Council says bill would protect middle-income housing

By Albert Amateau

More than 200 residents of Mitchell-Lama houses throughout Manhattan came to the steps of City hall on Tues. July 22 to hear City Council Speaker Gifford Miller introduce legislation aimed at protecting tenants at risk of losing affordable housing when landlords leave the Mitchell-Lama program.

Tenants, many of them from Independence Plaza North in Tribeca, chanted “Save our homes,” and cheered the provisions of the proposed Mitchell-Lama Conversion Protection bill, which has the support of Councilmembers Alan Gerson, Christine Quinn and Margarita Lopez.

The Mitchell-Lama law, enacted 43 years ago, allows landlords to leave the program and charge market rate rents after 20 years if they pay off outstanding mortgages and taxes.

The proposed legislation is intended to make it more difficult and expensive for owners to leave the affordable housing program. If enacted, the bill could affect an estimated 25,000 Mitchell-Lama units in the city, including 1,340 apartments at I.P.N. and 420 apartments in West Village Houses in the Village, which are in the process of leaving the program.

I.P.N. and West Village Houses tenant associations want to acquire the buildings and create limited equity co-ops.

“This is a fight for the heart and soul of the community,” Gerson told the crowd. “The tenants of I.P.N. moved in when this was a barren neighborhood and built a community. Then after 9/11, they lived through the worst of the worst. We’re not going to let a so-called sunset provision in the Mitchell-Lama law do what the terrorists were not able to do – force us out of the neighborhood.”

However, Steven Spinola, executive director of the Real Estate Board of New York, denounced the proposed legislation in a statement released later on Tuesday.

“Changing the rules now would be a serious breach of faith and would dissuade investors from creating much-needed units of new affordable housing in the future,” Spinola said. “The Mitchell-Lama program stands as a contract between government and the private sector, and any change being proposed by the City Council would clearly be a breach of that contract resulting in the loss of trust in government. We also question the City Council’s authority to enact such changes, but even the attempt to do so is sending a terrible message.”

Miller, however, said that while the state has the tremendous authority in Mitchell-Lama matters, “we believe that these steps can be taken by the Council.” The proposed legislation, he said, “gives the Department of Housing Preservation and Development the tools to negotiate on behalf of the tenants and the city.”

Neil Fabricant, I.P.N. tenants association president who helped draft the bill, said later he was sure the measure “would help push Mitchell-Lama landlords, and in particular, Larry Gluck [new owner of I.P.N.] to do the right thing and reach a reasonable agreement with tenants.”

The proposed legislation would apply to Mitchell-Lama rental apartments supervised by the city Department of Housing Preservation and Development and built after Jan. 1, 1974 and therefore not subject to rent stabilization if landlords buy out of the program.

H.P.D. would be required to do an impact study on the effect of a building’s leaving Mitchell-Lama. The study would examine the rent increases that tenants would have to pay, the availability of affordable housing and the number of families likely to be displaced as a result of higher rents. The owner would then have to pay for mitigating any adverse effects on tenants.

Prior to final approval of a buy-out, H.P.D. would have to determine whether the owner had substantially complied with Mitchell-Lama laws and regulations. If the agency finds the owner did not comply, the new legislation allows a civil penalty equal to three times the amount of damages suffered by tenants or the city.

The bill requires landlords to notify tenants 18 months in advance of a buy-out, compared to 12 month notice required now. In addition, the bill authorizes owners and tenants to enter into voluntary comprehensive agreements intended to maximize preservation of affordable housing for any tenant in a building at the time of a buy-out.

The legislation would set an administrative fee of $1,000 per apartment to offset the cost to H.P.D. of administering the law.

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