Three Mitchell-Lama housing developments overseen by the New York City Department of Housing Preservation and Development operated at a financial loss, even as they gave bonuses and gratuities to staff and neglected critical building repairs, according to an audit released on Friday by New York State Comptroller Thomas P. DiNapoli.
Auditors examined Tivoli Towers in Crown Heights, Clinton Towers in Manhattan, and Evergreen Gardens in the Bronx, and found unsafe living conditions, including crumbling façades, mold, water damage, and broken fire doors, and identified more than $114,000 in bonuses, gratuities and holiday-related payments.
“Even in the face of New York City’s affordability crisis, my audit found troubling conditions and questionable spending at three housing developments that show clear need for better oversight of the Mitchell-Lama program, which is crucial to preserving affordable housing,” DiNapoli said in a statement. “The Department of Housing Preservation and Development must do more to ensure that these properties are managed responsibly and that tenant apartments are safe, well-maintained, and affordable.”
The Mitchell-Lama program provides affordable rental and cooperative housing to middle-income families. HPD oversees 92 Mitchell-Lama developments in the city with 46,787 apartments and is responsible for ensuring that managing agents keep buildings in good physical condition and that funds for the development are spent appropriately.
Deteriorating Conditions
The audit covered the period from January 2019 through April 2025 and reviewed a total of 1,076 apartments across five buildings.
At the Tivoli Towers (1 building, 321 units), the comptroller found:
- Damage to the building façade first identified in 2021. The agency says financing was secured in 2022 and repair work began prior to 2024, but the audit notes as of August 2024, facade work had yet to be completed.
- Inoperable fire doors on multiple floors, leaks and standing water in boiler and elevator rooms.
- Mold and peeling paint observed in occupied units, with reports of repeat flooding.
- Playground, courtyard, and community spaces closed off to tenants for years.
"Mitchell-Lama residents deserve safe, well-maintained and affordable apartments, but State Comptroller DiNapoli's audits revealed significant oversight shortcomings and troubling maintenance issues," said State Senator Zellnor Myrie.
Financial Oversight Issues
There were also financial oversight issues at the Brooklyn complex. Auditors reviewed 138 transactions, totaling $922,115 from July 1, 2019 through June 30, 2024, and found there was $80,061 reported on unsupported or unrelated transactions, including $48,393 in bonuses and $5,400 in gratuities.
Paid vendors without HPD approval or evidence of competitive bidding and had $207,496 in unpaid bills as of September 30, 2024, while operating at a net loss of $930,112 (2022), the audit found.
Vacant Units
The audit also found that there were 16 vacant units at Tivoli Towers as of July 24, 2024, with 10 vacant for more than 120 days, including six that were left empty for over a year.
Residents have long reported egregious living conditions, said City Council Member Crystal Hudson.
"I hope this audit brings swift action by HPD that will ensure safe, livable conditions for all New Yorkers and protect the integrity of the Mitchell-Lama program," she said.
Recommendations
DiNapoli’s audit included several recommendations for HPD to improve its monitoring of the three developments and ensure they are operating in a fiscally sound manner. These include HPD:
- Strengthen oversight to ensure managing agents maintain the developments in a manner that preserves the properties and protects the health and safety of their residents by ensuring annual inspections are conducted, reports are completed and deficiencies are corrected.
- Ensure that immediate corrective action is taken when hazardous conditions are found.
- Develop and implement policies and procedures for bonus and gratuity payments.
- Adequately review transactions for appropriateness of expenses and sufficiency of supporting documentation during annual reviews.
- Ensure contracts exceeding $100,000 are competitively bid and approved by HPD.
- Improve monitoring of vacant units and rent arrears, and ensure vacant units are promptly filled.
