There have been many published stories recently about warehoused apartments and fiscal irregularities at Dayton Beach Park
There have been a number of published reports about shenanigans at Dayton Beach Park, a multi-building Mitchell-Lama housing development in Rockaway Beach, primarily on the news site, DNAInfo, penned by local reporter Katie Honan.
Those reports have written of warehoused apartments, Department of Investigation raids and fiscal wrongdoing on the part of the current president and board of directors.
The development has been problematic of years, what with staff firings, employee strife and demonstrations and charges of cronyism, board wrongdoings and even charges of physical threats against the president and board members.
As with everything else, money seems to be at the root of all of the problems. While the housing complex was built under the 1950’s Mitchell Lama Law designed to bring middle class subsidized housing to those who needed it.
Back in 1955, when the flight to the suburbs was going full blast and many city neighborhoods were deteriorating from lack of money and municipal attention, the Mitchell-Lama bill, named after State Sen. McNeil Mitchell and New York Assemblyman Alfred Lama, was signed into law.
The purpose of the program was to encourage the building of moderate-income housing, to keep more middle-class families within the state’s cities, and to help stabilize city neighborhoods. And the program worked — scores of Mitchell-Lama buildings (some 270 developments with nearly 140,000 apartments) were constructed throughout the 1950s, ’60s and ’70s, and provided housing for lower- and middle-income families. The projects developed under this program received real estate tax breaks and low interest loans and mortgages in return for keeping rents and purchase and resale prices far below market value for a period of time. After this period the co-op corporation could opt out of the program. Some say one of the real reasons for Mitchell-Lama in the first place was so that these buildings could stabilize borderline areas–clearing the way for the private real estate market to step in.
Many of the neighborhoods where Mitchell-Lama buildings were built have seen a dramatic increase in real estate prices, especially in neighborhoods that have become “upscale” making “buying out” of the program more attractive than ever to many. If and when a Mitchell-Lama or a similar co-op does go private, those who own apartments can potentially sell them at market rates. If you paid $12,000 for your apartment, and are now seeing apartments all around you selling for $500,000 or $1 million or more, that’s a powerful incentive for many people.
Today, according to the Mitchell-Lama Residents Coalition, there are about 130 city-sponsored Mitchell-Lama developments, under the jurisdiction of the Department of Housing Preservation and Development (HPD); and approximately 94 state-sponsored Mitchell-Lamas, under the jurisdiction of the state Division of Housing and Community Renewal (DHCR). They range from the Bronx’s giant Co-op City, with 35 buildings and 15,372 units, to Williamsburg’s Northside Gardens, with just 41 units. To date more than 50 Mitchell-Lama city and state-sponsored rental developments have bought out, and according to HPD, 20 more are currently pending. Dayton Beach Park, along with the other “Dayton” Mitchell Lama projects in Rockaway, is sponsored by the city’s HPD.
Recently, to stop the flow of Mitchell-Lama projects from going private and to keep the apartments affordable to middle class New Yorkers, the city proposed a new program called Article XI Conversion, adopted in 2011, which allows a transfer from the HPD program to something called the Housing Development Fund. That fund has been used successfully to convert abandoned buildings and the like. While the city sees this as a compromise that would allow the owners of the apartment to increase their equity in their apartment when they are ready to sell their apartments, a Mitchell-Lama advocacy group, Cooperators United for Mitchell Lama, says that it will make the apartments “unaffordable for the people who want to continue to live in them and to families on the waiting list,” some who whom have been waiting for years for an apartment to open up.
At the present time, the group says, there are 41 “warehoused” apartments at Dayton Beach Park despite the fact that the waiting list is lengthy.
One shareholder agreed to speak on the record, but asked that her name remain anonymous because she is afraid of retaliation from the present president and board of directors.
“All of the charges made recently are true,” she said. “The 41 apartments are being warehoused because the board wants the control of their votes when it comes time to vote on conversion to Article XI. If nobody owns the apartment, the board controls the vote for those 41 apartments.”
She adds that some of the apartments have been empty for more than two years and that the board keeps saying that the apartments are “under repair” and will be sold when the repairs have been made. She calls that a “joke.”
In any vote, each apartment in the complex gets one vote, she explained. Having those 40 or 50 extra votes could well make the difference between passing and failing.
She opposes the plan because she has been living there for two decades and plans to stay, so she will not benefit from the plan, but her monthly costs would escalate.
She says that she does not know whether the contention that some insiders have been quietly and secretly buying the empty apartments so that they can be resold for big money if the conversion goes through is true or not.
“The apartments don’t belong to them or to anybody else, as far as we know,” she said, “but there must be some reason why the board is warehousing them.”
Cooperators United for Mitchell-Lama held a meeting at the complex two weeks ago that was heavily attended.
“There are a lot of elderly people who went to the meeting, because they don’ understand what’s going on,” she said. “They are afraid they will get hurt financially, or that they will lose the apartments they have lived in for decades.”
A few weeks ago, the Department of Investigation raided the office and took out boxes of papers, according to DNAInfo.
The woman who spoke with onrockaway.com believes that the DOI and HPD are in bed together with the president and the board, and will do nothing to get to the bottom of the charges.
“People would cheer if they took the president out in handcuffs,” she said. “Everybody here is just fed up.”