Letter: New housing not an efficient model

Long Island homeowners and real estate investors are Long Island homeowners and real estate investors are putting more houses up for rent as they wait for a hoped-for rise in sale prices, according to brokers and online real estate listings. In addition, developers are finding it easier to get financing to build apartment buildings than co-ops or condos. Photo Credit: iStock

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In the news story "Old school's new life" [July 11], Artspace says it is creating affordable housing from the former PS 109 in East Harlem. But what the organization should say is this is like hitting a casino jackpot for the tenants and developers.

First, New York City gave the building to the developer for $1; I'm sure its appraised value had to be several million dollars. The developer then spent $52.2 million renovating the building into 90 apartments.

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That divides into $577,777 per apartment, and if you used an interest rate of 3.25 percent amortized over 30 years, the occupant of each unit should pay $2,511 a month. But instead the tenants will pay only $494 for a studio and $1,022 for a two-bedroom. Most of the $52.2 million came from government agencies, with some from private contributors. Via low-income tax credits, taxpayers will subsidize the heat, hot water, taxes and common charges forever.

This is just unsustainable. This isn't a project that should be sugarcoated as a great thing to be replicated.

Bob Chapman, Levittown

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