Affordable housing in New York City
is rapidly disappearing. 
As speculative value of New York real estate continues to rise, big money investors, often in the form of private equity funds, see opportunities in deregulating housing that was built to serve low and moderate income families. In the years from 1990 to 2006, over a quarter of New York City’s privately-owned subsidized housing stock was deregulated and the losses are only accelerating.
Mitchell-Lama housing, which includes 1520 Sedgwick, has been hit the hardest. Over 40% of the Mitchell-Lama housing developments that existed in 1990, homes for 26000 low and moderate income families, have been deregulated and lost as an affordable housing resource.
When the Mitchell-Lama program was created by the New York State Legislature in 1955, it was intended to create decent, affordable and long-term housing for New Yorkers. Developers were often sold state or city owned property at a nominal cost, in return for building these properties in what were then considered blighted areas. In addition, most Mitchell-Lama owners received, and continue to receive, substantial subsidies in the form of Section 8 funding, insured mortgages with low interest rates, interest-reduction payments and large tax abatements.
Unfortunately, the amount of time that the developers were required to keep buildings in the Mitchell-Lama program was decreased through the years, so that developers are now allowed to pay off their insured mortgages and take buildings out of the program after 20 years. Almost all Mitchell-Lama buildings in New York City are now beyond the 20 year buyout threshold. Now, with a booming speculative market in New York real estate, many of the owners of Mitchell-Lama buildings see an opportunity to make huge returns on their investments; investments that have been subsidized by the taxpayers of New York.
For more information on the affordable housing crisis in New York, see:
“Closing the Door 2007: The Shape of Subsidized
Housing Loss in New York City.” (PDF Download)
By Tom Waters & Victor Bach Learn more at Community Service Society
