Ruling eases taxes on Mitchell-Lama units going private

Co-op owners in Coney Island complex spared $21M

TRD New York /
Dec.December 18, 2014 02:07 PM

Owners of some of the city’s subsidized apartments will find it easier to make their way out of one of the city’s most widely-used affordable housing programs, due to the implications of a new court ruling.

The state Court of Appeals said yesterday that owners at a Coney Island apartment complex don’t have to foot a $21 million tax bill that the city levied on them in 2007, when they took their buildings out of the Mitchell-Lama program.

The 1,600 owners of Trump Village 3 coops successfully argued that they were being penalized twice for taking their units private — once when they left Mitchell-Lama in 2007, and once when they sold off their units, according to the New York Daily News.

The appeals court nullified the first tax, rejecting the city’s argument that it is an essential part of keeping properties in the program. Stroock & Stroock & Lavan’s Daniel Ross, who represented the owners, said that the ruling would have wide-reaching implications for the city’s other 70,000 Mitchell-Lama units.

“It will allow other Mitchell-Lama coops (that want out of the program) to make future plans with much greater certainty,” Ross told the newspaper.

The Mitchell-Lama program gives builders tax breaks and low interest loans to construct affordable apartments. After 20 years, or when loans are paid off, residents can leave the program and sell their units.

“There is no question it is in the city’s best interest for these major developments to remain affordable,” a spokesperson for Mayor Bill De Blasio said. “Preserving our existing stock of affordable housing is a huge component of our housing plan.”

A 1,650-unit Mitchell-Lama building in the South Street Seaport area went private in November. [NYDN]Tess Hofmann

 

Related Articles

arrow_forward_ios
A rendering of 165 Broome Street (Credit: Handel Architects)

Nonprofit plans affordable housing development near Essex Crossing

Nonprofit plans affordable housing development near Essex Crossing
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag

All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag

All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
Brad Lander and Vanessa Gibson (Credit: Getty, iStock)

NYC will lose 21,000 affordable units to budget cuts: report

NYC will lose 21,000 affordable units to budget cuts: report
Mayor Bill de Blasio (Getty, iStock)

Developers fume over city plan to cut affordable housing spending

Developers fume over city plan to cut affordable housing spending
A new study found that almost nine in 10 households have paid at least some rent in May (Credit: iStock)

Almost 90% of renters have made payments in May: report

Almost 90% of renters have made payments in May: report
Mayor Bill de Blasio (Credit: Getty Images)

De Blasio proposes big cuts to affordable housing budget

De Blasio proposes big cuts to affordable housing budget
CHIP's Jay Martin 

“The landlord is just a collection agent for the city,” CHIP head argues

“The landlord is just a collection agent for the city,” CHIP head argues
(Credit: iStock)

Analysis: As coronavirus spreads, here are all the active hot water violations in NYC

Analysis: As coronavirus spreads, here are all the active hot water violations in NYC
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...