owners bought a Treasury bond and want to treat us like a tech stock with a windfall.”

Krueger and others argue that this battle is a warning to all the ground-rent co-op buildings that have become more common in the city since the 1980s.

“This is a classic example of a patently immature claim, and the plaintiffs know it,” a spokesperson for 57th & 6th Ground LLC told The Post in a statement. resolve rent restoration amounts through arbitration if a negotiated amount cannot be reached, and that is what needs to happen now. If Coop believes that his proposal was made in good faith, then he must believe that an arbitrator would find it persuasive. But by filing this complaint, Coop has tacitly admitted that it believes its proposal is meritless.”

There are about 65 to 100 cooperatives across the city that face similar struggles.

For now, Carnegie House has bought some time, winning a temporary delay in arbitration, but the fight is far from over.

As residents brace for what could be financial disaster, they’re left wondering how long they’ll be able to call this slice of Manhattan real estate home.

“In terms of the 100 or so other ground lease cooperatives that exist throughout the city, we’re just the first in the barrel that goes over Niagara Falls,” Hirsch told The Post.

However, the spokesman says that residents who cannot afford the potential increase recently received an offer of financial assistance – a 10% discount on the portion of the final rent awarded in arbitration over $25 million per year. This, the spokesman adds, would fund a reserve to help and subsidize those particular tenants.

a ten percent discount on the portion of final rent awarded in arbitration over $25 million per year, which would fund a reserve to assist and subsidize deserving lower-income residential tenants.

Some state lawmakers are already siding with residents.

In May, lawmakers proposed a bill to prevent steep rent increases for 25,000 apartment owners in ground-rent buildings, including some in Manhattan’s wealthiest neighborhoods like Carnegie House.

The new bill, introduced by Sen. Liz Krueger and Assemblywoman Linda Rosenthal would cap these increases, similar to rent-stabilized apartments. The legislation aims to protect co-op owners, many of whom are middle or working class, from possible closure and bankruptcy.

However, the Real Estate Board of New York and landowners oppose the bill, claiming it unfairly benefits wealthy homeowners. Supporters argue the law is needed to protect affordable housing, while critics suggest it should have been included in the state’s latest housing package.

“We’re not rich people,” Barbara Grumet said.