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Guide to Mitchell-Lama Housing

Guide to Mitchell-Lama Housing

Description
The history of Mitchell-Lama
Mitchell-Lama developments
Price
Requirements
Applying for one
The wait

Description

What is Mitchell-Lama Housing and how can you qualify and apply for one of these units. Mitchell-Lama housing is probably the closest a New York homebuyer can come to hitting the real estate jackpot. Funny name aside, this is an affordable housing policy that provides large, well-kept rental and co-op apartments to middle income New Yorkers. With apartment prices dipping way below $100,000, it’s no wonder the waiting list to secure one is long. Here’s everything you need to know about Mitchell-Lama housing and how to get on a waiting list yourself.

The history of Mitchell-Lama

The name comes from two politicians -- New York State Senator MacNeil Mitchell and Assemblyman Alfred Lama -- who sponsored the 1955 bill that created the housing plan. Their idea was to clear sites in “blighted” areas of New York to construct income-restricted rentals and “limited equity” co-ops. Those neighborhoods include Chelsea, the Lower East Side, Upper East Side and Upper West Side -- places where affordable apartments are now mostly a thing of the past. Income-restricted rentals mean apartment rents are tied directly to a tenant’s income -- much like all affordable housing in NYC these days. The co-op prices are set so a buyer pays an “equity value” which is returned to them when they sell. Meaning, the buyer scores a cheap apartment but won’t get any profit after they move out.

Mitchell-Lama developments

Builders were given tax-breaks and low-interest mortgages in exchange for keeping Mitchell-Lama developments affordable. In the years it was active, developers constructed about 105,000 apartments in 269 Mitchell-Lama buildings over all five boroughs. Sadly, the program isn’t active any longer, as the last Mitchell-Lama building was constructed decades ago. And many building owners have since gone through the complex process of buying out all the mortgages, exiting the Mitchell-Lama program, and converting units to market-rate apartments. The buildings that remain -- about 45,400 apartments over 98 buildings -- are supervised by the NYC Housing and Preservation Department (HPD) or the NYS Division of Housing and Community Renewal.

Price

So how much do people actually pay to live in these apartments? The market value of a neighborhood has no bearing on co-op or rental prices. Co-ops range anywhere from $4K to $70K at the highest end of the scale. Maintenance for co-ops is also much lower than market value.

Requirements

Simply getting on a waiting list for a Mitchell-Lama apartment depends on two eligibility requirements: income level and family size. The number of people occupying the apartment has to match the number of bedrooms. And your income cannot surpass a certain amount decided by the city. Income limits for a co-op apartment range anywhere between $79K and $149K, while rental restrictions range from $50K to $95K. (If you’re living in a Mitchell-Lama apartment and your household income begins to exceed the maximum income limit, you have to pay an extra surcharge.) You can see a more complete list of income restrictions at the HPD’s website.

Applying for one

Say you meet the income requirements and can move ahead to apply for housing. Some Mitchell-Lama buildings have an “open” waiting list, in which you can apply to add your name to. Other building’s waiting lists are closed, meaning they won’t take names because enough people are waiting for an apartment already. Occasionally, a building that has exhausted its waiting list will open the list to the public. Buildings must announce that they’re opening their waiting list in the media, which gives New Yorkers the opportunity to apply through the HPD. Don’t get too excited, though: you’re just entering a lottery to be added to the waiting list, not to be in line for the next available apartment!

The wait

Once on a waiting list, it’s time to wait… a long time. It takes New Yorkers years just to move to the top of a waiting list, with some buildings boasting 15 year waits. For those buildings with open waiting lists, be sure to call and ask how long their list spans before sending in your application. And then be prepared to follow up with building management to check in and confirm you’re still interested. If an apartment becomes available and you still meet the income requirements, you can take it or wait for the next available apartment. If you reject the second place (but why would you do that?) you go back to the bottom of the waiting list or could get booted off it all together.

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