Landlord Can't Convert Mitchell-Lama Complex

Landlord sought a Letter of No Objection from HPD in response to its proposal to convert a Mitchell-Lama housing complex to non-rent-regulated housing. HPD refused to approve landlord's request. Landlord appealed, claiming that HPD's ruling was arbitrary and unreasonable. The court and appeals court ruled against landlord. A provision of landlord's deed said that, for 50 years, no change would be made in the use of the land in the area of the building complex. Landlord argued that this didn't mean the site must be used for affordable housing. Landlord claimed that this meant only that the site would be used entirely for residential use. But the restriction on use of the land also called for neighborhood rehabilitation of the area and called for the creation of moderately priced housing. The courts found that HPD properly ruled that it would be improper to permit high-rent housing when the intent was to create a middle-income housing project.

Tivoli Stock LLC v. HPD: NYLJ, 5/1/08, p. 32, col. 3 (App. Div. 1 Dept.; Lippman, PJ, Friedman, Catterson, Moskowitz, JJ)