State Comptroller’s Audit Reveals Financial Ethics Questions in Affordable Housing Building

In a report released by the state Comptroller’s Office, affordable housing property, Sunnyside Manor in Yonkers has been exposed for potential fiscal mismanagement.

State Senator Mitchell and Assemblyman Lama created the Mitchell-Lama program in 1955. It aimed to create affordable housing for middle-income residents in New York. Developers receive tax abatements, low-interest mortgages, and a guaranteed annual return across 269 developments and 105,000 apartments throughout the state. The New York State Housing and Community Renewal (HCR) agency oversees this program.

The December 8 audit conducted by the Office of the Comptroller sampled five Mitchell-Lama developments outside New York City. Through the investigation it uncovered a mismanagement of over $300,000 in funds across these properties.

Sunnyside Manor in Yonkers, a 121-unit co-op building managed by Metro Management, suffered criticism over potential unethical transactions. Specifically for its failure to disclose conflicts of interest and lacking a mechanism to ensure fair evaluation of bids. One egregious example highlighted was a payment of $14,159 to a construction company owned by the management superintendent.

State Comptroller Thomas DiNapoli expressed deep concern over the findings– urging the HCR to strengthen its oversight. And in the case of Sunnyside, the report recommends “Enforcing compliance with Regulations related to conflict-of-interest transactions and to the responsibilities of the Board, and systematically reviewing Board meeting minutes to identify non-compliance with Regulations and acting when necessary.”

DiNapoli emphasized the importance of preserving Mitchell-Lama developments as vital resources for working families in the state; especially amidst New York’s affordable housing crisis. And the office warned that developments engaging in improper transactions would inevitably pass the financial burden onto tenants.

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