NYC Landlord Becomes a Billionaire, Thanks to Gentrification BoomBy
Some tenants lament "harassment" dressed in a pinstripe suit
Owner Wiener inspects boilers, tool rooms and hallway mopping
In the world of New York housing, where landlord-tenant battles are both routine and brutal, Joel Wiener has plenty of scars.
One of the city’s top 10 rental apartment owners, Wiener’s been sued for overcharges and shoddy repairs, and denounced by politicians for making housing too expensive for the working class.
None of it, though, has slowed his rise. From a disclosed net worth of $124 million in 2001, the 68-year-old Wiener today has a fortune of $1 billion, according to the Bloomberg Billionaires Index. He’s benefited from soaring property values as gentrification spreads to one city neighborhood after another.
His Pinnacle Group manages about $2 billion worth of property -- some 10,000 units, almost all rent-regulated, in every New York borough save Staten Island. The firm has also made millions converting about 25 buildings to condominiums.
Through his lawyer, Ken Fisher, Wiener declined to comment on his net worth.
Kim Powell, who co-founded an anti-Wiener group called Buyers and Renters United to Save Harlem in 2005, says his wealth has come at the expense of tenants.
Powell and other critics say landlords like Wiener are helping to accelerate the demise of affordable housing by snapping up buildings in once undesirable neighborhoods and driving out existing tenants with high rents. Gentrification was a major issue in the recent campaign that saw Mayor Bill de Blasio elected to a second term. He’s pledged to build 300,000 affordable units by 2026.
“The harassment comes dressed up in a pinstripe suit,” Powell said. “This is a family empire that’s mushroomed into a billion-dollar estate.”
Fisher, an attorney with Cozen O’Connor, said Pinnacle provides safe and well-maintained housing.
"You can’t really go wrong in New York by attacking a landlord," he said. "Any claim that they neglected buildings is completely bogus."
Wiener grew up in Brooklyn where he worked as a lawyer before joining the family’s real estate business. In the 1990s, he set out on his own and focused Pinnacle’s business model on buying rent-regulated, run-down properties that house many tenants behind on their rent. He then often extensively renovates the buildings, which allows him to raise rents legally to cover some of the expense, according to Fisher.
“The first thing he does is go down to the boiler room to see if it’s in good order,” Fisher said, describing Wiener’s hands-on style, learned from his landlord father. “Then he goes to see the super’s tool room to see if it’s neat, then he goes to see if the stairwells on the upper floors have been mopped.”
Buildings that have been cleaned-up “might have felt like gentrification to long-term residents who were accustomed to sub-standard living conditions, but it’s just good management," Fisher said.
Wiener’s holdings swelled to more than 20,000 units in the early 2000’s after he obtained financing from Praedium Group, a $10 billion real estate investment firm.
He has since pared those assets, buying out Praedium and other partners in many of his remaining buildings. He bulked up his financial heft after selling bonds in Israel through his Zarasai Group Ltd., a company named after the village in Lithuania from where Wiener’s family emigrated to the U. S. before World War II.
Zarasai’s holdings are now valued at about $2 billion, according to an Israeli filing in August.
Some tenants are less impressed. In 2007, a group of Manhattan residents brought a lawsuit against Wiener and Pinnacle. It alleged that rent increases for improvements exceeded the actual costs. It also claimed tenants were evicted wrongfully and that the landlord failed to fix violations such as rodent infestations and lack of heat.
The parties settled in 2011. Pinnacle, which didn’t admit fault, wanted to avoid the litigation cost, Fisher said, and ultimately paid out $1.1 million to tenants, a fraction of the claims.
Pinnacle is also involved in a decade-long tussle with tenants of a historic apartment complex in Brooklyn Heights that it bought in 2002. They contend his plan to build a below-ground parking garage threatens the physical stability of their buildings as well as a section of the nearby Brooklyn Queens Expressway. Fisher called the claim a “scare tactic” and is confident construction can be done safely.
Residents, who asked not to be identified because they live in the building, also say Pinnacle neglected the property to get tenants to leave in order to raise rents.
Fisher denied the assertion. “Some tenant activists are so extreme that they probably blame Joel for the Dodgers leaving Brooklyn,” he said.
The property has already proven a solid investment for Pinnacle and Wiener. Purchased for $16.5 million in 2002, it was valued at $43 million in 2012, according to an independent appraisal then.
"People are entitled to make money," said Jeffrey Dinowitz, a Bronx assemblyman who has fought with Pinnacle on rental issues. "But do what you are supposed to do."
— With assistance by Zeke Faux, and Caleb Melby