Given the city’s galloping real-estate values, shareholders in many affordable Mitchell-Lama co-ops are finding themselves confronted with a devilish dilemma: should we stay in the program with its tax advantages and limited resale prices, or leave the program and reap the rewards of those galloping real-estate values?
The latest to come face-to-face with this dilemma are the shareholders at the 326-unit St. James Towers co-op in Clinton Hill, Brooklyn, where voting was completed on Thursday on whether to remain affordable or cash in. If two-thirds of the shareholders vote to leave the Mitchell-Lama program, an offering plan will be drawn up and a final vote will be held.
If shareholders vote to leave, it will be another blow to Mayor Bill de Blasio’s vow to add thousands of affordable housing units to an increasingly unaffordable housing stock. During a news conference Wednesday at St. James Towers, Crains reports, elected officials entreated shareholders not to cash out. Public Advocate Letitia James, who lives nearby, pleaded with them to put the public good of affordable housing – and its ramifications for the neighborhood's racial composition – ahead of the personal windfall. "What about the impact on diversity?" James asked. "And what about the impact on culture? Do any of you care? What you've got in your hands is the fate of this community."
Attorney Karol Robinson, who represents Mitchell-Lamas, explained the devilish dilemma to Habitat last year: “There are some Mitchell-Lamas where the shareholders are philosophically opposed to privatization. They believe that their property was given tax abatement and other beneficial mortgage rates so that it could remain stable and affordable, and it should continue to provide the same opportunity for future generations. On the other hand, there are some who feel, ‘Under the law we’re permitted to privatize. Let’s go with it.’ Those boards and shareholders believe that operating as a free-market, unregulated development will provide better options and result in overall greater benefits to the shareholder community.”
The final vote tally at St. James Towers is expected to be released in a few days.
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