The Real Deal New York

Mitchell-Lama waitlisters were carelessly skipped over: Comptroller

Primitive recordkeeping and Airbnb rentals discovered in state’s investigation
By Tess Hofmann | July 29, 2015 03:55PM

Scores of waitlisted applicants at Mitchell-Lama developments have been illegally passed over for apartments as a result of alarmingly dsyfunctional building management, a state probe into the affordable housing program has revealed. The audit by New York State Comptroller Thomas DiNapoli’s office also found that residents of the middle-income affordable developments have been renting their apartments on Airbnb.

Auditors focused the investigation on three Mitchell-Lama developments — Cadman Towers, a 421-unit co-op in Brooklyn Heights, Trinity House, a 199-unit rental building on the Upper West Side, and Washington Square Southeast, a 174-unit co-op in Greenwich Village. Building management for the three properties declined to comment or did not respond to The Real Deal.

Over a period of three years, only 69 units across the three developments opened up. But at Trinity and Washington Square, building management sometimes offered these units to applicants who were several slots down from the top of the waiting list, without explanation.

Waitlist systems were found to be shockingly disorganized and kept in paper rather than electronic form, the audit found. Often, changes to applicants’ statuses were “heavily amended with handwritten notations” DiNapoli’s office said.

When auditors contacted people on the lists, many disputed that they had withdrawn applications or failed to respond, saying they were never contacted by management.

At Washington Square, the auditors found that the majority of the first 300 waitlisted applicants had no addresses listed — with management citing this as the reason for not offering apartments to the candidates in the proper order. With little effort, auditors found a box containing the addresses of all 300 candidates, including those who were skipped over, DiNapoli said.

In many cases, management failed to submit new residents to the Department of Housing Preservation and Development for approval, as required by law.

And in two cases, though Mitchell-Lama residents are prohibited from subleasing, tenants of the Washington Square development were found to be renting out their apartments on Airbnb — one for $150 per night and one for $109 per night. One of these residents had racked up 50 guest reviews.

The Trinity School, which manages the Upper West Side facility, recently received approval from state and federal authorities to hike rents 13 percent.

The board of another Mitchell-Lama development, the 2,700-unit Lindsay Park compelx, is under investigation for alleged misuse of funds.