The River Crossing building in Harlem; Photo by CTC Creative
A group of real estate investors is buying 2,800 New York City rental apartments for $1.2 billion. But instead of keeping with the industry’s custom of converting affordable units into market-rate homes, L+M Development Partners and its partner Invesco Real Estate plan on returning a chunk of those units to long-term regulation. The venture involves the purchase of five former Mitchell-Lama buildings in Manhattan, with four in Harlem and one on Roosevelt Island.
Waterside Plaza, a former Mitchell-Lama Housing Program-funded rental project. Photo via Flickr cc.
A high percentage of working New Yorkers do not qualify for low-income rentals yet still struggle to pay the city’s exceptionally high rents on the private market. While this may seem like a new problem, in fact, it is something legislators and housing advocates have been attempting to resolve for over 70 years. Indeed, this is how the affordable rentals and co-op units offered under the Mitchell-Lama program first came into being, and 68 years after its launch, Mitchell-Lama is still offering middle-income renters and buyers access to affordable housing.
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Mayor Bill de Blasio announced Thursday that the city will invest $250 million to protect 15,000 Mitchell-Lama apartments from going to market rate. The investment is part of the city’s initiative to create or preserve 300,000 units of affordable housing by 2026. The new program will address over 15,000 Mitchell-Lama homes where affordability is at risk over the next eight years.
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Photo via Wiki Commons
Affordable housing is one of the hottest topics in the real estate market these days. It all started with Mayor de Blasio’s plan to preserve or build 200,000 affordable units over the next ten years, which has resulted in a slew of new lotteries for below-market-rate apartments, putting his goal ahead of schedule. And let’s not forget the expiration of the controversial 421-a tax abatement, which provides incentives to developers when they reserve at least 20 percent of a building’s units for low- and moderate-income tenants. But despite the buzz-worthy roll affordable housing has been on, many are still left wondering what exactly it is.
Everything you need to know about affordable housing
Photo of Trump Village West via Trump 4 West
Built by Donald Trump’s father, Fred, in 1964, Trump Village in Coney Island features seven 23-story towers with 3,700 co-op and rental apartments. To pay for the $70 million project, which would total $564 million today, Fred Trump used Mitchell-Lama, a government program that granted financial incentives in exchange for setting aside affordable housing. The typical rental contract lasts 20 years, and after that, landlords can opt-out of the program. As Crain’s reported, Trump Village became one of the first co-ops to exit the Mitchell-Lama program in 2007, letting residents sell their apartments for whatever the market allowed. Owners of 38,000 Mitchell-Lama apartments, representing 28% of the program’s housing, have left in the past 20 years. But as the value of these apartments, which were once affordable, keeps rising, New Yorkers looking for affordable housing there, and other former Mitchell-Lama apartments, may be out of luck.
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The Lincoln-Amsterdam House is a 25-story co-op building that stretches from West 64th to 65th Streets along the eastern side of West End Avenue, just one block away from Lincoln Center. It’s a Mitchell-Lama development, which, as 6sqft previously explained, is a program “created in 1955 to provide affordable rental and cooperative housing to moderate- and middle-income families.” As of today, the 100-name waitlist is open for four-bedroom units in the building to households with a minimum of six persons earning between $33,440 and $149,531 annually. The co-ops will sell from $102,814 to $109,545.
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Trinity House is a 199-unit rental building at 100 West 92nd Street on the Upper West Side, just a block away from Central Park. It was built in 1968 by the Trinity School, which occupies the first three floors, as a Mitchell-Lama development. As 6sqft previously explained, this affordable housing program “was created in 1955 to provide affordable rental and cooperative housing to moderate- and middle-income families. These buildings are privately owned, but are under contract with New York state to keep prices affordable. Owners of these buildings receive tax abatements and low-interest mortgages.”
Back in 2013, Trinity House made headlines when the school received approvals from the city for a rent hike of up to 13 percent, more than three times the standard increase for rent-stabilized units that year. However, units have still remained affordable, and a 750-name waitlist has just opened for studio apartments that range from $432 to $503 a month for one- and two-person households earning between $17,263 and $90,625 a year.
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