![]() A two-bedroom unit at Cadman that currently costs $60,000, for example, would go for about $300,000-still a steal compared to stratospheric market rates in our neighborhood, but now out of reach for the majority of New Yorkers. Outgoing shareholders could sell their units for four or five times the initial equity they invested, and pocket half of the sale. Most saliently, 2-to-11 conversion at Cadman Towers would entail a spike in sales prices. Advocates of affordable housing who have long fought to protect one of New York City’s signature low- and middle-income housing programs now worry that other Mitchell-Lama boards will follow Cadman’s lead in attempting to dismantle this important public good. This threat of semi-privatization has raised the concern of Mitchell-Lama coalitions across the city. The process, known as “Article 2 to Article 11 conversion” in housing law parlance, would reconstitute our public, subsidized housing complex as a much more expensive, semi-private HDFC co-op. So it was alarming when, in December of 2021, our board of directors formally submitted a plan to take our building out of the Mitchell-Lama program. Subsidized by the city and state in the form of generous tax abatements and public financing opportunities, Mitchell-Lama housing was created so that families with modest earnings could afford to put down roots in the city, and so that prices would not lurch upward every time a unit turned over. Since I moved in at Cadman Towers with my partner two years ago, I have felt exceptionally lucky to benefit from the uniquely affordable arrangement that is the New York State Mitchell-Lama program. State agencies, including the Housing Finance Agency (HFA), Empire State Development Corporation (ESD), and HCR, have collaborated to identify State Mitchell-Lama housing companies to participate in mortgage refinancings, which generate funds for capital improvements and property upgrades.Tobias Salinger The Lindsay Park Mitchell-Lama co-op in Williamsburg.ĬityViews are readers’ opinions, not those of City Limits. ![]() When owners buy out, their buildings are no longer subject to HCR or HPD Mitchell-Lama regulation, and apartments need not be kept affordable for moderate-income households (rent regulation for rental projects built before 1974 remains in effect, as do the regulatory requirements of tax relief or other programs). Owners may choose to buy out of the Mitchell-Lama program by prepaying the existing mortgage in order to have the ability to re-sell their projects at market rates. By 1980, HDC had refinanced projects containing 29,000 units and thereby reduced New York City’s debt burden.ĭevelopments were eligible to withdraw or buy out from the program after 20 years, upon prepayment of the mortgage, or after 35 years in the case of developments aided by loans prior to May 1, 1959. Beginning in 1977 (after New York City’s fiscal crisis in the 1970s), the New York City Housing Development Corporation (HDC) and the Federal Housing Administration (FHA) refinanced many of the City’s Mitchell-Lama portfolio. The program also required ongoing supervision by the agency originally sponsoring the development of the project, either the New York City Department of Housing Preservation and Development (HPD) or New York State Homes and Community Renewal (HCR). In exchange for low-interest mortgage loans and real property tax exemptions, the Mitchell-Lama program limited profits and placed income limits on tenants or cooperative owners. The Mitchell-Lama program has subsidized the construction of 269 developments, with over 105,000 apartments for middle-income households. Agency: NYS Homes and Community Renewal (NYS HCR).
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