0:00:12 16 sec
Procedure
Hearing called to order and housekeeping
Council staff opens the joint Finance and Housing & Buildings Committee hearing, asks attendees to silence electronics and not approach the dais.
New York City Council
Committee on Finance
Oversight - Financial Tools for Maintaining the Affordability of Mitchell-Lama Housing
Jul 15, 2026 · 1:00 PM · 3 hr 22 min
Hearing
Meeting chapters
Read summaries and jump into the video at the segment start.
0:00:27 56 sec
Remarks
Chair Lee opens oversight hearing on Mitchell-Lama affordability
Council Member Linda Lee, Finance Chair, welcomes members and agency partners from HPD and DOF, introduces the hearing topic on financial tools for maintaining Mitchell-Lama housing affordability.
0:01:23 1 min 14 sec
Remarks
Chair Lee on Council actions to preserve Mitchell-Lama housing
Lee reviews the Council's prior steps: extending property tax exemptions, expanding benefits for buildings staying in the program, and the FY25 state budget reducing shelter rent tax from 10% to 5%.
0:02:37 33 sec
Remarks
Chair Lee calls for exploring new financial tools with agencies
Lee emphasizes the need for continued oversight with HPD and DOF to explore existing and potential new tools to support Mitchell-Lama viability without passing costs to tenants.
0:03:10 1 min 19 sec
Remarks
Chair Sanchez on deteriorating Mitchell-Lama conditions and oversight failures
Council Member Pierina Sanchez describes physical and financial deterioration across Mitchell-Lama developments, hazardous conditions, rising rents, and demands HPD come with solutions rather than reactive responses.
0:04:29 1 min 16 sec
Remarks
Chair Sanchez on Mitchell-Lama program history and HPD oversight role
Sanchez reviews the program's 1955 creation, 269 developments statewide, 170 in NYC, HPD's supervisory responsibilities including budget approval, rent increases, inspections, and public investment in preservation.
0:05:44 53 sec
Remarks
Chair Sanchez on financial distress data and state audit findings
Sanchez cites 10% of remaining Mitchell-Lamas in financial distress, 37 developments with ~29% average rent increases in 2025, and a March 2026 state audit finding hazardous conditions and $2.3M in misspent funds.
0:06:37 1 min 12 sec
Remarks
Chair Sanchez on Tracy Towers and Kingsbridge Arms as distress examples
Sanchez highlights Tracy Towers and Kingsbridge Arms in her district as examples of severe financial and physical distress, with over $1M in debt and inability to cover basic operating expenses.
0:07:49 52 sec
Remarks
Chair Sanchez calls for proactive HPD oversight and early intervention
Sanchez argues HPD oversight must mean proactive capital planning, adequate reserves, timely repairs, transparent accounting, and early detection of distress before residents reach a breaking point.
0:08:41 1 min 12 sec
Remarks
Chair Sanchez thanks staff and returns to Chair Lee
Sanchez thanks her committee and district staff, then returns the floor to Chair Lee, who also thanks staff and swears in witnesses.
0:09:53 21 sec
Agency Testimony
HPD First Deputy Commissioner Phillips introduces agency testimony
Adam Phillips, HPD First Deputy Commissioner, introduces himself and colleagues Alika Amprey-Samuel and Julie Walpert, and begins describing the Mitchell-Lama program's role in NYC's affordable housing stock.
0:10:14 1 min 13 sec
Agency Testimony
HPD on Mitchell-Lama portfolio composition and governance
Phillips details approximately 90,000 Mitchell-Lama apartments in 134 NYC developments, split between city (HPD) and state (HCR) supervision, with two-thirds co-ops and one-third rentals, all privately owned and managed.
0:11:27 52 sec
Agency Testimony
HPD on Mitchell-Lama portfolio at a crossroads
Phillips states the portfolio faces rising operating costs, significant capital improvement needs, and uneven rental/maintenance income, positioning these as challenges requiring a path to stabilization.
0:12:19 24 sec
Agency Testimony
HPD on rising operating costs across Mitchell-Lama portfolio
Phillells details skyrocketing insurance premiums, increasing utility costs, and rising staff salaries making it harder for Mitchell-Lamas to balance budgets or fund capital improvements.
0:12:43 22 sec
Agency Testimony
HPD on aging housing stock and billions in capital needs
Phillips notes much of the stock is 50-70 years old, with major systems at end of life, deferred capital, and decarbonization requirements leading to billions in estimated capital needs over the next decade.
0:13:05 59 sec
Agency Testimony
HPD on erratic rent increase process and statutory requirements
Phillips explains Mitchell-Lamas follow a different process than rent-stabilized buildings, with HPD legally required to approve increases to cover costs, and that increases often make up for many years at once.
0:14:03 22 sec
Agency Testimony
HPD on 2025 rent increases and Tracy Towers in context
Phillips notes 37 developments saw average 29% increases in 2025, comparable to Tracy Towers' 30%, arguing Tracy is not exceptional and reflecting portfolio-wide challenges.
0:14:25 55 sec
Agency Testimony
HPD on SCRI/DRI enrollment and statutory limits on income-based charges
Phillips discusses SCRI/DRI enrollment efforts, the statutory cap on over-income surcharges preventing cross-subsidization, and the need for legislative action to raise the SCRI income cap locally.
0:15:20 31 sec
Agency Testimony
HPD on block-by-block plan capital commitments for Mitchell-Lamas
Phillips highlights the administration's block-by-block housing plan dedicating hundreds of millions across FY27-28 for capital improvements in city-supervised Mitchell-Lamas, and a holistic portfolio-wide approach.
0:15:51 41 sec
Agency Testimony
HPD on SCRI income cap expansion and operating cost containment
Phillips urges Council collaboration to enact the statewide SCRI income cap increase from $50K to $75K locally, and discusses HPD's housing supervision team working to contain operating costs.
0:16:32 37 sec
Agency Testimony
HPD on exploring land sales and new revenue models for Mitchell-Lamas
Phillips describes Mitchell-Lamas exploring sale of parking lots and undeveloped land to fund trusts offsetting expenses, paying for climate upgrades and capital needs, and creating additional housing.
0:17:09 54 sec
Agency Testimony
HPD closes testimony with commitment to long-term Mitchell-Lama preservation
Phillips expresses confidence that with responsible stewardship and new investment, Mitchell-Lamas can serve New Yorkers for decades, and invites Council collaboration.
0:18:03 1 min 53 sec
Q&A
Chair Sanchez questions HPD on proactive vs. reactive asset management
Sanchez presses HPD on whether its model is proactive or reactive, questioning why increases are presented as making up for many years at once if financials are reviewed regularly. Phillips explains the process of reviewing financials and planning for capital improvements.
0:19:56 1 min 9 sec
Q&A
Chair Sanchez on smoothing rent increases and HPD's asset management responsibility
Sanchez argues HPD should move toward gradual increases over time and asks how the agency understands its asset management role post-financing. Phillips describes monitoring during and after construction.
0:21:05 58 sec
Q&A
Chair Sanchez on five-year increase in high-risk Mitchell-Lama indicators
Sanchez asks about the Mayor's Management Report showing a five-year increase in high-risk rental and cooperative indicators. Phillips discusses working with owners on preservation outcomes.
0:22:03 2 min 34 sec
Remarks
Speaker Menin delivers opening statement on Mitchell-Lama crisis
Speaker Julie Menin thanks the chairs, references her June 25 letter to the administration about Tracy Towers' 30% rent increase, and frames the hearing as examining whether the city is using all available tools before asking tenants to bear costs.
0:24:37 54 sec
Remarks
Speaker Menin on state audit findings and need for stronger stewardship
Menin cites the state comptroller audit identifying chronic deterioration and financial oversight weaknesses, arguing preservation requires strong stewardship, transparent management, and strategic public investment.
0:25:31 1 min 2 sec
Remarks
Speaker Menin on balancing financial viability with affordability
Menin frames the hearing as balancing two responsibilities: preserving Mitchell-Lama financial viability while preserving the affordability that defines the program, and transitions to questioning.
0:26:33 1 min 43 sec
Q&A
Speaker Menin presses HPD for rent increase data requested in June 25 letter
Menin asks for a comprehensive list of city-run Mitchell-Lama developments and rent increases over 10 years. Phillips says they can provide it later; Menin insists it should be discussed on the record now.
0:28:16 1 min 42 sec
Q&A
Speaker Menin asks HPD about comprehensive financial review of all Mitchell-Lamas
Menin asks whether HPD has conducted a comprehensive financial review of all city-supervised Mitchell-Lamas and which developments face the most significant upcoming increases. Phillips says they regularly review financials but doesn't have specifics at hand.
0:29:58 31 sec
Q&A
Speaker Menin questions HPD on oversight and accountability mechanisms
Menin asks about HPD's oversight mechanisms to ensure management companies fulfill fiduciary responsibilities. Phillips describes working with private housing companies and overseeing property managers.
0:30:28 1 min 3 sec
Q&A
Speaker Menin asks HPD about tools to prevent Tracy Towers-style increases
Menin asks what additional resources HPD plans to deploy to prevent similar increases. Phillips discusses SCRI income cap expansion, advocating for additional Section 8, and federal resources.
0:31:32 1 min 29 sec
Q&A
Speaker Menin asks about HPD loan programs and Tracy Towers financing
Menin asks how many developments have closed under the multifamily housing rehabilitation loan program and whether Tracy Towers has applied. Phillips reports 12 projects in the pipeline and Tracy Towers' two-phase closing timeline.
0:33:01 3 min 2 sec
Q&A
HPD reads list of Mitchell-Lama developments with pending rent increases
HPD staff read into the record a list of developments with pending or scheduled rent increases, including Washington Square Southeast, Sam Burt, Trinity House, First Atlantic Terminal, Jefferson Towers, Tracy Towers, Masrick Towers, Rupert House, and Lincoln-Amsterdam, with requested increase percentages.
0:36:02 2 min 50 sec
Q&A
Speaker Menin asks how HPD will help tenants facing significant increases
Menin asks how HPD will help tenants across these developments. Phillips describes targeted SCRI outreach, and Julie Walpert provides statistics on 2025 increases: 37 developments, average 26% over multiple years, 25 with 20%+ increases.
0:38:52 47 sec
Q&A
Speaker Menin asks if HPD requires owners to exhaust refinancing before increases
Menin asks whether HPD requires owners to demonstrate they've exhausted all HPD/HDC refinancing options before approving increases. Phillips confirms HPD takes a holistic view of expenses, income, and existing debt.
0:39:40 55 sec
Q&A
Speaker Menin asks about financial tools explored for Tracy Towers
Menin asks what financial tools HPD explored before the Tracy Towers increase. Phillips explains existing and new HPD capital, that residents don't pay for HPD debt service, and the shelter rent tax reduction helped.
0:40:35 54 sec
Q&A
Speaker Menin asks about Mitchell-Lama eligibility for city-backed insurance program
Menin asks whether Mitchell-Lamas will be eligible for the $100M city-backed insurance program in the FY27 budget. Phillips confirms yes, and hopes it will lower premiums market-wide. Menin notes the Council's pending insurance accountability bill.
0:41:29 1 min 40 sec
Q&A
HPD reads list of developments that closed on HRP loans since 2021
Phillips reads a list of Mitchell-Lama developments that have closed on HPD's multifamily housing rehabilitation loan program, including Riverbend, Ryerson Towers, Atlantic, Crown Gardens, Kings Bay, and others.
0:43:09 2 min 31 sec
Q&A
Chair Sanchez questions HPD on physical needs assessments for Mitchell-Lamas
Sanchez asks how often Mitchell-Lamas conduct physical needs assessments. Phillips explains the integrated physical needs assessment (IPNA) requirement for projects entering HPD's pipeline, and Julie Walpert notes 48 IPNAs completed since 2020.
0:45:39 1 min 6 sec
Q&A
Chair Sanchez on capital need costs and monitoring building conditions post-increase
Sanchez asks for a roll-up of capital needs costs from the 48 IPNAs and how HPD monitors whether rent increases translate into improved conditions. Phillips describes monthly construction monitoring and HPD's oversight role.
0:46:45 20 sec
Q&A
Chair Sanchez asks for HPD violations breakdown in Mitchell-Lama portfolio
Sanchez requests a breakdown of HPD violations within the Mitchell-Lama portfolio. Phillips says they can provide that information.
0:47:05 2 min 48 sec
Q&A
Chair Lee questions HPD on SCRI/DRI enrollment and outreach
Lee asks about the 8,000 estimated eligible households for SCRI/DRI, how many are enrolled, and what outreach is conducted. Phillips reports 5,500 on Section 8 and 6,000 on SCRI, and Julie Walpert describes constituent service coordinators' outreach.
0:49:53 49 sec
Q&A
Chair Lee on nonprofit partnerships and language access for SCRI outreach
Lee asks whether HPD partners with nonprofits and how many languages are offered for SCRI outreach. Walpert says they use a language line and seek community partnerships. Lee encourages culturally competent nonprofit partnerships.
0:50:41 36 sec
Q&A
Chair Lee on reasons eligible households don't enroll in SCRI
Lee asks the primary reason eligible households don't enroll. Walpert says reasons vary widely, from income issues to household composition, and emphasizes continuous engagement.
0:51:17 49 sec
Q&A
Chair Lee on HPD coordination with Department of Finance for SCRI/DRI
Lee asks about coordination with DOF. Phillips says HPD fully administers SCRI for Mitchell-Lamas with minimal DOF overlap, though Walpert notes DRI applications are completed by DOF and they coordinate workshops.
0:52:07 1 min 1 sec
Q&A
Chair Lee on shelter rent tax cap and development-level tax liability
Lee asks how many Mitchell-Lama developments will reach the 5% shelter rent tax cap and how many will have lower liability. Phillips confirms all have moved to 5% and mentions J51 reauthorization as another tool.
0:53:07 50 sec
Q&A
Chair Lee on Mitchell-Lama delinquencies and total arrears
Lee asks about delinquencies on shelter rent tax and water bills. A DOF representative reports approximately $47.5 million in arrears for property tax and charges. Lee asks about HPD engagement with DEP on water costs.
0:53:57 46 sec
Q&A
Chair Lee on HPD monitoring of delinquent properties
Lee asks how HPD monitors delinquencies and what happens when a property is delinquent. Phillips describes reviewing financials, engaging housing companies on balanced budgets, and using it as a jumping-off point for capital work.
0:54:43 51 sec
Q&A
Chair Lee clarifies shelter rent tax cap application
Lee asks whether any building will be charged less than 5% of shelter rent. Phillips confirms every Mitchell-Lama is now paying 5% shelter rent tax. Lee asks about comparing exemption values against the cap.
0:55:33 43 sec
Q&A
Chair Lee on Local Law 97 exemptions for Mitchell-Lamas
Lee asks about Local Law 97 penalty exemptions for Mitchell-Lamas. Phillips says they're exempt through 2035. Lee asks about post-2035 increases; Phillips says they'll provide that information.
0:56:16 42 sec
Q&A
Chair Lee on HPD capital and expense funding for Mitchell-Lamas
Lee asks whether HPD provides expense funding for non-capital repairs or operating support. Phillips says no, HPD only provides city capital for capital-eligible rehab items, and advocates for more Section 8.
0:56:58 1 min 1 sec
Q&A
Chair Lee on HPD capital spending changes since preliminary budget
Lee asks about changes to capital spending since the preliminary budget and how much has been utilized for Mitchell-Lama preservation in FY25-26. Phillips reports the total preservation budget for FY27 is $1.32 billion.
0:57:59 1 min 7 sec
Q&A
Chair Lee on capital commitment rates and five-year plan for Mitchell-Lamas
Lee asks about capital commitment rate changes over 10 years and how much of the five-year capital plan is budgeted for Mitchell-Lama preservation. Phillips says commitments have increased and they don't break out Mitchell-Lama separately.
0:59:06 1 min 1 sec
Q&A
Chair Lee on trends in Mitchell-Lama pipeline and capital deployment
Lee asks whether the percentage of Mitchell-Lama units is similar year over year. Phillips says they've seen increases in Mitchell-Lamas coming to HPD, driven by aging stock and more forceful HPD encouragement to pursue preservation.
1:00:07 2 min 24 sec
Q&A
Council Member Dinowitz questions HPD on SCRI compliance and Tracy Towers
Dinowitz thanks HPD for visiting Tracy Towers, asks whether HPD is in compliance with Local Law 44 pre-filled SCRI applications, and disputes HPD's claim of full compliance given his office has had to assist many applicants.
1:02:31 1 min 51 sec
Q&A
Council Member Dinowitz asks if HPD has ever rejected or modified a rent increase
Dinowitz asks whether HPD has ever rejected or modified a proposed rent increase, or if it serves as a rubber stamp. Phillips says HPD has modified increases by finding ways to lower expenses.
1:04:22 1 min 41 sec
Q&A
Council Member Dinowitz questions 50% security cost increase at Tracy Towers
Dinowitz highlights Tracy Towers' security costs jumping from $1.8M to $2.8M, a nearly 50% increase, and asks whether HPD reviewed financials before proposing the 31% rent increase. Phillips says the increase hasn't gone into effect and they're reviewing expenses further.
1:06:02 1 min 34 sec
Q&A
Council Member Dinowitz on HPD hearing timing and financial review process
Dinowitz criticizes the 4 PM hearing time for Tracy Towers as inaccessible to working residents, and presses Phillips on whether HPD reviewed financials before the public hearing. Phillips confirms ongoing review.
1:07:36 2 min 44 sec
Q&A
Council Member Dinowitz on Tracy Towers loan history and accrued interest
Dinowitz details Tracy Towers' $40.7M loan from 1971 accruing $106.2M in interest by 2012, and asks HPD to clarify the debt history. Julie Walpert explains a withdrawn federal subsidy led to the interest accrual, and HPD/HDC deferred payments to protect tenants.
1:10:20 57 sec
Q&A
Council Member Hudson on accountability for capital improvement loans
Hudson asks what accountability measures ensure loans and grants are used effectively and produce measurable improvements. Phillips describes the IPNA, architect/contractor process, and monthly HPD/lender construction monitoring.
1:11:16 1 min 5 sec
Q&A
Council Member Hudson on Tivoli Towers construction oversight and displacement prevention
Hudson says she'll follow up on Tivoli Towers' ongoing construction issues, and asks what HPD offers households that don't qualify for SCRI/DRI but can't afford increases. Phillips says Section 8 vouchers would be ideal but they're in shortfall.
1:12:21 1 min 47 sec
Q&A
Council Member Riley on capital funding dedicated to Mitchell-Lamas
Riley asks how much money is specifically dedicated to city-supervised Mitchell-Lamas and how developments are selected. Phillips says they don't break out the budget separately and describes the development pipeline process.
1:14:08 2 min 8 sec
Q&A
Council Member Riley on capital needs assessment and land sale protections
Riley asks HPD to commit to providing a development-by-development capital needs assessment, and asks what protections ensure residents are involved before land is sold or developed. Phillips says co-op boards drive the process; Alika Amprey-Samuel emphasizes creative revenue tools.
1:16:17 54 sec
Q&A
Council Member Riley on 30% increases as systemic failure
Riley argues that if 30% increases are common across the portfolio, it demonstrates a systemic failure. Phillips agrees and points to J51 reauthorization and collaborative tools as solutions.
1:17:11 1 min 49 sec
Q&A
Council Member Banks on state audit findings and capital investment effectiveness
Banks cites the state comptroller audit identifying mold, pests, and infrastructure deficiencies, and asks what specific investments the city has made and how HPD measures effectiveness. Phillips describes the preservation pipeline and addressing hazardous conditions first.
1:19:00 1 min 18 sec
Q&A
Council Member Banks on accountability for deteriorating Mitchell-Lama conditions
Banks asks who bears responsibility when deficiencies persist for years—management, boards, contractors, or HPD. Phillips describes HPD's oversight authority and providing technical assistance, noting differences between co-ops and rentals.
1:20:18 1 min 46 sec
Q&A
Council Member Banks on asset sales as preservation tools vs. distress signals
Banks asks whether HPD views parking lot sales as innovative preservation tools or signs of deeper financial distress. Phillips calls it a massive opportunity and innovative revenue source. Alika Amprey-Samuel emphasizes collaboration.
1:22:04 2 min 16 sec
Q&A
Council Member Banks on Linden Plaza oversight and management accountability
Banks asks about HPD's oversight before Linden Plaza's rehabilitation and how conditions deteriorated so far, and calls for accountability for the management company that ran it into the ground. Phillips says Linden Plaza's outcome is positive. Alika notes HPD visited both Tracy Towers and Linden Plaza for lessons learned.
1:24:20 1 min 45 sec
Q&A
Council Member Sanchez on management company neglect across multiple developments
Justin Sanchez asks what tools HPD has to intervene at the management level when a single manager shows patterns of neglect across multiple buildings. Phillips describes bringing in property management firms for deeper reviews and mentions AEP and 7A programs.
1:26:05 2 min 1 sec
Q&A
Council Member Sanchez on HPD authority to remove or disqualify managing agents
Sanchez asks whether HPD can remove or disqualify a managing agent from Mitchell-Lama developments and what triggers that. Phillips confirms HPD has the authority to work with housing companies to find new management. Alika notes management companies are leaving the portfolio.
1:28:07 1 min 16 sec
Q&A
Council Member Sanchez on HPD audits and shareholder arrears
Sanchez asks how frequently HPD audits Mitchell-Lama books and raises concerns about a development with over $1M in shareholder arrears, asking whether rent increases become self-defeating. Phillips describes annual financial statement requirements and the limited operating subsidy tools available.
1:29:23 2 min 9 sec
Q&A
Council Member Farías on Jamie Towers and systemic oversight failures
Farías delivers opening remarks about Jamie Towers in her district, citing systemic failures in oversight and management, and introduces Reso 83 urging stronger state protections for Mitchell-Lama residents.
1:31:31 1 min 29 sec
Q&A
Council Member Farías asks HPD about new safeguards to prevent steep increases
Farías asks whether the administration has planned new reporting and monitoring safeguards to prevent situations like Jamie Towers. Phillips discusses J51, SCRI income cap expansion, and Section 8 advocacy.
1:33:00 3 min 34 sec
Q&A
Council Member Farías on 50% increases and lack of transition time for families
Farías presses on the lack of manageable transition time for families facing steep increases, noting 30-day notice is insufficient. Phillips says HPD tries to stagger increases but the Tracy Towers increase hasn't taken effect yet.
1:36:34 1 min 55 sec
Q&A
Council Member Farías on HPD project manager assignments and pipeline delays
Farías asks whether HPD is required to help close out projects stalled by lack of project managers, citing Jamie Towers' $8M in allocated capital stuck for three budget cycles without a project manager. Phillips says they're staffing up the preservation finance team.
1:38:30 3 min 24 sec
Q&A
Council Member Farías on HPD project tracking and Mitchell-Lama prioritization
Farías asks whether HPD has a central tracker and how Mitchell-Lamas are prioritized in closings. Phillips describes an internal tracker and says prioritization depends on project readiness. Farías notes Jamie Towers has financing in place but no project manager assigned.
1:41:54 3 min 22 sec
Q&A
Council Member Aldebol on capital funding accountability and project delays
Aldebol asks about HPD oversight to ensure allocated funds are used appropriately and projects move faster, noting costs escalate with delays. Phillips says the referenced project is in the pipeline and new project managers will help move things along.
1:45:15 2 min 19 sec
Q&A
Council Member Aldebol on SCRI outreach for senior-heavy Mitchell-Lama developments
Aldebol asks about HPD partnerships with Department for the Aging and senior organizations for SCRI outreach, given many Mitchell-Lamas are naturally occurring retirement communities. Alika describes 25 SCRI outreach workshops in the past year and willingness to partner with community organizations.
1:47:34 2 min 14 sec
Q&A
Council Member Aldebol on gradual increases vs. deferred maintenance cycles
Aldebol discusses a Mitchell-Lama co-op that received a huge increase after 10 years of none, and argues for regular gradual increases instead of waiting. Phillips agrees HPD would welcome regular increases and notes co-op boards often resist raising maintenance.
1:49:48 3 min 14 sec
Q&A
Council Member Brewer on Mitchell-Lama to HDFC conversions and Clinton Towers
Brewer raises concerns about Mitchell-Lama conversions to HDFC, asks about Clinton Towers' construction problems, and calls for a roundtable with state and city stakeholders. Phillips says no current conversions are underway and offers to host a roundtable.
1:53:02 2 min 42 sec
Q&A
Council Member Brewer on Lincoln-Amsterdam increases and state audit response
Brewer asks about 110 West End Avenue's large increase and how HPD is addressing the state comptroller audit findings. Phillips explains Lincoln-Amsterdam hasn't had an increase in 25 years and needs to pay bills, and says HPD has prepared responses and met with the comptroller.
1:55:44 1 min 20 sec
Q&A
Council Member Wong on Article 5 co-op eligibility for capital funds
Wong asks whether Article 5 redevelopment co-ops like Penn South are eligible for HPD capital funds, noting they believed they were excluded. Phillips confirms they are eligible to apply through HPD's preservation pipeline.
1:57:04 1 min 1 sec
Q&A
Council Member Epstein on proactive rent increase recommendations
Epstein asks why HPD waits for Mitchell-Lamas to request increases rather than proactively recommending small annual increases. Phillips says HPD does make recommendations but co-op boards often resist. Epstein urges HPD to collaborate with council members to encourage boards.
1:58:05 1 min 55 sec
Q&A
Council Member Epstein on shelter rent tax reduction to zero and J51
Epstein asks about getting shelter rent tax to zero and whether HPD will advocate for it. Phillips points to J51 as the best tool to get close to zero. Epstein asks about forgivable loans; Phillips says they're structured as deferring and accruing with a balloon.
2:00:00 1 min 35 sec
Q&A
Council Member Epstein on matching capital dollars and forgivable loans for Mitchell-Lamas
Epstein asks why HPD doesn't match council members' Reso A capital dollars and why not offer forgivable loans. Phillips says HPD usually puts in far more than matching amounts and the loans defer and accrue. Epstein raises it as a roundtable topic.
2:01:36 1 min 20 sec
Q&A
Council Member Epstein on balancing affordable housing development on Mitchell-Lama land
Epstein asks how HPD balances the need for more affordable housing with preserving Mitchell-Lama land value. Phillips says it will be case-by-case, looking at available land and capital needs in collaboration with the council and co-op boards.
2:02:56 1 min 8 sec
Q&A
Chair Sanchez on financial indicators and risk assessment for Mitchell-Lamas
Sanchez asks what indicators HPD receives regularly beyond financial statements and how they assess risk. Phillips cites financials, vacancy reports, outstanding payables, and online violation profiles as key indicators.
2:04:04 1 min 45 sec
Q&A
Chair Sanchez on HPD support for co-ops with shareholder arrears and governance challenges
Sanchez asks what HPD offers co-ops struggling with shareholders in arrears and governance issues. Alika describes training and technical assistance for boards, and notes HPD has requested additional resources for capacity building.
2:05:49 1 min 48 sec
Q&A
Chair Sanchez on legal support for co-ops and AEP placement of Mitchell-Lamas
Sanchez asks about legal support resources for co-ops and raises concerns about a Mitchell-Lama placed in the Alternative Enforcement Program. Phillips says HPD doesn't offer legal resources but can connect to nonprofits, and says AEP signals a need for preservation intervention.
2:07:36 1 min 3 sec
Q&A
Chair Sanchez on cost drivers for carrying charge increases and balloon loan outcomes
Sanchez asks whether HPD has an accounting of how much increases are due to capital vs. operating costs. Phillips says it's almost always operating expenses, as HPD structures debt so residents don't pay principal/interest. Sanchez asks what happens to the balloon; Phillips says it's refinanced with extended affordability.
2:08:40 2 min 53 sec
Q&A
Council Member Dinowitz on Tracy Towers debt structure and loan history
Dinowitz asks HPD to explain how the debt works at Tracy Towers, noting the original $40M loan grew with $106M in interest and was refinanced to $147M. Phillips explains the difference between HDC's first mortgage requiring payments and HPD's deferred subsidy.
2:11:33 3 min 27 sec
Q&A
Council Member Dinowitz on oversight of 2016 Tracy Towers capital loans and incomplete work
Dinowitz details a 2016 loan for elevator, boiler, and roof repairs at Tracy Towers where work was apparently not completed, and asks what oversight HPD conducts. Phillips describes monthly construction monitoring by HDC and HPD, and distinguishes between repair and replacement scopes.
2:15:00 2 min 40 sec
Q&A
Council Member Dinowitz on $36M Tracy Towers capital plan and permit delays
Dinowitz asks about the $36M capital plan for Tracy Towers, when work begins, and what HPD can do to expedite permits. Phillips says work should start in the next couple months and HPD communicates with DOB to expedite. Dinowitz urges faster action given shed costs.
2:17:40 2 min 17 sec
Q&A
Council Member Dinowitz on Tracy Towers $40M HPD loan as deferred debt
Dinowitz clarifies that the $40M HPD put into Tracy Towers is a loan, not a grant, and expresses concern that residents were told it was an investment. Phillips confirms it's a loan with no principal/interest payments due, deferring and accruing to the end of the term.
2:19:57 4 min 59 sec
Q&A
Council Member Dinowitz on warranty accountability for completed capital work
Dinowitz asks what mechanisms HPD has to hold contractors accountable after work is completed, citing Tracy Towers' history of repairs that didn't last. Phillips describes monthly monitoring during construction and warranty periods. Alika notes HPD teams remain available post-construction.
2:24:56 3 min 8 sec
Q&A
Chair Sanchez on vacant units and phased increase reviews
Sanchez relays questions from a constituent via Council Member Banks about vacant units past 90-day windows and whether HPD audits after phase one of a three-phase increase. Phillips says HPD monitors whether future increases are needed and wants vacant units brought up to code.
2:28:04 52 sec
Q&A
Chair Sanchez on Mitchell-Lama program exits and loan balloons
Sanchez asks how many Mitchell-Lamas have been lost from the program. Phillips says 65 city-supervised developments have exited. Sanchez confirms that's when the loan balloon comes due—when a Mitchell-Lama wants to exit the program.
2:28:55 2 min 45 sec
Procedure
Chairs thank HPD and transition to public testimony
Chairs Sanchez and Lee thank HPD for their testimony and encourage agency staff to stay for public testimony. Lee reviews public testimony rules including two-minute limits and written submission procedures.
2:31:40 5 min 42 sec
Public Testimony
Jean Hill, Tracy Towers Tenant Organization President, testifies on building conditions
Hill describes chronic elevator breakdowns, flooding from 52-year-old plumbing, substandard repairs, lack of security cameras, and 60% of residents not qualifying for subsidies. She criticizes HPD for approving work that doesn't last and demanding money without delivering service.
2:37:22 2 min 55 sec
Public Testimony
Ed Yeager, Coordinating Council of Cooperatives, testifies on limited equity housing needs
Yeager advocates for including all limited equity housing in policy discussions, recommends a task force with council, HPD, DOB, and co-op boards to reduce city-mandated compliance costs, and highlights co-ops' community contributions including NORC programs.
2:40:16 3 min 17 sec
Public Testimony
Sally Stroman testifies on bidding process and change order costs
Stroman raises concerns about the bidding process favoring the same vendors, excessive change orders increasing costs, and calls for a tenant committee to address issues across co-ops citywide.
2:43:33 2 min 43 sec
Public Testimony
Eric Foreman, AFL-CIO Housing Investment Trust, testifies on preservation financing
Foreman describes HIT's $2.2B investment in NYC affordable housing since 9-11, including $569M in Mitchell-Lamas, applauds city capital commitments, and calls for thinking big about preservation with union jobs.
2:46:16 3 min 57 sec
Public Testimony
Janice Brody, Clayton Apartments board member, testifies on deficits and need for grants not loans
Brody describes Clayton Apartments' $15,000/month deficit, $700K insurance costs, and $25M+ in needed repairs, arguing Mitchell-Lamas should be treated as infrastructure receiving capital grants rather than loans that add to debt.
2:50:13 2 min 33 sec
Public Testimony
Ryan Schallenberg, Clayton Apartments VP, testifies on Legionella costs and management issues
Schallenberg details $250K+ spent on Legionella remediation with no reimbursement, $697K annual insurance, poor approved management companies including one indicted for theft, and lack of revenue-generating assets compared to other Mitchell-Lamas.
2:52:46 2 min 22 sec
Public Testimony
Susan Peters testifies on monetary policy and banking system
Peters, a former Wall Street bank data professional, discusses how private banks create money through lending and argues the government should study this system's impact on city finances and affordability.
2:55:08 4 min 17 sec
Q&A
Council Member Dinowitz questions Clayton Apartments on insurance costs per unit
Dinowitz asks Schallenberg about insurance costs per unit. Schallenberg calculates $4,300/unit. Dinowitz compares this to Tracy Towers' $4,600/unit and notes ANHD's estimate of $1,770/unit for affordable housing, calling for HPD to negotiate better rates.
2:59:25 1 min 50 sec
Public Testimony
Richard Heitler, Village East Towers treasurer, testifies on annual rent increase proposal
Heitler proposes scrapping the three-year rent increase system in favor of annual increases, faster loan processing, a small loan program for discrete repairs, mortgages for new purchasers, ending 2-to-11 conversions, and giving Mitchell-Lama rentals the option to convert to co-ops.
3:01:15 10 min 18 sec
Public Testimony
Richard Heitler on loan delays costing Village East Towers over $500,000
Heitler details how a three-year delay in closing on a capital improvement loan cost Village East Towers over $500,000 in additional pipe repairs, water tank replacement, and sidewalk shed costs, arguing delays are financially devastating.
3:11:32 3 min 53 sec
Public Testimony
Steven Toro, Tracy Towers resident, testifies on subsidy ineligibility and displacement risk
Toro, a disabled retired Tracy Towers resident, explains he can't qualify for SNAP/SCRI due to his wife's income, fears losing his apartment, and argues HPD is a band-aid for a systemic problem requiring structural solutions.
3:15:25 3 min 44 sec
Public Testimony
Sam Moskowitz, Gouverneur Gardens board president, testifies on reform recommendations
Moskowitz testifies about Gouverneur Gardens' $54M capital project and 70% low-income residents, recommending multi-year budget projections, simplified zero-sum budgeting, earlier owner's rep hiring, and tracking of vacancy and arrears as distress indicators.
3:19:09 2 min 55 sec
Public Testimony
Jean Hall, Rochdale Village board president, testifies on 31% carrying charge increase
Hall describes Rochdale Village's 25,000 residents facing a 31.2% carrying charge increase, aging infrastructure, and escalating costs. She recommends expanding city capital programs to state-supervised Mitchell-Lamas and creating a dedicated Mitchell-Lama capital fund.
3:22:04 49 sec
Procedure
Hearing adjourned
Chair Lee confirms no further public testimony on Zoom or in person, reminds attendees of the 72-hour written testimony submission window, thanks the administration and public, and adjourns the hearing.