As the Trumps Dodged Taxes, Their Tenants Paid a Price


As the Trumps Dodged Taxes, Their Tenants Paid a Price

2018-12-17T08:49:54-07:00December 17th, 2018|Advocacy, Local Updates|

They were collateral damage as Donald J. Trump and his siblings dodged inheritance taxes and gained control of their father’s fortune: thousands of renters in an empire of unassuming red-brick buildings scattered across Brooklyn, Queens and Staten Island.

Those buildings have been home to generations of strivers, municipal workers and newly arrived immigrants. When their regulated rents started rising more quickly in the 1990s, many tenants had no idea why. Some heard that the Trump family had spent millions on building improvements, but they remained suspicious.

“I’ve always thought there was something strange going on,” said Jack Leitner, who has lived in the Beach Haven Apartments in Coney Island, Brooklyn, for more than two decades. “But you have to have proof, and it’s an uphill battle.”

As it turned out, a hidden scam lurked behind the mysterious increases. In October, a New York Times investigation into the origins of Mr. Trump’s wealth revealed, among its findings, that the future president and his siblings set up a phony business to pad the cost of nearly everything their father, the legendary builder Fred C. Trump, purchased for his buildings. The Trump children split that extra money.

Padding the invoices had a secondary benefit for the Trumps, allowing them to inflate rent increases on their father’s rent-regulated apartments.

“The higher the markup would be, the higher the rent that might be charged,” Robert Trump, the president’s brother, once admitted in a sworn deposition obtained by The Times.

The president and his siblings have long since sold their father’s buildings and moved on with their inherited fortunes. But for tenants, the insidious effects of the scheme continue to this day.

The padded invoices have been baked into the base rent used to calculate the annual percentage increase approved by the city. The sum total of the rent overcharges cannot be calculated from available records. As a way to appreciate the scope of the impact, a onetime $10 increase in 1995 on all the 8,000 apartments involved would put the total overpaid by tenants at more than $33 million to date, an analysis of approved rent increases shows.

Mr. Leitner, a retired computer programmer, was not pleased to learn that his rent had been artificially inflated. Like other tenants interviewed by The Times, he wants that money back.

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