How To Apply For Mitchell-Lama Housing

Affordable housing for middle-income residents of the state of New York became a law in 1955, largely through the efforts of then Senator MacNeil Mitchell and Assemblyman Alfred Lama.

Known officially as the Mitchell-Lama Housing Program, it was based on the mechanics of the private housing cooperative of Morningside Gardens in Manhattan borough which had been put up with tax money subsidy, and transformed the housing landscape of New York by allowing its middle- and moderate-income residents to become owners or renters of housing units.

The Mitchell-Lama Housing Program initially created 150,000 units of housing around New York, when non-profit organizations and private developers were granted substantial abatements in property tax and mortgages with low interest that were backed up by bonds from the City of New York and the state. As a quid pro quo measure, the owners of the buildings agreed to keep the rents low and to maintain minimum profits.

Today, qualifications for rental or ownership of housing under the Mitchell-Lama Program are based on composition of family, income and benefits obtained from monthly low costs. Restrictions on applicants who qualify include their ability to share units, sell, transfer or bequeath them.

The building owners registered with the Mitchell-Lama Program, as well as those listed in the Division of Housing and Community Renewal (DHCR), have the “buy-out” option (buying out their building) after 20 years, whether it has remained owned by the housing company or association of cooperative owners, by paying off the balance of the mortgage. The current waiting lists of Mitchell-Lama for units are closed as these are all occupied.

The Mitchell-Lama Program has no specified master list and when units are vacated, those availabilities are openly publicized. Applicants must submit not only their own financial information but the financial information of people whom they would live or move with in the unit to the housing company which developed the unit.

There are minimum and maximum requirements for both income and number of unit occupants which must be met before an application is approved. A two-bedroom unit, for instance, entails a household consisting of three people or one guardian or parent with one child or two persons who are both adults.

Individual applications to different unit developments which are qualified will be added to the waiting list and given a spot. However, re-submission of all qualifying information, including the applicant’s financial condition, would have to be done. If there were changes in the applicant’s income or family size and they have been deemed qualified, the applicant becomes eligible for units other than that initially applied for, but within the same building, or added to the appropriate waiting list for this other unit.

Applications on the waiting list are based on a chronological order. Preferential status is given to local New York residents, disabled people, current occupants who have applied for eligibility for a smaller or larger unit, and veterans. The 2007 report of the New York State Office of the Inspector General, however, indicated some waiting lists of Mitchell-Lama projects which have been ignored or manipulated with regards to recipients of preferential status.

According to the terms and condition of the Mitchell-Lama Program, an occupant who dies or leaves the unit may be succeeded in the rental or ownership of the unit by immediate family members who have lived with the occupant for two years and are named in previous annual financial reports.

Immediate family members are described as spouses; children, including stepchildren and adopted children; biological parents, stepparents and adoptive parents; siblings; nephews and nieces; aunts and uncles; and parents- and children-in-law of the occupant.

Individuals who are not biologically related to the occupant but can prove “financial and emotional commitment” as well as interdependence between him or her and the deceased occupant are recognized as legitimate successors. However, if an occupant left because of eviction with due cause, no one may succeed after him or her.

An occupant is required to maintain the unit as his or her primary resident. Subletting, leasing or transferring the lease of the unit is just cause for eviction of the occupant and whoever else is occupying the unit at the time. The unit will go to the next applicant on the waiting list if the remaining occupant after eviction is not qualified for succession.

Both owners and renters of the units pay the same monthly costs and have the same rights and privileges. Owners who leave for reasons other than lawful eviction may not sell their units except to the housing company which redeem their shares for a certain value based on calculations of initial price of purchase and a percentage of the building’s amortization. Renters have no rights whatsoever to sell the units.

An occupant is required to submit annual reports regarding his or her financial status and income and those of the unit’s other residents. Changes in household membership must also be reported to the housing company. Additional children other than those stated originally in the application, divorce, widowhood, marriage, death and other occupants moving out of the unit are all household composition changes and must be indicated in the reports.

The terms and conditions of the Mitchell-Lama are flexible and extensive and include the privilege of the occupant to invite any family member, i.e. a distant cousin, to stay with him or her, albeit the fees and eligibility for the unit will be affected based on the new household resident’s existing presence and income.

An occupant is forbidden to take financial compensation or rent from any individual he or she invited but has not reported to the housing company. Prospective occupants who are unrelated to the occupant will require the housing company’s permission and the submission of the unrelated prospective occupant’s financial information.

If an occupant’s overall household income has an increase, their fees are accordingly increased and may go up to 150% of the original rates. Disabled occupants have some flexibility for increases or decreases in fees. Should the income increase more than 150%, however, the occupant and other residents forfeit the right to maintain occupancy of the unit, if the DHCR and the housing company so decide since they determine an occupant’s eligibility as well as the removal of occupants. Eviction for income increase rarely happens and a majority of occupants get off flagrantly with violations of the Mitchell-Lama Program’s rules and regulations.

An occupant’s income is a determinant for surcharge fees other than the rental and maintenance charges and will be assessed accordingly. Upon notification that a surcharge will be imposed, an occupant is required to submit a certified true copy of his or her paid New York State taxes for the year preceding the notification. If there is a discrepancy between the copy submitted by the occupant and the information given by the New York State Department of Taxation and Finance, the occupant should resolve the situation before any assessment could be made for surcharge fees

Any Program housing company or development is eligible for a buy-out through repayment of mortgage value to the city government of New York. This happens when the market for residential homes becomes lucrative, since the building is no longer accountable to the rules and regulations set forth in the Program after a buy-out. Owners profit by renting or selling units at prevailing real estate prices instead of being restricted by adherence to the mortgage terms stipulated by the city government.

In cases of building rentals, the owners are the housing companies who may decide unilaterally to opt for a buy-out. After giving due notice to renters and the public and the buy-out contract has been signed, the housing companies can legally charger higher rents.

The exception is the rent stabilization protection accorded to renters in the Program’s buildings which were built before January 1974 and located in Nassau, Rockland and Westchester counties or in the City of New York. Rental prices in this case are regulated by the DHCR’s Office of Rent Administration and may not be increased without review or evaluation by the Rent Guidelines Boards of the counties mentioned. Renters in these Mitchell-Lama developments are entitled to lease renewals and corresponding services and cannot be evicted except on legal grounds or explicit violations of the law.

Cooperative owners in Mitchell-Lama developments get to vote on issues like whether or not to consider a buy-out and have the freedom to charge prices higher than their initial investment for their units if they decided to sell.

But for renters who reside in buildings built after 1974, this situation leaves them vulnerable to more rental hikes and defeats the purpose that the Program envisioned, which is to help financially-challenged New Yorkers have, and maintain, decent living shelters.

Meanwhile, those owners who don’t want to move out after a buy-out and are not able to afford the high cost of carrying fees and those who have physical disabilities and experience extreme difficulty in finding a new place of residence fall prey as well to the precarious situation of a buy-out.