ICYMI: Residential Co-op Slammed With 450% Rent Hike Amid Ground Lease Co-op Crisis

NEW YORK, NY (07/23/2025) (readMedia)-- Residents of Carnegie House, a predominately middle-class ground lease co-op in Manhattan, are facing a staggering 450% rent increase after an arbitration panel ruled to raise the residential coop's annual ground-lease rent from $4.36 million to $24 million. First reported by Katherine Clarke at the Wall Street Journal, over 300 families – many of whom are retirees and middle-class New Yorkers – are now at risk of deconversion and displacement.

Carnegie House is one of nearly a hundred ground lease co-ops across southern New York State caught in a legal and financial trap. Designed in the 1950s to give middle-class families a path to homeownership, ground lease co-ops own their apartments but rent the land beneath them - leaving residents vulnerable to skyrocketing land values and predatory rent hikes from private landowners.

As written by Clarke, "if Carnegie House fails to make the payments and its ground lease is terminated, the building would convert back into rent-stabilized apartments, and the owners would see their equity dissolve. Those who have mortgages would still have to pay them, even if they no longer own shares in the building."

"Because these deconversions are so rare, what would happen next is in dispute. The landowners argue that they could set the rent following a negotiation with the tenants, but tenant advocates say that would violate rent-stabilization laws." With ground leases across New York City nearing expiration, the crisis is expected to deepen without immediate intervention.

The Ground Lease Co-op Coalition, which makes up more than 25,000 New Yorkers living in ground lease co-ops, is urging lawmakers to pass the Ground Lease Co-op Bill (S2433A/A2619A). This legislation would close key legal loopholes that leave these co-ops unprotected and offer residents vital tenant protections if their buildings are forced to deconvert into rentals.

Read the full reporting from the Wall Street Journal here.

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