City Limits Magazine, October 1981 Issue

8/3/2019 City Limits Magazine, October 1981 Issue

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OCTOBER 198$1.5

THE NEWS MAGAZINE OF NEW YORK CITY HOUSING AND NEIGHBORHOODS

PUBLIC HOUSING


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Short Term Notes

TenantsFile SuitAgainst

In RemManagerSometimes it is all that tenants ofowner-abandoned, tax-foreclosed buildings can do to figure out just who is collecting the rent. But when the rent goesup, tenants usually make it their businessto see if that's legal. In the case of ninecity-owned buildings in northernManhattan involved in a two-year-old

program to let private firms managesome city residential buildings, tenantshave gone to court to challenge a newround of rent increases.In a lengthy Ii-point complaint,tenants representing 179 of the 294apartments in nine buildings in theWashington Heights-Inwood section ofManhattan, have charged that a renthike instituted with the approval of thecity housing department in July by themanager, Lemle and Wolfe, a real estate

firm, is illegal because the apartmentsshould be under the rent regulatorysystem. Although city-owned property isexempt from rent regulations, the complaint challenged the buildings' actualstatus.The new rents, which some tenantsbegan paying in August, resulted in increases that ranged from nominal forsome residents to about 300 percent forone Post Avenue household. On AugustCITY LIMITS/October 1981

31, New York County Supreme CourtJustice Charles Tierney issued a temporary restraining order that returnedrents to their earlier level pending a fullhearing, now scheduled for early Oc-tober.The tenants also charged that the city'smove to place them under privatemanagement violated their right to equalprotection under the law in that tenantswere not offered the option of a differentform of management. The buildingswere seized by the city for tax arrears in1978 and have been managed sinceNovember, 1979 by the firm of Lemleand Wolfe under terms of the city'sPrivate Ownership Management Program (POMP). Launched two years ago,POMP's aim is to get some of the city'sbetter tax foreclosed stock back on thetax rolls. Under its guidelines, privatemanagement have contracted to operateproperties and, using federal Community Development funds, repair systemsand apartments. Upon successful completion of the contracts, the privatemanagers are offered first right ofrefusal to purchase the buildings. As ofearly summer, approximately $300,000in federal funds had been spent on thenorthern Manhattan buildings forrepairs.

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"We weren't asked if we wantedinto a private management progrrecalled Joe Mucciolo of 685 AcadStreet who heads a committeerepresentatives from the nine buildtenant associations. "We were neveformed that the Tenant Interim Lprogram was available," said MucAnother of the city's alternative agement buildings, the interim leasegram offers tenants an eleven mlease and varying amounts for repTenants pledge to purchase the buildat the end of the lease or followirenewal.

Regina Bilotta, director of POchallenged Muccioli's assessment.the time there was no organized tegroup," she said, adding, "We fehad to do something to save the bings." She denied the rent restructplan caused undue hardship for dents, noting that Section 8 federalsubsidies were available for elitenants. She also said a "rent phashad been offered for those who neit, as well as relocation assistance.Residents have responded thattwo-month phase-in is "totunrealistic" and that the prospecrelocating tenants, some of whom lived in the building for 30 to 40 yeafers little comfort.Arthur Steinman of Lemle and Wexpressed surprise at the legal actionstressed that his firm is not the buildowner. Steinman acknowledged thand when the buildings are purchaseLemle and Wolfe, further renovwill take place and, he said, at that rents are likely to be raised once mSo far, Steinman said of his compaPOMP involvement, "I don't seeLemle and Wolfe has received anythThe [federal assistance] money weceived was put into the buildings.didn't get five cents."Jack Dunn, director of the InwPreservation Corporation, which helped tenants organize against the increases called the private managemprogram "a giveaway."DT.L.


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Rents ,Set Loosein Jersey City

The City Council of Jersey City, NewYork's 225,000 resident neighbor and themagnet for a growing overflow of investment from New York's volatile real estate market, voted September 1 to loosenthe reigns on rent regulated apartmentowners. The move, which took effectimmediately, allows permanent rentdecontrol of apartments in five to sevenunit buildings as soon as they becomevacant. In addition, the new measure decontrols rents in new, private construc- 'tion and rehabilitated buildings that increase in assessed value by 100 percent ormore. In larger multiple dwellings, underthe measure, an apartment's rents are allowed to reach market levels uponvacancy, then are regulated for thelength of the resident's tenancy. Thechanges affect about 60,000 tenants.The new system was spearheaded ,byMayor Gerald McCann, a Democratelected last November who citedincreasing building abandonment and adeclining tax base to justify the change.

CONTENTS

McCann told the New York Times onthe day of the Council vote: "I want tax-payers to come to our city. I want buying Tenant Unity Dayproperty in Jersey City to be a good in-vestment. tNorbert Herold, President of the Jer-sey City Tenant's Committtee, a renters' Tenant organizations from aroundadvocacy and organizing group, charac- the city will gather on October 24,

terized the decontrol measure as a har- from 1 to 4 PM, in Manhattan'sbinger of massive tenant displacement. Madison Square Park for an afternoo"Gentrification is happening downtown of tenant unity. The Tenant Speak-now," he commented, "and it' s defi- Out, which is being coordinated by thnitely one of the things behind this-be- Metropolitan Council on Housing, issides landlords just wanting to make -designed to express support formore money." According to Herold, al- ' strengtheJled tenant protections andthough McCann vocally supported va- rent control legislation, particularly thecancy decontrol during his previous comprehensive Flynn-Dearie tenanttenure in the City Council, he down- protection bill. Invited speakers includ

al that bill's sponsors, Assemblyman Johplayed the issue during last fall's mayor .campaign. Dearie (D-Bronx) and State Senator. John Flynn (R-Yonkers), as well asA hastily organized city-wide group mayoral candidate Frank Barbaro andcalled the Coalition to Save Rent tenant leader.s. Last year 's Tenant UniControl, condemned the'new system and ty Day attracted nearly 2,000 par-began a petition drive to bring the rent ticipants. For details on this year'scontrol question before the city's voters. _ event, and to register organizational enU n d e ~ the Jersey City charter, 15 percent dorsernents, contact the Metropolitanof all registered voters' signatures a r ~ Council on Housing at (212) 598-4900.needed to compel a referendum on sucha question. A spokesperson , for theCoalition said- the petition validatingprocess should be finished by lateOctober.DT.L. /

Cover PhotoNYC HOUSING AUTHORITY

SHORT TERM NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . 2 (CITY IlMI1S)WAR OF THE QUEENS 'GARDEN APARTMENTS . . . . . . . . . . . . . . . . . . . . . . .4SHARING CON ED'SPOWER . . . . . . . . . . . . .. . . . . . . . . . . . .. . . . . . . . . . . . 8CO-OP BANK ON ITS'OWN . . . . . . . . . . . . ' ,' . . . . . . . 10Public HousingHousing Authority's Domain . . . . . . . . . . . . . . . . . .' . . . . 11Life in the P ~ o j e c t s :'. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Public Housing: Making the Choice . . . . . . . . . . . . . . . . 17LOFfS FOR WHOSE LIVING? . . . . . . . . . . . . . . . . . . 20

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The Warof theQueensGardenApartments

Amid charges of harassmentand intimidation and a rapidlyapproaching financialcrisis, thousands of Queens garden. apartment dwellers are trying

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to cope with theirlandlords' co-op plans.

IBy SUSAN BALDWIN

I'M arie Allison, crippled, frail, and almost totally blind,. hobbled down the ill-lighted staircase of her secondfloor home and balanced herself with her cane on what was leftof the front door stoop. Eighty-years-old and a two-time strokevictim, Allison is a 2O-year resident of a Queens garden apart- .ment complex where the developer is pushing hard to convertsome .400 rental apartments into expensive one and two-familyhomes. Outside her door uprooted sidewalks, open ditches,missing stoops, and exposed gas mains make the neighborhoodresemble a war zone. '

Her neighbor, Gail Benzman, a vice president of the tenantsassociation and a vigorous opponent of the conversion, said,"I s this any way to treat the seniors here? She had her strokesCITY LIMITS/October 1981 4

beCause she has to live in so much fear. I f [the developer] keepsharassing her this way, she's certainly going to die."

Known as Central Gardens Apartments, this thirty-threeyear-old complex has been a battlegrolind for more than twoyears between tenants, developers and .managers. The campaign may represent the worst of the brushfIre wars beingfought across the borol!-gh in garden a p a r t m e ~ t complexeswhere owners are chasing the quick profIts they can realize byc o n ~ e r t i n g the rental units into one and two-family homes orcooperatives and condominiums.

The city counts 99 of these garden complexes, housing some24,000 families and about 100,000 people. While the CentraGardens apartment battle may be an extreme example of the


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clash between owners and tenants, the city is looking anxiouslyat what could turn into one of the largest displacement phenomenons since the heyday of urban renewal.A city task force formed in August 1980, to deal with theonslaught of conversions produced a ~ t u d y that underscoredwhat was already known: that no easy solutions existed forcurbing the conversions. I t also pointed ou t that there are both"good" conversions and "bad" ones.The report suggested that existing low interest federal loanprograms could be useful, as well as Section 8 rent subsidies.But it questioned the long term financial feasibility of the lowincome co-op route at least one tenant group is pursuing. Itsstrongest r'ecommendation was state legislation to extend codeenforcement activities to the apartments to reduce tenantharassment.

Hastily BuiltBut since issuing the report the task force, composedprimarily of officials from the office of the Queens BoroughPresident and the _city housing department, has not met forseveral months. and, according to a spokesperson at the

Department of Housing Preservation and Development, thegarden apartment issue has been "placed on a back burner"for the time being.Built after World War II to house veterans and theirfamilies, the garden apartment complexes were constructedhastily and on a huge scale to help meet that era's serious housing shortage. Some of them were built under Section 608 of theNational Housing Act which allowed for the relaxation ofbuilding code standards so that more units could be builtquickly and cheaply. Now, over thirty years later, the buildingsneed major structural and systems repair. and critics of theconversions contend that the developer/converters are, at best,doing cheap, quick, cosmetic rehabilitative work.Nor do the tenants have the same protection others facingconversion have. Orlando Artze, an aide to Congressman Ben

jamin Rosenthal, Democrat-Liberal of Queens, said the gardenapartments had somehow "slipped through the cracks" whenlegislation was being developed at the state level to protecttenants in cooperative and condominium conversions. Rosenthal is currently calling for a two-year moratorium on allcooperative and condominium conversions across the country.In the state legislature, Assemblyman Ralph Goldstein,Democrat-Liberal of Queens, has been introducing legislationsince 1978 to include the garden apartments in the same regulations covering the cooperative conversion of regular apartments. It has passed the Assembly but has been blocked eachyear in the State Senate by a strong real estate lobby. He hasalso supported a moratorium bill, which has died in the Housing Committee of the Assembly.

Villas, Queens Style

smokescreen behind which Gilman has persuaded the city'sConciliation and Appeals Board, the arbiter for rent stabilizedapartments, to remove the entire complex eventually from thestabilization system because of the upgrading and conversionThe C.A.B. attached stipulations to protect stabilized tenants,but even that guaranty hasn't helped in the face of what thetenants say has been non-stop harassment.Gilman, they also maintain, didn't even wait for the C.A.Bapproval, but started months earlier turning off boilers, breaking through walls and windows, tearing up sidewalks and cutting gas and telephone lines.

Tenants responded by filing suit against Gilman and, accoring to DCU'id Ng, their attorney, the suit is a test case that wilhave a major effect on the future of the garden apartments.During a recent visit to Central Gardens Gilman was reluctant to be interviewed, but volunteered that he plans to chargefrom $100,000 to $150,000 for l:ris one and two-family homesand that he is not sympathetic to the tenants or their needs.They will have to go, he insisted, because they will never beable to afford his housing.

Most of the regulation imposed on Gilman by the C.A.B.has apparently been sidestepped. Tenants and their attorneycharge that nominal monetary relocation benefits, the provision of a block of 40 units for the remaining senior citizensand, notably, granting tenants in occupancy at the time of conversion two to three-year leases irl "habitable rental units comparable to units they presently occupy" have all been ignored.

"I n addition to all the harassment and costly time in courtfighting him, Gilman has not lived up to any of his C.A.B.stipulations," said Iris Cord;Jy, president of the tenantsassociation. "There is no end to what I can tell you, but, Iworry, come November, that there will be only ten familieshere because I can assure you there will be no heat-the sameas iast year." At present, about 140 of the original 402 tenantfamilies are left on the site, while some 262 apartments standvacant. And, to date, no new families have moved in, althoughsome are expected within the next few weeks. Corday's experience has spurred her to help form the Queens Garden Apartments Tenant Coalition which is trying to organize tenants inthis housing throughout the borough.

Oaks and HeatherIn two much larger complexes-Glen Oaks Village, withsome 2,900 units on the Nassau County border and HeatherGardens with 1,400 units in the Bayside section-tenants havealso been combatting cooperative conversion. Battles betweentenants and developer/owners smolder but have not reachedthe raging inferno proportions of Central Gardens.While readers of the real estate sections of New York's Sunday papers are being offered "a great opportunity . . . a chance

to live in your own cooperative garden home," the rent strikewhich began in December, 1980 in Gerald Guterman's GlenOaks continues. The 350 tenants on rent strike and theirDespite grandiosely redubbing Central Garden Apartments lawyer, Richard Creditor, spend most of their time in housing

the "Villas of Forest Hills" to attract homebuyers, tenants court.charge that developer Sol Gilman has performed only a minor "They've called out inspectors to play down our problems,"face lift in the name of substantial demolition and major insisted Bernice Siegal, head of the tenants union and C


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"We've even tried to settle with Gutennan, but he's refused.. . . Now we're in court where the judge is calling us individually, case-by-case. This is not the way to handle us." She alsosaid that tenants believe Guterman's political connections havebeen hampering their case. Gutennan's lawyer is Irwin RobertBrownstein, a former state supreme court judge and formerstate senator. Gutennan himself is active in Democratic Partypolitics and has been a prominent supporter of Controller Harrison J. Goldin.While Gutennan refused to discuss his plans for Glen Oaksand other conversion projects he is undertaking, his sales officeadmitted thatit has sold "slightly over" 1,000 units at GlenOaks and that prices r:ange from $23,664 for a standard onebedroom apartment to $65,000 for an eight-room duplex.The fear at Glen Oaks is that Gutennan may put the converted cooperatives back on the rental market if, he canot sellthem, 'and that new tenants will not be covered by rentstabilization since the apartments were removed from the rentregulatory system when they were converted.According to Siegal, tenants are holding $500,000 from therent strike. "We understand that he has had to spend betterthan $200,000 in legal fees to fight us," she asserted. "This is a

costly battle."Guterman is no longer the owner of the 1 400-unit HeatherGardens, and the tenants that remain there continue to receiveservices and pay rent. But, according to a city report, declinethere began with Guterman's October, 1977, purchase. Theproject is now in a complicated receivership shared between

East New York and Jamaica Savings Banks.Heather Gardens represents the sort of anomaly many of thcomplexes pose: its deteriorated, tin-sealed buildings are acrothe street from homes selling for upwards of $100,000. Wohas begun, said resident Sharon Kosofsky, on the 400 vacaunits Gutennan cleared of tenants years ago with the planselling them as one and two-family homes. Funds for his project ran out, but he still owns rights to part of the properwhose fate is to be determined in court sometime in early Otober.

Different ConversionsAlthough conversions in the garden apartment complexehave been frequently seen as a vehicle for tenant displacemen

an innovative plan at the 30-year-old 746-unit Park DrivApartments in Kew Gardens is attempting to avoid just thproblem. The plan would keep all families in their homes as tnant cooperators, a choice tenants didn't make until they weconvinced it was their only option if they wanted to remain"We struggled to keep the complex as rental housing, butstarted to become obvious that this couldn't last," said th

ebullient 23-year-old Robyn Fisher, one of the tenaorganizers with the Kew Gardens Tenants League who waborn and raised in the complex. "We've been on rent strike oand off," she said, "but we needed a more permanent solution."Tenant leaders in this tightly-organized community starte

Mrs. Marie Allison on her stoop at the "Villas ofForest Hills," formerly Central Garden Apartments.CITY LIMITS/October 1981 6


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In his conversion moratorium legislation, Congressman Rosenthal has included,a stipulation favoring the sale and conversion of rental property such asPark Drive to bona fide tenant organizations. In hisargument for. self-help co-oping, the Congressman-stresses the importance of removing the "middleman" or the developer/converter and therefore, thehuge profit made at, the expense of the tenants.Currently, the Hon's share of the pot of gold inconversions comes ffom landlords selling todevelopers/converters, not tenants, and paying only16 percent in capital gains taxes on the assessed valueof the property at the time of the transaction. Thereis no incentive for landlords to seD to tenant groupsnow, because under the present statute the capitalgains tax on s u c ~ a sale is 50 percent, not 16 percentof the assessed value. Rosenthal is pushing for achange in the law that would permit the same tax advantage in sale to tenantS as is presently allowed insales to middle men.

to talk about tenant-controlled or self-help cooperatives after adeveloper expressed interest in buying the complex and subdividing it into thirds with one and two-family homes,cooperatives and rental housing.Although their plan is still in the talking stages, tenantsbelieve they could purchase their apartments for approximately$1,000 per room. The tenant population, which has a largenumber of elderly residents, is about evenly made up of whites,blacks and Hispanics.,Gerald Guterman also owned Park Drive at one time, flipping it back and forth between himself and developer GeorgeMehlman. Mehlman wound up in jail, convicted of anembezzlement,scheme involving investors in the complex, andthe project's mortgage was foreclosed upon. The court appointed a receiver at that point in arch of 1980 who was JohnA. Zaccaro, a Manhattan real estate agent and husband ofQueens Democratic Congresswoman Geraldine Ferraro.Tenants have faulted conditions under b,is management, butthey have been most adamant against his plans to quickly havethe project sold to satisfy banks and creditors.The tenants narrowly avoided a bankruptcy sale onSeptember 16 when they agreed to turn over $85,000 in rentstrike money to Zaccaro and have their attorney, MartinBerger, help work out a plan to payoff the claims against theproject.Meanwhile, aided by Clara Fox and Carol Lamberg of theSettlement Housing Fund, as well as representatives of theBorough President's office and Orlando Artze, tenants metwith Housing Comissioner Anthony Gliedman to discuss thepossibility of getting a federal Community developmentfunded loW interest Participation Loan to rehab the complex'smajor systems.Lamberg said the group had approached Citibank to providethe permanent fmancing and that what the tenants need at thispoint is time to put together a workable fmancial package. The

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Fund believes a moderate rehab can ' be carried out in 2months. .Should their ideas pan out, Park Drive tenants mademonstrate that the future of this endangered species-thgarden apartment tenant-is not all doom and gloom. Bumost tenants are faced with far Jess pleasant conversions andobservers are hopeful that some legislation with teeth in it wilsoon be adopted."I have nothing against a landlord rehabbing his property

but it should not be done on the backs of the people,'Assemblyman Goldstein ~ i s t s . "We have lost thousands ounits of rental housing to conversions and what's left on themarket is fast becoming only luxury housing. We have a crisishere in Queens, but nobody does anything to protect thetenants on the city level. . . The Borough President doesn't do~ y t h i n g ; Mayor Koch won't even talk to us. Ultimately, ~ h a tWIll happen to all those displaced people? Who knows, maybewe'll be contributing to the shopping bag ladies." 0

- Robyn Fisher, a tenant organizer at Park Drive apartmen

CITY LIMITS/October 1 ~ 1


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Sharing Con Ed's PowerBy RICHARD SCHRADER

T he desire of every consumer of_electricity in New York City is .to .unplug Con Ed. The utility's history stanqs as anunending memory of misfortune; systematic pollution, debilitating' blackouts, and an addiction to rate increases. Mostrecently, a senes of fires in the bellyof their nuclear dinosaur atIndian Point have eroded the reputation of the institution mostNew Yorkers love to hate.Several large New York apartment complexes have partedcompany with the utility in recent years, adopting "cogen,eration" systems that produce both electric power and heat forresidents at relatively cheap rates. Con Edison has failed tosupport these ~ f f o r t s - j u s t as it has stood in the way ofrenewable resources of all kinds-with a stubborn defiance.This on the singular principle that the law has decreed electricity to be a commodity sold within a monopolized market. Butthe cogeneration trend continues, and regulatory changes may .soon challenge the wisdom of Con Edison.Richard Stone, the housing manager of Big Six Towers, a1,000 unit apartment complex in Woodside, Queens, can pointto the progression of numbers that suggests that some dreamscan be captured. Stone's complex has built a $2 million powerplant that includes six generators (four diesel, two gas) and can ,produce four megawatts of electricity. The accounting projections appear quite favorable; the first year of operation accrued a total cost of $391,000 including payment of interestand amortization of debt. Last year, Con Ed charged $582,515for the exact consumption. Each family living in Big SixTowers will save $300.

original blinking light bulb, finds further resistance within texecutive committees of the utility industry. State utility comissions, while empowered to adjust rates based on a showiof proper cost, cannot brandish their swords at utilitiesmake them replace incompetent management. The managof the Three Mile Island Plant, which did more to discrenuclear power than an army of anti-nuclear dissidents, shave their jobs.The alchemy at work in Big Six Towers is "bottom-cycle generation." This process captures the waste heat, produceither by an industrial process.or an electric plant for useheating or cooling a building. Another apartment complexQueens, Rochedale Village, has installed its 0'Yfi generatowhich are f)fed by natural gas which it purchases frBrooklyn Union Gas Company. Three-quarters of the enein the fuel burned is delivered as heat into the outdoors. BuRochedale, the heat is not lost but reclaimed, then pipsmoothly through. the buildings' arteries to heat water. Telectricity internally generated by Rochedale's system, co4.54: per kilowatthour. Last year, Big Six Towers paid 9.24:kilowatthour for Con Edison power. In 1979, Rochedale Visaved 560,000 gallons of scarce fuel.

Starrett City, a self-contained Brooklyn residential comunity comprising 46 high-rise buildings, associated schoand shopping centers, has opted for cogenenJ,tion as wbuilding t h r ~ 6,000 kilovyatt generators. Starrett City's sysnot only supplies electrical heating, cooling and domestic water needs for the 22,000 residents, but exchanges eneresources with the 26th WardWater Pollution Control Planmunicipally owned treatment plant iocated less than a thsand feet from the housing p r o j ~ c i . '

For Stone's managing tasks, several broad principles survivethe rigors'of the balance sheet. He concludes that savings flowfrom thiee streams, "the fact that we waste little energy, having an energy efficiency ratio of 75 percent compared to ConEd's 25 percent; that the fIXed costs are not as great since ConEd carries a great deal of unnecessary plant and equipment andwe use the steam which ordinarily goes up Con Ed's stacks. osupply hot waters and to supplement the boilers for roo'mheating."

') Methane gas, unused by the treatment plant, is piped togenerator to be used as a supplerhental'boiler fuel to reducedependence on fossil fuels so wearisome to engineers in chaof all manner of power projects. Up to 160,000 cubic feetmethane is cons,umed per day.

Yet Starrett City's project manager Barbara Tillman quicConEd is indeed burdened by excess baggage. The utility

possesses some 48 percent excess generating capacity; virtually fhalf of their distibutioI) system remains idle during a typicalday's consumption. Delivering electricity is simply a secondaryfunction for the company. As regulated by the Public S ~ r v i c e Commission, the utility is guaranteed a 12-15 percent rate ofreturn on capital invested in plant and equipment. The company can take advantage of a dazzling array of tax benefits thatmay be deferr as long as the utility continues to invest in construction projects. Con Ed currently tucks a 3 billion distribution system comfortably away inside its already swollen $5.7billion rate base. The incentive to retire dilapidated equipment,bits and pieces of which harken back to the era of Edison's

discovered the snake in the garden. Built in to the design, wa series of redundancies protecting the plant from a powblackout. Starrett City's peak needs are 1 ,000 kilowatts;system can produce 18,000 kilowatts. Most generators operwith a 50-55 percent excess capacity. " I t is' simply cheapeoverinvest in plant at the outset," explained Ms. Tillm"since Con Ed's back-up rates are utterly prohibitive. Tutility wants $300,000 just to hook us into the gnd." The oneed a generator would have for the utility would be in I. emergency. Last year, Starrett City suffered not one minutedown-time; the lights never blinked.

CITY LIMITS/October 1981 8


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Co-op Bank Is Qn Its Own

Just three years after it was launchedby Congress, and only 18 monthssince it officially opened its doors, theNational Consumer Cooperative Bank isbeing unceremonioUBly ousted from itsfederal nest and ushered into the hostileworld of the private capital markets. Thequestion now is, can a non-governmentbank with a special mission remain sensitive and useful to the groups and thecause for which it was established?The answer to that question will beprovided only after a series of fairly hectic procedural moves are made to carry

out the ownership transfer ordered byCongressional amendments passed inAugust. Another part of the picture willalso emerge if Congress, as the bankhopes, sticks to its current plan to makeone last injection of funds-currentlyslated at $53 million-for the comingyear.The bank was initiated in 1978 by theNational Consumer Cooperative BankAct to provide the same fmancing forcooperatives that the government hasprovided for farmers. The bank's majortool has been its Title I loans made atmarket rate.Technically, what is transpiring at thebank is the conversion of governmentheld stock into bank debt. The bankmust begin repayments on that debt in1990, and retire the entire amount by2020. That conversion, to take place officially on December 31, will make thebank a privatel'non-profit operation attached to government only by the threedIrectors out of 15 the President will continue to name, as well as the sizeablefederal debt it will carry.Shareholding cooperatives are nowbeginning the process of nominating candidates for nine of the twelve seats theywill elect. Three members of the boardwere elected by stockholders in June.Currently, there are 136 of the one hundred dollar-apiece shares outstanding, allbelonging to co-ops that purchased themwith their equi,ty dollars upon receiving

CITY LIMITS/October 1981

bank loans. An October 9th deadline hasbeen set for new stock purchases by coops who want to vote for the directors.Another part of the/bank, which somecritics have said has yet 'to achieve itsoriginal goal, is the office of Self HelpDevelopment and Technical Assistance,or Title II . The Self Help fund is thespecial arm established to fmance co-opsnot eligible for regular loans. Its limitedfunds are targeted to help low incomeco-ops get going and as an aid to those introuble. A continuing controversy overhow those funds should be spent willnow shift, under the new amendments,as the Office of Self Help becomes aprivate, non-profit foundation governedby its own board, possibly overlappingwith that of the bank. Troubled from thestart by delayed organization and underfunding, the unit's ability to survive asthe bank embarks on the high seas ofprivate borrowing will be a major issuethat shareholders will be raising withcandidates for the Board of Directors.

"We're already hearing many voicescalling for [the bank] to act more like abank," commented Charles Savitt of theCo-op Development and Assistance Project which has monitored the bank's progress. And for some advocates, thattrend implies a fiscal conservatism at theexpense of fledgling, or borderline, low

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income cooperatives.Should Congress deliver themillion for this year-$47 million fortle I $5 million for Title II- i t wobring the bank's government fundlevel close to $200 million, one tshort of the $300 million the governmwas expected to lend by 1985. Splementing those funds must come frborrowing in the same private momarkets in which other banks compand through the sale of mortgagesbank holds to a secondary mortgmarket."It's not going to resemble the beveryone thought it 'would be a y

ago," reflected Philip St. Georges, ditor of the bank's Mid-Atlantic Regiooffice. "However," he added, "i tstill be the first place that co-ops go borrowing.' ,

How much there will be, its cost which co-ops will be able to affordborrow is open to question. One brfor housing co-ops came in the amement which extended to 1985 a capthirty percent on the amount of loansbank can make to housing cooperativThus far, the bank has made 80 percof its loans for housing. With suchlarge portion of the bank's loan pofolio tied up in housing loans it ispected that the bank will move to divsify, if only because tying so mucapital up in long term mortgages cana drain.

On the other hand, housing loans be used to raise other capital and bahOUsing director Ed Kirschner told Housing 'and Development ReporterAugust he expected to see the banhousing investment grow to one to tbillion dollars in order to help paythe federal debt.According to St. Georges, bank hoing loans for.low income co-ops will hto be leveraged with other sources of linterest capital. But the size of that poof dollars is also rapidly diminishingfederal cuts take effect.DT R.


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Forty five years ago, New York .Oty pointed the way for the nation inthe construction of decent, safe and sanitary housing. The city's Hous-ing Authority grew to manage an empire of vast proportions and iswidely reputed to be the most successful provider of assisted low incomehousing in the country. But its growth has slowed, many of its projectsare aging and in need of repair, and the Housing Authority is criticizedroundly from both sides of the political spectrum. In the age of the"free market," can public housing hold on? Does anyone want it to?

Housing Authority'sDomainBy Tom RobbinsW hen reference is made to the state of 19C


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Domain FROM P. 11families-a figure officials insis,t would at least triple were anysubstantial program of new construction mounted-is testimony that the "projects" continue to be much sought,after.Major expansion and new construction ceased in the earlyseventies-a poor municipal bond market slowed things considerably and President Nixon's 1973 moratorium on funds forfederal subsidized housing put a lid on construction activitythat has never been effectively removed.\ Presently, the Authority has 3,258 apartments under construction, 920 of them "gut rehabilitation" of existing housing,mostly city-owned, tax-foreclosed buildings. Another 3,584units are under construction, 773 of which are rehabs. It's a lotof activity for some cities and authorities, but for the organization that has built nearly 170,000 apartments it's fairly smallpotatoes. And, for a city where thousands of families live insubstandard, dilapidated housing, it barely makes _a dent.Right now, however, it is all the Housing Authority can doto manage its 163,000 apartments, keeping them heated and indecent repair. The spectre haunting the Authority's headquarters at 250 Broadway is gradually falling behind the day-to-dayshort tenp repair, to the point where small jobs, left ul}done,become big ones, then system-wide catastrophes. "That's whathas done in the other authorities," noted Housing AuthorityGeneral Manager John Simon:T his summer Congress adopted a change in income eligibility levels for public housing-a change that is controversial and, according to the Authority, potentially devastat-Iing. Congress opted to limit entrance to public housing tofamilies at or below fifty percent of the area's median income,

underestimated the amount the price of fuel oil would risethe year. With fuel decontrol, that situation is worseningThe Authority has compensated by making central ocuts, not filling vacancies" juggling employees onto frbudget l i n ~ s and generally cutting "softer" ,' program Mostly, "softer" spells the social service aspect of the Autty budget, particularly community and daycare centers. Sktradesmen, however, have also been reduced in number.the short term, those things are bad," said Simon, "but i

long run they can be crippling.", The changing picture of f e d ~ r a l support is also interrupone of the Authority's most important programs: shifti,nsubsidy-poor state and city-built projects into the federal port program. Forty five of the Authority's projects have fully transferred from the state and city rolls and have receneeded federal modernization. funding as a result. Authority Transfer Program, however, is !;lOW stalled, anstate constructed and seven city-built projects.have yet to mthe needed crossover.How bad could the future be? "The first impact" heavy reductions in its operating subsidy, said Christian

the cutback on services. Then we'd have to start closing prodown."But Christian believes that would never happen. "I canagine they'd allow a $3 billion investment just go dowdrain." Noting that it would take an estimated $9 billiorecreate the housing it rules today, Christian insistedAuthority would weather its current fiscal crunch, just as iweathered others. He frrmly rejects some options being trieother Authorities, such as selling of f buildings as cooperat"That's a charade," he snapped. " I f tenants can't meefair market rent, how can they meet the carrying costs on op?"

,and said local authorities could fill no more than 10 percent of S rne of that confidence in the face of seemingly impentheir vacancies with families earning more than that. The gloom, sounds almost like bravado. But then, today's A u t h o ~ i t y and the city's CongressIonal delegation have argued cials descend from the "founders" of public housing infairly strenuously that the NYCHA's income mix of tenants is ,York, a ' troupe of innovators whose sheer determinunique. To compel it to further limit entrants' income would helped launch public housing as a concept and build it, bmean admitting an overwhelming welfare population and driv- by-brick, in the midst of a depression, into a reality. Aloning out the majority of working families. Whether or not the way, New York City's commitment to decent, safe dynamic works in that fashion, federal Housing and Urban sanitary housing created the models on which other natDevelopment Secretary Samuel Pierce, Jr. has agreed to ex- efforts were based. Added to the federal program wasercise "the full flexibility" allowed him under the statute. "I sponsored and subsidized housing in 1939, and a city effothink he'll do ' whatever he can," said Housing Authority itiated in 1937. 'Chairman Joseph Christian. I f the Authority were forced to When Mayor Fiorello LaGuardia stood with Goverigidly comply with the new regulations, he said, the resulting Herbert Lehman and Mrs. Eleanor Roosevelt to openchange in Authority populations would severely affect his ,ambitiously-dubbed First Houses on the Lower East Sidoperation. "Our thrust," added Authority spokesman Roy 1937" a promised federal commitment had yei to materiaMetcalfe, "has been to reach out and get the upwardly Instead, with the benevolent involvement of Bernard Barmobile." the financier who made the Authority a low interest loan,Whether public housing in New York is still playing that role Vincent Astor, who sold hls buildings along East Third Sis up to question. But it is clear that any hopes that it can sur- at bargain' price, as well as the labor of hundreds of W.vive are pinned to what General Manager John Simon employees, the city's and the country's frrst low income describes as "the basics." sidized housing was built.For the last year the Housing Authority has operated with By the time the U.S. Housing Act of 1937 establisheonly 85 percent of the federal operating funds it should be tools by which public housing would be subsidized New, receiving. That cut resulted not from a Republican-spawned in- City was already off and running on two more projeccision, b ~ t a Carter administration gaffe that badly Harlem and Williamsburg. Between 1938 and 1944CITY LIMITS/October 1981 12


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Left to right, Governor Herbert Lehman, Mrs. Eleanor Roosevelt and Mayor Fiorello LaGuardia at First Houses opening, /937.

.3 N.Y.C.H.A. built more than 10,000 apartments in projectsthat remain the largest in the A u t h ~ r i t y ' s domain.By tapping the new state-floated housing bonds, theAutl;iority built, amongst other projects, another 3,500 unitsalongside the Brooklyn Navy Yard, a major spur for whichwas the approaching Anierican entry into World War II. In thesevere housing shortage that followed the end of the war, theAuthority was able to produce housing out of each of its fund-ing pools. Under the state program, between 1945 and 1949,24,000 apartments went into planning and construction.The approach to public housing was noticeably affected bythe National Housing Act of 1949, which proVided vast sumsfor slum clearance and allowed for construction of new middleincome housing as well as low income. The N.Y.C.H.A. continued to construct new housing on a major scale, but a largepart of it was now iIJ locations that private developers didn't

want.Although the pace of new construction didn't slacken duringthe fifties and sixties there was a gradual shifting from the"superblock" concept-where the economy of scrue helpedkeep the costs of low income housing low;-to sites scatteredaround the city.

I t became glaringly apparent in the middle 19605 that the state and city subsidy programs under which the of the Authority's housing was built were leaving major gathe needed operating budget. As operating expenses grewburden on th ; H o u ~ i n g Authority, which was supposed to those needs from 'rents also grew. By 1977, when a traprogram for those projects was fmally implemented by gress, that deficit had grown to $65 million. Congress'proval of the Authority Transfer Program allowed trouprojects to come under the federal subsidy program andprovided much-needed modernization f u n d sThe federal projects didn't escape the enormous jumoperating costs and twice, in 1969 and again in 1974 unde, Housing and Community Development Act, federal conttions were increased.Very low income tenants of public housing also receassistance in 1970 in the form of the Brooke amendment, ssored by Senator Edward W. Brooke of Massachusetts. law capped the amount of their income tenants should prent at 25 percent, and provided the rental assistance foAuthorities to go with it. The cap was enacted but the promfunds fell victim to the Nixon moratorium. So in mauthorities around the country, even more so than in York, the Brooke amendment widened rather than decrethe gap between operating expenditures and rents.

A similar problem, this time for public housing rentersother end of the income range, was resolved at that time, Congress ruled that rather than being forced out once thecomes surpassed the upper end of eligibility, tenants coulto pay more and stay. The change, though important, after many had already left because of the income limitsRecent years have seen the Authority involved in a variehousing services that represent a far cry from the stereotypublic housing project. The Authority now owns and manover 500 FHA-foreclosed one, two and three-family hand under Project Home is attempting-with limited

cess-to sell them to residents.It also 'undertook a role in the city's crisis-level worklotax-foreclosed buildings when it agreed to take over manment of i 300 units in occupied buildings. That experimennot worked well, with the Housing Authority being unhabout the low level of repairs they are budgeted to providthe buildings before they are sold to the tenants. A few obuildings will be bought by the Authority and managepublic housing. Somewhat more beneficial has beenAuthority's gut rehabilitation planned for 1,500 units in vacity-owned buildings: The Authority expects to take over buildings for rehab adjacent to its projects.Despite this, there are few , plans for major new projDevelopments continue to get smaller-and there is anphasis on low rise buildings, such as the Authority's latefort planned on sites in Bushwick. Overall, the future seemforetell a holding action for the country's biggest houauthority: a time of just trying to hold its own against increoperating costs and an administration disenchanted not with the costs, but the concept, of low income housing. 0

13 CITY LIMITS/October 1


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In the Projects. FROM P. 11

Brenda Cyrus, a small, energetic resident of the Red HookEast Houses, was recently elected president of the project'stenants association. Cyrus moved to Red Hook from CrownHeights while pregnant in 1970 because, she says, her formerlandlord would not allow children in his building. Like morethan a third of the family heads in her project, Cyrus is a singleparent."Red Hook has a bad reputation," she said one recent morning, sipping coffee while her two sons romped in a far cornerof the Cyrus' two bedroom apartment. "They seem to haveput more undesirable people here-drug pushers and so on -so the cops don't respond when something's going on here.People who were here years ago say the police would give you afine if you rode a bike on the grass. Now it's different." Sheleft to quiet down the children and returned. "You know," shecontinued, "I always have to wonder where my kids' energy isgoing to around here."

Later, walking around the project's grounds in a loose-fitting blue windbreaker with "NYCHA TENANT PATROL"emblazoned in yellow on the back, Cyrus was sought out byneighbor after neighbor. Some told her about apartment problems, notably slow repairs and overdue painting and plasteringwork. Many talked about the progress of Tenant PatrolsHousing Authority-sponsored efforts to deter crime andbeautify common areas-in their buildings.Cyrus was quick to emphasize signs of progress in the sixstory, 41 year old Red Hook East buildings. She pointed outseveral buildings' hallways and entranceways, recently transformed from institutional grayness in a surprisingly effective (ifsuperficial) combination of Tenant Patrol elbow grease andAuthority paint. She pointed out the development's new win-dows, installed in many buildings under the federally fundedmodernization program. "It should be better with these," Cyrussaid. "Last year I had my oven on every other day."Despite hopeful signs, though, the project's shortcomingsare striking. "These are old buildings," Cyrus explained, "sothings are falling apart." Meanwhile, the Red Hook Eastoperating staff, responsible for maintenance, caretaking andgroundskeeping, is seven workers s h o ~ of its proper Authority-designated size. Some building entrances are completelydark and foreboding at night. The Red Hook developments'two day care centers cannot hope to handle a population ofabout 1,000 children under age six. The nearby public librarybranch, a windowless, one story affair that looks more like abunker than a seat of learning, has had to reduce its' operationto a few hours daily.

In spite of the dual problems of isolation and apathy, Cyrussees tenant organization as a viable way to deal with most ofRed Hook'.s difficulties, and her personal combination oftoughness and warmth may indeed sway many residents whowould otherwise give up the effort. "We have 50 or 6OpeopleCITY LIMITS/October 1981 14

in the tenants association now," she remarked, "but it's hto get people motivated. There's been/so many promises."

T he Red Hook developments aren't the most troubled pects operated by the New York City Housing Authorthe public corporation that runs all the city's public renhousing, but they rank among a substantial number of ot"problem projects." In that sense, the Red Hook experienctypical. But the quality of life in the A u t h o ~ i t y ' s domain degeneralization by virtue of its sheer scale: 263 developmeconsisting of 170,000 apartments in the five boroughs, pmore than 30,000 subsidized units in private, leased housiThe city-wide public housing stock ranges in size from LIsland City's 3,149 unit Queensbridge project to the 123-famFirst Houses on the Lower East Side to a scattered collection'smaller, rehabjlitated multiple dwellings. The vast physplant even includes about 500 one and two-family homrepossessed by the Federal Housing Administration in yepast and now operated as public housing for "upwarmobile" families. Conventional projects range in age fromyears to a few months; in style, from townhouse to high-riselocation, from convenient to remote.And the program's physical dimensions are matched byawesome human tide. According to figures released by Authority early this year, the projects house over half a millpeople, including 290,000 blacks, 138,000 Hispanics, 57,whites and 20,000 other residents. Nearly half the populatiqmade up of minors. 57,000 tenants are elderly. A third ofresident families are headed by single parents. The Authorinumbers put the amount of residents receiving public astance at about a quarter of all families, a figure that exploone very popular myth about the city's public housing popution. The stated mission of that vast population's landlord"t o develop, provide and maintain decent, safe and sanithousing for low income New Yorkers." NYCHA ChairmJoseph Christian recently asserted that, despite a shrinkoperating budget, the Authority continues to fulfill its offiresponsibility and meet a traditional need. "The private sechas always been unable to construct affordable housing for lincome people," Christian said.The New York Authority is widely reputed to be the msuccessful public landlord in the nation (although cynics.mpoint out that the competition is none too tough) and, as Chtian proudly put it, ' We've never lost a uriit." In light ofmonumental abandonment problems which have plagumany public housing authorities around ~ h e country, the NYork projects' virtually non-existent vacancy rate amounts tsignificant accomplishment.Yet the question of quality remains, and in a housing systso large' and diverse, neither the daily.challenges faced by Brda Cyrus and her neighbors nor the ringing phrases ofAuthority's public relations department can be expectedanswer it.


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A t 45, the Autb.ority is feeling the effects of an early oldage. Many older projects, like Red Hook, are among thesystem's largest, and for years operating dollars have failed tokeep pace with the stock's aging process. Mark Rosenberg, anemployee at Fort Greene's 37-year-old Whitman Houses, attributed many of his development's problems to that im-balance. "A lot of it is money," he reflected, "As_the physicalplant gets older, you have to spend more money, not less. "Yet the Authority's workforce trudges along. Between fieldstaff and outside contractors, 147,000 painting and plasteringjobs were reported complete last year. The system's EmergencyService Division handled 233,000 jobs. Worker-days expendedon electrical, plumbing and other skilled assignmentsnumbered in the tens of thousaIlds.

At 1980's end, however, the Authority reported a city-widebacklog of over 125,000 work tickets for project maintenance,glass-work and skilled repair jobs. The Authority said lastyear's average response time for maintenance complaints wasabout five days. Long-time residents recall the days when acomplaint to management in the morning prompted a repairman's visit after lunch. A worker in one aging high-rise placedthe wait at his project for non-emergency repairs close to twoweeks, adding, "There's no question that during the last 20years the level of services has deteriorated."While the degree of declining services varies Wildly around

Brenda Cyrus, tenant leader in Red Hook Houses, Brooklyn.

the city, and despite a low turnover rate in the Authority's CService workforce, short-staffing ' is in evidence. LeMcHenry, who lives in the northeast Brom.'s 30-year-Parkside Houses, said staff vacancies at that still well-kcomplex last "an average of six months or better." employee at a South Bronx project cited the same average ing gap. "They say there's no layoffs," lie complained, "what's the difference? It's attrition." The hiring p roblemworker added, transcends mere numbers: "We feeL it becawe're being asked to do more work with short staff. Whecaretaker finds this mountainous amount of work, he may say 'forget it. '" And, he concluded, for the 25 percentAuthority workers living in public housing, as well as otemployees who act as "sponges" for tenant discontedeteriorating conditions have hardly boosted morale in recyears.The major federal program available to ease such conditiby modernizing 'older projects is known as the AuthorTransfer Program, and surprisingly, in some places, it spurred fervent tenant opposition. ATP is the mechanithrough which former state and city-subsidized developmehave been transferred to the federal pipeline in recent ye(about 90 percent'of New York's public housing is now eitfederalized or in the transfer process) . When a project entthe transfer 'program, it is guaranteed modernization monfor specified fixtures, such as windows, garbage compactofloor tiles or mailboxes. Under federal guidelines that mandan "income mix," maximum allowable income standards lowered for all new tenants (the highest allowable income four-member families applying to federally-subsidizdevelopments is $16,510 yearly; in state and city-aided projecit's $18,150). That "income mix" has been the focal pointtenant opposition in some developments, and the controveris telling. .D espite the promise of modernization, many tenants at Bronx's 31-year-old Pelham Parkway Houses last yunsuccessfully fought their c o m p l e ~ ' s transfer from cityfederal funding. According to a June, 1980 story in'the BroNews, which later editorialized on their behalf, residents in1,260 family project opposed the move in fear "that once federal government comes in, low income families and welfrecipients will pour into the project." The story went onrelate the Pelham tenants association president's remarks ameeting on the issue. "We have the right ,to be members omiddle-income housing project," she was quoted. "For if nwhere do we go?"

The Pell}am Parkway families generally earn more thother public housing tenants; their average reported income$10,600 last Year compared with a system-wide average$8,200. In 1980, the Pelham project had a percentagefamilies receiving public assistance that was one-tenth overall welfare level in public housing. And the Authoritdemographics show that, as of early this year, the compleunique character wasn't purely economic. Its proportionsingle parent families is reportedly a quarter of the city-waverage. At 30 percent, its population over 62 is nearly ttimes the projects' overall level. And in a system that wreportedly over 80 percent black and Hispanic, P e l h a mtenancy was nearly 80 percent white.15 CITY LIMITS/October 19


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Courtyard oj Borinquen Plaza in Bushwick. Brooklyn,

population of working-to-middle class whites may beless and less of them, it seems, are biting at all.

C learly, with so many New Yorkers waiting to gepublic housmg, a lot of families are convinced thawill get better in the projects. In light of a tightening rmarket, price is a big attraction. Rents for most prresidents are capped by law at 25 percent of their incomnew federal measure will raise that limit to 30 percent ovenext few years). The average monthly rent per public unit,utilities, is under $150; this for apartments that are genewarmer and better maintained than the limited stock of

AcommOnlY invoked cause for the changing quality of life parably priced private housing.in public housing-one that many Pelham residents And beyond the provision of housing, the system offwould undoubtedly confirm-is its changing population. And modicum of social services, though they have suffered'uduring recent decades, the shift has in fact been radical. Since fiscal pressures in recent years. 150 community centertheir inception, the projects have been swept by the ebb and operated in the projects, more than half funded byflow of New York's population as a whole. They have reflected Authority and the rest by outside sponsors and tenant assto the extreme a current of change in the city's poor and work- tions. The system has 62 Head Start programs as well, buting class communities; drifting from a mostly white tenancy in enrollment of 8,700 is dwarfed by an overall pre-school the 1930s and '40s to today's overwhelmingly black, and grow- population of more than' 47,000.ing Hispanic, population. People entering the system generally do so for reasons"When we first moved in here the place was about five per- differ dramatically from those of past tenants. The familicent black and 93 percent white," recalled Leslie McHenry, ex-servicemen filled the projects during post-World Wwho has lived at Parkside Houses for nearly 25 years and now years in response to a severe housing shortage, and in thatheads its tenants association: Parkside is currently composed their situation was similar to the current one. But for manof roughly equal groups of black, white and Hispanic those residents, life in the projects was transitory; as famresidents. grew in size and income, the p r i v a t ~ market beckoned. "T

The public housing system's racial concentration is as strik- .had more options," Phyllis Spiro said of earlier tenaning as its shifts of population. While many formerly middle in- Brooklyn's projects. "People moved out when the Kingscome projects like Parkside retain a fairly integrated character, Mitchell-Lama opened. A lot moved out to two-family homost public tenants today live in racially polarized develop- in Canarsie."ments. And in the more diverse projects at least, the white Today, the public developments more often provide a repopulation is aging. than a stepping-stone, as ' residents move from sub-stanLike the system as a whole, Parkside last year had a white housing in surrounding neighborhoods. Emergency relocapopulation that was over 50 percent elderly; its bustling senior from that housing into the projects is commonplace. "Icenter, sponsored by the Human Resources Administration, step up for them," said Leslie McHenry of most new tenfills daily with it sea of white faces. As for Parkside's non- McHenry believed the change in tenancy had encouragelderly white residents, McHenry said, "the last white family decline in services because, she noted, "people moving in moved here four years ago." don't expect as much, don't know their right to get a habitAn Authority spokesman explained that the system's general apartment."racial polarization results largely from the fact that public Raising residents' expectations, many people in the syDOUSing projects naturally reflect surrounding neighborhoods. agreed ,may be a key to the projects' future:particularly in Phyllis Spiro, who has lived at the 81 percent white Sheepshead of a national political drift away from such public enterprBay Houses since 1957, isn't convinced. "Whites are never of- As Don Cavellini, a housing assistant who works at Melfered all-black houses," she asserted, adding: "People know Houses in the South Bronx, reflected: "The only way the the projects in their neighborhoods, yes, but nobody at Hous- jects can work ultimateiy, or housing can work, is if the tening will tell them about projects out of their neighborhoods." feel they control it and have a stake in it." Leslie McHThe Authority denies any suggestion that it has engaged in agrees, worrying that in the absence of strong tenant orgracial steering. Qualifled applicants are given three chances, ac- zation, "the projects will become a dumping ground." But,cording to the Authority, to accept apartments in different pro- quickly added, the burden of maintaining safe, decent houjects offered on the basis of available vacancies. Failing that, for a diverse population can't be placed squarely on residthey are said to be remanded to the end of the program's backs. "When you have friends downtown," she asserte150,OOO-plus waiting list. Said Authority Chairman Christian: reference to Authority headquarters at 250 Broadway,"Everyone gets three bites at the same apple." In any case, the pressure is applied downtown. So no matter what anybody steering question with regard to the system's once prevalent you, that's where the responsibility is."OCITY LIMITSIOctober 1981 16


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I

The 2,740 unit Pruitt-Igoe projecl in SI. Louis in the process of ts 1976 demolition.

Massachusetts, the Boston Housing Authority with 4,500 of its165,000 units empty, was placed in receivership in February,1980, by a State Superior Court judge who cited "indescribablecondttions" in the BHA developments and "incalculablehuman suffering."

And the image that many have of public housing is that ofthe Pruitt-Igoe development in St. Louis and the four-colormagazine photographs showing the dynamiting of one of thell-story, block-long buildings on a '57-acre site that Architectural Forum has praised for its design just a few years beforeand predicted it would "save not only people, but money."Leonard Downie Jr., in his book, "Mortgage on America,"comments: "Clearly pu.blic housing in the United States hasbeen programmed to fail." I t doesn't have to be.Certainly the record is erratic. But tucked away in smallercities across the country like Elkhart, Indiana, are public housing developments that succeed and which are not easily distinguishable from condominium developments further out of

town. On Staten Island, there is one project for the elderlywith-yes, in New York City-single story bungalows not unsimilar to a Florida retirement community.For a look at how public housing has developed-and atsome of its problems-check out this chronology:1937: Passage 'of the landmark Housing Act of 1937 underthe New Deal administration of Franklin D. Roosevelt; thoughmuch amended, still the basic law. Joseph Fried comments in"Housing Crisis U.S .A." that: "I n its early days, public housing was rarely thought of as 'black housing' originating as itdid during the Great Depression in which sO many of the poorwere working-class white families victimized by a collapsedeconomy."CITY LIMITS/October 1981

1969: "On February 10, 1969, to the great displeasureMayor Richard Daley and other of the Chicago ~ t a b l i s h m eJudge Richard Austin held that the Chicago Housing Authity had intentionally chosen sites for fiunily public housing wthe purpose of maintaining residential separation of the rain Chicago. The judgement order issued five months lgenerally required future public housing in Chicago to takeform of low-rise, scattered site projects wneighborhoods." This case was Gautreaux vs. Chicago Hoing Authority.1971-1972: A months-long bitter dispute in Forest HQueens, focusses on the difficulty of achieving scatter housing in a predominantly white com,munity. Jerry Birbapresident of the Forest Hills Residents' Association, coments: "They' re transplanting a malignant rumor to a healtviable community." Jimmy Breslin comments: "These thbuildings we speak of were designed originaUy as an attackthe c e n t ~ r , the heart, of the great problem that the nation faand cannot handle: poverty and race." The, argument.resolved by cutting three 24-sfory towers down to twelve stoeach and by giving the community substantial control over tant selection. By 1981, the NYCHA claims the resultant pect is working "beautifully." But such scatter-site projeuniversally successful when they can be built, are nonethevigorously opposed by many white communities.1973: President Richard M. Nixon declares a moratoriumfederal s u b s ~ d i e s for housing and urban nmewal citing "hicost, no-result boondoggling by the federal government."1974: Congress passes the Housing and CommunDevelopment Act of 1974 which contains; in Section 8 of Acle 201, the most prominent current vehicle to provide l'income housing, and which, the NYCHA has comment

18 .


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"was based on the premise that the private sector of housingwould more naturally house low-income families without themajor social and political disruptions which were perceived tobe endemic in the conventional public housing program."1980: The U.S. Comptroller General issues a "Report ToThe Congress" that public housing serves "a more diverse

group" than Section 8 and: "For units of the same quality,public housing is the least costly alternative over a 2O-year subsidy life and it results in housing projects which are likely toprovide service for much longer than privately owned Section 8units." This report, prepared by the General Accounting Office, calls for an "increase in the use of the public hous.ing program which is the least expensive method." It is also permanent housing as contrasted with the 2O-year life of Section 8.The GAO concedes "practical restJ;aints to greater use ofpublic housing such as local resistance, program image andmanagement problems in some large housing authorities."This is, of course, a selective history dealing with a subject atonce complex and simplistic. The complexity is in the variety of.funding apparatuses and in analysing the indirect (tax expenditures, for instance, which are various forms of tax write-offsand tax abatements) vs. the direct costs which are the Ipore ob-

o vious flow of tax dollars, as well as any analysis of populationsserved, and so on. The simplicity is in tbe fact that throughoutthis history is the maneuvering around what Breslin calls, "thecenter, the heart, of the great problem that the nation faces andcannot handle: poverty and race."As of 1980 we have a new debate in the era of Reaganomics.Most Washington observers agree tha t Section 8 "is dead." Inthe few years of its existence, it has provided windfalls fordevelopers and banks ( through mortgage interest rates). But, ina time of officially proclaimed austerity, it has built up.commitments of $128 billion of future expenditures in existing contract agreements for existing programs. ,There will be Hell topay in the Senate!

Over a long period of years, there is no doubt that theGautreaux decision of 1969 is to the housing world whatBrown vs. Board of Education of 1954 which required thedesegregation of public schools has been to the world of education. After all, if there had been no housing segregation, therewould have been no school segregation. 0The cost of Section 8 over a period of years is immense,much higher, as the GAO notes, than public housing. This isthe price paid for the entry of the private sector into the lowincome housing market. And with the reluctance of communities to accept "scatter-site" housing, this is the price, in thelong run, of racism.So we have come full circle. I f Section 8 dies-or iskilled-because of its extravagance, we are left with the oneprograni which over the years, for better or for worse, hasshown the capability of providing substantial amounts of hoUsing for low-income families. This program is publically;fmanced public housing.The Gautreaux decision of 1969 set the framework for aconfrontation which runs deep in this country's basic dilemma,that between integration and separatism. When HUD proposed a modest program to float Section 8 certificates awayfrom a local administering authority so that they could be usedto promote "social mobility" and "spatial deconcentration"

on a regional level, separatist Black organizations opposed thproposition as one that would disperse the Black communiand thereby destroy its political base in the ghetto.The argument is furious. Richard Cloward and Frances FoPiven say: "The Achilles heel of housing programs has beprecisely our insistence that better housing for the Black pobe achieved by residential desegregation. This ideal glosses ovthe importance of the ethnic community as a staging area fgroups to build the communal solidarity and power necessato compel eventual access to the mainstream of urban life." response, Whitney Young Jr., the late executive director of thNational Urban League.called this "self-imposed apartheidThere are many other parts of the puzzle. One of these is thsubtle shift over many years from the concept of public houing as the fulfillment of society's responsibility to workers whcould not afford rents in the private sector to the conceptpublic housing as a way of "warehousing" the poor who aincreasingly neither .wanted nor needed in the work force considering the changes in that work force which favored youngwhite, college-trained professionals. In this case, the housinissue is joined to the struggle to provide jobs and education insociety whose economic system is turning relentlessly to one o"hi-sci" technology dominated multi-national corportions. .

The higher the costs of Section g have meant that for thavailable money, fewer units of low income housing could bprovided. At the same time the program has provided profifor developers and lending institutions that would no t othewise be iIi the low-income housing business. Racism-prevailing factor in the chronology listed above-has fulfilleits historic function. It has deprived the many for the profit othe few. .The simplest economics should inform us that when low-rehousing is in short supply, pressure is created to force all othrents up, and mechanisms will be found to by-pass even thstrongest rent-controllaws. So the fight for rent control shoulbe joined with the fight for low-rent housing although frequently it is not.I f the image of public housing held by many is one of dulwarehouse-like monotony, the image of its administrators also that of entrenched and stodgy bureaucrats.It might surprise some, therefore, to see some of tdramatic innovations in public housing design. And to fmd thcomment buried in a lengthy New York City Housing Authoty analysis of its own "Legislative and Fiscal ~ s t o r y " : " F rthe largely improvisatory days of the construction of Fir

Houses to today's intricate maze of complex legislation, thehas transpired a social movement which this City and this ntion ignores at its peril."And from NYCHA Chairman Joseph J. Christian, th"ultimate ,bureaucrat" who has said that' the success of thNew York City Housing Authority can be attributed in largmeasure to the fact that 900/0 of its employees are in civil sevice. comes this: ."We are now in a' position to incorporate awe have learned, from our successes and from our failures, i

to the design of housing and communities which will set nestandards . . . and let us add to this the hard experience of thyears."Maybe we should listen! 019 CITY LlMITSlOctober 1981


20/28

On the Lower East SideILofts for Whose Living? By Chuck DeLaney

C... you picture lht'South Bronx a. aD arttsts'cofony, a sort 01 SoHoDOrthf You can't. Well, th eKayorcan.

Kecb . . . . uked E d ~ a r d Lot'1Ie. the executive ell-IW!tGr of th e Sou&h BroruBfl4evelopment O t f k ~ , toUIInk about convertlncabandoned IChoois and oklfu&orlM Into apartmentAaacl studloa for anlats.'"There Is no more crea-tive community .. fa r ..revttaUzinc a nelpbor-hood tbat'. down and out,".ad &he .a y. "Lookwhat tMy"ve done 1ft SoBoaDd bow tMy've ehanpdCUD&oa &ad 80IIIepen. 01 the EUt VWap.The area 8'OundthNi and Ie uplltt;ed.o *....

t.oj

l2Q

East 8th Street buildings, site of city's loft-steading proposal. Banner, by local residents, was removed by officials before tour fo r developers.Sign says: Esta Tierra Es Nuestro (This Land is Ours).N ew York City loft-dwelling artistsexpected some help from the Kochadministration this year. Having listenedto some t0l;lgh-sounding talk from theMayor, many eagerly awaited theMayor's imminent attack on the landlords' loft scam and his support for residential rights legislation. The rights bill,however, was scuttled and instead, artistszot an offer to resettle the Lower EastSide by converting abandoned, city

owned tenements into loft co-ops. Sofar, the initial response to the development end of the Mayor's comprehensiveLofts Policy has been limited and bothartists and Lower East Side residents regard the development with concern.In early August, New York's Department of Housing Preservation and

D e v e l o p ~ e n t advertised a request forproposals for "Artists HomeownershipSites," accompanied by a press releasecontaining the Mayor's pithy sUJl1IllaryCITY LIMITS/October 1981

of the.artists' painful career as pilotfish.Site One, eleven buildings on East EighthStreet between-Avenues B and 'C, andSite Two, six buildings on Forsyth Streetbetween Rivington and Stanton, couldprovide up to 140 loft-type units. Whilelocal community groups had oeenbriefed that such a plan might be forthcoming, the sites were not general knowledge until the early August announcement. Proposals were due six weekslater, one week after Labor Day.

" I t is the goal of this 'program to provide live-work [sic) housing for artists ofmoderate i n c o ~ e , " reads page 1 of theproposal, which estimates that finishedunits should sell for $40,000 to $50,000.While the proposal noted that developerscould use federal Section 235 mortgageinterest subsidies and other availablegovernment assistance, it stressed thatthere was interest in proposals using, other means of financing. Development20

p l ~ s must feature criteria for prothe purchaser of the rehabilitated cor condo unit is an artist and the deI'lans must be for open ~ n i t housingminimum of 1500 s q u ~ feet per uOn the September 15 deadline datproposals were submitted to AssiHousing Commissioner Janet Langwho is in charge of the project. Shpressed pleasure with the propodescribing them as "all rery profesally done, containing a \ot of workthought. " Proposals wet;e evenly divbetween t ~ o s e submitte by develoand those from groups f artists. Sproposals were for o n ~ , two or buildings, while developers' proptended to address an entire site. At one proposal was submitted to devboth sites. A decision is expected tainly by the -end of the year, ifsooner," according to Lrngsam., One proposal came f ~ o m a grouartists, all but one of whom already


21/28

in lofts. One member of that group nowlives in a loft building where tenants andlandlord are already tied up in court andservices have been sporadically withheldin the past year. His wife is a composer,and he had a show of his paintings inSoHo last year. He would only talkanonymously. Having spent a solidmonth filling out the proposal, heobserved, " I f they were going to ask artists to submit proposals, the formsshould have been much clearer. A lot ofthe material we had to submit waswasted energy-the core of the proposalwas about five pages. There were a hun-.dred pages of information that mightconcern developers with a big plan, butnot us."This group had known each other before the proposal request came out, andhad attended City auctions with an eyetoward buying something. I " I f thebuildings go to artists," reasons myfriend, "I think the idea has a chance ofat least benefitting artists. My wholereason for doing this is that now is notime for renting loft sp,ace in Manhattan.They're kidding themselves if they givethe buildings to a developer. They'rehulks, in terrible condition." He figureshis group, including several skilledcarpenters tha,t can do most finishingwork, can just complete the projectwithin the city's proposed price range."Even then, we won't be able to do itwithout some kind of loan," he observed.The question of whether financing willbe available for these projects, and manyof the questions regarding the allegedspecial housing needs of artists, will enterinto an evaluation of this projett afterHPD announces the results of the RFP.There are some general questionsraised by the announcement of the "artists homeownership" concept. Naturally these focus on the neighborhoodselected for the program. Gentrification,already rampant in the East Village, hasput the other areas of the Lower EastSide on alert. During visits to the EighthStreet site arranged by HPD for the people interested in the proposal, localresidents expressed their concern directlyto HPD ' officials and interesteddevelopers. Signs and banners which haddecorated the exteriors of some of thebuildings were quickly removed, but theresidents visited the workshops that were

run at the housing department's 100Gold Street offices to help potential applicants master the form. In addition tohearing more about the neighborhoodfrom residents, applicants were also addressed spontaneously by loft activistMario Pikus, a defendant in the landmark loft case, Lipkis v. Pikus. "I toldthe artists to stay put in the neighb9rhoods where they are," explained Pikus,"not to move into somebody else'sneighborhood to develop places for thegentry to park their Mercedes."Some applicants noted that the information sessions were lacking in certain :basics as well. In some buildings in thesites there are no staircases, so planninghad to proceed from "typical" floorplans and without a chance to inspect thebasement or roof of a building. Artistswho submitted proposals felt that ifthere had been a longer time between announcement of the program and thedeadline more groups of artists couldhave submitted proposals. Over 250forms were purchased from HPD afterthe announcement of the program, andonly twenty proposals came in.

local community," she explained. Frilander worked with groups in the Fsyth Street area to gain some HousAuthority funds for low-income asenior citizen housing after the aresidents expressed concern about thetists' project. .Along with local r e s i d e ~ t s , Friedlaer rejects any justification of the projbased on economic integration: "Thano longer needed here, it's taken plawe need to anchor low-income residentConcerns have also been expressedthe local Community Board and otgroups. The press has been receptivethe neighborhood's side of the story, aa h u m a n i n t e r e s t sidebar developwhen Adam Purple, the purple-cbicycling gardener familiar to many NYorkers turned out to be a tenant in Forsyth Street site,- where he also matains his garden.

There seems no end to the ideas restate can develop for the enterprisartist. New York Magazine reported tsummer that the Catskills are the nhot area for displaced New York artiand o!le landlord is advertising lofts Crown Heights/ at $375 a month that tenement floors. with the walls rippout. He'll supply the materials, the arsupplies the work, the leases are sh

Concern of neighborhood residentsalso generated a proposal. "There arelocal artists, although they don't all haveslides of their work," explains HarrietCohen, a neighborhood resident andlocal housing activist who worked withother residents to prepare a proposal thatwas submitted by four local groups-theCoalition for Housing Development,Land, Pueblo Nuevo and the Joint Planning Council. The proposal, titled "How.the Other Half Could Live" would provide 107 units, principally two and threebedroom apartments, for low incomeneighborhood residents on Site One. A

: and there's no rent control.

, portion of the proposal is devoted torefuting the general rehab economics advanced by the City, and the proposal isbacked with statistics and a profile of the 'neighborhood. Financing for this projectshould come, according to the proposers, via a combination of City participation loans, tenants' sweat equity, andfederal community developnient Illoney."Expensive artists' housing is notwhat this neighborhood needs," commented City Councilmember MiriamFJ,iedlander, who represents the area. "Ilove artists housing, but it must be at a,level the artists can afford and whichalso addresses the housing needs of the

21

The artists 'looking at buildings Loisaida do so with tears in their eyThe developers have long had dollarstheirs. Whether this "Artists Homeowership Program" will increase the ratewhich essential character and appearanof Loisai da disappears is not clear.

"I wouldn't want me moving into .' neighborhood," noted one loft tena

"but I'm already here. Believe me, , you residents of low and middle-inconeighborhoods that fear the onslaughtartists-we'd rather stay where we aIn fact, if the City had any decenabout it they would settle the loft mand let us stay put. Importing us to East Village? It 's like releasing stemedflies in an orchard-I don't thwe're supposed to reproduce." 0Chuck DeLaney is a member o f LowManhattan Loft Tenants, an organizand lobbying group for loft dwellers.

CITY LIMITS/October 1 ~


22/28

An Anti-Arson Tool for N e i g h b o r h o o d ~ I By Harriet Cohen

There is a vast arsenal of weapons employed against poormainly minority neighborhoods. Some, like the bulldozers ofurban renewal have generally been retired. Others get replacedor reconditioned. A few, however, have become time-honoredtools. Arson is one of these. INever a priority on government or private agendas forelimination, arson f ~ e s in New York City last yearalone, acc.ording to Fire Department figures, were numbered at9,234. Th'ose flames consumed 50 lives, caused $100 million inproperty damage, absorbed over $80 million of the municipalbudget, and layed waste to thousands of housing units.

The major push for preventing arson and punishing thoseresponsible has come from organizations in the affected communities themselves. Now, in New York City, a new city-wideresource organization has been launched to aid thosegrassroots efforts.The Neighborhood Anti-Arson Center (NAC) was createdto support ongoing prevention activities as well as to helpgroups establish "early warning systems", initiate arsonawareness campaigns and advocate for changes in government,banking and insurance industry practices that impede arsOl].control.The Center's activities focus on arson-for-profit, the chiefcause of the spiralling arson fires in New York and other cities.Fires intentionally set to collect inflated insurance claims, stemfinancial loss or to clear buildings for rehabilitation or demolition have escalated as neighborhood change has accelerated.But unlike fires set as revenge, vandalism or other personalreasons, economically-motivated fires can be controlled byreducing the financial incentives .and increasing the risks ofdetection. So .far, however, the actors in the most strategicpositions to do this have not met the challenge. Insurance companies have been slow to change corporate practices that inadvertently promote arson-for-profit. Public safety agencieshave failed to develop arrest and conviction rates that wouldserve as deterrents.

In respOnse, neighborhood groups have initiated their ownsolutions. In Boston, for example, the Symphony Road TenantOrganizing Project developed a direct action and predictionapproach that led to the conviction of a city-wide arson ring oflandlords, developers, lawyers and police and fire officials.The Boston model has been refmed into an arson "earlywarning system" based on recognizing the cycle of deterioration in buildings before they are burned. Building history cantell much of the tale: previous fires, numerous title transfers,large tax arrears, multiple code violations and a high vacancy

rate all indicate an arson-ripe building. By spotting these signsearly, d i s t r ~ buildings can be matched with appropriate intervention and prevention strategies.CITY LIMITS/October 1981 22

The Boston early warning system is now being introducNew York Citj, allowing arson-prone neighborhoods to resources on high-risk buildings. The system Ialso servesvaluable tool for understanding a neighborhood's hostock and local real estate practices.The Neighborhood Anti-Arson Center has l a steering mittee of orgaruzations and deeply involved in preventio

forts: People's Firehouse, Flatbush D e v e l o p m ~ n t CorporaCrown Heights Progress Council and the Northwest BCommunity and Clergy Coalition. The Center is assisting groups in developing early warning programs as well asviding a forum for the,exchange of information and resouThe Center will expand to provide technical assistance to ogroups that want to integrate an anti-arson perspectivetheir ongoing neighborhood preservation wort Located aoffices of the AssociatiQn of N e i g h b o h o o d HouJ)evelopers at 424 West 33rd Street in M a n h ~ t t a n , the Ccan be reached at 239-9414 for more inform,tion. D

IIHarriet Cohen is the director of the New York NeighborAnti-Arson Center. I

. .. a quarterly iournal for housing activistsorganizers . The pages of SHEL TERFORCEnews and analysis that can 'l be found in anypublication.ANALYSIS:

HOW TO:

REPORTING:

PLUS:

, IRent Control, Condomania,Displacement . GovernmentPrograms, Housing Court...Buil(ling a Tenant Union,Negotiating with L a n ~ l o r d sWinning Rent contrOI'J:llinga Rent Strike ..News and Analysis of h usingstruggles around the_ untryand abroad IBook Reviews , From th eGrassroots, Facts and Figures.Legal Developments, Films,Jobs ..

SUBSCRIPTION: $8 .00 for 6 issues SAMPLE dOpy: $1.50name ________________ ~ - - - - - - - - - - - - - -address_______________________________city state zip__ ISHELTERFORCE . 380Molin SI., East Orange, No) . 07018


23/28

To the Editor:

Loan Program has gr()wn into a major moderate income houing producer iI1 New York City.Secondly, Citibank has taken the lead in working with tFederal Department of Housing and Urban Development anthe city to develop a program for the use of FHA 223F moI read with interest the article "Reinvestment: Enter the gage insurance which will enable a borrower of rponies fCommercial Banks" in the June-July issue of City Limits. As multifamily housing rehab to access long-term mortgagCitibank's representative at the meeting with the Coalition ' money at a fIxed rate of interest of 711z percent. The GoverAgainst Redlining, sponsored by the Federal Reserve Bank and ment National Mortage Association, which is making thethe Comptroller of the Currency, described by Tim Ledwith in funds available, has committed $15 million to New York Citthe article, I can attest to the accuracy of what he wrote. partly due to the lobbying efforts of Citibank. At the preseHowever, I was disappointed at what he didn't write about the time Citibank has two loans under review by FHA 'for tmeeting, because he leaves the impression that the commercial mortgage ' insurance, and once FHA has approved the ibanks are doing nothing. surance, we will move forward with GNMA. .On the contrary, at the meeting I personally spoke on the af- . _ These are only two examples of Citibank's 'Continuing effofirmative efforts Citibank is undertaking to address the issue of to fInd s o l u ~ i o n s to a major problem in metropolitan Ne,rehabilitating New York's multifamily housing. c,iticorp Com- Y o r ~ . Is the, solution drawn out and mired in bureaucratmunity Development has assisted in the renovation or con- hurdles? Yes. Are people of good will doing enough? Prqbabstruction jof 21,000 units of housing through $409 million in not. Mr. Ledwith is correct-high interest rates, tenants' iconstruction loans, seed money and long-term mortgages from ability to absorb higher rents and deferred maintenance o1971 through 1980. pousing are all serious hurdles. But, for him to ignoOf equal importance is the fact that staff members of dtibank's comments at the Coalition meeting does not giCiticorp Community Development and Citibank's Flatbush recognition and support to those people within the bankinCommunity Banking Pilot made a major time commitment in system who are seeking to find viable solution,s.working with the Department of Housing P r e ~ e r v a t i o n andDevelopment to streamline the p r o c e d ' u r ~ for the ParticipationLoan Program so that the program was more workable forbanks, owners and the c

Documents

City Limits Magazine, October 1981 Issue