Related Cos. Is Sued Over ‘Poor Door’ Claims at Hudson Yards

(Bloomberg) -- Related Cos. was sued by a group of prospective tenants claiming racial discrimination at Manhattan’s Hudson Yards development.

The lawsuit was brought by three Black New Yorkers selected by lottery for affordable-housing rental units in the development on the West Side. They allege that the company is violating federal, state and local laws by segregating the occupants of the rental units from those in the luxury condominiums.

They claim the separation amounts to a “poor door,” a separate entrance for tenants of income-restricted units. The state outlawed the practice in 2015 for builders accepting tax credits to put up affordable rental housing.

“The differences in wealth equate to the lower-income residents not having access” to the same “posh amenities” as the wealthier occupants of 15 Hudson Yards, they said in the complaint, filed Thursday in federal court in Manhattan, calling it “New York-style financial apartheid.” They asked the court to declare that Related is violating the law, award damages and bar the alleged policy.

Related said the suit has no merit.

“This appears to be the case of a lawyer drawing up a frivolous lawsuit and seeking to chase a headline without any basis in actual fact,” spokesperson Jon Weinstein said in a statement. “To be clear there is one lobby in the building with entrances on 30th street and the Plaza, accessible to everyone who lives in or visits the building.”

The luxury condos and the affordable rental units have the same building staff and management office, Weinstein said. There were 80,000 applicants for the 107 affordable apartments, and in the two and half years the building has been open, no one selected for the slots has moved out, he said.

The state provides hefty tax benefits to builders that incorporate lower-income units within or near their luxury developments in New York City, an effort to spur construction of sorely needed affordable housing. That means income-restricted rental units often share space with the city’s loftiest addresses.

In 2014 developer Extell Development Co. sparked an uproar when it created a separate entrance for lower-income rental tenants at an Upper West Side condo development. The following year the state outlawed the practice for developers receiving the tax credits.

The case is Moody v. The Related Companies, 21-cv-06238, U.S. District Court, Southern District of New York (Manhattan).

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