Residents of BK Mitchell-Lama co-op vote against privatization

Shareholders were considering a plan allowing them to sell their units at market prices
February 28, 2017 12:30PM

St. James Towers at 21 St. James Place in Clinton Hill

The shareholders at a Mitchell-Lama co-op building in Clinton Hill rejected a plan to privatize their property, passing up the opportunity to possibly sell their publicly-subsidized units for substantial profits.

The residents at St. James Towers voted against leaving the affordable housing program last week, Brooklyn Paper reported. If they had chosen to privatize the building at 21 St. James Place, they would have been able to sell their units at free-market rates.

Each of the 326 units had a vote, and a two-thirds majority was needed for privatization to happen. If the plan had gone ahead, it could have meant serious profits for the shareholders, as the median price of a condominium in Brooklyn was $895,000 in the fourth quarter of last year, compared to $727,500 in the same period of 2015, according to a recent Douglas Elliman report.

The vote followed a rally, where pro-privatization residents clashed with those who wanted to keep the building affordable. Those in favor of selling said they wanted the opportunity to benefit from rising home values, according to the paper, while others argued privatization would take badly needed affordable housing away from the gentrifying neighborhood.

Mitchell-Lama, a statewide program created in the 1950s, granted tax abatements and subsidized mortgages to developers for the construction and maintenance of rental and co-op properties. [Brooklyn Paper]Miriam Hall