Sale price cap helps Roosevelt Island co-op stay affordable

October 05, 2011 08:48AM

A 365-unit Roosevelt Island co-op has an innovative plan to keep its apartments affordable even as it leaves the Mitchell-Lama program, the Wall Street Journal reported. The 38-year-old Rivercross co-op, at 531 Main Street, will exit the program, which limits the prices landlords can charge for units for 20 years in exchange for tax breaks, but will cap the sale price of 80 percent of the units at $500-per-square-foot. Of that price, $150 will subsidize the remaining 20 percent of the units to keep them near Mitchell-Lama prices.

“We will be, as far as I know, the first building that would be able to find a middle ground between staying in Mitchell-Lama, which would result in higher maintenance to fix the building, and privatization,” said Sanjiv Tandon, chairman of the co-op’s finance committee.

The Journal noted that the move comes as the demographics on the island, once a haven for affordable housing, are changing. One building, the Eastwood, exited Mitchell-Lama and went market rate a couple of years ago, and two other large rental buildings, Westview and Island House, are contemplating following suit.

But some residents say privatization was inevitable because of the $50 million mortgage the building recently took out, in part to fund $16 million in building upgrades, and they worry the $150 will be used mostly finance debt repayment. [WSJ]