The Mitchell-Lama program was enacted under state law in 1955 to create affordable rental and cooperatively owned housing for moderate and middle-income New Yorkers. The program was a major force in urban renewal, and facilitated the construction of over 140,000 units spanning more than 300 developments. The affordable portfolio is at risk due to expiring affordability requirements.
In response, NYC Housing Development Corporation (HDC) created the Mitchell-Lama Reinvestment Program in 2017, which built upon its existing programs, while taking a more holistic approach towards properties’ immediate and long-term needs. The new MLRP program will rapidly deploy new capital to provide low-cost, long-term financing needed to anchor the affordability of the approximately 100 remaining Mitchell-Lama developments, consisting of more than 45,000 homes.
MLRP provides Mitchell-Lama rentals and co-ops with ultra-low cost capital and waived financing fees to address current and future physical needs while minimizing financial stress on the residents. HDC loan proceeds will enable critical project repairs, funding of reserve accounts for future needs, and lock in affordability for the next generation of New Yorkers for an additional 20 years.
As part of the program, the developments are required to order an Integrated Physical Needs Assessment (IPNA) to direct the scope of work in a more energy efficient manner. The IPNA is a property evaluation tool jointly developed and released by HDC, New York City Department of Housing Preservation and Development (HPD), and the New York State Homes and Community Renewal. The tool integrates an evaluation of energy, water and health needs into a full roof-to-cellar assessment of a property’s physical conditions to ensure that the holistic needs of the property are addressed. HDC and HPD established a list of qualified providers that owners may use to complete an IPNA.
Additionally, HDC Asset Management provides ongoing technical support to portfolio projects as needed. HDC provides services such as financial planning, emergency loan underwriting, scope development, bid review, construction monitoring and utility bill servicing.
Since program inception HDC has closed financing for 9 projects with a total of 9,123 units of affordable housing. Additionally, HDC has restructured $245M in debt, the majority of which for capital repairs at the properties. Lindsay Park is a 2,709 unit Mitchell-Lama Cooperative development located in the Williamsburg neighborhood of Brooklyn consisting of seven 22-story buildings. Excluding 7 superintendent units, 2,702 units are affordable to households earning up to 125% of AMI. The development includes various amenities for residents including community rooms, laundry rooms, lobbies, swimming pools, and on-site parking andaq solariums. The complex has one commercial building with 2 supermarkets and a total of 15 commercial tenants. Lindsay Park was refinanced under HDC’s Mitchell-Lama Reinvestment Program in December 2018. The new financing involved in this transaction is anticipated to fund approximately $40 million in rehabilitation and preserve affordability for another 40 years.