The Incredible Shrinking Mitchell-Lama Program

The very first real-estate project the current president of the United States worked on as a young developer was Trump Village, which his father, Fred Trump, built in Coney Island in 1964 and which he described, with the family’s ingrained flair for hyperbole, as a “miracle mile [of] luxury housing” featuring “a Taj Mahal of aesthetically appealing apartment houses” – even though it lacked air conditioning and resembled a warren of Soviet-era housing blocks on the outskirts of Minsk.

The seven 23-story buildings with 3,700 co-op and rental apartments were built under the Mitchell-Lama program. Nearly 140,000 affordable apartments, both rentals and co-ops, were built under the program between the late 1950s and the early 1980s. In a city starving for affordable housing, demand continues to outstrip supply: middle-class New Yorkers who qualify under the income requirements routinely have to wait years to get one.

Part of the reason for the long wait is that the demand keeps rising while the supply keeps shrinking. In the past 20 years, owners of 38,000 Mitchell-Lama apartments, representing 28 percent of the program's housing, have left, Crain’s reports, opting for the freedom to sell their apartments at prevailing market rates. In 2007, the residents of Trump Village voted to join the defectors.  This wave of defections poses a formidable challenge to Mayor Bill de Blasio, who has promised to preserve or create 200,000 affordable units. As additional Mitchell-Lama apartments look to enter the open market, more battles loom for control of these valuable properties. In fact, bitter in-fighting is taking place today at market-rate Trump Village.

"Mitchell-Lama was one of the most successful affordable-housing programs ever," says Erica Buckley, a partner at law firm Nixon Peabody and former chief of the state attorney general's Real Estate Finance Bureau, where she reviewed the plans of buildings looking to exit the program. Her use of the past tense is telling. “As apartments leave,” Buckley adds, “it has caused lots of complications.”