Refinancing of Starrett City Housing Complex Will Permit $40 Million for Structural Improvements
Albany, NY – July 29, 2009 – (RealEstateRama) — Governor David A. Paterson signed into law legislation that will extend affordable housing for another 30 years to the tenants of the 5,881-unit Starrett City housing complex in Brooklyn – the nation’s largest publicly assisted affordable housing complex. The new law allows the owners to refinance the complex, providing at least $40 million for capital improvements to existing structures, facilities and apartment interiors, and as a result, Starrett City will remain in the successful Mitchell-Lama affordable housing program.
“Ensuring that housing remains affordable is a priority of my Administration,” Governor Paterson said. “As unemployment levels rise and so many New Yorkers face increasing struggles during this economic downturn, it is imperative that we do everything we can to keep New Yorkers in their homes. Not only does this law allow for the extension of affordable housing to the thousands of tenants who live in the vibrant Starrett City community, it also allows for the developers to make necessary renovations without causing rents to rise. I want to thank all of those who have been working for several years to make today’s announcement possible.”
The Starrett City refinancing bill, sponsored by Senator John Sampson and Assembly members Inez Barron and Vito Lopez, will allow for the preservation of Starrett City as affordable housing by allowing the current owners, the Dean family, to refinance the project and take out equity. The Division of Housing and Community Renewal (DHCR) and the New York State Housing Finance Agency (HFA) have been working closely for more than two years with the owners, Starrett City Associates, and other governmental partners to preserve the community’s affordable housing and to protect its tenants from rent hikes.
Senate Majority Conference Leader John L. Sampson said: “I am pleased Governor Paterson has signed the Starrett City refinancing bill into law, a victory for the State and the residents of Starrett City. The refinancing will allow Starrett City management to fund renovations to the complex without raising tenants’ rent, something we all can agree is good for New Yorkers in these tough economic times.”
Assemblywoman Inez Barron said: “I am pleased to have been the prime sponsor of legislation that will help maintain the stability of residents who have been a pillar in this community. The Starrett City residents will benefit from the owners’ commitment to remain in Mitchell-Lama for another 30 years, assuring affordable housing to low- and moderate-income families. At the same time, the residents will benefit from the commitment of the owners to dedicate at least 25 percent of their loan proceeds to fund improvements and repairs to the complex. This agreement is strengthened by the commitment to a partnering between the owners, tenants and elected officials. I would like to thank Governor Paterson, Speaker Silver, Assemblyman Lopez and Senator Sampson for their leadership in bringing this legislation to fruition. I also want to acknowledge the dedicated, consistent work of the tenant leaders, the tenants and ACORN on behalf of this legislation.”
Assemblyman Vito Lopez said: “Tenants have been the heart of Starrett City since its beginning. This legislation will support those residents who have spent their lives developing the community into what it is today. Tenants can be assured that their homes will remain affordable and that much needed repairs and improvements will be made.”
Under the new law, Starrett City Associates will dedicate at least $40 million to a capital reserve fund, which will provide important repairs and improvements, including:
- Replacement of apartment unit refrigerators, dishwashers, kitchen cabinets, counters and bathroom vanities;
- Replacement of damaged and older vinyl floors; and
- Tower and garage structural repairs.
The new law also gives tenants input into the allocation of capital reserve funds and other issues. The owners also agreed to hold regularly scheduled meetings tenants and local elected officials while the capital improvements are being made. In return, Starrett’s owner would be allowed to recognize the appreciated value in the property through an equity take-out; however, no portion of any tenant’s rent could be increased to pay for any debt resulting from that equity take-out.
Starrett City was built in 1976 and comprises 46 buildings over more than 153 acres. Also known as Spring Creek Towers, the affordable housing complex includes parking garages, handball and basketball courts, grassy fields, playgrounds and a shopping center. The development is one of the largest and most successful in the Mitchell-Lama program, a state program that has provided affordable rental and cooperative housing to moderate- and middle-income families since 1955.
The following statements were given in support of the new legislation:
U.S. Senator Charles E. Schumer said: “This is the final piece of the puzzle to ensure Starrett City stays affordable for the current tenants and the next generation. The agreement we crafted was a huge victory and I applaud Governor Paterson and all the stakeholders for sticking true to their word and staying the course. We couldn’t have gotten this done without the owners, the tenants, federal, State, and local government officials all working together toward a common goal – preserving Starrett City as the haven for affordable housing that it has always been and always should be.”
Congressman Edolphus Towns said: “This important legislation to preserve the Starrett City Housing Complex greatly complements the work we have done at the federal level to sustain affordable housing opportunities for New Yorkers. Starrett City is a fundamental part of our community that provides a foundation for underserved families and will continue to do so for generations to come.”
DHCR Commissioner Deborah VanAmerongen said: “Today the Governor is signing a law that will protect tenants, improve the quality of life at Starrett and also provide a framework that we can use to maintain affordable housing at other endangered complexes around the State.”
HFA President and Chief Executive Officer Priscilla Almodovar: said: “Governor Paterson’s action today marks an important step in ensuring that Starrett City remains affordable for existing and future Starrett residents – a goal that many of us have been working towards for the last few years. It also ensures that the financial resources will be there to fund vital capital improvements that will improve the lives of the residents. We applaud Senator Sampson and Assemblyman Lopez for their important role in protecting the interests of the residents and in preserving affordable housing.”
Senate President Malcolm A. Smith said: “The preservation of our State’s affordable housing stock is one of the Senate’s leading priorities. Senator Sampson’s legislation will provide those who live at Starrett City some much-needed peace of mind. I commend Governor Paterson and our great Assembly colleagues for their effective advocacy on behalf of low- and moderate-income families, and for recognizing that every New Yorker deserves access to a safe and affordable home.”
Senate Majority Leader Pedro Espada, Jr., Chair of the Senate Committee on Housing, Construction and Community Development, said: “At a time when the City is in the midst of an affordable housing crisis and residents are experiencing financial difficulties during this economic recession, this new law will keep thousands of rental apartments in the affordable housing stream under the Mitchell-Lama program. This law demonstrates what can be achieved for the people of this State when the private sector and the State and Federal governments work together. The Mitchell-Lama program historically has been a source of quality, affordable housing for moderate-income and working families in the five boroughs and throughout the State. This law validates that fact.”
Assembly Speaker Sheldon Silver said: “In the midst of an economic recession, the Assembly Majority understands that affordable housing is a necessity for working families. That is why during the close of session we passed this legislation. For decades, Starrett City has been home for thousands of working people in Brooklyn. Thankfully, residents will no longer fear being priced out of this invaluable development. The legislation signed today will help the building complex to manage its finances, improving its ability to fund maintenance, repairs, and upgrades to this on unique complex and guarantees that Starrett City will remain diverse and affordable.”
New York City Mayor Michael R. Bloomberg said: “The goal of our Administration’s plan to create or preserve affordable housing for 500,000 New Yorkers – the largest municipal housing plan in the nation – is to keep New York City a place where people who work hard here can afford to raise their families here. The extension of affordable housing at Starrett City for another 30 years will go a long way towards helping us achieve that goal.”
Brooklyn Borough President Marty Markowitz said: “It is our unrivaled economic and ethnic diversity that defines life in Brooklyn and New York City—and Starrett City is the gold standard of that diversity. I have been proud to stand with tenants, advocates, and all our public officials in the fight to preserve it—and I applaud the work of Governor David Paterson, Senator John Sampson, Assembly members Vito Lopez and Inez Barron, Brooklyn’s own HUD Secretary Shaun Donovan, who have added to the laudable efforts of Senator Charles Schumer, Congress member Ed Towns and Council member Charles Barron to ensure Starrett remains in Mitchell-Lama and continues to be the model for diverse, urban living in Brooklyn and America.”
Housing and Urban Development (HUD) Deputy Assistant Secretary for Multifamily Housing Programs Carol J. Galante said: “This is a very special day for New York State, New York City, and especially for the thousands of residents of Starrett City. HUD applauds Governor Paterson for signing legislation that guarantees that Starrett City remains affordable for the next 30 years and part of the Mitchell-Lama program. This legislation reinforces the efforts of so many other New York elected and government officials who worked to preserve Starrett City as safe and affordable housing.”
New York City Department of Housing and Preservation and Development (HPD) Commissioner Rafael E. Cestero said: “HPD, on behalf of the City of New York, has worked with our government partners and the owners to help preserve Starrett City for working class New Yorkers. If this housing had left the Mitchell-Lama program, it could not be replaced. In financing Starrett City’s capital needs, this legislation, sponsored by Assembly members Barron and Lopez and Senator Sampson, simultaneously ensures that these thousands of homes will remain affordable for at least 30 additional years. This is a great accomplishment, and one of which we can – as a community – be very proud.”
