Objective

To assess the extent of implementation of the six recommendations included in our initial audit report, Mitchell-Lama Vacancies (Report 2020-N-2).

About the Program

The Mitchell-Lama Housing Program was created in 1955 to provide affordable rental and cooperative housing to middle-income families. The New York City (NYC) Department of Housing Preservation and Development (HPD) – the nation’s largest municipal housing preservation and development agency – is charged with promoting the quality and affordability of NYC’s housing. In NYC, there are 93 HPD-supervised Mitchell-Lama rental and limited-equity cooperative developments with approximately 47,000 total apartments.

Apartments in Mitchell-Lama developments tend to be desirable because of their affordability; consequently, the waiting lists for many of these apartments can be quite lengthy. To ensure efficient turnover of vacant apartments, HPD’s Reporting and Compliance Directive (Directive), issued in 2017, requires developments to fill vacancies within 120 days. Developments are required to provide a written explanation for the apartments that have been vacant for more than 120 days as well as a plan of action to resolve the prolonged vacancy. Developments are also required to submit Quarterly Turnover and Vacancy Reports to HPD, showing apartments that were filled (turnovers) during the quarter and current vacancies that need to be sold or rented. HPD’s staff of Property Managers are responsible for monitoring the developments’ apartment turnovers and vacancies to ensure compliance with requirements.

Our initial audit report, issued July 13, 2021, examined whether HPD was ensuring that vacant apartments at developments were filled timely. The audit – which covered apartments that were vacant and those that became vacant in calendar year 2019 and actions taken by HPD, through March 12, 2021, to address these vacancies – found HPD did not adequately monitor developments to ensure their compliance with the requirements of its 2017 Directive. Despite the scarcity of affordable housing, vacant apartments were generally not filled in the 120-day time frame, with 1,286 apartments taking, on average, 222 days to fill, including 214 that remained vacant for a year or longer. As of December 31, 2019, 78 developments reported 670 vacancies, 371 (55%) of which had been vacant for over 120 days, including 111 apartments vacant for over a year and eight apartments vacant for more than 3 years. At one development – Lindsay Park in Brooklyn – 15 apartments had been vacant for as long as 30 years. Further, the audit found that HPD did not enforce the requirement for developments to submit plans of action for apartments vacant for over 120 days, nor did it have evidence that it followed up with developments for status updates.

Key Findings

HPD officials have made some progress in addressing the issues identified in the initial audit report. Of the initial report’s six audit recommendations, one was implemented, four were partially implemented, and one was not implemented.

Key Recommendation

Officials are given 30 days after the issuance of this report to provide information on any actions that are planned to address the unresolved issues discussed in the follow-up.