More Mitchell-Lama Buyouts

[consigliere]

The article below, by Errol Louis, appeared in the June 17, 2003 online edition of The New York Sun:
 
Mitchell-Lama Expirations Near
Another Wild Card in City Housing Battle
 
Even as the high-profile legislative battle to extend New York City's rent control laws approaches a finale in Albany, tenants and landlords are preparing for another affordable-housing war.
 
The next fight will be over the expiration of rent subsidies on tens of thousands of apartments built around the city in the 1970s and '80s under the Mitchell-Lama program.
 
One of the first skirmishes is taking place in the West Village, where hundreds of tenants are lobbying, negotiating, and suing to keep their 420-unit complex, the West Village Houses, from being converted to market-rate prices.
 
Located at the west end of Christopher Street, a block from the newly renovated Hudson River Park, the average two-bedroom apartment at the West Village Houses rents for $900 a month, while nearby market-rate apartments in the red-hot neighborhood are said to be renting for as much as $8,000.
 
"We're all holding our breaths, waiting to see what happens," said Doris Woolfe, a retired opera singer who has lived at the complex since 1989.
 
Ms. Woolfe said she has made three trips to Albany this year to urge lawmakers to help keep the complex's rents low. "This should not be given up," she said.
 
"This is like an oasis for lower-income and middle-income people," said Madeline Chang, a city schoolteacher who has lived at the West Village Houses for 14 years and spent half that time teaching first grade and kindergarten at a public school a few blocks away. "We raised all these kids," she said.
 
The small-town feel of the complex was intended by its creators, according to Katy Bordonaro, President of West Village Houses Tenants' Association.
 
From its inception in 1955 through the opening of its last project in 1978, the Mitchell-Lama housing program provided tax breaks and low-cost mortgages to real-estate developers as an incentive to have them build rental or co-op units affordable to middle-class New Yorkers.
 
In exchange for charging tenants 30% of their income for rent and limiting occupancy to middle-income renters — currently,people earning $62,800 or less for a family of four — participating landlords received the right to pay off their low-cost mortgage after 20 years and begin charging market rates.
 
Even if the buyout option isn't exercised, a Mitchell-Lama landlord can exit the program when the building's mortgage is repaid, usually after 30 years. The West Village Houses, which opened in 1974, is among the first of the Mitchell-Lama complexes to approach this 30-year termination point.
 
The 30-year mark is also important because the city's existing rent stabilization laws apply to buildings built before 1974. That means tenants in older Mitchell-Lama complexes can remain protected by rent stabilization even after their landlord leaves the program, while tenants in newer buildings will soon begin to be charged market-rate rents.
 
West Village Houses is owned and managed by West Village Associates, a landlord that recently announced plans to buy its way out of the program and raise rents as high as $3,000 a month.
 
The tenants have sued the developer in state court, claiming the building was substantially completed before January 1, 1974, and should therefore be covered by rent stabilization.
 
"West Village Associates has begun the process of transitioning the property out of the program, after having more than fulfilled its 20-year commitment to New York State and New York City," the company said in a written statement yesterday. "The residents of West Village Houses have enjoyed extraordinarily low rents for many, many years now."
 
That, Ms. Bordonaro said, is the whole point, noting that the West Village Houses were built as the result of community battles led by Jane Jacobs, the pioneering urban studies scholar.
 
Ms. Jacobs argued that neighborhoods and cities thrive when people from a varied, diverse mix of incomes and professions live in the same area, and that government should therefore subsidize some tenants.
 
Howard Chynsky and Rima Blair couldn't agree more.The married couple moved to the complex in 1976, when the area was desolate and crimeridden. "There was an alarm company across the street that used to test its alarms," said Ms. Blair, a professor at City University of New York. "It was pre-D'Agostino's."
 
"It was pretty deserted over here.You had to go office to get your over to the post mail," said Mr. Chynsky, a 55-year-old engineering consultant. "We were here to make it what it is today."
 
Hundreds of tenants from Mitchell-Lama buildings around the city are expected to attend a strategy meeting at the Borough of Manhattan Community College Wednesday, June 25. There are 120,000 Mitchell-Lama units in New York City, according to the Independent Budget Office.
 

[consigliere]

The item below, by J. Tozzi, appeared in the June 20, 2003 online issue of City Limits:
 
MITCHELL-LAMA DRAMA
 
The 894 tenants of Phipps Plaza West apartments are suing their landlord to stop him from buying out of the Mitchell-Lama program.
 
FYI: In the latest round of the battle between Mitchell-Lama tenants and landlords seeking to buy out of the program, the 894 tenants of the Phipps Plaza West apartment complex on Second Avenue between 26th and 29th Streets are suing the owners, alleging that Phipps Houses is trying to back out of an agreement to provide affordable housing until 2011. According to a complaint filed in State Supreme Court in April, Phipps Houses entered a 40-year agreement in 1971 to keep rents down in exchange for tax breaks and other government incentives under the Mitchell-Lama law.
 
Although owners can buy out of the Mitchell-Lama program after 20 years, the tenant association claims that the original 40-year agreement would prevent a buy-out until 2011. The suit, which seeks $1.3 billion in damages in addition to keeping the housing affordable, also says that Phipps Houses misrepresented their intention to convert the apartments to luxury housing when tenants signed leases.