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Homes & Community Renewal, Division Of Housing & Community Renewal Enforcement Of The Mitchell-Lama Surcharge Provisions

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Thomas DiNapoli, NY State Comptroller

The Office of the State Comptroller posted the following audit today.

The focus of the audit was to determine if surcharges are being properly assessed at Mitchell-Llama housing developments supervised by Homes and Community Renewal's Division of Housing and Community Renewal (DHCR).

The Office chose Co-op City, a 15,372-unit co-op in Bronx; Rochdale Village (Rochdale), a 5,860-unit co-op in Queens; and Electchester Houses (Electchester), a 2,399-unit co-op in Queens consisting of five housing developments (Electchester First through Fifth) as our focus.

Key Findings

1.  While some exceptions were noted, surcharges were generally properly calculated and assessed for the tested transactions at the sampled developments. However, there were significant deficiencies in the practices used to confirm the accuracy of tenants’ self-reported income at two (Co-op City and Rochdale Village) of the three developments we reviewed.

2.  Income verification audits were required for 110 of the selected tenants in our review. However, we found that just 33 (30 percent) of the required audits had been done: 31 at Electchester, two at Co-op City, and none at Rochdale Village. As a result, there is limited assurance that tenants are paying surcharges based on their actual income.

  • Developments are not charging tenants the maximum allowable surcharges when tenants do not provide a certified tax return to substantiate self-reported income.
  • The data file used to identify tenants subject to an income verification audit was incorrect for 17 percent of the transactions we sampled. As a result, certain tenants may be incorrectly excluded from audit and possibly from additional surcharges.
  • DHCR is several years behind in generating the match between tenants’ self-reported information and their tax records. At the time of our review in 2017, DHCR’s most recent match was for 2012.
  • The Private Financing Housing Law states that tenants whose income exceeds the maximum income limit by 25 percent or more require DHCR’s approval to remain in their units. We identified 29 units at our sampled developments that exceeded the limit. However, we found no evidence that DHCR had approved the residency of these tenants.

The full text of the audit could be found here.

 

Kenrick Sifontes
Audit Director

Office of the State Comptroller
Division of State Government Accountability
110 State Street, 11th Floor
Albany, NY 12236

Tel.:     212-417-5200
E-mailStateGovernmentAccountability@osc.state.ny.us

 

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Thomas DiNapoli, NY State Comptroller