Deterioration: Funding for Capital Repairs

The Mitchell-Lama housing stock is aging poorly because ML is one example of how governments have perpetuated systemic classism and racism by constructing housing according to income, designing housing for the “poor” that the architects and designers would not themselves live in. It is not hard to see how housing should be constructed—in any upper income neighborhood one can view the standard to which all NYC housing construction should have been held. Because of this, as well as the other dynamics elucidated below, Mitchell-Lama developments need serious investment by government to protect their buildings.

Especially in light of the inferior construction, but regardless of it, capital expenses ought to have been anticipated and planned for. The plan cannot have been to “solve” the affordable housing crisis by plopping people down in substandard housing and not making further investments to maintain the developments. A reasonable assumption would have been to expect to make continual investments so long as the underlying conditions that created the poverty and income inequality and therefore the need for the housing persisted. Furthermore, rather than a facile reliance on an outdated notion of affordability (30% of gross income) that is unrelated to evidence or the real costs of being lower income, government should have allowed for a periodic and nuanced reevaluation of whether, as the shared cost of housing necessarily rises as all costs do over time, the residents of ML housing can meet their non-housing needs and are not rent-burdened, and adjusted funding accordingly.

Concerns about the cost of repairs in the aging ML developments have often been the impetus for talk of privatization or conversion to Article XI co-ops. Not only are current repairs an issue but upcoming environmental laws will require large investments to bring these buildings into compliance. Funding these big repair and modernization jobs can be a challenge to the budgets of the lower income shareholders, and those interested in privatizing use this to sell people on the idea that flip taxes can be used to pay for repairs so that current residents do not have to face rising maintenance costs or assessments. Of course, the numbers don’t add up. First, flip taxes are well-known to be speculative (no one can predict apartment turnover and sales price) and second, even when they materialize, the flip taxes need to first be used to pay for higher real estate taxes, to pay more debt service on the higher interest commercial loans the now-private co-op must take out (as opposed to the very low-interest loans the city offers to MLs), and to replace the lost surcharge and first sales (double equity) income.

The real solution is for Mitchell-Lama residents to join together to demand that the city and state make good on their oft-stated ‘commitment’ to diverse, affordable housing by prioritizing investment in the Mitchell-Lama program so it can continue to successfully house generations of low and moderate income New York families.