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December 2, 2009

DiNapoli: Mitchell-Lama Housing Left Vacant Too Long

Audit Finds Some Affordable Apartments Left Unoccupied for More than Two Years

More than 70 percent of vacant apartments in the three largest Mitchell-Lama developments in Manhattan were left vacant for excessively long periods, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. One development, the 364-unit Rivercross cooperative on Roosevelt Island, also permitted owners to sublet units, violating the affordable housing program’s requirement that units should be the principal residence of tenants and their families.

“The shortage of affordable housing is forcing many New Yorkers to spend more of their shrinking paychecks on rent,” DiNapoli said. “Mitchell-Lama is supposed provide access to affordable housing, and the key word is access. Taxpayer dollars are helping fund Mitchell Lama and those tax dollars shouldn’t be wasted, in effect subsidizing vacant apartments.”

DiNapoli’s audit examined records at the six largest Manhattan developments in the Division of Housing and Community Renewal’s (DHCR) Mitchell-Lama program between June 1, 2007 and October 31, 2008. The developments included three cooperative buildings—Southbridge Towers, River View Towers, and Rivercross, and three rental developments, Lakeview Apartments, Island House and Westview.

Auditors found that condominiums in the program were generally sold within an appropriate length of time, but noted that 97 of 137 vacant rental units during the audit were vacant for more than 60 days. Of these, 20 rental apartments were left vacant for more than two years, and one three-bedroom unit in the Island House development was not rented to new tenants for nearly three years. While DHCR Regulations do not explicitly address the required timeframe for filling vacancies, it expects developments to make sufficient efforts to rent or sell vacant units within 60 days.

Auditors noted that the three rental developments were planning to leave the Mitchell-Lama program, and deliberately kept the units vacant in order to rent them at market prices after departing the program. DHCR officials said this process, known as ‘warehousing’, is not consistent with the intent of the Mitchell-Lama initiative and is not permitted.

DiNapoli’s audit recommended that the developments:

  • Establish a time frame for filling Mitchell-Lama vacancies;
  • Inform development owners that warehousing is not permitted;
  • Determine whether subletting should be permitted at the Rivercross development.

This audit is part of DiNapoli’s ongoing effort to ensure the appropriate use of tax dollars dedicated to affordable housing programs.

Click here for a copy of the audit.


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