The Mitchell-Lama Revival

While housing affordability for lower-income families and “fixing” the beleaguered New York City Housing Authority have dominated much of the political debate, state legislators secured key funding for new housing opportunities for the middle class in this year’s enacted budget.

It’s commonly believed that middle-class households are stuck between the opportunities available to lower-income households—such as Section 8 and public housing programs—and the increasing number of housing developments that target the rich.

The state’s original Mitchell-Lama housing program, enacted in 1955, set out to tackle this problem. Until 1981, when developments stopped, the program created 66,000 subsidized rental apartments and 69,000 co-op apartments in New York City and throughout the state, a report found.

However, the fatal flaw of the Mitchell-Lama program was that those units were eventually pushed to market-rate prices, and many middle-income households were priced out of the housing developments. Today half the rentals and 7 percent of the co-ops in New York City no longer qualify as affordable housing.

“The Mitchell-Lama program, I believe, was probably the greatest housing program we ever created in New York State because it was based on a very simple premise: that various income levels can live under one roof,” state Sen. and Independent Democratic Conference Leader Jeff Klein said. “I wanted to sort of recreate the program and we called it Mitchell-Lama 2020 because we wanted to build in the success of the original program, but realize now it’s hard to do the program as it was in the past.”

The original Mitchell-Lama program incentivized developers with cheap land and low interest rates. The difference between 1955 and now is that the state is short on cheap land and interest rates are already low.

To incentivize development, the 2014-15 state budget included $25 million to be used primarily to finance the construction of new units for households that make up to 130 percent of the area median income. For example, the AMI in New York City for 2015 is $86,300 for a family of four, which means the Mitchell-Lama 2020 units would be available to families making under roughly $112,000 a year.

The state budget also included an additional $25 million to be used to finance the rehabilitation of existing Mitchell-Lama units and $100 million to NYCHA for a modernization program focused on capital repairs and improvements.

Klein and Assembly Housing Chair Keith Wright both stressed to City & State that housing affordability is not just an issue that impacts the poor.

“This housing crisis is not only hitting our low-income, it’s hitting our middle-income and quite frankly, not everyone is upper-income and we have a real crisis on our hand—it’s affecting multitudes,” Wright said. “Rent regulations not only affects the lower class, but also the middle class.”

Wright, who also supports the Mitchell-Lama program, said the best way to combat the housing affordability crisis is to renew and strengthen the rent regulation laws set to expire in June, include anti-harassment provisions and get rid of vacancy decontrol—which allows landlords to charge market rate for previously rent-regulated apartments when tenants move out. 

Republicans, who hold the majority in the state Senate, have historically opposed strengthening rent regulations, but did vote to increase protections slightly four years ago as part of a larger deal.  

Still, Wright said the state Senate Republicans have no incentive to pass rent regulations because they only have two members whose districts in Staten Island are actually impacted by the law. In contrast, his district in Harlem saw 50,000 applicants for 200 units at a recently built development.  

“It’s crazy right now and for middle-income, it’s the same problem,” he said. “I’m all for (the Mitchell-Lama 2020 housing program). I think it really gave middle-class people of New York a homestead, gave them a place to go and it gave them a reason and a stake in our communities.”