Brooklynites can cash in—or sell out, depending on your point of view

February 23, 2017

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To sell or not to sell. That is the question facing owners of publicly backed co-op units at a Mitchell-Lama building in Clinton Hill, Brooklyn.

The shareholders at St. James Towers are scheduled to vote Thursday on whether to advance a privatization plan for their communally owned affordable housing. If they reject the plan, they will remain under current rules, which limit them to marginal profits on the severely discounted shares they bought years ago. In that case, if they sell, they would pass on their units to other middle-income New Yorkers on a decade-long wait list—who would pay a five-figure sum.

If shareholders embrace privatization, however, they could sell to private owners for market prices. A one-bedroom at the nearby Clinton Hill Co-ops goes for $599,000.

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The building’s affordability deal provides a path for shareholders to buy out the co-op after 20 years. The process includes three votes, and Thursday’s is the second. A yes vote would convey a notice of intent to leave the affordable housing program and authorize the creation of an offering plan, spelling out the financial implications of leaving. A third and final vote no sooner than 2018 could then privatize the building.

Each of the 326 units gets a vote Thursday. A two-thirds majority is needed for privatization to advance.

Courtney Shapiro, who bought her one-bedroom St. James unit 10 years ago for $12,000, plans to vote to keep the door open for selling. She noted that a yes vote would not commit shareholders to doing so.

“I just want to explore my options,” said Shapiro, a former teacher who also worked in criminal defense for Legal Aid. “And I can’t see my options until I see an offering plan.” She said that plan would show how she and her neighbors, many of whom are elderly, would fare under privatization.

Marlene Steele, whose 99-year-old mother lives in the building, has tried to rally opposition to the proposal because “I care about the people.

“Why would you not want to leave somebody the blessing that you were given?” she said.

The tower opened in 1968, according to the Department of Housing Preservation and Development. The agency does not weigh in on the vote, but the loss of 326 affordable home-ownership units would fly in the face of the de Blasio administration’s goals.

“HPD is ready and willing to support the shareholders if they choose to seek our help on preserving affordability,” said Juliet Pierre-Antoine, spokeswoman for the city agency.

During a news conference Wednesday at the Brooklyn development, elected officials entreated shareholders not to cash out. Public Advocate Letitia James, who is a nearby resident and landlord, pleaded with them to put the public good of affordable housing—and its ramifications for the neighborhood’s racial composition—ahead of the personal windfall.

“What about the impact on diversity?” James asked. “And what about the impact on culture? Do any of you care?

“What you’ve got in your hands is the fate of this community.”

The St. James Towers residents are primarily people of color, according to Assemblyman Walter Mosley, a resident of an adjacent tower. But the neighborhood flipped from black to white in a decade, according to census data. In 2000, the 11205 ZIP code was 53.8% black and 22.8% white; by 2010 it was 34.4% black and 45.7% white.

To sell or not to sell. That is the question facing owners of publicly backed co-op units at a Mitchell-Lama building in Clinton Hill, Brooklyn.

The shareholders at St. James Towers are scheduled to vote Thursday on whether to advance a privatization plan for their communally owned affordable housing. If they reject the plan, they will remain under current rules, which limit them to marginal profits Goldenbahis on the severely discounted shares they bought years ago. In that case, if they sell, they would pass on their units to other middle-income New Yorkers on a decade-long wait list—who would pay a five-figure sum.