Assembly Approves Legislation to Strengthen Mitchell-Lama Housing Program

Initiatives Would Protect Tenants and Make Program More Accessible to Middle Class Families

WASHINGTON, D.C. – June 6, 2013 – (RealEstateRama) — Assembly Speaker Sheldon Silver and Housing Committee Chair Keith L.T. Wright today announced the approval of a comprehensive package of legislation that would help to preserve Mitchell-Lama housing by increasing protections for current tenants and changing eligibility requirements to allow more middle-class families to participate in the program.

The Mitchell-Lama program was created in 1955 and provides affordable housing to middle-income families across the state by giving developers low-interest mortgage rates and real property tax exemptions.

“For nearly 60 years Mitchell-Lama housing has provided individuals and families with the stability needed to build strong and prosperous communities,” said Silver. “Today, the Assembly advanced our commitment to affordable housing by approving legislative measures that would protect tenants after buy-outs and make the program more accessible to a greater number of New Yorkers.”

Throughout the state, the cost of housing has steadily risen while average income levels have remained relatively stagnant. In order to ease this financial burden on moderate-to-low-income families, a bill included in the legislative package would expand the criteria for eligibility for Mitchell-Lama housing by allowing households that make up to 125 percent of the area’s median income to qualify (A.5438/Silver).

“It is no surprise that New York City is facing an affordable housing crisis. With the vacancy rate in the city and surrounding areas consistently less than five percent, finding affordable housing is next to impossible for most residents,” said Wright. “Mitchell-Lama housing is of vital importance to many in my community of Harlem and across New York City. We must do everything possible to continue, improve and expand this program. The package of bills passed today in the Assembly does exactly that, while protecting tenants and helping middle-income New Yorkers find homes that they can afford.”

As more Mitchell-Lama companies reach the point in time that they may voluntarily leave the program, one of the bills in the package would encourage housing companies to remain in the Mitchell-Lama program by allowing investors to receive a greater return on their investment than is currently allowed by statute (A.6570/Wright). The measure would also grant greater protections for tenants in buildings whose owner withdraws from the program by subjecting their apartments to rent stabilization even if constructed after 1974.

The legislative package also includes a measure sponsored by Assemblymember Linda Rosenthal, (A.1128) that would protect tenants in Mitchell-Lama developments that have dissolved and become rent regulated by prohibiting an owner from applying for a special rent increase.

Additional protections for Mitchell-Lama participants included in this Assembly housing initiative would require the landlord or housing agency to:

  • demonstrate maintenance of essential services before an approval of rent increases in Mitchell-Lama buildings is granted (A.454/Dinowitz); and
  • provide notice to tenants of a buy-out no less than 12 months prior to the date of dissolution (A.6568/Wright).

As a means to make affordable housing more available during these tough economic times, Silver noted that earlier this year the Assembly passed legislation that would raise income limitations to allow individuals or families that would otherwise not be eligible for Mitchell-Lama housing to participate in the program (A.6569/Wright).

New York State Tenants and Neighbors Coalition Executive Director Maggie Russell-Ciardi said, “The Mitchell-Lama program is a vital affordable housing resource for New York State’s low-and-moderate-income tenants. Keeping as many buildings as possible in the program is one of our highest priorities. If a building does exit Mitchell-Lama and enter rent stabilization, it is imperative that rents be set at the last rent authorized when the building was still in Mitchell-Lama so that the tenants are not priced out of their homes and their communities. We commend the Assembly for taking action on these critical issues, and we look now for action from the Senate.”

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