Purpose

To determine whether vacant housing units at the Clinton Towers Mitchell-Lama housing development were being rented in a timely manner. Our audit focused on the period January 1, 2012 through March 31, 2017.

Background

The Mitchell-Lama Housing Program was created in 1955 to provide affordable rental and cooperative housing to middle-income families. The New York City Department of Housing Preservation and Development (HPD) is the nation’s largest municipal housing preservation and development agency. Its mission is to promote the construction and preservation of affordable, high-quality housing for low- and moderate-income families in thriving and diverse neighborhoods in every borough. HPD accomplishes its mission by enforcing housing quality standards, financing affordable housing development and preservation, and ensuring sound management of the City’s affordable housing stock. In New York City, there are 94 HPD-supervised Mitchell-Lama rental and limited-equity cooperative developments with approximately 44,000 total units (apartments).

Clinton Towers, a Mitchell-Lama rental development in Manhattan, is owned by Clinton Towers Housing Company, Inc., which was formed in 1972 for the purpose of constructing, owning, and operating the 396-apartment development. Clinton Towers was completed and occupancy commenced in 1973. The development is managed by P&L Management and Consulting (P&L). Prospective tenants file an application and their names are placed on a waiting list based on the size of the apartment the applicant requested. When vacancies occur, applicants should be offered and awarded apartments in the order their names appear on the lists - subject to HPD’s approval.

Key Findings

• Vacant apartments at Clinton Towers were often not rented in a timely manner. We found that for the period January 2012 through March 2017, an average of 13 apartments each month had been vacant for over 60 days, resulting in an estimated $740,000 in lost rental revenue.
• On March 31, 2017, 15 apartments at Clinton Towers had been vacant for more than 60 days, even though there were over 9,000 applicants on the external waiting lists, resulting in approximately $78,000 in lost rental revenue. Eleven of these apartments were vacant for more than six months, including three that had been vacant for more than a year.
• HPD is not adequately monitoring vacancies at Clinton Towers.

Key Recommendations

• Implement policies and procedures for staff to follow when conducting audits or reviews of housing company operations, including processes for monitoring and taking corrective action on extended vacancies.
• Formally establish and clearly communicate the timeframe for housing companies to fill vacancies.
• Obtain and review quarterly vacancy reports from Clinton Towers to ensure that vacancies are filled within the established timeframe.
• Follow up on the long-standing vacancies identified in this audit report and ensure they are filled promptly.

Other Related Audits/Reports of Interest

New York City Department of Housing Preservation and Development: The Mitchell-Lama Program - Awarding Housing Units and Maintaining Waiting Lists (2014-N-3)
New York City Department of Housing Preservation and Development: The Mitchell-Lama Program - Awarding Housing Units and Maintaining Waiting Lists (2016-F-25)