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Also, he said, some owners, like real estate investment trusts and pension funds, need to spend more "to maintain rents at certain levels" to meet their profit projections, especially if they paid a high price for the building during the market's halcyon days.
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Many people are still struggling to pay energy bills, buy food and maintain rent or mortgage payments.
Reducing the supply of showroom space devoted to toys will enable the managers of the Toy Center to maintain rent levels, said Mr. Buslik, who estimated that actual rents in the complex ranged from $30 to $35 a square foot a year.
The Housing Act of 1938 provided subsidies aimed at encouraging slum clearance and maintained rent control.
The properties were some of the last "shortlife" housing cooperatives in existence – the buildings technically owned by the council but lived in and maintained rent-free for over 30 years after a series of housing policy screw ups in the 70s left the council unable to afford the maintenance.
"You can't maintain the rents," she says she tells them.
In return for a series of tax breaks, the owners agreed to maintain affordable rents and limit their profit to 6percentt.
Housing advocates hope that this rejection will tamper the speculative sales of other Mitchell-Lama buildings that have drawn concern over the last few years as the buildings have sunseted out of their legal obligations to maintain affordable rents.
He said as recently as the 1990's the housing market might not have supported this project -- a few years ago, he was lucky to maintain current rents when a tenant moved out, even though his own costs for taxes and insurance and maintenance were increasing.
The Policis report, based on a survey of 2,000 residents in social housing, found that half were not confident that they would be able to maintain their rent payments if they received their rent directly.
And if both parties maintain their rent-stabilized status, he said, they cannot be evicted unless they stop paying rent or violate the terms of their lease.
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