![]() ![]() He contended that when many Mitchell‐Lama housing companies were faced in the past with sharp increases in maintenance and operating costs, they “got into the habit” of “taking care of their other obligations” before attending to the mortgage payments due the city, by which time there was insufficient money to make these payments. Kailo, the deputy housing and development administrator, said in an interview. “Increased costs and increased demands made by tenants for, services which were never originally contemplated, such as security guards,” have contributed to the total upsurge in Mortgage‐payment arrears in the city's Mitchell‐Lama program, Meyer M. The upward spiral has similarly marked the state program.Ĭompleted Mitchell ‐ Lama projects also have been hit hard by inflation-as has existing housing generally. ![]() In the city program, new Mitchell‐Lama apartments rented for an average of $32 a room in 1966 today the average in projects coming on the market‐,is‐:about $100 a room, which critics consider luxury rather than middle‐income rent levels. These provisions result in lower rents, or cooperative carrying charges than if the housing were built without such aids.īut even with this assistance, soaring construction and maintenance costs and sharply higher interest rates on the government bonds financing the housing have caused development and operating expenses, and thus rents, to shoot upward in the Mitchell‐Lama program. In addition, sizable realestate‐tax abatement may be locally granted to Mitchell‐Lama developments and, where a rental project is involved, the housing company is limited in its profit. They hope to convert it to a lower‐priced rental complex, which could entail a loss to the city of as much as $12‐million. Fewer than 20 apartments have been sold and the venture seems a failure as a cooperative, city officials say. Spearheading them in their long battle was Jane Jacobs, the urban planning critic and at the time a West Village resident.īut soaring construction costs while the project was being debated for years have led to an austere exterior design and necessitates monthly maintenance costs of from $350 to $700. The cluster of five‐story walk‐up apartments, intended as a cooperative, was built at the insistence of Village residents who wanted low‐rise, “human‐scale” housing and successfully opposed high‐rise plans for the area. One major problem confronting the city's MitchellLama program today is what to do with West Village Houses, a nearly completed, $25‐million complex in Greenwich Village that, appears to be a dark‐brick- elepnant. ![]() West Village Houses: Project With Problems Lama of Brooklyn, enables the state or a city to provide longterm, reduced‐interest mortgage loans to builders of such housing. The law, sponsored by State Senator MacNeil Mitchell of Manhattan and Assemblyman Alfred A. Some critics of the city's Mitchell‐Lama program have contended that the state's version of the program is more efficiently and soundly run, with virtually none of the 72 state Mitchell‐Lama developments here experiencing serious mortgage arrears.Ĭity housing officials deny this and respond that any comparison is unfair because, they say, there are greater legal and political obstacles involved in keeping the city's Mitchel‐Lama developments financially selfsustaining.īoth the city and state Mitchell‐Lama programs were created as a result of a 1955 state law that permitted New York State or any of its municipalities to provide financial aid for the construction of middle‐income housing. There, are 50,000 New York City families living in projects built here under a similar but separate program run by the state. Some 40,000 families live in rental or cooperative apartment developments built under the city's Mitchell‐Lama program. Nonetheless, the officials concede that the mortgage arrears may be costing the alreadydeficit‐ridden city some $1‐million in excess bond‐interest costs this year and that if the arrears escalate at an even sharper rate than now, the financial viability of the program itself could be undermined. And in a number of other cases, they hold, the mortgage arrears are only “technical,” because the projects are due retroactive tax abatements from the city that offset the arrears. But city housing officials note that more than half of the $26‐million is accounted for by fewer than ‐10 particularly problem‐ridden developments. ![]()
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