Masaryk Towers, a six-building affordable housing co-op, has endured years of financial turmoil and dissension. Now the Lower East Side complex faces another legal challenge. Earlier today we received a press release from two advocacy organizations announcing a lawsuit, on behalf of nearly 200 Masaryk residents, accusing the city of illegally approving carrying charge increases.
The lawsuit was filed in Manhattan Supreme Court against the Department of Housing Preservation and Development, which oversees the Mitchell Lama cooperative. It alleges that residents received an 11% increase in carrying charges in March of 2011, followed by an 18% increase 15 months later. The press release asserted that carrying charges cannot be increased within two years of a previous hike.
More from the release:
Not only was the increase illegal… but it was authorized behind closed doors – without notifying residents or allowing them to participate in a public hearing, which is required by law. Instead of following legal procedure, shareholders say HPD and the building’s management company gave the increase the green light through an informal and opaque process, which the Board of Directors then allowed through without protest… “The Mitchell-Lama corporation flagrantly violated the city’s rules that are supposed to protect the shareholders and give them certain due process rights,” said Shafaq Islam of the Urban Justice Center’s Community Development Project. “The low- to middle-income shareholders saw their carrying charges rise by a staggering 31% in the span of a mere 16 months.”
The lawsuit was filed by lawyers from the Urban Justice Center. Good Old Lower East Side has been working with the residents, as well.
We have contacted HPD and the Masaryk board for a response. This story will be updated if/when we hear back from them.
UPDATE 11:09 p.m. We received the following response from HPD:
The agency reached its determination after careful consideration of the relevant facts, and we are confident that the court will agree that the decision complied with all legal requirements.
It is unfortunate that it has come to lawsuits to fight against the rent increases but Masaryk Towers owes alot of money to Con Edison for its use of utilities like electricity and steam and the complex has to pay the money it owes. HPD had to request the 18% rent increase that was approved by the Board of Directors which came right after a fuel surcharge ended that the tenants were paying for over six months and the building complex is too old to become “green” and become more energy efficient. It is a tough situation that is causing alot of problems for its middle income tenants who are having a hard time making ends meet as it is in this terrible economy.