Agreement Reached To Keep Starrett City Affordable
A collective sigh of relief swelled into a roar of approval and applause from the crowd gathered in Starrett City on Monday as Senator Charles Schumer and Governor David Paterson announced that the bidding process to sell the 140-acre housing development east of Canarsie now includes a signed agreement to preserve affordable housing and allow eligible residents to continue paying below-market rents for the next 20 years.
Schumer and Paterson outlined the Memorandum of Understanding (MOU), signed by the current owners, the federal Department of Housing and Urban Development and the state's and city's housing commissioners, that lays out guidelines governing the sale of the massive property and strict restrictions on any rent increases. The agreement was hailed as a model for other subsidized public housing.
When New York's senior senator said, "New York City and New York State have kept their promise to this and the next generation of residents and Starrett City will remain an oasis for working class families for the next generation," the huge crowd gathered on the grassy knoll near Twin Pines Drive and Pennsylvania Avenue applauded in unison.
"This agreement," Schumer continued, "charts a clear course to ensure whoever buys Starrett City must keep it as a haven for affordable housing that it has always been and always should be."
When Governor Paterson stepped up to the podium, he said, "We can't build communities and grow our economy unless we have safe, affordable roofs over our heads."
Per the MOU, current tenants are grandfathered into their apartments, eliminating the need for disruptive and costly moves for tenants. Starrett City, which opened in 1974, will remain in the Mitchell Lama affordable housing program for at least the next twenty years. The agreement allows a new owner to commit to participating in Mitchell-Lama for a longer period of time but no shorter than twenty years.
It was speculated that Starrett City Associates, the 46-tower complex's current owners, would begin soliciting bids this week with the possibility of a sale announced by the fall.
Among the elected officials at Monday's announcement were representatives Ed Towns and Nydia Velazquez, State Senator John Sampson, City Councilman Charles Barron and Borough President Marty Markowitz. Also on hand were federal, state and city and state officials, who supported the process to keep the housing complex affordable, as well as community activists, including former judge and assemblyman Frank Seddio and Rabbi Avrohom Hecht, executive director of the Jewish Community Council of Canarsie.
In 2007, officials blocked the $1.3 billion sale of the 5,880-unit housing to a private developer who would have taken Starrett out of government housing programs and raised rents across the board, forcing thousands of tenants from their homes.
Schumer and Paterson said the MOU guarantees the people of Starrett City can now be assured that the property would remain affordable for them and the next generation.
Bertha Lewis, Executive Director of New York ACORN, a tenants advocacy group, added, "For nearly two years the thousand of Starrett City tenants, the Starrett Tenants Association and ACORN have fought together to preserve this community for working class New Yorkers of every stripe for generations to come. Today we are here to say: we did it.
"…Starrett tenants will have the peace of mind of knowing that their homes and their community will remain affordable for them and their children for generations to come.
Lewis commended the leadership of several government agencies, as well as elected officials, "for coming together at every level and putting their heart and soul into this fight by stepping up to the plate and never backing down."
The complex's tenants association had scheduled a meeting this evening to explain to residents what the new agreement means and what the future holds for them once the U.S. Senate approves the federal legislation in the next few weeks before it is expected to be signed by President Bush.
Starrett City, which was formally renamed Spring Creek Towers five years ago, began as a real estate investment for some 250 limited partners, including Donald Trump in one of his first major property ventures, who pooled $33 million for a five percent down payment and received a one percent fixed mortgage.
Investors, who risked their money on a low-income housing project in what was then a blighted Brooklyn community, have reaped more than a 100 percent profit, not to mention generous tax breaks and low-interest government loans they were granted over the years. When the bid for sale was announced those investors were looking to cash out and reportedly earn them at least $500 million.
State and federal regulators rejected the $1.3 billion bid from Clipper Equities last summer because the deal would have led to significant rent increases for tenants, the eventual loss of thousands of apartments for low- and moderate-income New Yorkers, requiring an additional, and costly government subsidy.