The state has closed a loophole that allowed landlords to enact huge rent hikes upon exiting the Mitchell-Lama program. Under the loophole, owners of Mitchell-Lama rental buildings constructed before 1974 will no longer be able to raise rents to market rate by claiming that leaving the program amounts to a unique and peculiar circumstance. (Instead, the units will become rent-stabilized.) The new regulation comes as government programs like Mitchell-Lama subsidize fewer and fewer units in the city: Between 1990 and 2006, the city lost 27 percent, or 32,422, of its apartments in subsidy programs, according to data from the Community Service Society. Although the regulation may have an impact on many of Brooklyn’s Mitchell-Lama buildings, it won’t matter at its largest one. The present or future owners of Starrett City could bring rents at the 5,800-unit complex to market rate if they left Mitchell-Lama, since the development was completed in 1974.
Albany Bars Rent Rise for Thousands [NY Times]
Starrett City’s Owners Look to Leave Mitchell-Lama [Brownstoner]
Photo by West Side Neighborhood Alliance.