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The Mitchell–Lama Housing Program is a non-subsidy governmental housing guarantee in the state of New York. It was sponsored by New York State Senator MacNeil Mitchell and Assemblyman Alfred A. Lama and signed into law in 1955. [2] [3]
The program's publicly stated purpose was the development and building of affordable housing, both rental and co-operatively owned, for middle-income residents. [4] [5] Under this program, local jurisdictions acquired property by eminent domain and provided it to developers to develop housing for low- and middle-income tenants. Developers received tax abatements as long as they remained in the program, and low-interest mortgages, subsidized by the federal, state, or New York City government. They were also guaranteed a 6% or, later, 7.5% return on investment each year. The program was based on the Morningside Gardens housing cooperative, a co-op in Manhattan's Morningside Heights neighborhood that was subsidized with tax money. [6]
It was signed into law in 1955 as the Limited-Profit Housing Companies Law. [2] [3] It was later recodified as article II of the 1961 Private Housing Finance Law. [7] [8] Article II Limited-Profit Housing Companies refer to not-for-profit corporations, whereas article IV Limited Dividend Housing Companies refer to non-Mitchell–Lama affordable housing organized since 1927 as business corporations, partnerships, or trusts under State Housing law of 1926. The New York State Division of Housing and Community Renewal (DHCR), was merged with the New York State Housing Finance Administration in 2010 to create the New York State Housing and Community Renewal agency. The new agency provided financing, maintenance and supervision of mortgages to developments as long as they remained in the Mitchell–Lama program. [5]
Between 1955 and 1978, roughly 135,000 units of afforadable housing were produced using Mitchell-Lama funding. [1] Notable apartment complexes developed with Mitchell-Lama funding include the Dayton Towers, Manhattan Plaza, the Cadman Plaza, Co-op City, and the 1199 Plaza. [9] According to the New York State Homes and Community Renewal (formerly DHCR), "A total of 269 Mitchell-Lama developments with over 105,000 apartments were built under the program." [10]
Landlords generally may remove the developments from Mitchell–Lama by prepaying the mortgage, which usually happens 20 years after the project is developed. However, in some cases, special land use agreements specify more time. [11] Between 1990 and 2005, Mitchell–Lama housing lost "22,688 units, over a third (34 percent) of its stock." [12] That pace has now increased with the real estate market for rental buildings. When a building is privatized, it loses its tax abatement, the owner generally must refinance the mortgage, and the owner loses the right to a 6% annual return on investment.
What happens to the tenants in those buildings depends on when they were built and public policy.
Tenants in rental buildings built before 1974 go into rent stabilization upon leaving Mitchell–Lama. That means their rents increase according to the New York City Rent Guidelines Board orders for each new lease [13] as well as according to orders by the New York Office of Rent Administration for, among other things, major capital improvements [14] and landlord hardship. [15]
Tenants who do not qualify for enhanced vouchers, including all tenants in post-1973 buildings that were not federally subsidized, must pay the rent set by the landlords. [a] The buildings that are no longer in a rent-regulation program pose a particular problem for tenants who were receiving special subsidies such as subsidy programs because of poverty [16] age, [17] and disability. [18]
After a certain period of years, owners of Mitchell–Lama limited equity housing co-operatives may decide according to their co-op voting rules to "privatize" or demutualize their building as well. That may permit owners to sell their apartments, often at a high profit, but it can potentially increase the maintenance fees of remaining residents since the building loses its tax abatement and may have increased payments for a non-subsidized mortgage. Flip taxes on resales can be used to mitigate such increases, but that is up to the co-op boards. There is some effort to require them by legislation, but that has so far been unsuccessful. Such demutualization thus simultaneously diminishes the stock of affordable housing in a given area and increases tax revenue. [19]
Some politicians have proposed bills [20] to the New York State legislature that would put all buildings leaving or that have left Mitchell–Lama into rent stabilization upon privatization. The Rent Act of 2011 [21] signed into law on June 24, 2011, did not mention Mitchell–Lama rentals or co-operatives.
In November 2007, the State's Division of Housing and Community Renewal (DHCR) – now NYS HCR – adopted regulations stating that just removing a pre-1974 Mitchell–Lama from the program is not a "unique or peculiar circumstance" justifying a substantial rent increase. [22] Several landlords challenged that policy in court, asserting that it contradicts a court decision, KSLM-Columbus Apts. v. NYS DHCR, [23] and a lower court's reference to DHCR policy letters. [24] Justice Schlesinger of the New York State Supreme Court ruled [25] that the regulations are legal, and one of the owners (Steve Witkoff, owner of 95 W. 95th Street, now called "Columbus 95") appealed to the state's mid-level Appellate Division. On December 28, 2010, the Appellate Division, First Department (covering the New York City boroughs of Manhattan and the Bronx) unanimously upheld DHCR's regulation. [26] The owner of Columbus 95 failed to pursue judicial permission to appeal to New York State's highest court. [27]
Public housing, also known as social housing, refers to affordable housing provided in buildings that are usually owned and managed by local government, central government, nonprofit organizations or a combination thereof. The details, terminology, definitions of poverty, and other criteria for allocation may vary within different contexts, but the right to rent such a home is generally rationed through some form of means-testing or through administrative measures of housing needs. One can regard social housing as a potential remedy for housing inequality. Within the OECD, social housing represents an average of 7% of national housing stock (2020), ranging from ~34% in the Netherlands to less than 1% in Colombia.
In the United States, rent control refers to laws or ordinances that set price controls on the rent of residential housing to function as a price ceiling. More loosely, "rent control" describes several types of price control:
A housing cooperative, or housing co-op, is a legal entity which owns real estate consisting of one or more residential buildings. The entity is usually a cooperative or a corporation and constitutes a form of housing tenure. Typically housing cooperatives are owned by shareholders but in some cases they can be owned by a non-profit organization. They are a distinctive form of home ownership that have many characteristics that differ from other residential arrangements such as single family home ownership, condominiums and renting.
Section 8 of the Housing Act of 1937, commonly known as Section 8, provides rental housing assistance to low-income households in the United States by paying private landlords on behalf of these tenants. Approximately 68% of this assistance benefits seniors, children, and individuals with disabilities. The Department of Housing and Urban Development (HUD) oversees Section 8 programs, which are administered locally by public housing agencies (PHAs).
A Lease-Purchase Contract, also known as a lease purchase agreement or rent-to-own agreement, allows consumers to obtain durable goods or rent-to-own real estate without entering into a standard credit contract. It is a shortened name for a lease with option to purchase contract. For real estate, a lease purchase contract combines elements of a traditional rental agreement with an exclusive right of first refusal option for later purchase of the home.
Subsidized housing is government sponsored economic assistance aimed towards alleviating housing costs and expenses for impoverished people with low to moderate incomes. In the United States, subsidized housing is often called "affordable housing". Forms of subsidies include direct housing subsidies, non-profit housing, public housing, rent supplements/vouchers, and some forms of co-operative and private sector housing. According to some sources, increasing access to housing may contribute to lower poverty rates.
A slumlord is a slang term for a landlord, generally an absentee landlord with more than one property, who attempts to maximize profit by minimizing spending on property maintenance, and usually rents to tenants that they can intimidate. Severe housing shortages allow slumlords to charge higher rents and, when they can get away with it, to break rental laws.
Penn South, officially known as Mutual Redevelopment Houses and formerly Penn Station South, is a limited-equity housing cooperative development located between Eighth and Ninth Avenues and West 23rd and 29th Streets, in the Chelsea neighborhood of Manhattan in New York City. The complex has 2,820 units in ten 22-story buildings. Penn South is so named because of its location southwest of New York Penn Station.
The New York State Housing Finance Agency (HFA) is a New York State public-benefit corporation created in 1960 to increase the supply of rental housing for low-income people by issuing bonds and providing low-interest mortgage loans to regulated housing companies.
Rent regulation in New York is a means of limiting the amount of rent charged on dwellings. Rent control and rent stabilization are two programs used in parts of New York state. In addition to controlling rent, the system also prescribes rights and obligations for tenants and landlords.
Deborah VanAmerongen joined Nixon Peabody as a strategic policy adviser in February 2010. She works closely with attorneys in the firm's Affordable Housing practice to provide advice to developers, owners, and managers of affordable housing, as well as their financing partners, in the preservation and production of affordable housing nationwide.
New York State Homes and Community Renewal (HCR) is New York State's affordable housing lender. Its mission is to expand affordable housing opportunities for low- and moderate-income New Yorkers. HCR consists of several state agencies and corporations: the New York State Division of Housing and Community Renewal (DHCR), the New York State Housing Finance Agency (HFA), the State of New York Mortgage Agency (SONYMA).
3333 Broadway is a group of five apartment buildings ranging from 11 to 35 stories at Broadway between West 133rd and 135th Streets, in Manhattanville, Manhattan, New York City, United States. Completed in 1976, it was the largest residential structure in the United States. Together, the five buildings include 1,193 apartment units. The present manager of the property is the Urban American Management Corporation.
Graham Court is a historic apartment building in Harlem, Manhattan, New York City, along Adam Clayton Powell Jr. Boulevard between West 116th and 117th Streets. It was commissioned by William Waldorf Astor, designed by the architects Clinton and Russell, and constructed in 1899-1901 as part of the great Harlem real-estate boom.
Non-profit housing developers build affordable housing for individuals under-served by the private market. The non-profit housing sector is composed of community development corporations (CDC) and national and regional non-profit housing organizations whose mission is to provide for the needy, the elderly, working households, and others that the private housing market does not adequately serve. Of the total 4.6 million units in the social housing sector, non-profit developers have produced approximately 1.547 million units, or roughly one-third of the total stock. Since non-profit developers seldom have the financial resources or access to capital that for-profit entities do, they often use multiple layers of financing, usually from a variety of sources for both development and operation of these affordable housing units.
Laurence Gluck was an American businessman, investor, and lawyer. He was based in New York who was the founder of the real estate company Stellar Management.
The 421-a tax exemption is a property tax exemption in the U.S. state of New York that is given to real-estate developers for building new multifamily residential housing buildings in New York City. As currently written, the program also focuses on promoting affordable housing in the most densely populated areas of New York City. The exemption is granted for any buildings that add multiple new residential units, and typically lasts for 15 to 25 years after the building is completed. Longer exemption periods apply in less densely populated areas of the outer boroughs and upper Manhattan.
Affordable housing is housing that is deemed affordable to those with a median household income as rated by the national government or a local government by a recognized housing affordability index. A general rule is no more than 30% of gross monthly income should be spent on housing, to be considered affordable as the challenges of promoting affordable housing varies by location.
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The New York State Division of Housing and Community Renewal (DHCR) is an agency of the New York state government responsible for administering housing and community development programs to promote affordable housing, community revitalization, and economic growth. Its primary functions include supervising rent regulations through the State Office of Rent Administration (ORA), administering affordable housing programs, providing financial assistance for housing development and rehabilitation, supporting community development initiatives, ensuring compliance with fair housing laws, and managing the Weatherization Assistance Program. DHCR has been criticized by tenant rights groups for its failure to monitor their own programs and massive delays in investigating cases of the illegal deregulation due to an extensive backlog.
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