New York City may be in the midst of an affordable housing crisis, but the owners of co-ops at Southbridge Towers in the Financial District have decided they'd rather be market rate. The 1,607-unit complex was built in 1969 under the subsidized Mitchell-Lama affordability program, which means that many owners bought their apartments for $10,000 or less. Now, after months of heated debate, DNAinfo reports that the owners have voted to take their apartments private. The action passed by a slim margin; 1,082 owners voted yes, which is just 10 votes more than the required two-thirds margin.
This means that owners can now take advantage of the hot real estate market and sell their apartments for millions of dollars, so everyone who voted yes is looking forward to a sweet payday. But the of owners who voted against privatization take a more selfless view. They wanted to keep the complex as affordable housing so it could help future generations.
DNAinfo reports that there is still one more step before the plan is finalized. Even though two-thirds voted yes, now two-thirds have to "opt-in" to the privatization. They'll have 90 days to sign the agreement, and anyone who decides to "opt-out" will essentially become a tenant and will not have the ability to sell their apartment. The rents for these units will be below market rate, but they will be able to be increased by 5 percent every year (which is more than the annual increase for rent stabilized units).
· FiDi Affordable Housing Complex Votes to Go Private After Heated Debate [DNAinfo]
· Southbridge Towers coverage [Curbed]