New York City Department of Housing Preservation and Development

 

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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

New York City Department of Housing Preservation and Development
The Mitchell-Lama Program: Awarding Housing Units and Maintaining Waiting Lists


Issued: July 29, 2015
Link to full audit report 2014-N-3
Link to 90-day response

Purpose
To determine whether Mitchell-Lama-financed housing units are assigned to eligible persons in compliance with properly established waiting lists for the period January 1, 2012 through November 30, 2014.

Background
The New York City Department of Housing Preservation and Development (HPD) is the nation’s largest municipal housing preservation and development agency. Its mission is to make strategic investments that will improve and strengthen neighborhoods while preserving the stability and affordability of existing housing stock. The Mitchell-Lama program was created in 1955 to provide affordable rental and cooperative housing to moderate-income families. In New York City, there are 97 HPD-supervised Mitchell-Lama rental and limited-equity cooperative developments, with more than 45,300 total units. Each development is administered by either a Board of Directors (cooperatives) or a managing agent (rentals and cooperatives). Applicants apply to the individual developments for a unit of a specific size, and their names are placed on a manually maintained waiting list (list) created by HPD staff and subsequently maintained by the respective managing agents. As vacancies occur, applicants should be selected in the order they appear on the list and sent to HPD for approval. This audit is part of the Comptroller’s statewide initiative for audits of public programs designed to improve housing opportunities for working-class residents.

Key Findings

  • Applicants who were next in line for units in a specific development were not always offered and/or awarded a unit in the order they were listed. Also, we identified unit occupants whose names were not submitted to HPD for approval by the respective managing agents.
  • We observed inconsistencies in the methods used by HPD staff to place applicants on development waiting lists.
  • Development officials often did not indicate who made notations (e.g., indicating applicants’ continued interest in Mitchell-Lama units) on the manually prepared lists or when those notations were made. Several notations we tested were unsupported and/or disputed by applicants.
  • HPD did not adequately monitor building managing agents, nor did they take corrective actions, when appropriate.

Key Recommendations

  • Formalize procedures to conduct lotteries and establish waiting lists for housing developments.
  • Require managers of housing developments/buildings to maintain appropriate supporting documentation for notations made to waiting lists.
  • When awarding available units, prepare and maintain sufficient documentation of the reasons for awarding units to applicants other than the next available applicant on the waiting list.
  • Increase the number and frequency of internal compliance reviews to ensure units are occupied by eligible and HPD-approved applicants. Formally follow up on significant deficiencies to ensure that they are corrected.

Other Related Audit/Report of Interest
Division of Housing and Community Renewal: Vacancies at Selected Mitchell-Lama Housing Developments (2008-S-122)


State Government Accountability Contact Information:
Audit Director: Frank Patone
Phone: (212) 417-5200; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236