IPNTA Newsletters

February 2003

Mitchell-Lama Law Meant for All Stakeholders, Not Just Landlord

Owners of Mitchell-Lama projects often insist that the law “promises” them the right to buy out of the program after 20 years, thereby releasing them from keeping rents affordable.

But the concept of “promise” is neither stated explicitly, nor implied, in the original legislation (the State’s Private Housing Finance Law). The law does contain a provision enabling a buyout, assuming certain conditions are met, such as keeping up maintenance, avoiding corruption, and the like. But that provision is not fixed; it can be halted by new legislation or other government action.

In fact, no legislation, other than perhaps the Bill of Rights, is ever a promise that is unaterable by future generations facing new and different challenges. And even our federal Constition can be — obviously has been — altered through amendments.

The key point is that the Mitchell-Lama law was passed to advance the interests not only of the landlord, but of all the stakeholders in any given project.

Who are these stakeholders?

The original IPN owner, Harold Cohn of Duane Street Associates, is just one of them. Another is the government, which provided the land, tax abatements, mortgage subsidies, 95 percent of the development costs (Cohen provided only 5%), and guaranteed profit for the owner.

The tenants, who have helped turn what was once a bleak, desolate, windblown set of streets into a thriving community, and who have invested decades of their lives here, are another. And let’s not forget the larger community, which relies on IPN to keep Tribeca a mixed income, ethnically diverse, vibrant neighborhood.

Mr. Gluck:  Last year, Harvey Cohn said that IPNTA was just trying to scare people to raise money, and that the Cohn family had no intention to buy out. We said "put it in writing." Let's stop the silly talk, Mr. Gluck. Put your promises [about not raising rents for 70% of tenants] in legally enforceable written form, and we'll believe them.

Finally, there are our public schools, which have educated generations of our children, and which depend on new generations of children whose parents cannot afford elite private schools. The law was never intended as a landlord-take-all giveaway. It was intended to meet the needs of all its stakeholders.

Those needs remain. That is why IPNTA has been urging politicians, public officials and others to stop any impending buyout. Under IPNTA’s primary strategy to have IPN sold to the tenants at an affordable price — and to protect from steep rental increases those tenants who cannot or don’t want to buy their apartments — all stakeholders’ interests would be served.

The original owner would get the hefty proceeds of the sale. The government would retain its interest in a project in which it has invested enormous amounts of money over time. The tenants would get to keep their homes, either by buying them at affordable prices, or continuing to rent them at affordable rates. And Tribeca would continue its richly diverse character.

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