New York City, November 28, 2007 – Calling on the owners of Starrett City to do right by the taxpayers that subsidized the complex for the past 30 years, New York City Comptroller William J. Thompson, Jr., City Council Speaker Christine C. Quinn, Brooklyn Borough President Marty Markowitz and City Council Member Charles Barron joined dozens of Starrett City tenants, members of the Starrett City tenants association, other elected officials and leaders of NY ACORN today to call on the owners of Starrett City to commit to principles and a process to preserve affordability in the impending sale of the complex.
The group called on the principals of Starrett Associates and all potential bidders on the complex to commit to submitting all bids for Starrett City to a panel convened by NY ACORN of Starrett City tenants, clergy, labor leaders and local elected officials. The panel will interview each bidder and then analyze and rate each buyer’s commitment to affordability. At the end of the process the panel will certify and approve bidders who agree to a set of principles to keep Starrett City affordable.
Elected officials also called on Starrett Associates to agree in advance to only move forward with bids that the tenant panel finds will preserve affordability for Starrett’s 11,000-plus tenants.
“The struggle around Starrett has been a shining example of how to maintain affordable housing for working class families,” said Council Member Charles Barron, who represents Starrett City. “We must be vigilant in our efforts to assure that any new owner of Starrett respects affordability, and provides quality maintenance and security. A victory for affordability at Starrett City represents a victory for affordability nationwide.”
“After more than 30 years of benefiting from low-interest mortgages, publicly subsidized refinancing, direct subsidy and tax depreciation rules, it is only right that Starrett City’s owners affirm their commitment to affordable housing by adhering to principles like those outlined by tenants and NY ACORN,” said Comptroller Thompson. “We need to do everything we can to protect the wonderful and diverse community that is the heart of Starrett City.”
“Time and time again, the tenants of Starrett City have stood together and demonstrated their resolve to protect their neighborhood,” said Council Speaker Quinn. “I’m proud to stand beside them once again to send a message loud and clear: every single unit in this community – all 6,000 of them – must remain affordable.”
“I applaud the principles that are announced today in an effort to ensure that Starrett City remains an affordable housing option for New Yorkers,” said Senate Democratic Leader Malcolm A. Smith. “We now have a renewed opportunity to work cooperatively using these principles as a basis to ensure this community remains one of the most diverse, vibrant, affordable and accessible to the average New York City resident. My hope is that the principles outlined today will be a framework for a productive and meaningful agreement with any new buyer. Affordable housing is a problem throughout the entire region and we need to maintain and ultimately expand the supply of affordable housing for New York’s working families.”
“Starrett City is a thriving community and a beacon of affordability—and it’s only fair that the Brooklynites who call Starrett home should have a strong decision-making role in its future,” said Brooklyn Borough President Markowitz. “By forging these principles, Starrett City residents, NY ACORN and their supporters in the community are taking a stand—demanding, as we all should, that any potential buyer respect the values that have made this development the model for successful, diverse, affordable urban living in Brooklyn and America.”
“The last time someone tried to buy Starrett City, they talked a good game about affordability. But when you looked at the numbers it was clear they were attempting to pull a bait and switch on Starrett tenants and New York taxpayers,” said Bertha Lewis, Executive Director of NY ACORN. “We are not going to go through that again this year. The rules of the game have changed and the owners and would-be owners of Starrett City need to abide by them. We are urging them today to join us in accepting a process that we all can have confidence in to produce the right result for Starrett tenants and New York’s taxpayers,” said Lewis.
The tenant panel is demanding that any developer considering buying Starrett and any government agency or lender involved in the purchase or sale of Starrett City submit their bid to the panel and agree to be interviewed by members of the panel. Acceptable plans must include:
I. PERMANENT AFFORDABILITY FOR EXISTING AND FUTURE RESIDENTS
As prospective owners consider the purchase of Starrett, their budget projections must be based on the following factors, including but not limited to:
• Maintenance of project based Section 8 for current apartments
• Support of efforts to convert Rental Assistance Program apartments to project based Section 8
• Maintain project based for Section 236
• Commitment to reject enhanced vouchers. Enhanced vouchers triggers and requires relocation of families. Conversion from project based subsidies to tenant based subsidies will, over the long term, lead to displacement of current residents and gentrification of Starrett City.
• For all unsubsidized apartments, base rent must be set at current rent levels for those apartments and owner must agree to either place those units in rent stabilization or take increases as determined annually by the rent guidelines board. There can be no restructuring of base rents at speculative and inflated levels.
• Residents continue to reside in the apartment they currently occupy.
II. ECONOMIC INTEGRATION SO THAT THE INCOME MIX OF THE COMPLEX REMAINS CONSISTENT WITH INCOME LEVELS OF CURRENT STARRETT TENANTS
In order to preserve a mixed income community, vacant apartments must be rented according to a formula that would maintain the income mix at Starrett.
Families may go over 100% AMI and remain at Starrett; upon vacancy unit will be re-rented to initial category of income slated for that unit.
III. SERVICES
Bidders must guarantee the ongoing delivery of current services, including but not limited to security, groundskeeping, maintenance, resident services, health club, youth and senior services, etc.
IV. VACANT LAND
Vacant land must be developed along the guidelines and income bands set forth below regarding economic integration and an affordable, safe, environment similar to the current Starrett City development:
25% fixed income to 40% AMI ($14,880 for 1 person – $32,880 for 6 persons)
25% 40% AMI – 60% AMI ($19,840 for 1 person – $49,320 for 6 persons)
25% 60% AMI – 80% AMI ($29,760 for 1 person – $65,760 for 6 persons)
25% 80% AMI – 100% AMI ($39,680 for 1 person – $82,200 for 6 persons)
Background and Chronology
One year ago – in November, 2006 – the owners of Starrett City put the complex of 5,881 apartments spread out over 46 buildings along the Jamaica Bay on the auction block. On February 9, 2007, Clipper Equities entered into a contract with Starrett Associates to purchase the complex for $1.3 billion. One month later, on March 1, 2007, the U.S. Department of
Housing and Urban Development rejected Clipper’s bid because the new owner’s plan would not preserve Starrett City as affordable housing for its largely working class population of over 11,000 tenants. On July 9th, HUD and state officials rejected a revised version of Clipper Equities’ bid and in August, Clipper’s contract to purchase the complex expired – killing the deal once and for all.
On August 29, Starrett Associates wrote to New York state officials and signaled their intention to withdraw from New York’s Mitchell-Lama housing affordability program. Tenants and government officials believe the letter is a negotiating tactic to give them leverage in winning approval of an eventual sale and are calling on the owner’s of Starrett City to work with tenants to keep the complex in the Mitchell-Lama program and affordable to current and future tenants.
