Investigation into a member of Co-op City’s board of directors getting pushed to the top of the waiting list for a sought-after townhouse may not be the only scandal plaguing the 25-building development in Baychester, the Daily News reported. Now, applications submitted by two other board members for a pair of two-story townhouses may need to be re-examined to see if their stated incomes qualify them for the townhouses at the complex, a 320-acre housing cooperative managed by Riverbay. One board faction has brought in Riverbay’s lawyer to investigate. There are also rumors that there is a movement among that board faction calling for an outside independent investigation, according to the Daily News. The next step may be to bring in the state Division of Housing and Community Renewal, which oversees the Mitchell-Lama complex.

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Bronx’s Co-op City, a 25-building development in Baychester, is investigating allegations that a board member was pushed to the top of the waiting list for a sought-after townhouse. Though Co-op City is comprised mostly of apartments, it also has 236 smaller townhouses, with a five-year waiting list, sources told the New York Daily News. The complex is a 320-acre housing cooperative managed by Riverbay, which is overseen by a 15-member board of directors and one state housing representative. The board — whose members live there — voted Tuesday to have in-house attorney Jeffrey Buss investigate whether Riverbay’s sales department broke any rules by transferring the townhouse to a new owner who also is a board member. Last week, several board members called for a probe into the transfer, claiming that Riverbay sales director Steve Gold may have given board member Leticia Morales preferential treatment. Morales moved into the townhouse a month ago, and denies any involvement in being bumped up the list, while Gold has been suspended pending the probe. A spokesperson for the state Division of Housing and Community Renewal, which oversees sales and transfers at subsidized Mitchell-Lama developments such as Co-op City, said the agency is reviewing the allegations. [NYDN]

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Tenants at several Harlem-area Mitchell-Lama rent-stabilized apartments are accusing their landlord, New Jersey-based Urban American Management, of trying to ratchet up rents and squeeze out long-time residents, according to the New York Daily News. The buildings, which Urban American paid $918 million for in 2007, contain roughly 4,000 tenants, many of whom say that new tenants paying higher rates get preferential treatment, while older residents are denied basic upkeep and maintenance on their homes. “The new tenants get new kitchen cabinets, granite countertops, wood floors… we get nothing new and maintenance keeps getting worse,” Hilary Saunders, a long-time resident at one such complex, said. “We’re tired of being treated like second-class citizens in our own building.” [NYDN]

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Brooklyn’s Starrett City, the largest publicly assisted affordable housing complex in the country, will remain affordable under the state’s Mitchell-Lama affordable housing program for the next 30 years, the State Housing Commissioner has announced. The extension, finalized this week, was made possible by new state legislation signed this summer, allowing the complex’s owners to refinance their mortgages on the buildings if they allocate $40 million of the proceeds from that plan to a capital improvement program. Starrett City’s owners had planned to sell the complex for $1.3 billion two years ago, but the sale was blocked by the state out of concern that the new owners would not be able to keep the units affordable after paying the steep price.

Across town from Tishman Speyer’s Stuyvesant Town and Peter Cooper Village, residents of Independence Plaza North at 80 North Moore Street in Tribeca are hoping the recent rent-stabilization ruling applies to them, too. At the 1,339-unit I.P.N., a case brewing since 2005 argues that tenants’ rents should be stabilized because their landlord received tax abatements through the city’s J-51 program. The state’s highest court recently ruled that the investors owe $200 million to Stuyvesant Town residents who were overcharged on their rents for the same reason. Stephen Meister, an attorney who represented the Real Estate Board of New York in the most recent Stuyvesant Town appeal and also represents I.P.N.’s landlord, Laurence Gluck, said the cases are quite different. In I.P.N.’s case, the city mistakenly continued to grant Gluck tax breaks for two years after he removed the building from the Mitchell-Lama middle-class housing program in 2004, Meister said. After he stopped receiving the abatement, Gluck repaid roughly $17,000. In April, the I.P.N. case was turned over to the state Division of Housing and Community Renewal, which expects to issue an opinion no earlier than January. [Downtown Express]

From left, Brooklyn Beep Marty Markowitz, State Sen. Diane Savino, Rep. Jerrold Nadler

City officials announced a $21 million deal today to renovate the Luna Park housing complex in Coney Island, under an agreement that would keep the apartments in the Mitchell Lama affordable housing program for another 20 years.

The agreement ends years of controversy about the Coney Island co-op complex. A number of shareholders at the 1,600-unit development had been actively considering a plan to go private, with some actively pushing for a feasibility study on whether to exit the Mitchell Lama program.

“It was a poignant moment for us to preserve the affordability [of Luna Park],” said one local official, who asked not to be identified.

Several other Mitchell Lama buildings in the Coney Island area have gone private in recent years, including Ocean Towers, a 360-unit development that was sold for $5.9 million to Cammeby’s International in 2007. [more]

The city’s supply of affordable housing is shrinking. Despite Mayor Bloomberg’s success in bringing 94,000 new public housing units — 72,000 of which are designated for low-income families — to the market, his efforts have been outweighed by the 200,000 affordable apartments lost to gentrification and rent deregulation during his term, the New York Times reported. In 2008, 42 percent of the city’s households were considered low-income, that is, making less than $37,000 per year. However, the supply of apartments they could afford at that time had shrunk to 991,592, or 17 percent less than the 2002 supply. Bloomberg has said he wants to invest an additional $965 million to expand his housing plan if re-elected, in order to stabilize apartment buildings where rents aren’t covering owners’ debt, and to preserve 10,000 more Mitchell-Lama housing units. [more]

The long debate over privatization at Southbridge Towers near South Street Seaport, which contains 1,651 Mitchell-Lama co-op apartments, is heating up after a new 605-page “red herring” report was released on the issue. The report details the financial repercussions of exiting the affordable housing program and allowing the apartments to be sold at market rate. The units could go for anywhere from $260,000 for a studio apartment to $920,000 for a three-bedroom, and many residents say they would welcome the opportunity to own a valuable New York real estate asset and to be able to pass it on to family members. Others are worried about taxes under privatization, of which the government currently covers 90 percent. State Attorney General Andrew Cuomo’s office is accepting public comment on the red herring until Oct. 23, after which he will make recommendations or amendments and approve a final plan. The vote on the final plan, called the “black book,” is slated to take place next year, and would need approval from two thirds of the apartments in order to pass.