For City-Supervised Mitchell-Lama Cooperatives Thinking About Privatization: Think Again

As of August 15, 2016, there are 20 City-Supervised Mitchell-Lama Cooperatives that are eligible to voluntarily dissolve and become either a market-rate cooperative or condominium. This Stroock Special Bulletin provides information regarding a meaningful alternative to privatization that may be helpful to shareholders of these 20 cooperatives. It's the Article II to Article XI Conversion Program – a program that is in line with the mission of the Mitchell-Lama law, and which also provides modest equity appreciation to existing shareholders and much-needed middle income housing for future generations to come.

Overview

The Mitchell-Lama program is widely viewed as one of the most successful contributors to affordable housing in New York City history. The fact remains, however, that the statute explicitly permits voluntary dissolution, which has been interpreted to mean that Mitchell-Lama cooperatives can privatize – to dissolve and reconstitute themselves as