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Audit of Affordable Apartment Waitlist Finds Multiple Abuses

By Ben Fractenberg | August 17, 2017 6:16pm
 Knickerbocker Village in the Lower East Side.
Knickerbocker Village in the Lower East Side.
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Wikimedia Commons/Wusel007

MANHATTAN — Some people were allowed to skip waiting lists to get below-market apartments in Mitchell-Lama developments, an audit released Thursday by New York State Comptroller Thomas DiNapoli found.

One of the most egregious cases included a building management employee at the Lower East Side’s Knickerbocker Village who was given a one-bedroom penthouse in March 2015 even though he wasn't on the waiting list, according to the report. 

“Knickerbocker’s property manager explained that they assigned this apartment to an employee to have additional staff on site in case of an emergency, such as Superstorm Sandy,” the report stated.

At least two applicants for one-bedroom apartments in the Westview apartments on Roosevelt Island who should have been offered units in 2015 were passed over without justification, according to the report.

The comptroller’s office also found that Knickerbocker management did not get proper Division of Housing and Community Renewal approval for eight out of nine succession apartments, where a household member takes over the apartment from the primary lease holder.

The audit examined 74 tenant files in five developments citywide from January 2014 to May 2016, examining new admissions, successions and transfers, where people already occupying units will apply to change apartments within the same development.

Investigators also found that both the Knickerboker and Westview developments were not promptly filling all their vacant units.

The Westview had 51 out of its 361 units empty during an inspection last August. Some of the apartments had been vacant for as long as five years.

“Westview’s owner explained that the development had been in the process of privatizing since 2011, so the 51 units were being kept vacant in the interim,” the report stated. “However, Westview’s owner was unable to explain why eight new tenants were approved and had moved into one-bedroom units in 2014 and 2015.”

Several units in the Knickerbocker were being used as offices by management, according to the report, and a third had been vacant since November 2014 because DHCR officials said it was “noisy and difficult to rent.”

Auditors later found that no applicants had been offered the apartment, according to the report, and DHCR later said the last four tenants had requested to move to other units and it would be converted to an office for the rental agent.

The comptroller’s office recommended several fixes for the mismanagement, including making sure all successions and transfers were approved by DHCR, taking "appropriate action” against tenants awarded apartments without proper approval and ensure all records be kept on an online system and not be kept on any paper waiting lists.

DHCR said in a response letter dated July 17 that the audit found only one instance of a tenant awarded an apartment without proper approval.

“In addition, for the particular unit in question, management decided to award the apartment to a housing company employee for a well-justified reason that DHCR approved,” the letter stated.

“Knickerbocker's senior manager lives off-site. Due to management's well founded concerns regarding the health and welfare of its residents following Superstorm Sandy and the need to oversee major hurricane-related renovations to apartments, management decided that is was in the development's best interest to have the assistant manager reside at the premises.”

The agency also said in a statement it had a "strong record of compliance in overseeing the Mitchell-Lama portfolio of 68,000 apartments" and administered the waiting lists fairly and effectively. 

"Unfortunately, in its shortsighted review, OSC has chosen to focus on some select, unique circumstances including Knickerbocker Village which was severely impacted by Superstorm Sandy," the DHCR added. 

Knickerbocker management said in a statement they have “moved to correct any issues in the tracking system for vacancies found” and will work with DHCR to make sure they are in compliance.

“Knickerbocker Village works hard to provide a quality experience for every one of our more than 4,000 residents, many of whom have lived here for decades,” the statement said.

Westview management did not return an immediate request for comment.