city limits magazine, march 1979 issue

8/3/2019 City Limits Magazine, March 1979 Issue

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CITY LIMITSCOMMUNITY HOUSING NEWSMARCH 1979 VOL. 4 NO.3HPD EVICTION UNIT:

RENT NOW, REPAIRS LATERO.K. - WE GOT A\PB t-tOTHE.R


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tenants in the "better" buildings that have been receiving adequate or basic services and repairs. "W e determine to evict on a building-to-building basis," she said,noting that In Rem managers assigned to the LegalAffairs Unit keep up-to-date records of tenants who dono t pay rent and report these figures to the unit for eviction proceedings.The Legal Affairs Unit has five female attorneysassigned to it. Head of the office is Rita Dattola, formerly of the Division of Alternative ManagementPrograms (DAMP) under the direction of AssistantCommissioner Philip St. Georges.But Dattola's refusal to return calls to City Limits tosubmit to an interview are symptomatic of how HP Dviews this new unit-nervously.Gershun, who returned Dattola's calls, would onlysay that she was speaking for the unit because Dattola is"shy" and "just getting used to the new job responsibilities. "

In noting that the eviction unit works with both thegeneral counsel and the office of property management,Gershun indicated that it is a unit that has no allottedplacement on HPD's organizational chart. In fact, itsaccountability within HPD and its various programsremain mysterious and vague.

In a departmental memorandum to Mayor Edward I.Koch dated January 12, Commissioner Nathan Levanthal admitted that the city "has built an astronomicallevel of rent arrears and with the doubling of the In Remworkload this year, the level of arrears is accelerating."He also mentioned HPD's plans to bring larger numbersof eviction cases.As of October 1, 1978, the HPD rent arrears, Leventhal pointed out, amounted to $15.9 million and in January, the amount had increased to $21.6 million.

stitute adequate services.Peter Wendt and Charles Brennan, of Mobilizationfor Youth (MFY) on Manhattan's Lower East Side, saidthey had not heard complaints of increased evictions oftenants, to date, but confirmed that they would be looking out for this new development. Several B ~ o o k l y n legal aid units had the same response.

In fact, in its quest to find tenants threatened witheviction, City Limits was only able to find one definitecase-that of the tenants of 53 Stanton Street, who havesought political support from the White House to thelocal councilwoman, Miriam Friedlander (D-Man.), intheir fight for delivery of services to their building.

The city recently issued three-day notices against nineof the 16 residential and commercial tenants in thebuilding. Prior to the deterioration of services under thecity's management, the building had 27 residential andthree commercial tenants. Fifty-three Stanton Streetwas taken In Rem last May for failure to pay taxes.After a meeting March 14 with HPD propertymanagement and eviction officials in CouncilwomanFriedlander's office, the three-day actions against the

tenants were suspended, pending delivery of major. repairs and a complete inspection of the building.The building, according to one tenant spokesman,Arthur Male, needs major repairs to the roof, theplumbing, and to the windows.

The city attempted to interest the tenants in the interim lease program, but the tenants' association hasrefused to consider this program until major, expensiverepairs are made to the building.

According to Male, repairs to the building couldreach $50,000 to $100,000 for basic work. Under itsconsolidation program, HP D has reserved some $1,500per unit for repairs to make apartments habitable. In


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SALES POLICY ADOPTEDThe tenants at 1714 Palmetto Street in Queens may behomeowners before the end of April, which would maketheir building the first to be sold under New York City'snew sales program to non-profit tenant and communityorganizations.The Board of Estimate approved the sales policy onMarch 22. I t sets a price of $250-per-unit for buildingsin low income (CD-eligible) areas and requires HPDapproval of any subsequent resale of the building forthree years.The buildings being sold will for the most part becoming out of one of the city's treatment programs-community management, tenant leasing or sweatequity. The buyers will be low and moderate incomecommunity and tenant groups that will form non-profitcorporations to purchase the buildings.The policy of selling buildings to non-profit organizations is only a part of a much larger developing plan to"dispose of a significant number" of city-owned properties to private owners. A bill to expand the city'sability to negotiate such sales has been introduced in theState Legislature, according to the HPD CommissionerNathan Leventhal.New York City is now the landlord for some 37,000occupied apartments or eight per cent of all residentialproper ty in the city. The volume will soon increase dramatically when the foreclosure of Brooklyn propertiestakes place. I t is estimated that the city will need morethan $100 million in federal (Community Development)funds next year to manage and maintain all the buildings it will own by then. Whether the federal Department of Housing and Urban Development, which approved $41 million this year on an "emergency" basis,

restrictions were not appropriate. They added that therewas not likely to be much of a speculative market inmost neighborhoods with large numbers of city-ownedbuildings.As a result of the objections, HPD inserted a line in theresolution requiring approval by the city agency for anyresale during the first three years. "This is to guardagainst buildings being sold to speculators or similarlydisposed of," said Assistant Commissioner Philip St.Georges, who personally had favored an unrestrictedsales polciy.St. Georges maintains that the city is capable of processing 100 buildings through sale in 1979 and 200

buildings next year if there is a like number of community and tenant organizations ready to buy.st . Georges said it will be HPD policy to inspect allbuildings prior to sale and to make whatever repairs arenecessary to insure that major systems will work for atleast five years. Asked if that meant the city wouldguarantee the systems for five years, St. Georges said no.He said the sold buildings would be eligible for taxabatement for renovations paid for by the new owners. 0

HISTORIC BANK PACTThe Dime Savings Bank of Williamsburg in Brooklynhas signed an agreement that community residentsregard as a crowning success to their long campaign tostimulate more mortgage and home im provement loansin their neighborhoods.The agreement signed on March 5 pledges the bank toprovide at least $1 million in loans over the next year onrelatively low downpayment terms. Buildings for whichloans are sought will be evaluated individually rather


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RGB IS SET TO RULE AGAINON RENT INCREASE CEILINGS

by Michael McKeeA good deal of commotion has surrounded the NewYork City Rent Guidelines Board in recent months as itbegan the process of reconsidering, under court order,the rent increase guidelines it promulgated last year forrent stabilized apartments.The RGB was sued last summer by the Rent Stabilization Association, the owner organization which ad

ministers the "self-regulating" rent stabilizationsystem. The RSA claimed that the guidelines were toolow. Supreme Court Justice Martin Stecher did notaddress this issue, but agreed with the RSA and tenantrepresentatives who had intervened in the lawsuit thatthe RGB had violated the state's Open Meeting Law byholding meetings which were unannounced and notopen to attendance by the public. On September 25,1978 Stecher issued an order requiring the RGB toreconsider Guidelines Order No. 10; he also ordered theboard to allow the public to submit comments on theguidelines, reversing the board's past practice.By mid-February the RGB had received analyses bythe RSA and an ad hoc coalition of tenant organizations, as well as over 600 letters, all but 29 of them fromtenants. At a packed public meeting of the board onMarch 7 representatives of both sides made oral presentations on the guidelines. A decision on a revised OrderNo. 10 will be made at a second RGB meeting on April4. The annual guidelines, effective from July 1 to June30, set rates landlords may charge tenants when their

In years past the allowable increase for a one-yearlease has generally been one percentage point above theBLS index. Tenant leaders were startled that the oneyear guideline was three percentage points above theprice index. In its analysis of Order No. 10 the ad hoctenant coalition defended the BLS index as "the onlyobjective data available" to the RGB, and criticized the"qualitative factors"considered by the board (cash flow,the cost of money and "the value of different types ofinvestment as compared to investment in stabilizedmultiple dwellings") as "capricious and unwarranted."

Attacking the BLS index as "abnormally low," theRSA last fall conducted a survey of its members, askingthem to provide data on their expenditures for thecalendar years 1976 and 1977. The survey mailed toowners was accompanied by a letter from new RSApresident Frank Kristof which identified the purpose ofthe survey as intending to prove that the 1978-1979guidelines were too low.While the BLS index has been generally accepted for adecade as a source of objective data on cost increasesfor operating stabilized housing, the RSA claimed thatexpenditures, not prices, should be the basis for determining the guidelines. Under the law, owners who feelthey are not adequately compensated by the guidelinescan apply for special "hardship" increases which, ifgranted, are imposed on top of the guidelines. Aminiscule number of owners apply each year.These issues were argued and discussed before the


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especially significant because there had been a sharpdecrease in the cost of heating oil during the first fourmonths of 1978, the major reason for the small rise inthe BLS index.A fatal flaw in the RSA survey, according the Rowenand Weitzman, is an absence of a sample design andmethodology, standard procedure for such a study,necessary as an indication of the statistical reliability ofthe data. This criticism was also made by HerbertBienstock, regional commissioner of the U.S. Bureau ofLabor Statistics, who on February 20 wrote the ROB:

"The absence of a section describing the sample designand methodology used to develop the expenditure dataprecludes any detailed evaluation of the RSA report.Absence of this information may have some additionalrelevance here, since questions of self interest might beraised."Representing the owners at the March 7 hearing wasRSA counsel Arthur Richenthal. He predicted increasing owner non-compliance with the rent stabilizationlaw unless the guidelines were raised, and dismissed thetenant criticisms of the RSA survey as "hyper-technical." Kristof was present but did not testify,fueling speculation that he was unwilling to stand toostrongly behind his expenditure survey in light of theattacks on it.Richenthal also asked the ROB for an additional"pass-along" increase to compensate owners for sharpfuel cost increases during the November 1978 toFebruary 1979 period. The ROB voted unanimously toconsider this matter. However, the RSA subsequentlywithdrew this request, raising uncertainty as to whetherthe ROB will consider it at the April 4 meeting.Normally these cost increases would be reflected in theApril 1978-April 1979 BLS index, and would result in

COUNCIL RENEWS RENT SYSTEM

Lee Sterling

The City Council voted overwhelmingly to renew rentcontrol and rent stabilization for the next three years.Thirty-six members of the 44-member body went onrecord in favor of the legislation. Only one Councilmember, Leon Katz (D-Bkln.), abstained.The vote came after two days of public testimony andquestioning during which a substantial number of rentcontrol opponents appeared before the Council's Housing and Buildings Committee to complain about the illsof this legislation.Had the legislation not passed, both rent control andrent stabilization would have expired March 31.In his presentation in support of rent control and rent


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COUNCIL EYES RENT IN CITY'S UNITSby Susan Baldwin

A very weak and possibly compromising resolutionthat permits the city to raise rents on its vast number oftax-foreclosed properties without guarahteeing deliveryof basic services was held over at the City CouncilMarch 27.Even though the measure constituted an amendedbill, it was permitted to go to the Council less than 24hours after it was passed in committee as an emergencyact. Such a bill requires a two-thirds vote for passage.

The amended bill, known as 594A, passed the Council's Committee on Housing and Buildings by a vote offive to one after two days of testimony during which itreceived a great deal of criticism.Intro.594 had asked that any occupied rent controlledunit (hat had been taken in a tax-foreclosure proceedingand had subsequently been sold by the city would bedecontrolled and go into the city's rent stabilizationsystem. This would mean that the city or anyone whobought the property could set the amount of rent without restriction.Although the amended bill contains language thatcan, at best, be described as confused, it does guaranteesome limited advances for tenants: namely, landlordscannot allow their buildings to go In Rem and thenredeem them with the idea of de-controlling the rents;rents cannot go above the Maximum Base Rent (MBR),the rent ceiling that will be set for these city-ownedapartments and rent control will be preserved.Critics of 594 and the amended 594A claim that therestill are no guarantees that rents will not be raised farabove the level justified by the quality of maintenanceprovided by the city.

"It is not our desire to impose a hardship on tenants,"he added. "At the same time, it is our desire to achieveself-sufficiency so the buildings do not come back intocity ownership."Questioned by Katz about the city 's making an investment in its properties, Leventhal said that HPD would"very strongly object' 't o having to put 22 per cent (of theassessed valuation) into a building before sale.During the same hearing, William Rowen, southernregion chairman of the New York State Tenants andNeighborhood Coalition, said of the bill, "Essentially,this is an 'In Rem decontrol' bill which would servemuch more directly the interests of private landlordsand speculators who would be interested indeed inacquiring city-owned properties whose rents have been

'restructured.' "He also said that if this bill were approved, the "city'spoorest and least mobile citizens, in the large part theelderly and handicapped" would be the most penalized.Both Katz and Councilwoman Ruth Messinger (OMan.) have been very critical of the city's reliance onusing federal Community Development (CD) funds torepair and maintain its In Rem properties.Leventhal and HPD officials' lobbying for Intro. 594and 594A have said that if the legislation were passed,the city would have a much better chance of receivingCD funds to run its tax-foreclosed properties because,under this legislation, they hope to be able to sell theproperty back to the private sector-a move that issupported by the federal government.During the committee debate on 594A, Messingerstated that it was inappropriate for city officials to rely


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the commissioner [Leventhal]. He spoke to us beforethe vote, and said our support was very important."Alan H. Wiener, area director of HUD, also lent hissupport to the legislation in a letter directed to Leventhalthat was read at the Council.Referring to HPD's plans to dispose of the In Remproperties, he said, "HPD's policy guidelines for thesales of In Rem buildings to non-profit entities in CDeligible areas is one such step. Another step that shouldbe given serious consideration is an adjustment in thepresent workings of the rent regulatory system as itapplies to In Rem buildings."The main problem with 594A is justifying the payment of more rent for little or no services. Critics havesaid repeatedly that they support rent restructuring inbuildings enrolled in the city's treatment programs(e.g. community management, interim lease) becausethey are receiving services.The city claims it must raise rents because the In remprogram is exorbitantly expensive.And tenants claim that they must receive services ifthey are to pay rent. 594 A will be heard April 10. 0

SOLAR MECHANICSHUD has extended until April 26 the deadline forapplying for solar energy grants under the fifth andfinal cycle of the federal demonstration program, whichso far has equipped 11,500 residential dwelling unitswith solar systems.Round Five, which contains more than $2 million,

stresses for the first time solar installations in multipledwellings housing low and moderate income families.Projects by neighborhood housing organizations that

SUEDE.The goals of the program, according to ETF, are toprovide training that will lead to jobs in the solar orrelated fields and to reinforce the need to apply themost appropriate energy technology in low incomeneighborhoods.The ETF plan also addresses a couple of troublingissues, mainly the absence of a strong solar energymarket at the present time due to the high cost of solarequipment for low income people and the relativelysmall level of government subsidies available."Federal solar dollars are somewhat in question asthere does not appear to be any guarantee of HUDdemonstration dollars in 1980," ETF said in its proposal. One alternative suggested by ETF is CommunityDevelopment Block Grant funds, although New YorkCity has never allocated CD funds for solar energy. " I tis [hoped] . . . that both solar installations and solaremployment will develop near enough in the future toprovide ongoing commercial expansion of the industryand at the same time employment for low incometrainees."

Most of the 12 energy systems to be installed willinclude rooftop solar collectors, purchased fromStandard Solar Collectors, a minority-owned company inBrooklyn, and will range in cost from $1,200 for singlefamily homes to $36,525 for the largest mUltiple dwellings. Two of the systems will be passive solar wallheaters, panes of fiberglass bolted to outside walls thatcollect and radiate heat.No sites for the solar systems have been set as yet.ETF said it is having difficulty finding single-familybuildings that both meet the federal low-income guidelines and are in good enough condition to justify theinvestment of the solar equipment.


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CETA JOBS RESTOREDHPD, which proposed last November that the CETA

VI program of the Association of NeighborhoodHousing Developers be slashed from 335 jobs to 80jobs, has agreed to restore a large number of the slots.In several negotiating sessions held since a demonstration by about 200 people at HPD on Jan. 29, thehousing agency has yielded to the following:

-A doubling (to 160) of the number of jobs for groupsin the disputed ANHD package.-The inclusion in the ANHD umbrella of several organizations not recommended for any jobs under HPD'sinitial proposal.- The right for ANHD to decide about allocations ofjob slots among the 38 housing organizations under itsCETA umbrella.HPD, in turn, obtained ANHD's agreement to takeadministrative responsibility for a couple of subcontractors not in its original proposal, bringing the totalnumber of jobs in the contract to 194.Although the current CETA contract expired at theend of March, ANHD has received approval to extend ituntil the end of May and will be seeking Board ofEstimate approval to roll it 'over under Sept. 26, whenthe new contract would begin.ANHD has also been fighting for an increase beyondthe nearly 5,000 CETA slots currently available to thenon-profit sector on the assumption that New York Citywill n6t be able to meet the low average income ($8,690

per year) required by the federal government for CETApublic service employment. New York City is not evenclose to the recommendation by the Department ofLabor that a "substantial" proportion (generally inter

ANHD NAMES BETTY TERRELLAS ITS.EXECUTIVE DIRECTOR

The appointment of Betty Terrell as executive directorof the Association of Neighborhood Housing Developers has been announced by ANHD President MargaretMcNeill.Terrell, director of the Moris Heights NeighborhoodImprovement Association in the Bronx in 1977-78, hasmore than 10 years of experience working with tenantswho have housing problems. She has designed a modelfor a community corporation to own and manage buildings under control of the tenants.Her housing career began when she organized herown apartment building. Later she worked as a volunteer with the Metropolitan Council on Housing andMHNIA before becoming its director.Terrell, who is 36, attended the Monroe BusinessInstitute, Bronx Community College and Hunter College.

MILLIONS UNSPENT FORCDNearly half of the $343 million in federal CommunityDevelopment funds allocated to New York City from1975-78 has not been spent, according to a City Councilreport that was sharply critical of the city's management

of the program.Mayor Koch, acknowledging the criticism, agreed toa request in the report that the city's CD application besubmitted for approval to the Council as well as to theBoard of Estimate."When I took office in January, 1978, I too, foundthe program poorly sup


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HPD APPOINTMENTSCharles Reiss, former director of housing at the CityPlanning Commission, is the new assistant commissioner for community development at HPD. His appointment is effective April 9.Reiss replaces Barry Light, who, after ten years withthe city at HPD and CPC, is going to work for the StateUrban Development Corporation.Asked to explain his reasons for leaving HPD, Lightsaid, "I thought it was time for a change. I have beenwith the city a long time. I wanted to try something different. " Light described his employment plans at UDCas "intriguing," but said that he could not commentfurther on his new job as he is not sure what his dutieswill be.

For the past eight months Reiss has served as directorof housing at CPC and, prior to that , he was director ofthe Staten Island office of City Planning where he wasin charge of waterfront and water quality studies. From1968 to 1971 he served with the mayor' s office as executjve director of the Urban Design Council."I am looking forward to my new job," Reiss said,stressing that he hoped to run his department as "efficiently as Barry did. "In his new job Reiss expects to push for more construction of one- and two-family homes in low andmoderate jncome neighborhoods. He also said that hisoffice would be revitalizing the old Section 235 program in an effort to stimulate low cost mortgages andprovide for home ownership on vacant city-ownedurban renewal sites around the city. This program, heexplained, allows for low-interest four-and-a-half percent mortgages.

The New York State Tenant and Neighborhood Coalition has been lobbying to increase this appropriationto at least the $7,925,000 requested by the State Divisionof Housing and Community Renewal. NYSTNC maintains that Carey's request will result in no new groupsbeing funded and a freeze in the grant amount currentlymade to 118 neighborhood organizations funded underthe program.As City Limits went to press, legislative leadersseemed to be heading toward agreement to increase theappropriation to $6,925,000 either in the executivebudget or the supplemental budget to be adopted laterin the session. D

SCHOOL FOR ORGANIZERSPeoples Housing Network has begun another series

of training sessions for people interested in learningabout community organizing.The to-week program, which began March 27, coverscommunity and tenant organizing, sweat equity homesteading, rent control, fund-raising insurance redlining,the state legislature and community reinvestment.The classes are $3 each or $25 for the entire course.

PHN also offers specialized on-site training sessionsfor organizations that wish to have their staff trained.For further information call Roger Hayes or MichaelMcKee at 533-5650.CD CONFERENCE PLANNED

The New York City Housing and CommunityDevelopment Coalition will hold its fifth annual CDConference May 3 from 9 a.m. to 4:30 p.m. at theHarlem State Office Building: Contact Brian Sullivan or


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HUD PROPOSES WAYS TO BLOCKEARLYSALE OF SECTION 8'S

by Bernard CohenDespite some doubts about how real the problem is,HUD is taking steps to prevent owners of subsidizedlow-income (Section 8) housing developments fromcashing in on low-cost borrowing and tax benefits, thenquickly selling their properties and displacing poor tenants.Two steps under serious consideration by HUDwould prohibit an owner from pre-paying a federallyinsured mortgage to get out from under federal supervision and would bind the owner to the full 20 to 4O-yearterm of the Section 8 contract, doing away with the current practice of allowing owners to renew or opt out ofthe contract every five years. The latter proposal isbeing incorporated in a revision of the Section 8 regulations that will soon be proposed by HUD.The purpose of the proposed changes is to prevent theloss of low income housing units; although interviewswith a dozen federal, state and New York City housingofficials turned up widespread doubt that early conversion of Section 8 projects to unsubsidized housing willbe a problem in the forseeable future, particularly here."The factual circumstances do not exist as far as I cansee in the City of New York," said Roger Simons, acting executive director of the New York City Housing

Development Corp., which is financing 3,000 to 4,000units of Section 8 housing. "I'm not going to say it can'thappen, but I think it is highly unlikely," said DeputyCommissioner Peter Joseph of the city's Department of

allowing private investors who own and operate Section8 housing to sell their projects or convert them to condominiums in as little as five years. This would likelyresult in the displacement of low and moderate incometenants and is in marked contrast to the much longerservice which.can be expected from a program such asconventional public housing which should serve subsidized tenants for at least 40 years at much lower costs."Predicting that the cost to the public of prematuresales could run into the hundreds of millions of dollars,the GAO letter blamed the five-year renewable contractscombined with the rapid build-up of tax shelter benefitsthat provide an economic incentive to unload the property after 10 years. I t estimated that after recaptureand capital gains taxes are paid, investors could expectyearly rates of return of about 28 per cent and 32 percent on multi-family properties sold after five or 10years respectively.HUD officials said privately that the GAO letter was"alarmist" and that GAO's analysis was based onhypothetical conditions that were so favorable that theylacked credibility. "I think many on staff here feel theGAO financial analysis does not reflect the real situation of owners, " one said.Joseph Burstein, counselor to HUD Secretary PatriciaHarris, said, "I know of no such case where this hasever happened. The question has been raised theoretically by the GAO and we are taking care of it; but it has


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there is nothing to stop an owner from paying off theHUD-insured mortgage and finding another means offinancing, such as a conventional bank loan. " I f anyonegot into our program and got the advantages of ourinsurance and Section 8, I think they have the obligationto stay with us, but legally they have the right not to staywith us," said Alexander Naclerio, director of housingfor the New York area office of HUD.The second modification, requiring adherence to theSection 8 contract for at least 20 years, would apply toall developments.In New York City, there are a number of existingfactors weighing against premature sales.

Any Section 8 developments financed with bonds soldby the State Housing Finance Agency or the New YorkCity Community Development Corporation, are governed by state law, which prohibits refinancing for atleast 20 years and requires approval of the supervisingagency (HFA or CDC) for any sale. In addition, the lawprovides for substantial recapture of tax benefits from ahousing company that is dissolved early on. Stringentrent laws protect tenants from summary evictions.Beyond the legal protections are the weak marketconditions of most New York City neighborhoodswhere Section 8 is being built, according to many localhousing officials. Saying it was difficult to imagine thebuildings surviving on their own, they asked what developer would buy without the subsidy attached and whattenant who did not need the assistance would move in.By definition, "the structure needs Section 8, and without it it is not feasible," said Naclerio. " I t isn't veryrelevant to New York," said Linda Field, who assemblesSection 8 loan packages for developers.While agreeing with that view, Stanley Berman, a tax

that has the Section 8 rent assistance. "W e stumbled onthis as a side trip," said William Gainer of GAO'sProgram Analysis Division.Gainer said he saw nothing wrong with offering lucrative incentives to build low-income housing "as long asthere are sufficient controls to assure that the housingserves needy tenants for 20 years." D

ANTIREDLINING RULES

The state Banking Board recently adopted by a voteof nine to one regulations to combat wholesale redliningof communities by banks.The board's action came three months after statelegislators met with Governor Carey and received acommitment from him to secure these regulations.Modeled after federal guidelines under the CommunityReinvestment Act of 1977, the regulations require banksseeking to merge, expand, or open new branches toshow how they meet the credit needs of the communitiesthey serve. This information is to be on file for publicscrutiny. 0

MUSLIMS CLOSE LOANAfter a number of months of delay, the city's firstsweat equity participation loan was closed and 14Muslim families are living in spacious low rent homes inWest Harlem.


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CETA VII LOOKS TO PRIVATE SECTORby Gini Sherry

On October 27, 1978, when President Carter signedthe Comprehensive Employment and Training Act(CETA) Amendments of 1978 into law, a new CETAera was quietly ushered in. Embodied in Title VII, a newsection of CETA, is a two-year demonstration program,the Private Sector Initiative Program.Title VII represents a potentially significant newthrust in national CETA policy. It is, specifically aimed aincreasing the participation of the private sector in employment training programs in order to increase thelevel of permanent unsubsidized job placement for"economically disadvantaged" persons. How this goalwill be accomplished is suggested by the federal Department of Labor's proposed regulations for the Title VIIprogram, which call for the creation of a "local partnership" between private sector business and industry andeach CETA prime sponsor (that is, the government unitrequesting CETA funds; in New York's case, the City ofNew York).The partnership is to be spearheaded in each city by aPrivate Industry Council (PIC), an organization whichmust be formed or designated by each prime sponsorinterested in receiving CETA VII funds. To assist citiesand other prime sponsors to establish PICs, the Department of Labor is providing $25,000 planning grants to450 prime sponsors nationwide.

Broad ResponsibilitiesPICs will be the center of Title VII activities in each

of flexibility in their approaches to training andsecuring permanent private sector jobs for theunemployed and underemployed recipients of CETAVII services. In fact, an explicitly stated goal of TitleVII is a reduction in the number of CETA-subsidizedprivate and public sector jobs, a goal echoed in theAdministration's fiscal year 1980 budget. The Carterbudget proposes a $729 million slash in CETA,including a reduction in the number of public service(Title VI) jobs from 625,000 as of September 1979 to467,000 as of September 1980. At the same time, thebudget includes a $400 million appropriation request forTitle VII to be used during the current fiscal year.Clues to the direction and design of CETA VIIprograms permeate the proposed regulations. A majoremphasis is placed on identifying and plugging the labordemand needs of the private sector-discovering wherepermanent job opportunities are available and trainingpeople to fill these jobs. Techniques for accomplishingthis include entering into on-the-job training contractswith private businesses and industries for partial traineewage reimbursement; development and administrationof other training programs; and entering into contractual agreements with private firms, neighborhood-basedorganizations and educational institutions to achieve theincreased job opportunity goal.

Local Economic DevelopmentPrecisely because the scope of Title VII is broad and


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businesses and industries, the program could be used toassist the following kinds of efforts: Supporting the retention or expansion of locallybased firms capable of providing training and long-termjobs for neighborhood residents presently lacking skillsneeded by these firms. Providing special assistance to the small businesssector of New York's economy; authoritative studiesindicate that almost all new private sector jobs aregenerated by the small business sector of the economy,and that about 80 per cent of these jobs are created byfirms with 250 or less employees and a full 50 per centby firms with 50 employees or less; by targeting CETAVII assistance to small businesses with growth potential,aid could be given to that section of the private sectorwhich tends to be locally owned and managed. Supporting innovative efforts of neighborhoodorganizations to develop locally-based businesses underworker cooperative ownership or joint workercommunity ownership.

Nothing In WritingNew York City's Title VII planning and polic),makingprocess is yet to be disclosed. The Department of

Employment's office of Policy and Program Development, charged with oversight of the program, has nowritten material available as of yet concerning theexpected design and operation of CETA VII. Likewise,the city's Private Industry Council is unable to supplyinterested organizations with a written programmaticagenda outlining the anticipated focus and range of activities expected to occur under Title VII. Communitygroups-especially those involved or interested in addressing economic development needs in their neighborhoods-should become familiar with CETA VII issuesand opportunities, in order to be able to effectivelyrespond to the city's Title VII Plan. The Plan, accordingto the proposed regulations, must be made available toall interested parties for review and comment prior tosubmission to the Department of Labor. 0

HOMESTEADING MOVES TO BROOKLYNThe month of June may turn out to be an importantmilestone for the HUD multi-family urban homestead

ing demonstration program in New York City.I f all goes according to schedule, the first of eightbuildings being rehabilitated under Phase I of the sweat

who will do the rehabilitation and then move into thebuildings as co-operators. They will buy the buildingsfor $500 and will pay monthly carrying charges of $45 to$50 per room.Although HUD has committed $2 .2 million in low


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TOTTERING DEMOLITIONPROGRAMSHORED UP AFTERNEAR COLLAPSE

by Bernard Cohen

345 East 99th St. in Man hattan set for demolition.


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time; failure to recover costs of demolishing privatelyowned buildings.While criticizing the practice by private demolitioncompanies of stockpiling buildings to improve theirwork flow, the report said the haphazard way HPD released buildings for demolition and grouped them incontracts also discourage efficiency.In cases where a building was put on "hold" in themiddle of the pre-demolition process-for example, if acommunity organization raised objections to demolishing the structure-the "status can be in limbo foryears," the report said.In 1977, the city signed 614 contracts to demolish1,609 buildings at an average cost of $6,700 per buildingand a total cost of $10.8 million. More recently, productivity sank to 150 buildings per month. "No matterwhat we did, that number did not change," Davis said.

Davis said both HPD and the contractors were to blamefor the dismal performance of the demolition program.He added that. there were a great many factors tha tcould prevent completion of a contract , including a single building dangling on "hold" or delays in replacingtorn-up sidewalks or erecting fences around the demolition sites.Nevertheless, he stressed that with the resumption ofdemolition contracts, HPD intends to monitor companies very closely to make sure buildings come downpromptly (he hesitated to specify what promptly meant,but said 30 days, 60 days and 90 days at various times)and would deny future business to firms that don't liveup to their current contracts. HPD does business withapproximately 55 small and medium-sized demolitioncompanies in the New York City area, although about80 per cent of the work goes to about half of them.

A major recommendation of the OMB report was theHPD should work with much larger, more sophisticatedcompanies outside New York City and greatly increasethe size of contracts. Davis said he has had discussionswith about 12 such companies but that no decisions hadbeen made. However, another source said the city waspreparing a contract with one company to knock down500 buildings."That's not the final answer to the number of unsafebuildings," Davis said, adding that HPD would bedeveloping other options, which he declined to specify.One idea that has been floating around the agency is toimport the U.S. Army Corps of Engineers and the U.S.National Guard to do some of the work.Asked if HPD was again contemplating using dynamite to demolish buildings, an idea the agency droppedmore than a year ago after it triggered an explosion ofcommunity protest, Yermack said, "We are not lookingat it right now." He added that most city buildings canbe razed by conventional means at no greater cost, andlocal opposition remains a strong deterrent.The size of the 70-member demolition unit has notbeen increased. Davis said he wants to see how the reorganization and effort to implement the report 's recommendations affects productivity before he thinks aboutenlarging the staff.Despite Davis's assurance of "an increased focus ondemolition coming out of HPD," good intentions havenot yet been translated into reality. The agency was stillunable to answer a question about how many contractsinvolving what number of buildings were currentlyopen. "We won't have a fix on that until our analysis isin place," Davis said. 0


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CITY, REP. GREEN ASK FEDS TO FUNDS100M CD PLAN FOR CITY-HELD UNITSby Susan Baldwin

New York City was put on notice by Washington lastAugust. I t was to develop a self-sufficiency plan byFebruary 28 to run its tax-foreclosed (In Rem) housingor condemn itself to a no-man's-land housing disaster.The city has developed the plan for dealing with itsever increasing number of problem dwellings. And ithas gained an advocate in Congressman S. WilliamGreen (R-Man.), the former director of HUD's N.Y.regional office, who supports the city in its effort tosecure $100 million from the federal CommunityDevelopment Block Grant fund to maintain its deteriorated In Rem housing stock.

"I certainly think the city should be given the opportunity to try to maintain its property and try to stayon top of it," Rep. Green told City Limits recently,noting that he plans to recommend to the HouseBanking, Finance, and Urban Affairs committee thatHUD give the city $100 million for the CD V year to runits tax foreclosed properties. Green is a member of theHousing and Community Development Subcommitteeof the House banking committee.

"But the real question here, aside from the supportmoney," he was quick to add, "i s whether the city'svarious alternative programs can develop the capacity totake on this large number of properties. This coulddevelop into a large political football with devastatingeffects on the city's future ."In a report to the House subcommittee submitted at

Housing and Community Development Act of 1974permit these funds to be used for In Rem purposes.According to Green, the city's major responsibility isto target how it will use the money for the properties .New York is expected to receive a total of $241 millionin its CD V fundings, of which $100 million, ifapproved, will go to the In Rem program and about $22million will be used for alternative managementprograms.In the city's self-sufficiency plan submitted on theFebruary 28 deadline to HUD's New York area office,Housing Preservation and Development CommissionerNathan Leventhal pointed out that the city projectssome 83,000 occupied units in city ownership by CD VII(the third year of the In Rem program) and that theseproperties must be "treated simply and returned toprivate ownership" as soon as possible.According to Leventhal's statistics, the city hasapproximately 37,000 occupied units at the presenttime.Noting that HPD has "rejected a large scale return tothe traditional kind of public auctions which in the pastserved as the principal means of disposing of city-ownedproperty," Leventhal outlined the following three mainoptions for disposing of the city's vast holdings: "(I)restricted auction sales; (2) net leasing properties for aone-year period while an owner secures privatefinancing and demonstrates good management and tax


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than will enter city ownership each year. The commissioner's predictions also suggest that by CD VII, the citywill need "some $280 million annually to fully fund allcosts of the In Rem management and treatmentprograms," with $200 million of this amount being noncity funded.

In addition to requesting changes in state and locallegislation that would permit the city to restructurerents, HPD, in its report, has also said that it will relymore heavily on its recently adopted consolidation andimproved demolition and seal-up programs to carry outits proposed self-sufficiency program.By CD VII, the report projects, the city's request for

CD funds will grow to $200,600,000 unless some otherfunding source can be found, and the tax levy cost to thecity of maintaining the properties will rise to$52,300,000. At the same time the city expects toprovide city funding for all the fuel and utility costs,two ineligible CD expenditures. The city also hopes toreceive about $27,910,000 by CD VII in rent revenuesfrom alternative management buildings.HUD Area Director Alan W ie ner could not bereached for comment on the city's plan, but Ginger

Macomber of the Community Planning andDevelopment Division at the area office said, "I muststudy it in greater detail, but from a first reading I thinkthey [HPD] tried hard to furnish us with the statisticsthat we asked for."

Officials at HPD and HUD will be meeting with eachother on a regular basis over the next few months todevelop the fmal application for the In Rem program,which must be submitted to Washington by the end

of June. The CD V funding year begins September 1,1979.In the meantime, Congressman Green will continue tolobby in Washington for approval of the $100 million tomanage and repair the In Rem property. At one pointearlier this year, it had been hoped that the federalgovernment might have an additional $100 million torun these properties so that the city would not have todevote $100 million of its CD-total of $241 million tothis program."Money is tight in Washington, and there just isn'tthat much extra to go around," Green said. "The citywill be lucky to target this $100 million for the program.

"And in order to do this right, I am hoping that HUDwill provide the city with the technical assistance it needsso that an innovative anti-abandonment housingprogram will be developed," Green continued. "I thinkwe're in for some tough decisions down the road, and itremains to be seen whether HPD can manage its In Remproperties or not."Noting that some 113 cities across the nation havehousing abandonment problems, Green has called onHUD in Washington to "do more to assist local governments to turn the tide of housing abandonment andproperty tax delinquencies."

"I n spite of the severity and scope of housing abandonment," he added, "HUD-as I learned fromAssistant Secretary Embry's January 29 letter-has 'notprovided any special kind of assistance to citiesregarding housing abandonment, nor do we [HUD]keep data on the amount of block grants for - thatpurpose.' This approach must change," Greenconcluded. 0


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ACTION GRANTS PASS BY NEEDY AREASWithin the next few weeks, the city will be announcing the awarding of several pending Urban Develop

ment Action Grants (UDAG) but applications fromlow and moderate income neighborhoods around thecity where such a grant would have a major impact willbe conspicuously absent." I t really is a shame that the city has not providedmore assistance to these communities so that they wouldlearn what the UDAG program is all about and have achance to compete for these monies in Washington,"said Ronald Shiffman, director of the Pratt Center for

Community and Environmental Development, theorganization that provides substantial help to low andmoderate income neighborhoods in their applicationseach year for Community Development (CD)-eligibleactivities.Shiffman's major criticism of the city's implementation of the UDAG program is its "inability o r unwillingness" to help these communities develop viable economic development or commercial revitalization plans.A total of $400 million a year for three years is available under this program created by the Housing andCommunity Development Act of 1977. Of this totalamount, $300 million a year will be available for largercities, while 25 per cent of the program funding must goto cities with populations of 55,000 of less.

"UDAG funds are to provide support for projects thatare intended to aid in the revitalization of the city'seconomic base or in the reclamation of neighborhoods.The intent of the program is to l e v e r ~ g e private dollarsfor development and revitalization:' said Joan Malin,

tion the city should and could have gotten anywherefrom $35 to $40 million last year if it had submittedsmaller, more modest, neighborhood-oriented plans.Two areas that have expressed interest in the UDAGprogram are Manhattan Valley on Manhattan's UpperWest Side and Flatbush in Brooklyn."A t this point I don't even know if we will go after a

UDAG," said Nancy Foxworth of the Manhattan Valley Coalition, whose group is trying to develop a planfor a neighborhood sports center and skateboard facility and a youth hostel and restaurant in an underutilizedschool and an abandoned nursing home.According to Foxworthy, the coalition is having a fairamount of difficulty getting CD IV money "priedloose" to hire an architect to develop the plan.In Brooklyn, the Flatbush Development Corp. isworking on a revitalization plan for community use ofthe Loew's- East Kings, an abandoned movie theatre.The UDAG proposal, Joyce Coward of the Flatbushorganization said, will be developed carefully and sensitively so as not to interfere with the economic viabilityof the existing commercial strip in the neighborhood.She noted that the community in another Brooklynneighborhood-Red Hook-is opposing the conversionunder UDAG of an abandoned factory formerly ownedby Goya because it will hurt other existing neighborhoodbusiness by causing an increase in storefrontabandonment.

Other "big, polished" UDAG plans include theproposed $172-million Portman Hotel for the TimesSquare area; a $3-million fund to match loans from conventional sources to provide 90 per cent of the financing


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Utility Board continuedmajority of industrial and commercial utility consumersin New York City.Rev. Morton Van Allen-Executive director, UrbanCrisis Task Force, a multi-service agency in the areas ofcrime prevention, consumer services, youth counseling,senior citizen services, housing employment, educationand job training; pastor of the Downtown BaptistChurch.Rev. Robert Emerick-Pastor, Grace United Methodist Church; member Manhattan Community Board 7;president of New York City POWER (People OutragedWith Electricity Rates), a coalition of 30 church, labor,tenant, civic and consumer groups organized aroundenergy issues.Public RepresentativesCharles Hughes-President of the 18,OOO-memberLocal 372 of the American Federation of State, Countyand Municipal Employees, AFL-CIO; chairman of thepolitical action and legislation committee of DistrictCouncil 37 AFSCME.

Donald Moore-President, New York Chamber ofCommerce and Industry; trustee, Brooklyn PublicLibrary and Brooklyn Botanical Gardens; director,Brooklyn Academy of Music.Amalia V. Betanzos-President, Wildcat ServiceCorp.; former commissioner, New York City HousingAuthority; former commissioner of youth services;former deputy administrator/commissioner Department of Relocation.Under its mandate from the City Council, the reviewboard is to study "those factors which have contributedto the excessive costs chargeable to the New York Cityconsumer and those mechanisms, including the potential

of a creation of a publicly owned utility, which withameliorate this situation. "Approximately 25 persons asked to be considered forthe board. 0

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