IPN Tenants See Hope in New Council Bill

 by Ronald Drenger

In a step that could have a major impact on Tribeca’s Independence Plaza North residential complex, legislation is expected to be introduced this month at the City Council that would offer new protections for tenants at developments where the landlord wants to withdraw from the Mitchell-Lama government housing subsidy program.

Council Speaker Gifford Miller and councilmembers Alan Gerson, who represents IPN tenants, and Christine Quinn are sponsoring a bill that seeks to preserve the affordability of Mitchell-Lama apartments by imposing new requirements and costs on building owners who want to pull out of the program and convert their properties to market-rate housing.

“This bill will protect our ever dwindling stock of affordable housing, which we know is so critical to the city’s future” Miller said at a press conference on July 21 on the steps of City Hall, which was attended by more than 200 tenants of Mitchell-Lama developments around the city.
At a rally on the steps of City Hall on July 21, City Council Speaker Gifford Miller speaks to a crowd of more than 200 Mitchell-Lama residents about a new bill meant to help protect their affordable rents. At right is Independence Plaza tenant leader Neil Fabricant and, applauding on the left, is City Councilman Alan Gerson. Photo by Carl Glassman

The bill was supposed to be introduced at a council session the following day, but that session was postponed because of the shooting of Councilman James Davis.

Miller first announced his support of the bill in June, at a gathering of more than 700 Mitchell-Lama tenants at Borough of Manhattan Community College. (See story, “New IPN Owner Starts Buyout Process”)


IPN’s tenant association spearheaded the effort to develop the bill, as part of its attempt to block IPN’s new owner, Larry Gluck, from withdrawing, or “buying out” of Mitchell-Lama. The tenant group, led by Neil Fabricant, worked for a year with lawyers, finance experts and City Council representatives to craft the legislation, which has five main components:

• Building owners would have to give 18 months notice of a buyout. (Earlier this year, the city’s Department of Housing Preservation and Development (HPD), which supervises many Mitchell-Lama developments, extended the notification period from six to 12 months.)
• Owners buying out would be required to pay HPD a fee of $1,000 per apartment, which the bill’s supporters say would offset the city’s costs of supervising the withdrawal from the program.

  For IPN, with 1,330 apartments, Gluck would have to pay the city $1.33 million.
• HPD would be required to study the impacts that withdrawal from Mitchell-Lama would have on tenants, including the probable size of rent, the number of apartments likely to remain affordable for tenants, the availability of other affordable housing in the area, and the potential displacement of families.
• Before approving a development’s withdrawal from Mitchell-Lama, HPD would be required to conduct an investigation, including a public hearing, to determine if the building’s owner complied with all the requirements of the program and any other contracts with the city, such as those providing special tax breaks or subsidies. Building owners would have to provide proof of compliance.
(IPN’s tenant association has charged that the complex’s former owner and management company, from whom Gluck took over in June, didn’t adequately maintain the buildings and may not have followed all the rules for offering vacant apartments to people on waiting lists. The previous owner and management company deny those charges.)
• Building owners and tenants would be encouraged to negotiate a “comprehensive conversion settlement” that would preserve the affordability of apartments. The bill’s other requirements, including payment of any remaining administrative fees by the owner, would be waived if a settlement is reached.

The goal of the legislation, Miller said, “is not to demonize the owner. It’s to give the right tools to the city to ensure the right outcome.”

Hearings on the bill are scheduled to take place in September, and the council may vote on it by the end of the year.
 
The legislation would apply to Mitchell-Lama rental developments supervised by HPD—but not those overseen by the state—and built in 1974 or later. Developments constructed earlier than 1974 fall under rent-stabilization protection if they are withdrawn from Mitchell-Lama.

The bill’s sponsors estimated that 25,000 tenants in more than 65 Mitchell-Lama developments would be affected, including developments, such as IPN, where a buyout has been initiated by the owner but not yet approved by HPD.

Fabricant said that the bill would force owners to think twice before buying out and converting Mitchell-Lama developments to market-rate housing.

“Up until now landlords had nothing to worry about” the tenant leader said. “Tenants could tie the case up in court
Mitchell-Lama tenants from around the city crowded onto the City Hall steps to show their support for the legislation that was about to be introduced.
for a while, but there was little cost. This gives HPD enormous power and gives landlords a lot to worry about.”

Mitchell-Lama landlords will also be encouraged to keep their buildings in good condition, provide adequate services and follow housing regulations, Fabricant added

Gerson said that the city must protect tenants at IPN and other Mitchell-Lamas around the city who have helped develop and nurture neighborhoods.
IPN tenant leader Neil Fabricant, who helped draft the new bill with lawyers hired by the tenants, addresses the rally.
“The people of IPN are the people who moved in here when this was a barren residential area, the people who with their civic commitment and with their heart and soul built this community,” Gerson said.

The Real Estate Board of New York, which represents building owners and developers, opposes the legislation, charging that it is improper to modify regulations that were set out in the Mitchell-Lama program some 50 years ago. Under that law, Mitchell-Lama owners can withdraw from the program after a minimum of 20 years.

“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,” the group said in a statement. “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.”

“For anyone who entered into an agreement to build affordable housing with the expectation that 20 or 30 years down the road it could be converted to market rate, this violates that agreement,”said Micheal Slattery, senior vice president at the Real Estate Board. If it is public policy to preserve low- and moderate-income housing, he added, “then that should be publicly funded. It shouldn’t be placed on the backs of private property owners to take care of this obligation.”

Supporters of the bill say that building owners would still have the
opportunity to buy out, as provided in the Mitchell-Lama law, but that the city is allowed to establish new conditions in response to changing circumstances.

The Marino Group, Larry Gluck’s public relations firm, declined to comment on the legislation or its potential impact on IPN, deferring to the Real Estate Board’s statement.

“In this instance, because the proposal addresses a wide range of properties across the city, we consider it appropriate to let the industry respond,” said Steve Vitoff, senior vice president at the Marino Organization.

Carol Abrams, a spokeswoman for HPD, said the agency could not comment because it had not had a chance to review the legislation.