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Sale of Brooklyn's Starrett City complex could endanger its affordability

The $850 million sale of the 46-building complex could lead to higher rents for tenants

Via DoomDan515/Wikipedia

As the owners of the largest federally subsidized housing complex in the country look to sell their 46-building development in East New York, elected officials are raising alarm bells about the sale, the New York Daily News reports.

In September this year the owners of Starrett City, which include President Donald Trump, (a four percent stakeholder) announced that they intended to sell the 5,881-unit complex for $850 million to Brooksville Company.

Now elected officials like Senator Chuck Schumer and Representative Hakeem Jeffries are warning that the sale of the megadevelopment could endanger the complex’s affordability.

At present, the U.S. Department of Housing and Urban Development (HUD) subsidizes the complex in such a way that no one who lives there has to pay more than 30 percent of their income toward rent. Part of HUD’s agreement with Starrett City also allows the owners to get 10 percent of the development’s value in equity every year, according to the Daily News.

That amounts to anywhere between $6 million to $7 million annually at present, but that could skyrocket to $40 million annually after the sale. Schumer and Jeffries contend that this will force the new owners to hike rents on the apartments. The sale still needs to be approved by HUD, so it remains to be seen how the HUD Secretary Ben Carson, a Trump appointee, will respond to these concerns.