The residents of Southbridge Towers paid on average less than $18,000 for their apartments near the South Street Seaport. Now they're cashing out.

Southbridge Towers is a Mitchell-Lama complex, part of a program started in 1955 to foster affordable housing. Developers got hefty tax abatements to build on a promise of steady, if incremental profit. Lottery-winning residents adhere to a strict income cap and pay a $620/month maintenance fee on their co-op units, in exchange for living a comfortable, middle-class life in downtown Manhattan.

But who wants an incremental return on their real estate investment in 2014?

Last month, two thirds of the tenants of the 1,651-unit Southbridge Towers voted to exit the Mitchell-Lama program, making it the largest co-op of its kind in the city to convert to the open market.

The Times profiles the fierce debate between the tenants who saw the vote as an opportunity to get a leg up and those who feel it's a betrayal to the idea that housing is more important than profit.

“People of modest means now have an asset worth hundreds of thousands of dollars,” said Wallace Dimson, 68, the president of the Southbridge Towers co-op board. “If you have an opportunity to have ownership of a piece of Manhattan real estate in one of the fastest growing areas, does that outweigh any of these negatives?” Mr. Dimson said. “I think most people will tell you yes.”

"These negatives" are crushing increases in taxes and maintenance fees, which all but force these municipal workers, teachers, and other middle-income tenants to sell. Those who don't want their unit on the open market can get their initial investment back and leave, or stay as renters and lose their equity in exchange for the promise of 5% annual rent increases.

"It’s a sad day for affordable housing in New York,” said John Fratta, 61, the only member of the 15-member Southbridge Towers co-op board to oppose the decision. “It’s really a tragedy.” “I do think that there should be outrage,” said Christine Fowley, the president of the board of Cooperators United for Mitchell-Lama, an organization with members from Mitchell-Lama co-ops throughout the city. “People who’ve been long subsidized are able to walk away with a profit while pulling up the ladder. It’s just so wrong. It’s just not O.K.”



Many of Governor Cuomo's biggest donors hail from the real estate business, but he publicly claims he "has made preserving affordable housing a priority since taking office." De Blasio's affordable housing plan calls for pleading with market-rate Mitchell-Lama tenants to buy back into the program, but not reviving the plan to build new units.

New York City needs more than 550,000 new apartments for people making around $40,000/year. De Blasio's plan will build 16,000, which is twice as many as Bloomberg built.