Tenant advocates foresee in the movement by owners to leave the Mitchell-Lama program a wave of buyouts that will push rents out of the range of people with modest incomes. Tenants earning more must pay a surcharge. To qualify for Mitchell-Lama apartments, tenants could not have a household income more than seven times the annual rent for families of one to three and eight times the rent for families of four or more. ''If we don't replace the housing lost to buyouts, we will see an exodus of moderate and middle income people leaving the city, the backbone of the city, blue collar workers.'' ''From 1998 to today, in Manhattan alone we have lost 2,724 units and 5,962 are at risk because owners have made application to dissolve their Mitchell-Lama program,'' she said. ''There are about 60,000 units in the city-sponsored program, about 5,000 of which have gone out since 1989,'' said Julie Walpert, assistant commissioner of H.P.D., who is in charge of its Mitchell-Lama program. To date, 18 owners of Mitchell-Lama buildings supervised by the city's Department of Housing Preservation and Development and 22 under the state's Division of Housing and Community Renewal have bought out. Fields's office and head of its Mitchell-Lama Task Force.Īll told, about 105,000 units of housing in 269 developments, most of them in New York City or nearby suburbs, were built under the Mitchell-Lama banner. ''When Mitchell-Lama was started, it had a 35-year buyout but no takers, so it was decreased to 25 and then 20,'' said Lee Chong, director of land use, housing and development for Ms. Without giving developers the option of taking their buildings out of the program after a set time, it was believed, builders would not have been motivated to put up moderate income housing. Additional benefits were given to those who built on urban renewal land. In exchange, they had to place caps on their rents and could not impose increases unless profits fell below 6 percent. With the last project completed in 1978, the 20-year escape hatch has now completely opened.Įstablished in 1955 by the New York State Legislature, the Mitchell-Lama program was created to spur production of middle-income housing by offering developers of rentals or co-ops low interest mortgages and generous tax abatements. The Private Housing Finance Law, which governs Mitchell-Lama developments, permits developers to withdraw from the program after 20 years by prepaying their mortgages and taking other financial steps. ''If you hadn't had a rent increase in 12 years, and now you get one every year, how would you feel?'' she asked. Ruth Lerner, who was the manager of Waterside Plaza, which juts into the East River at 26th to 29th Street, during the years it was emerging from Mitchell-Lama, 1999 to 2001, adds a more immediate concern. Tenants, she said, ''thought Mitchell-Lama would forever allow them to live in affordable housing, and the fact that buyouts have occurred makes them wonder what potentially could be next.'' Virginia Fields, the Manhattan borough president, who established a task force in 1999 meant to ''slow the process down or completely stop it.'' ''With a buyout comes the possibility that apartments will go to market rate, putting them out of the reach of the folks who live there,'' said C. While there have been exceptions, the path out of Mitchell-Lama regulation is rarely smooth. WHEN residents of Mitchell-Lama apartments, accustomed to paying well below market rate rents, learn that their landlords are planning to take their buildings out of the program through a buyout procedure, panic and resentment often ensue, sometimes followed by years of exhaustive litigation.Įven after agreements releasing buildings from the program's constraints are reached, legal maneuvering and bitter feelings can persist for years.
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