While most New Yorkers scratch and scape to afford the city’s sky-high housing costs, a group of millionaires has found an underhanded way to take advantage of a major middle-income-apartment program and pay minuscule rents.
A state audit found hundreds of tenants — one with an income of $1.4 million — living in the city’s Mitchell-Lama developments as of 2012, though the law says only people of middle-class means are eligible for such accommodation.
These public-housing moneybags can pay rents reminiscent of the 1990s.
At the subsidized Kings Bay II development in Sheepshead Bay, Brooklyn, for instance, one resident paid just $636 a month in rent even while making $801,377 in 2012.
“For anybody to be making almost a million dollars a year and living here is just unfair,” said tenant Kareem Jabara, 45. “It’s a crime.”
The audit by state Comptroller Tom DiNapoli found that there were 230 tenants pulling in $250,000 a year or more living in the city’s 97 subsidized Mitchell-Lama developments in 2012.
The program was created in 1955 to provide housing for those whose income disqualified them for public housing but who struggled to pay market rents. It includes both rental apartments and low-cost co-ops.
The annual pay of a few residents who met income caps when they moved in has over the years risen to $1 million-plus.
At the sprawling Penn South co-op complex in Chelsea — where apartments are sold for as little as $109, 000 for a two-bedroom — one resident reported an income of $1.4 million in 2012. Another made $1.16 million.
Under state law, the city Department of Housing Preservation and Development is supposed to tell well-to-do tenants to leave once their income exceeds 125 percent of the eligibility limit.
But that almost never happens, the audit found.
Instead, landlords just tack on surcharges of 5 to 50 percent — a steal for tenants in today’s market.
The audit specifically reviewed five complexes: Big Six Towers in Queens, Confucius Plaza in Manhattan, Kings Bay II in Brooklyn, North Shore on Staten Island and Tracey Towers in The Bronx.
The seven-figure earners at Penn South were discovered when their incomes couldn’t be entered into computer databases that had room for only six figures.
Of the 191 sampled tenants, 59, or 30 percent, exceeded the eligibility limit by at least 25 percent, and many exceeded it by 50 percent or more. And there’s no telling how much some tenants really earn.
HPD Commissioner Vicki Been emphasized that the number of tenants making more than $250,000 is “quite small.”
There are 45,000 regulated apartments under the Mitchell-Lama program.
“The city’s Mitchell-Lama portfolio provides stable, affordable apartments to more than 100,000 New Yorkers, the vast majority of whom are low-income,” Been said.
Additional reporting by Priscilla DeGregory and Frank Rosario