Westview Voting on Affordability Plan

Westview tenants are voting this weekend on an affordability plan that will guide the building out of the State’s Mitchell-Lama affordable-housing program on a one vote-one apartment plan instead of one that is based on shares in a new corporation. The recently revealed plan offers some important wins for current tenants, but also leaves plenty of uncertainties, according to residents.

If approved, the plan would give hundreds of Roosevelt Island residents a chance for affordable home ownership, and possibly add more stability and community buy-in to an Island in transition, but this is only the first step in an approval process that requires City and State agencies to sign off.


The 28-page proposal landed on residents’ doorsteps September 6 following a vote of the Westview Task Force (WTF) board of directors in a closed meeting. The plan is a result of negotiations between the owner/sponsor of Westview and the WTF negotiating committee.

In a tenant-only meeting hosted at the Manhattan Park Theatre Club, the WTF laid out what it views as the big achievements in the affordability plan. These include policies providing a seamless and safe transition for tenants, an increase of $2.5 million in the owner’s contribution to a fund for the building’s rehabilitation, and $40-50 per share for apartments where the tenants are bought out. Yet this money is not a gift, and the newly formed cooperative will ultimately have to reimburse the sponsor for these contributions out of flip tax proceeds. (A flip tax is a transfer fee payable to the cooperative upon the sale of an apartment.)

Renters will not be submetered, and the WTF characterizes this, as well as the first year’s rent reduction (down to 6.1% from the previously proposed 14.9% rent increase) as proof of the commitment to affordable rentals for those who choose not to purchase.

The flip tax schedule has been modified from 50/30 to 60/20, meaning that after the affordability expiration date, the flip tax goes down to 20%. Yet, within the first two years after the first closing, the seller must pay a flip tax of 60%.

The purchase price has increased slightly, from $241 to $246 per square foot and the maintenance has decreased from $1.07 per share to $1.03 per share.

Meeting Takeaways

For some tenants, the plan still falls short of expectations. And some have lost trust that the task force is acting in good faith.

“I don’t believe anything the WTF or their lawyers say,” shared one tenant, who declined to be named due to the lack of trust pervasive during this time of transition. Another tenant echoed this frustration: “Through all of the years I’ve been dealing with this, it’s hard to know who is telling the truth.” Westview tenants have been ‘dealing’ with this since the ’90s, when the building first became eligible to exit the Mitchell-Lama program.

Some tenants expressed concern that there is not enough short-term protection in the event that costs projected in the engineer report come due sooner than expected, and argue that better reserve funding is necessary. The way the current plan is structured, tenants – both owners and renters – must pay for future building repairs. Current assessments have those at $25 million. At the meeting, tenants also learned that over $4 million has been spent on façade work.

Still, many tenants believe this is the best deal they are likely to get.

“Last year, when we got the Red Herring, was the time for us to fight/negotiate for a better plan,” said one tenant “We chose our issues: rent increases, submetering, and cost and responsibility for repair work. We did not win 100%. We are not going to win 100%. But we definitely now have a better deal than the one we were delivered last year,” adding that, “Any of us who plan to buy need to think seriously about protecting our investment, and that means getting seats on the new board. We need to be able to create a different, transparent board that also works to equitably protect all residents, buyers and renters alike.”

A No Vote

The WTF says the current Affordability Plan is the only option for tenants. In a memo, the task force announced, “We have a choice to exit Mitchell-Lama with the Affordability Plan in place or risk exiting the program with no plan at all. Negotiations are over.”

The memo goes on to state, “Voting NO does not keep us in Mitchell-Lama and does not get us a better deal down the road. A NO vote means risking exit from Mitchell-Lama with NO Plan, NO rent protection, NO ownership opportunity, NO buyout opportunities, NO funding for building repairs, only uncertainty and the very real risk of market rents [emphasis added by WTF].” It is unclear in using this language whether the WTF is announcing their unwillingness to go back to the table or whether they believe that this is the best deal for the building.


Typically, buildings that leave the Mitchell-Lama program go market rate. Roosevelt Landings, formerly known as Eastwood, left the program and became a market-rental building. (Mitchell-Lama tenants were allowed to remain, but as they leave, their apartments are renovated and rented at market rate.) Rivercross apartments are likewise being sold at market-rate prices, with a 45% flip tax on sales keeping things affordable for owners who remain. In fact, Island House alone holds the distinction of being the first building – both on the Island and in the City – to exit the Mitchell-Lama program and remain affordable.

According to The Cooperator, a publication that covers the co-op market, “The purpose of the [Mitchell-Lama] program was to encourage the building of moderate-income housing, to keep more middle-class families within [New York State’s] cities, and to help stabilize city neighborhoods. Some say one of the real reasons for Mitchell-Lama in the first place was so that these buildings could stabilize borderline areas – clearing the way for the private real-estate market to step in.”

The program worked. A total of 269 buildings with 105,000 apartments were built under the program. Developments were eligible to buy out after 20 years or prepayment of their mortgages.

Many of the neighborhoods where Mitchell-Lama buildings were built – Independence Plaza in Tribeca or Independence House on the Upper West Side, for example – have since become desirable.

Roosevelt Island is no exception. The success of the original four Mitchell-Lama buildings made further development possible.

Yet, because of the diverse population inherent in Mitchell-Lama housing, “affordable” housing is not affordable for all of Westview’s tenancy.

Next Steps

Not all Westview tenants are convinced that this vote even matters, especially given that this is merely a proposal and not a formal offering plan. In fact, some have reached out to New York State Housing and Community Renewal (HCR) and the Attorney General’s office on their own to inquire about their rights. The WTF hosted two more meetings prior to the vote to assist tenants in understanding this.

Even if it’s approved by tenants, the affordability plan will then be subject to authorization from HCR and modification and extension of the ground lease from the Roosevelt Island Operating Corporation (RIOC). Additionally, the New York State Department of Law must accept the final Offering Plan before the sponsor can start selling apartments.

Meanwhile, the Westview sponsor’s deadline of September 15 to reply to a Notice of Deficiencies filed by the New York State Attorney General regarding the building’s proposed cooperative offering plan has come and gone, and a new date of October 31 has been set.

If the tenants vote for the Affordability Plan and it passes through the State agencies thereafter, tenants are unlikely to receive a formal offering plan until end of 2016 or early 2017. They would then need to decide whether to buy, remain as renters, or move out, possibly with a buy-out.

If the tenants vote against the Affordability Plan, the WTF and the sponsor could go back to the negotiating table for a new plan, or not. Either way, the landlord has a legal right to exit Mitchell-Lama.

Tags: Affordable Housing Westview

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