Mayor Michael R. Bloomberg, Senator Charles E. Schumer, Governor David A. Paterson, and Department of Housing and Urban Development (HUD) Deputy Secretary Roy A. Bernardi today announced that the bidding process to sell Starrett City will move forward with a signed agreement in place to preserve affordable housing and keep rents down. A Memorandum of Understanding, signed by the current owners of Starrett, the New York City and State housing commissioners and HUD, lays out guidelines governing the sale of the massive properties and strict restrictions on any rent increases. Starrett City is the largest federal subsidized housing complex in the country, comprised of 5,881 affordable housing units.

“With all the dysfunction that has grown in Washington over the years, it’s important to give credit where credit is due. In the case of saving Starrett City, there’s enough credit to go around,” said Mayor Bloomberg. “Preserving existing affordable housing is a key component of our 165,000-unit New Housing Marketplace Plan  – the largest municipal affordable housing plan in the nation’s history. Working together, HUD, Governor Paterson, Senator Chuck Schumer, Housing Preservation and Development Commissioner Shaun Donovan, ACORN, and countless other City, State, and Federal stakeholders have crafted a solution that’s going to work well for tenants, owners, and the City of New York.”

With Starrett City Associates (SCA) set to put the property out to bid this week, the Memorandum of Understanding as well as a letter from SCA to Senator Schumer lay out a specific framework to ensure, no matter whom the final owner is, Starrett City will remain affordable. The text of the MOU will be included in any bid package made available to prospective purchasers of Starrett City so that these organizations, their advisors, and their potential financing sources will know exactly what the affordable housing requirements are from the outset.

Current tenants would be grandfathered into their apartments, eliminating the need for disruptive and costly moves for tenants. Starrett City would remain in the Mitchell Lama program as affordable housing for at least the next twenty years. The MOU allows an owner to commit to participating in Mitchell-Lama for a longer period time but no shorter than twenty years.

The MOU is signed by Disque D. Deane, Managing General Partner of Starrett City Associates (SCA), Harvey Rudman, President of Starrett City Inc, and representatives of the federal Department of Housing and Urban Development, the New York State Housing and Finance Agency, Division of Housing and Community Renewal, and the New York City Department of Housing Preservation and Development. Bidders will have 30 days to complete an offer for the property. SCA will select a group of financially viable finalists that will then be vetted through the local, state and federal government to ensure their commitment to preserving the property as affordable.

As part of the agreement, Schumer has authored and is pushing legislation that converts the existing Section 8 and Rental Assistance Program (RAP) contracts at Starrett to 20-year project-based Section 8 contracts. This change will cover 60 percent of the units at Starrett City and ensure that these units can remain affordable for 20 years, the standard length of a Section 8 contract.