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Village Mitchell-Lama Owners Illegally Listed Units On Airbnb: Audit

 An audit by the state comptroller's office found that residents at Washington Square Southeast, one of the three I.M. Pei-designed buildings on NYU's campus, illegally listed their apartments on Airbnb.
An audit by the state comptroller's office found that residents at Washington Square Southeast, one of the three I.M. Pei-designed buildings on NYU's campus, illegally listed their apartments on Airbnb.
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DNAinfo/Dan Rivoli

GREENWICH VILLAGE — An audit by State Comptroller Tom DiNapoli found co-op owners at a Mitchell-Lama building off Washington Square Park were illegally renting out their apartments on Airbnb.

Mitchell-Lama buildings were designated as affordable housing in 1955 under Mayor Robert Wagner' to provide rental and co-op units to middle-income New Yorkers. They are supervised by the city's Department of Housing and Preservation, which must approve all applicants to the 45,000-unit system spread across 97 buildings citywide.

DiNapoli's audit looked at two other buildings as well, and found building managers at all three were skipping over applicants on the long lists for each building, and often not getting HPD approval.

“New York is facing a dire shortage of affordable housing and it is imperative that the affordable apartments we have are managed fairly,” DiNapoli said in a statement when he released the audit on Wednesday. “No one should wait years for an apartment only to be passed over without explanation."

Mitchell-Lama tenants and owners are explicitly forbidden from making money off of guests or subletters, but the comptroller's auditors found one co-op owner at Washington Square Southeast was listing his apartment on Airbnb for $150 per night with a three-night minimum stay. Another owner had his apartment listed for $109 per night.

DiNapoli said the first owner has seven reviews on Airbnb, and the second had 50. He said when he informed HPD, the agency promised they would "follow up" with the building's managers.

Airbnb did not immediately respond to request for comment. The short-term rental company has been under siege for more than a year by state and city legislators who allege that it is enabling New Yorkers to operate illegal hotels and is hurting the city's affordable housing stock.

A January 2015 report by Attorney General Eric Schneiderman, using information he subpoenaed from the company, said 70 percent of Airbnb rentals in the city are illegal. Airbnb has argued that its services help New Yorkers meet the exorbitant costs of the city's skyrocketing real estate market.

Washington Square Southeast has 174 units at 505 Laguardia Place, and is one of three I.M Pei-designed buildings on a "superblock" owned by New York University. The other two buildings are used by NYU for faculty housing. The co-op owners at Washington Square Southeast pay NYU a yearly fee.

DiNapoli also looked into Cadman Towers, a 421-unit co-op building in Brooklyn Heights, and Trinity House, a 199-unit rental building on the Upper West Side and found many of the same issues, as well as additional ones. The full audit is available online, and the city has more information on Mitchell-Lama housing here.

DiNapoli's office said HPD "generally agreed with" the recommendations in his audit, including establishing automated, electronic housing lotteries and waitlists and conducting more compliance reviews to make sure apartments are occupied by eligible and HPD-approved applicants.

He also suggested the agency require building managers to keep supporting documentation for any changes they make to waiting lists, including the reasons for awarding units to applicants other than the next available one on the list.

HPD said that since Mayor Bill de Blasio took office, the agency had already decided to make the application system electronic, though that hasn't happened yet, and to increase the number of staff in their Division of Housing Supervision, which oversees the Mitchell-Lama system.

An agency spokeswoman made a point of noting that the time period the audit covered — Jan. 1, 2012 through Nov. 30, 2014 — "chiefly predates the work of the de Blasio administration."

"We take all issues of compliance and enforcement regarding the city's affordable housing stock extremely seriously," spokeswoman Elizabeth Rohlfing said.

New Mitchell-Lama developments are no longer being built, but Rohlfing said the agency works to keep existing units in the program and bring properties that have opted out back into affordable housing programs.