Opinion: We’re Loving Mitchell-Lama to Death – City Limits

“It is easy to romanticize Mitchell-Lama as it existed decades ago, when maintenance increases were rare and expensive infrastructure replacements were uncommon. But those memories reflect the realities of the 1980s—not the physical and financial conditions facing these buildings today.”

Earlier this month, New York State Comptroller Thomas DiNapoli released a troubling report on the Mitchell-Lama program. It documented unhealthy living conditions, weak oversight, and severe funding shortfalls—reading less like a report on one of the nation’s most celebrated affordable housing programs and more like a report on NYCHA.

Consider Esplanade Gardens, once known as the “Jewel of Harlem.” Today, the six-building complex faces a laundry list of unsafe and unlivable conditions, including an entire building without gas service for more than three years. The property carries roughly $170 million in mortgages and needs another $70 million for repairs. Meanwhile, residents have had to stomach maintenance increases of 80 percent or more.

This is not an isolated case. It reflects a deeper structural problem.

The Mitchell-Lama program, created in 1955 to provide affordable housing for middle-income New Yorkers, is now confronting the reality of age. Many of these buildings are more than 50 years old. Roofs leak, boilers fail, facades deteriorate, and critical infrastructure is reaching the end of its useful life. At the same time, many developments carry tens—or even hundreds—of millions of dollars in debt, with the need for millions more in repairs.

Mitchell-Lama buildings are entering the most expensive phase of a building’s life cycle, when major structural and mechanical systems begin failing, and repair costs accelerate rapidly.

Recognizing this challenge, the New York City Department of Housing Preservation and Development (HPD) created a practical solution: a pathway allowing Mitchell-Lama cooperatives to fund repairs in a timely manner and stabilize their finances without massive maintenance spikes, additional borrowing, or new taxpayer subsidies.

Just as the solution began gaining traction, the New York State Legislature effectively shut it down.

The program is known as Article II to Article XI, though a better description might be the Aging Affordable Housing Recovery Plan.

The concept is straightforward. Under the program, HPD resets future apartment sale prices at affordable, below-market levels—but higher than the extremely low prices in Mitchell-Lama. When an apartment sells, a portion of the proceeds is placed into a city-supervised reserve account dedicated exclusively to building repairs and debt reduction.

In effect, the program creates a new income stream to maintain aging buildings. Think of it as a 401(k) for affordable housing.

Some Mitchell-Lama cooperatives are still selling apartments for as little as $18,000. That may sound appealing, but it is financially unsustainable when buildings require tens of millions of dollars in reinvestment. Meanwhile, under the new program, applicants can apply for the city’s HomeFirst program, which provides first-time homebuyers with down payment assistance and debt forgiveness of up to $100,000.

Articles II to XI allow buildings to reinvest in themselves while preserving affordability. It is a win for the property, a win for residents, and a win for the city.

Yet some legislators viewed the program as a threat to the Mitchell-Lama system they are determined to protect—even as the program struggles under the weight of aging buildings and mounting repair costs.

That instinct is understandable. Mitchell-Lama helped create stable communities across New York for generations. But preserving the program does not mean freezing it in time.

Even Mayor Zohran Mamdani’s plan for 12,000 new apartments in Sunnyside, Queens, calls for 6,000 “Mitchell-Lama-style” units, which could perpetuate the problem we have today unless corrected. As Manhattan Borough President Brad Hoylman-Sigal recently said, “We can’t discuss Mitchell-Lama 2.0 if we still don’t get 1.0 right.”

Those words capture the challenge perfectly. It is easy to romanticize Mitchell-Lama as it existed decades ago, when maintenance increases were rare and expensive infrastructure replacements were uncommon. But those memories reflect the realities of the 1980s—not the physical and financial conditions facing these buildings today.

Instead of allowing the Article II-to-Article XI program to develop, the Legislature raised the shareholder approval threshold for participation to 80 percent, making it nearly impossible for co-ops to take advantage of this vital affordable housing recovery plan.

By refusing to acknowledge the structural shortcomings of Mitchell-Lama 1.0, we risk doing exactly what the headline suggests: we are loving Mitchell-Lama to death.

As Board President of Cadman Towers, I had the privilege of leading our shareholders through the conversion from Article II to Article XI in 2024. Today, Cadman Towers is the only Mitchell-Lama cooperative operating under this new framework.

The results speak for themselves.

In just 20 months, Cadman Towers has signed contracts for apartment sales that will generate $5 million for our repair reserve account—something unprecedented in the history of the Mitchell-Lama program. The program is expected to generate approximately $1.2 million annually, ensuring that our 600-unit community remains financially and structurally sound for decades.

For critics who call the program “privatization-lite,” the facts say otherwise. Cadman Towers signed a 99-year regulatory agreement to remain under HPD supervision. HPD continues to oversee budgets, repair projects, apartment sales, and the housing lottery. In addition, we were required to hire Habitat NYC as an independent monitor to oversee governance, finances, and major capital work.

This is not privatization. It is preservation. Mitchell-Lama residents across New York deserve the tools to repair and sustain their homes. That includes the ability to consider Article II to XI as a viable path forward.

The Legislature should revisit the Private Housing Finance Law and restore the original 66 percent shareholder-vote threshold, allowing cooperators to decide their own future.

If we truly want Mitchell-Lama housing to survive for another generation, we must allow it to evolve. Otherwise, we may succeed only in loving it to death.

Toba Potosky is the president at Cadman Towers HDFC.