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PR04-02-010 February 18, 2004
Contact: Press Office 212-669-3747
THOMPSON: NYC MAY FACE DRAMATIC LOSS OF AFFORDABLE HOUSING UNITS

 

Comprehensive Study and Detailed Maps of Mitchell-Lama and Limited Dividend Projects Show Impact If Buildings Opt Out Of Subsidy Programs

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New York City could lose more than 40,000 units of affordable housing over the next decade if all of the Mitchell-Lama developments slated to retire their subsidized mortgages in that period opt to withdraw from the program, according to a report issued today by Comptroller William C. Thompson, Jr.

The report, Affordable No More: New York City’s Looming Crisis in Mitchell-Lama and Limited Dividend Housing, examines the status of two of New York’s most successful affordable housing initiatives, the Mitchell-Lama and Limited Dividend programs. These initiatives created 292 housing developments totaling more than 149,000 units of affordable housing in New York City between 1928 and 1978. Under the terms of both programs, in return for public subsidies, cooperative maintenance charges and rental apartment rent increases were strictly controlled to ensure their long-term affordability.

Many of these projects are starting to meet certain conditions for withdrawing from the programs and charging stabilized rents and/or market rate sales prices. Since inception, more than 24,000 units of housing are no longer regulated under the Limited Dividend and Mitchell-Lama programs. Presently, eleven developments representing more than 6,300 units have submitted notice to leave the programs. A minimum of 59 Mitchell-Lama developments are scheduled to retire their subsidized mortgages between 2005 and 2015, removing one of the primary barriers to leaving the program.

Affordable No More provides the first comprehensive overview of the status of the Mitchell-Lama and Limited Dividend programs, including the location and key characteristics of every development. The report affords community organizations and elected officials an opportunity to examine the impact of the loss of these forms of affordable housing on a neighborhood, borough or citywide basis. The report also provides borough-by-borough maps detailing the status of each Mitchell-Lama and Limited Dividend project.

“Knowing the year, the location and the number of developments and units that are scheduled to retire their subsidized mortgages provides elected officials, policy makers and housing advocates with valuable information concerning the pace at which Mitchell-Lama developments may ‘naturally’ leave the supervision of DHCR (Department of Housing and Community Renewal) and HPD (Housing Preservation and Development),” the report reads.

“It also provides insight into how many units of affordable housing may be removed from the market each year and the volume of new affordable housing production that will be required over the next eleven years to replace the housing that might be lost,” the report continued. “Further, it provides important trend data about which sections of the City may experience a decline in affordable housing and where new affordable housing production efforts might be especially needed.”

The City’s housing plans fall short of the needs that will be created by the loss of the Mitchell-Lama and Limited Dividend projects, the report states. These initiatives will support the development of only 15,000 new units and the preservation of 10,375 existing units. Further, there is no firm commitment by the Administration that a significant portion of the housing generated under these initiatives with the support of public subsidies will be affordable to the average New York City family.

“We are poised to lose tens of thousands of affordable units over the next decade -- through these two programs alone -- with no credible plan to replace them,” Thompson said. “This report underscores the urgency of finding creative ways to put more affordable housing into the pipeline now.”

The report also faults the City’s Department of Housing Preservation and Development for its policies of not tracking the mortgage status of the Mitchell-Lama projects it supervises and for acting on buy-out requests on a project by project basis.

Thompson made the following recommendations:

  1. Working with financial institutions and the City’s pension funds, the City should investigate the feasibility of developing new loan programs that would provide Mitchell-Lama and Limited Dividend developments with access to long-term low interest financing if they continue to remain in their respective program.
  2. The City should coordinate a broad discussion among stakeholders and elected officials to develop legislative and administrative options that would maintain the affordability of Mitchell-Lama and Limited Dividend developments and/or increase the production of affordable housing. The resulting legislative and administrative proposals should become key components of the City’s legislative agenda in Albany.
  3. The City needs to develop affordable housing production goals on a neighborhood basis. With forehand knowledge of which neighborhoods will likely lose Mitchell Lama and Limited Dividend developments, the City can target its incentives and resources to respond to the loss of affordable housing.
  4. Working with local community organizations and elected officials, the City should develop assistance programs to help displaced Mitchell Lama or Limited Dividend families find replacement housing either in their neighborhoods or in other sections of New York City.
  5. The Department of City Planning is contemplating large-scale comprehensive development proposals in neighborhoods throughout the City. These unique opportunities must be maximized. Affordable housing that will realistically meet current and future demands must be a major component in all of these plans. One strategy that should be fully evaluated by the Department of City Planning is the inclusion of provisions for affordable housing when amending zoning regulations to encourage development.