Posted Jan 7, 2026, 7:34 PM
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New Yorker for life
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Join Date: Jul 2001
Location: Borough of Jersey
Posts: 56,624
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https://www.crainsnewyork.com/real-estat...ce-hundreds-midtown-co-op-carnegie-house
Judge approves massive rent hike that could displace hundreds at Midtown co-op
AARON ELSTEIN
January 7, 2026
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Hundreds of residents at a Midtown co-op could lose their homes after a New York state judge gave the green light to a massive increase in their ground rent.
The co-op, called Carnegie House, is a 21-story building located at the corner of West 57th Street and Sixth Avenue that sits on land acquired in 2014 by real estate investors. Two years ago the ground owners proposed raising the annual rent from $4 million to about $25 million, based on soaring property values along Billionaires Row, and in a ruling Monday Judge Nicholas Moyne upheld an arbitration panel’s decision allowing the rent hike.
“Retreat is not possible,” Moyne wrote.
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The decision is a “devastating blow to over 300 Carnegie House families battling to keep our homes,” co-op president Richard Hirsch said. He added that the co-op will appeal and pleaded with state lawmakers to help his building and about 100 other vulnerable co-ops around the city whose land has a different owner than the building above.
“We’re the canary in the coal mine,” he said. “We are the first of many to face this.”
If Carnegie House residents default on the increased rent payments they must now make to the landowners, they risk losing all the equity they’ve built up in their apartments over the years, and the real estate investors could convert them from homeowners to renters — assuming they can afford the new rents.
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Ground leases are common in commercial real estate. Rockefeller Center, owned by Tishman Speyer, rests on the land rented from Columbia University. President Donald Trump’s 40 Wall St. sits on land owned by a German investor. But these leases didn’t start showing up underneath co-ops until the early 1980s after an Upper East Side building prevailed in a lawsuit against the New York state attorney general. Separating the land from a building is a way for ground-leaseholders to raise cash while keeping a stake in the property. Typically ground leases last for 99 years, and rents reset every 25 years.
For a long time these rent increases were small. But rising property values across the city have recently made ground leases much more attractive to big real estate investors who are more likely to push for steeper hikes.
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