As he proposes funding cuts to the Department of Housing and Urban Development’s subsidized housing programs, President Donald Trump is set to gain millions of dollars from the sale of an affordable housing complex in East New York, best known as Starrett City. Investors, including Trump who owns a 4 percent stake in the development, sold the 46-building complex to two real estate firms for $906 million, ABC News reported Tuesday. Trump is set to profit about $36 million from the sale (an amount which could drop after mortgage costs and transfer taxes). Home to roughly 15,000 residents across 145 acres, Starrett City is the largest federally subsidized housing project in the country.
In a joint venture, Brooksville Co. and Rockpoint Group completed the deal on Monday, after pledging to invest $140 million in capital improvements, including rebuilding a power plant on the property, now known as Spring Creek Towers. The two real estate firms also agreed to extend the Section 8 program at the development for an additional 20 years. The state’s Mitchell Lama program will extend another 15, until 2054.
The deal was secured after getting approval from regulators, including HUD. Because Ben Carson, a Trump appointee, heads the agency, officials have criticized the deal, calling it a conflict of interest.
Last summer, Rep. Hakeem Jeffries and Rep. Elijah E. Cummings wrote a joint letter to the Donald J. Trump Trust about concerns over the property’s sale. The officials wrote: “The president is on both sides of the negotiation–he oversees the government entity providing taxpayer funds and he pockets some of that money himself.”
The housing complex was originally planned as a union-sponsored co-op in the 1970s, called Twin Pines Village. The unions struggled to pay for construction costs and turned to a private real estate company, Starrett Housing Corp, for financial help. The corporation ended up putting together a group of 200 investors, including Fred Trump, the president’s father. Fred’s 20 percent stake was later doled out to his children, although the amount he paid for it originally remains unknown.
In his Fiscal Year 2019 budget proposal released in February, Trump called for cutting funding for HUD by $8.8 billion and creating stricter work requirements for those who receive public housing subsidies. Congress rejected the cuts in March, appropriating millions for housing programs across the country.
[Via ABC News]
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Neighborhoods : east new york