After more than a year of tenant hand-wringing and political hardball, the owners of Starrett City signed a pact that will keep the complex affordable for at least the next 20 years.
First opened in 1975, Starrett City – a.k.a. Spring Creek Towers – is a sprawling 46-tower, 140-acre residential complex, with about 90 percent of the units receiving some kind of subsidy.
These subsidies include the Mitchell-Lama program for moderate-income workers, the state Section 236 program, and the federal Retired Assistance Program (RAP) and Section 8 program.
The remaining 10 percent of the 5,881 housing units is rented out at market rate.
However, after the complex’s owners, Starrett City Associates (SCA), became eligible to opt out of the Mitchell-Lama program, another firm, Clipper Equity LLC, bid $1.3 billion for the complex, spreading fears among residents and housing advocates that the complex would go market rate.
Under the Memorandum of Understanding (MOU) signed between SCA and several government agencies, any sale of the complex would have to stipulate that 60 percent of the units must remain part of the project-based Section 8 program.
This provision caps tenant rents at 30 percent of monthly income.
Additionally, under the MOU, current tenants would be grandfathered into their apartments, eliminating the need for disruptive and costly moves for tenants who are over- or under-housed, and also for those people who might not qualify for rental assistance under the standard rules.
Finally, Starrett City would remain in the Mitchell Lama program as affordable housing for at least the next 20 years.
The MOU allows an owner to commit to participating in Mitchell-Lama for a longer period of time but no shorter than 20 years.
The MOU announcement brought several elected officials to the complex last week, many of whom succeeded in stopping the sale last year and have been in discussions with SCA since then.
“This is the long-sought victory we have all hoped and prayed for,” said U.S. Sen. Charles Schumer. “This agreement charts a clear course to ensure whoever buys Starrett City must keep it affordable for its current and future tenants.”
Gov. David Paterson said creating and preserving affordable housing is one of his administration’s highest priorities.
“This memorandum of understanding is the result of hard work on behalf of the city, state and federal governments, as well as the owners and tenants of Starrett City,” said Paterson. “I am proud to show our support for keeping Starrett City affordable—now and into the future.”
SCA, which had held off putting the property up for sale until the MOU was signed, is now set to put the property out to bid.
However, the text of the MOU will be included in any bid package made available to prospective purchasers of Starrett City so that these organizations, their advisors, and their potential financing sources will know exactly what the affordable housing requirements are from the outset.
“We will watch the bid process like a hawk to make sure everyone lives up to this agreement,” said Schumer.
