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IPNTA
Newsletters
February 2003
Mitchell-Lama Law Meant for All Stakeholders, Not Just Landlord
Owners of Mitchell-Lama projects often insist that the law “promises”
them the right to buy out of the program after 20 years, thereby releasing
them from keeping rents affordable.
But the concept of “promise” is neither stated explicitly,
nor implied, in the original legislation (the State’s Private Housing
Finance Law). The law does contain a provision enabling a buyout, assuming
certain conditions are met, such as keeping up maintenance, avoiding corruption,
and the like. But that provision is not fixed; it can be halted by new
legislation or other government action.
In fact, no legislation, other than perhaps the Bill of Rights, is ever
a promise that is unaterable by future generations facing new and different
challenges. And even our federal Constition can be — obviously has
been — altered through amendments.
The key point is that the Mitchell-Lama law was passed to advance the
interests not only of the landlord, but of all the stakeholders in any
given project.
Who are these stakeholders?
The original IPN owner, Harold Cohn of Duane Street Associates, is just
one of them. Another is the government, which provided the land, tax abatements,
mortgage subsidies, 95 percent of the development costs (Cohen provided
only 5%), and guaranteed profit for the owner.
The tenants, who have helped turn what was once a bleak, desolate, windblown
set of streets into a thriving community, and who have invested decades
of their lives here, are another. And let’s not forget the larger
community, which relies on IPN to keep Tribeca a mixed income, ethnically
diverse, vibrant neighborhood.
Mr. Gluck: Last year, Harvey Cohn said that IPNTA
was just trying to scare people to raise money, and that the Cohn family
had no intention to buy out. We said "put it in writing." Let's
stop the silly talk, Mr. Gluck. Put your promises [about not raising rents
for 70% of tenants] in legally enforceable written form, and we'll believe
them.
Finally, there are our public schools, which have educated generations
of our children, and which depend on new generations of children whose
parents cannot afford elite private schools. The law was never intended
as a landlord-take-all giveaway. It was intended to meet the needs of
all its stakeholders.
Those needs remain. That is why IPNTA has been urging politicians, public
officials and others to stop any impending buyout. Under IPNTA’s
primary strategy to have IPN sold to the tenants at an affordable price
— and to protect from steep rental increases those tenants who cannot
or don’t want to buy their apartments — all stakeholders’
interests would be served.
The original owner would get the hefty proceeds of the sale. The government
would retain its interest in a project in which it has invested enormous
amounts of money over time. The tenants would get to keep their homes,
either by buying them at affordable prices, or continuing to rent them
at affordable rates. And Tribeca would continue its richly diverse character.
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