City overhauls Mitchell-Lama middle income housing program with increased oversight

Posted On Thu, June 27, 2019 By

Posted On Thu, June 27, 2019 By In affordable housing, Policy

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Citing bribery, fraud and other abuses and years-long waiting lists, New York City’s Department of Housing Preservation and Development has restructured the Mitchell-Lama program, one of the New York City’s oldest middle-income housing initiatives, the Wall Street Journal reports. Included in the restructuring effort will be the integration of the program’s application process into Housing Connect, the city’s existing affordable housing lottery, within the next year.

There will still be a waiting list for the Mitchell-Lama program, but there will be increased oversight of the process. The agency has also created a unit for constituents to get information and will be hiring new management companies for buildings. These changes are designed to address the results of probes conducted by the city’s Department of Investigation, which found HPD didn’t have sufficient supervision in Mitchell-Lama developments.

Abuses found in the investigation included co-op board members taking bribes to allow applicants to jump ahead on waiting lists, kickbacks for repairs done on units and board members receiving perks like new kitchen appliances. Some of the investigations have resulted in criminal charges.

HPD spokesman Matthew Creegan said, “Mitchell-Lamas are a vital source of affordable housing for New Yorkers, and over the past year HPD has revamped the organizational structure of the team that oversees these developments and made comprehensive updates to our policies and procedures in accordance with the Department of Investigation recommendations.”

Mitchell-Lama is still offering middle-income renters and buyers access to affordable housing 68 years after the program was created in the post-war period of the late 1940s as men and women returning from service and a new wave of refugees and immigrants arrived in New York City. The Mitchell-Lama program led to the development of 269 state-supervised developments with over 105,000 apartments, built mostly in locations where the housing crisis had hit the hardest. Waiting lists for Mitchell-Lama units are generally very long–it’s not unusual for applicants to spend well over a decade on a Mitchell-Lama waiting list.

The initial terms of the Mitchell-Lama contracts expired in 20 to 35 years, meaning that the program’s participating developers could then voluntarily convert their units to market rent, which 93 of 269 Mitchell-Lama developments did, mostly in the 1990s. Though the struggle to keep the program’s affordable housing affordable, the benefits of renting or buying in a Mitchell-Lama building continue to be significant. In 2017, Mayor Bill de Blasio announced that the city would invest $250 million to protect 15,000 Mitchell-Lama apartments from going to market rate.

[Via WSJ]

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