New York City Comptroller William C. Thompson, Jr. speaks at a news conference on Thursday, May 25, 2006, regarding the significant loss of affordable Mitchell-Lama and Limited Dividend housing units.
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Significant Loss of Mitchell-Lama and Limited Dividend Housing Seen Since 2004

New York City cannot keep pace with the rapid, significant loss of affordable Mitchell-Lama and Limited Dividend housing units as increasing numbers of project owners have opted out of the programs, according to a report released today by Comptroller William C. Thompson, Jr.

“In just the last two years, there has been a dramatic increase in the number of affordable units converting to market rate,” Thompson said. “We’re seeing a staggering loss of affordable housing and along with it, fewer and fewer housing options for New Yorkers.”

The report, Affordable No More: An Update – New York City’s Mitchell-Lama and Limited Dividend Housing Crisis Is Accelerating, found that between 2001 and 2003, about 4,700 units left the programs. Since 2004, however, the number of units that have left the programs and filed to leave the programs skyrocketed to more than 25,000.

If all pending withdrawals occur, New York will have lost more than 49,000 units – nearly a third of the 150,000 units created under the programs.

Joined by elected officials, housing advocates and tenants, Thompson said: “The crisis isn’t around the corner, it’s here today.”

According to Thompson’s report, the substantial and accelerating loss of Mitchell-Lama and Limited Dividend housing has offset many of the City’s affordable housing gains. Although the City’s Department of Housing Preservation and Development funded the creation of 12,229 affordable housing units since 2002, the City lost 12,943 units of Mitchell-Lama housing during that same period.

“It’s clear that, despite a very strong commitment by the City to create and preserve affordable housing, we are losing ground to the market forces that are tempting building owners to leave these programs,” Thompson said.

As owners increasingly opt out of these two programs, thousands of New Yorkers are going to be faced with rental rates that are far beyond their reach, Thompson said, using the experience of tenants of Independence Plaza North in Lower Manhattan as an example. Rents for a two-bedroom apartment in the development ranged from $900 to $1,400 per month when the development was part of the Mitchell-Lama program. After withdrawing from the program, two-bedroom rents soared to $3,200 per month.

“Now is the time to push for programs and changes in State laws to ensure the long-term affordability of these programs to protect financially vulnerable families,” Thompson said.

Thompson made the following recommendations in his report:

• New York State should establish a program to help refinance mortgages and pay for needed repairs for the remaining 52,090 units of Department of Housing and Community Renewal-supervised Mitchell-Lama housing that were financed by the New York State Housing Finance Agency, the Urban Development Corporation or the State Loan Fund.

• The State should enact legislation, already passed by the Assembly, to place under rent-stabilization all Mitchell-Lama developments built after 1974 that leave the program. In 2005, the sponsors of this bill estimated it would protect approximately 32,000 tenants.

• The State should enact legislation to prohibit owners of Mitchell-Lama developments from applying for rent increases under the “unique and peculiar circumstances” clause of the Emergency Tenant Protection Act.

• The City should investigate the feasibility of new loan programs that would provide Mitchell-Lama and Limited Dividend developments that are not eligible for the Housing Development Corporation Refinancing and Rehabilitation Assistance Loan program with access to long term low-interest financing if they continue to remain in their respective programs.

• The City should clarify the new Housing Development Corporation Mitchell-Lama Co-Op Conversion Program. For example, many Mitchell-Lama rental developments need extensive repairs in order to overcome years of deferred maintenance, yet it is unclear how capital improvements would be financed.

• The City should develop affordable housing production goals on a neighborhood basis, taking into account which neighborhoods are most likely to lose Mitchell-Lama and Limited Dividend housing in coming years.

• The City should work with local community organizations and elected officials to develop programs to help Mitchell-Lama and Limited Dividend families find replacement housing, in their current neighborhoods or in other sections of the City.

This report is an update to a 2004 study, Affordable No More: New York City’s Looming Crisis in Mitchell-Lama and Limited Dividend Housing.

A full copy of both reports can be viewed at the Comptroller’s web site: www.comptroller.nyc.gov.