![]() However, unlike a regular co-op building which may levy a 1% or 2% flip tax on the net sale proceeds, a Mitchell-Lama co-op may decide to levy a much stiffer flip tax in order to offset increased monthly charges by the remaining residents as a result of privatization, and perhaps simply because the co-op board feels like the building is owed some of the outsized gains due to privatization. Hefty flip taxes may be levied post privatization Just like in HDFCs and co-ops in general, a flip tax can be levied by the coop board to both raise revenue and to discourage “flipping” or trading by investors. Most Mitchell-Lama owners covet their properties, especially in NYC where property values have exploded in recent years.” David Reischer, Esq. ![]() The owner gets a small amount of money back in the form of their original purchase price plus some interest expense on any mortgage payments. When a Mitchell-Lama owner sells the property, the property go back to the co-op. I have been contacted by tenants to circumvent this rule but it is not possible as it is written into the law when Mitchell-Llama apartments were created over 60 years ago. The owners of a Mitchell-Llama apartment can’t profit when they sell the unit but can pass the unit to a successor if the person has been living in the unit for at least 2 years. To buy or rent a Mitchell-Lama apartment a person must pass an income test. The apartments were built for middle income residents. at who had the following to say about the Mitchell-Lama program: “The Mitchell-Lama program is named after the 2 senators that spearheaded the program and was conceived over 60 years ago so as to offer affordable housing in blighted neighborhoods. That’s why New Yorkers dream about Mitchell-Lama apartments! We recently interviewed David Reischer, Esq. Yes, you heard that right, a 2 bedroom apartment in New York City for under $20,000 to buy, and $1,100 a month to maintain. Monthly maintenance fees? Around $1,100 a month. ![]() For example, 353 Beach 57th Street in Far Rockaway, Queens became open for applications recently for two bedroom co-ops which could be purchased for approximately $17,000. Furthermore, monthly maintenance will be significantly lower than average due to special property tax abatements, subsidized mortgages and outright government grants. Why? Because they’ll be able to buy an apartment for well under $100,000, or even just a few tens of thousands of dollars or less. However, units have still remained affordable, and a 750-name waitlist has just opened for studio apartments that range from $432 to $503 a month for one- and two-person households earning between $17,263 and $90,625 a year.Why are Mitchell-Lama coops so attractive? Getting to the top of the wait list for a Mitchell-Lama co-op is akin to winning the lottery for New Yorkers. Owners of these buildings receive tax abatements and low-interest mortgages.”īack in 2013, Trinity House made headlines when the school received approvals from the city for a rent hike of up to 13 percent, more than three times the standard increase for rent-stabilized units that year. These buildings are privately owned, but are under contract with New York state to keep prices affordable. As 6sqft previously explained, this affordable housing program “was created in 1955 to provide affordable rental and cooperative housing to moderate- and middle-income families. It was built in 1968 by the Trinity School, which occupies the first three floors, as a Mitchell-Lama development. Trinity House is a 199-unit rental building at 100 West 92nd Street on the Upper West Side, just a block away from Central Park. Owners of 38,000 Mitchell-Lama apartments, representing 28% of the program’s housing, have left in the past 20 years. But as the value of these apartments, which were once affordable, keeps rising, New Yorkers looking for affordable housing there, and other former Mitchell-Lama apartments, may be out of luck. As Crain’s reported, Trump Village became one of the first co-ops to exit the Mitchell-Lama program in 2007, letting residents sell their apartments for whatever the market allowed. ![]() The typical rental contract lasts 20 years, and after that, landlords can opt-out of the program. To pay for the $70 million project, which would total $564 million today, Fred Trump used Mitchell-Lama, a government program that granted financial incentives in exchange for setting aside affordable housing. Photo of Trump Village West via Trump 4 Westīuilt by Donald Trump’s father, Fred, in 1964, Trump Village in Coney Island features seven 23-story towers with 3,700 co-op and rental apartments.
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