September 10, 2009 @ 5:09 pm
Bloomberg: Mitchell-Lama tenants just want to get rich by buying their own apartments.
Many previous posts have detailed how Mitchell-Lama developers made fortunes by getting urban renewal land at bargain prices, getting government-financed construction loans at 1% interest rates, getting multimillion dollar government-financed developer fees (cash in their pockets), getting additional millions of dollars in limited partnership tax shelter deals, and too many other ways to explain in this short post, some legal and some not. Even Mitchell, a lawyer, and Lama, an architect, both of whom were state legislators, made tons of money in these deals, as did many other politicians.
Mitchell-Lama developers all made fortunes beyond the rents they were allowed to charge. The rents were the smallest parts of these deals. Everyone who has had anything to do with real estate development knows this to be the case. And yet the story line that Michael Bloomberg continues to promote is that in exchange for keeping rents low they got a few tax breaks, and when thirty years were up the deal was they could sell the developments. And tenants just want to get rich!!!
In fact, Nelson Rockefeller changed the original Mitchell-Lama law to allow these buyouts after twenty years in the program without the developers being required to pay anything back for the massive tax rebates they had gotten. It was simply the power of the real estate crowd and the power of New York’s last mega-billionaire New York politician that combined to screw ordinary New Yorkers.
The tenants weren’t even told, not even in the fine print of their leases, that they could lose their homes to buyouts.
Think of a homeowner who believes his mortgage payments are fixed at $1,000 a month. One day he receives a call from the banker who advises him that his mortgage payments will now be $3,000 a month. The homeowner says but my mortgage says $1,000 a month!”
“I even read the fine print and there’s nothing that says you can do this.”
“Sorry, we changed the law in Albany twenty years ago, didn’t anybody tell you?”
If you don’t think that people who live in New York’s two million apartments think of them as their homes, or that the people who have lived in these Mitchell-Lamas for decades, raised their families in them, lived their entire adult lives in them, think of them as their homes, well, what can we say about that? Like Michael Bloomberg, maybe you’re just missing a piece — It’s what Republicans like to pounce on when Obama uses the word “empathy,” as though it’s a pejorative. The law’s the law — never mind about kicking old people out of their homes. And as for Bloomberg’s claim that he’s building all that new affordable housing. Have you seen any? Try finding one.
Here’s William Thompson and othres at an affordable housing rally.
And here’s the Bloomberg administration just following the mayor’s lead.
The phrase that comes to mind? The fish rots from the head. As for reading about any of this in the New York Times? Don’t be silly.