Critique of Mitchell Lama Affordable Housing on Roosevelt Island- Report of the NY State Inspector General

The Main Street Wire reports on the NY State Inspector General's Review of the Division of Housing and Community Renewal's Oversight of the Mitchell Lama affordable housing program and the response by current DHCR Commissioner Van Amerongen. The Inspector General's full report is here. According to the report, the Mitchell Lama housing program:

...has provided affordable rental and cooperative apartments for hundreds of thousands of middle-income New Yorkers since its inception in 1955. The State has made a substantial investment in Mitchell-Lama housing, providing private developers with low-interest loans and tax exemptions to build apartments subject to regulated rents and purchase prices. The majority of Mitchell- Lama housing developments are located in New York City, where the program is especially important as middle-income families may earn too much to qualify for federal government housing vouchers, yet struggle to pay market-rate rents.

The report is highly critical of DHCR's oversight of the Mitchell Lama program from January 2003 - October 2006 concluding that:

DHCR’s monitoring of Mitchell-Lama housing companies and its
enforcement of its own regulations has been grossly deficient on a broad scale. Rather than safeguarding the integrity of the program, DHCR, through its own shortcomings, has allowed housing companies to flout rules regarding apartment allocation, financial reporting, and contracting. DHCR’s deep and systemic failures have resulted in deterioration of facilities, waste of taxpayer money, increase in charges to tenants, and the allocation of apartments to unqualified applicants at the expense of those legitimately entitled to those same apartments.

As to Roosevelt Island's Westview Apartments (See pages 45-51) the report found that:

warehousing of Mitchell-Lama units appeared to be occurring at Westview, which is a highly desirable rental development with a waiting list of more than 1,000 applicants. As of August 2006, the complex had 31 vacant apartments, each of which had been vacant for an average of 327 days. In February 2004, a private entity signed a contract to purchase Westview, with the clear intent, once the property was free of Mitchell-Lama regulations, to convert it to condominium ownership. As a condition of the sale, the prospective buyer required DHCR to grant a waiver of the competitive bidding requirements of the complex’s management agent contracts in order to permit the buyer to assume the management of the property. DHCR granted the waiver in late 2004, agreeing to have the property managed jointly by the current owner and the buyer on a month-to-month basis until the sale of the property either was consummated or the contract was abandoned. The deal fell through in March 2006.
Shortly after the agreement to jointly manage Westview was reached, the number of vacancies began to rise. Before the agreement, Westview had, at most, three to five vacant units at any time. However, by November 2005, the number of vacancies had risen to 27, or a rate of 7.5 percent. According to an official at the U.S. Department of Housing and Urban Development, there should be no vacancies in subsidized housing in New York City, but if vacancies exist, they should not exceed one percent. Nonetheless, in his field report of December 5, 2005, the DHCR representative assigned to Westview termed the complex’s inflated vacancy rate “satisfactory.”

Image is of Danny Kaye from the movie The Inspector General at Amazon.com.