city limits magazine, october 1979 issue

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

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CITYLIMITSOCTOBER 1979 VOL. 4 NO. 7

GETTING READY FOR WINTER:WHO WU,I, PAY THE PRICE?

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by Bernard CohenWith winter fast approaching, preparations for rais

ing fuel oil prices to homeowners and rents for tenantsin New York City appear to be much farther along thanplans to help buffer hundreds of thousands of the hardhit ones from what government officials are calling anenergy-related economic" crisis."The sharply higher cost of oil-rather than its avail

ability-and the deteriorated condition of the heatingplants in thousands of city-owned residential buildingsare shaping up as the central cold weather problems for

landlords and tenants. Major oil companies say theyanticipate no serious drop in supplies this winter. MobilOil Co.'s allocation to its dealers in October was 105 percent of last year's volume, the first such increase in along time. City officials have dispensed with a bargestorage plan devised months ago when fear of shortageswas on everyone's mind.

It is the cost that will be raising havoc this year. Theaverage price of home heating oil is expected to be 63cents a gallon this year, compared with 45.5 cents in


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WINTER continued1978. FQr No.2 oil, which is used mostly to heat buildings with six to 19 apartments, the September price wasslightly more than 80 cents a gallon (a 60 per cent hikefrom a year ago). There is widespread speculation itcould exceed one dollar by the end of winter, althoughPresident Carter has asked the large oil companies tofreeze prices for the balance of the year.Homeowners and landlords, of course, will feel thepinch directly. According to the U.S. Department ofLabor, fuel accounted for 13.3 per cent of the maintenance and operating cost of a building in 1967 'compared with 35.7 per cent today. A 25-unit apartmentbuilding using No.6 oil that cost $8,295 to heat in 1978will cost more than $12,000 this year, according to datasupplied by the Rent Stabilization Association, a landlord organization.The process of passing these costs on to tenants is alittle more cumbersome, but the city has been alert tothe appeals of landlords. Since April, the Rent Guidelines Board has added fuel surcharges ranging from 0.5per cent to 2.5 per cent to 350,000 leases and set nearrecord rent increases of 8.5, 12 and 15 per cent for anadditional 350,000 one, two and three-year leases.Moreover, the RGB is considering additional fuel surcharges for many thousands of other tenants and willannounce its decisions in late October. Mayor Kochasked the City Council last June to let landlords raisethe rent of tenants in 350,000 rent controlled apartmentsa maximum of five per cent whenever the average delivery price of oil rises more than 15 per cent a year.Tenants in city-owned buildings will not face rent increases due to higher oil prices, according to DeputyHousing Commissioner Charles Raymond,because "wehaven 't worked out a way to restructure the rents."

The steep jump in the price of fuel is expected tocause extreme hardships for tens of thousands of lowerincome homeowners and tenants in New York City.There are fears that a cold, costly winter could deprivemany of adequate heat and utilities, force them tochoose between food and fuel or leave them vulnerableto fires started by space heaters or stoves. It might alsospur a new round of building abandonment .The law says that between October 1 and May 31, anapartment temperature of at least 68 degrees must bemaintained from 6 a.m. to 10 p.m. whenever the outsidetemperature falls below 55 degrees, and at least 55 degrees from 10 p.m. to 6 a.m. whenever the outside temperature falls below 40 degrees.There are a handful of federal and city programs thatare supposed to assure adequate heat and to help lowerincome people offset the increased energy prices. But asof October 1, there was still uncertainty about federalfunding for several key programs, concern over howNew York City tenants whose fuel costs are incorporated in their rent will qualify, doubts about how muchof the needy population will be served and manyunanswered questions concerning implementing

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regulations. Meanwhile, a state interagency task forceappointed several months ago by Governor Carey wasworking toward an October 19 deadline for submitting astate energy plan mandated by the federal government."W e have nothing releasable at this point," onemember of the task force said on October 4. City officials appear to have had little input in the plan as of thatdate.

Here is a roundup of energy assistance programs andwhere they stood on October 1.ENERGY CRISIS ASSISTANCE PROGRAM-Thisprogram has had four different names and two mastersin the four years it has been in existence. After two yearsof being administered by local community action agencies, it will be run this winter by the New York StateDepartment of Social Services, which had it the firstyear.The purpose of the program is to provide variousforms of assistance to lower income people who face acrisis due to high energy costs. The assistance includespayments of up to $400 per eligible household to coverthe payment of fuel/utility costs; the provision of shortterm assistance in the form of fuel supplies, warm clothing, blankets, replacement of broken windows, temporary shelter, health and other supportive services; directcash assistance of up to $50 where a person has paid afuel bill and is in a crisis.In New York City, "crisis" payments for the winterof 1977-78 were not made until early 1979. Paymentsfor the winter of 1978-79 were not made until May of1979 and were terminated on June 30. Although assistance for 27,700 people was granted during those twomonths, thousands of calls came in after the cutoff dateand still close to ,$1 million went unspent, according tothe city's Community Development Agency.Congress has authorized $250 million for the programthis year, of which New York State expects to receiveroughly $24 million and New York City $1O-to-$14million, depending on a still uncertain allocation formula. Actual appropriation of the funds has beendelayed, trapped in a dispute between the House andSenate over providing federal funds for abortion. President Carter has asked Congress for an additional $150million for the program, which would bring it up to$400 million. "W e are worried about when Congresswill pass on the funds," said one s tate official. "W e aretrying to find out if there is a way the state can advancethe money against future federal income."The program has a number of other problems, asoutlined by city and state officials. Two factors, theoverall amount of money (when it's available) and theincome eligibility standard, are combined, in the opinion of many, to exclude a lot of the poor and near-poor.Under the existing regulations, to qualify for the program an applicant must earn no more than 125 per centof the official poverty income level. A number of cityand state agencies have urged that the figure be raised to

continued on page J8


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THREE DEMONSTRATIONAREAS PICKED BYHUD

HUD has chosen three neighborhoods to launch a$19.2 million pilot program intended to accelerate housing rehabilitation and offer ownership to low and moderate income people in New York City.Combining Section 8 syndication proceeds with Community Development Block Grant funds, the "demonstration" is also an effort to strengthen the linkage between private developers and community-based organizations.When the program was announced last summer, officials said four neighborhoods would be selected andfunds furnished to rehabilitate 600 housing units. Innaming only three neighborhoods, a HUD official citeda "limitation of funds" due to rehabilitation costshigher than were originally projected. The total numberof units is still being determined, she said.The neighborhoods announced by HUD are: Morris Heights in the Bronx. The communityorganization is the Morris Heights NeighborhoodImprovement Association, 1618 Grand Ave. The developer is Rental and Management Association Corp.,1619 Third Avenue, Manhattan. Prospect Heights in Brooklyn. The communityorganization is the Prospect Heights NeighborhoodCorp., 279 Sterling Place. The developer is ProspectusDevelopment Corp., c/o Kings Restorations Corp., 327Hicks St., Brooklyn. Clinton in Manhattan . The community organization is the Clinton Housing Development Corp ., 66410th Ave. The developer is Related Housing Companies, 645 Fifth Ave., in Manhattan. The SettlementHousing Fund is listed as a party in the consortium.Clinton was not among the seven neighborhoodslisted originally by HUD and HPD as eligible for theSection 510 Demonstration. It was added reportedlyafter community representatives mounted political pressure on the city.Each neighborhood will have one Section 8 substantial rehabilitation project plus the moderate rehabilitation of additional units nearby using Community Development Block Grant funds and a slice of the synication profits from the Section 8 building.The timetable calls for construction to begin nextspring. 0

Robert Muniz, 41, director of operations and housingservices coordinator for the Melrose Organization forCommunity Action in the Bronx, has been appointedassistant housing commissioner for rent control. Hesucceeds Barbara Cohn, who left HPD in September,citing "personal reasons." 0

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RAYMOND QUITS HPDCharles Raymond, a deputy housing commissionerwho has spent the past 18 months managing the city'svast stock of tax-foreclosed residential properties, hasresigned from HPD, effective November 9.Raymond, 37, said he was leaving the agency to gointo private industry. Asked to be more specific, he said

the work involved "franchising." Others said the jobinvolved expansion of several hundred haircutting outlets into an international network. He and his familywill be moving to Connecticut.Raymond came to head a new Office of PropertyManagement at HPD just as the agency was taking onthe responsibility for managing and maintaining thousands of buildings housing what is now about 33,000 occupied apartments. He also supervised new alternativeprograms, such as an interim lease and communitymanagement, as well as relocation of tenants."I feel sad that I'm leaving," Raymond said. "Webegan this office with three or four people." He said hebelieved he had helped establish a direction for addressing the housing problems and had fostered "a reasonable relationship with communities." His reason forleaving, he said, is a desire for experience in privateindustry.Raymond, who has worked for the city for 10 years,was a deputy commissioner for management in thecity's Department of Mental Health prior to comingover to HPD.There was no immediate word on his successor. 0

_CITY LIMITS.City Limits is published monthly except June/ July and August/ Sep

tember by the Association of Neighborhood Housing Developers,Pratt Institute Center for Community and Environmental Development and the Urban Homesteading Assistance Board. Subscriptionrates: $20 per year; $6 a year for community-based organizations andindividuals. All correspondence should be addressed to CITYLIMITS, 115 East 23rd St., New York, N. Y. 10010. (212) 674-7610

Application to mail at second-class postage rates is pending at NewYork , New York 10001.Editor . .. .. . . . . . . . . . ........................... Bernard CohenAssistant Editor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Susan BaldwinDesign and Layout . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . Louis FulgoniBusiness Assistant . . . . . . . . . . . . .. . . " . . . . . . . . . . . . . . Carolyn WellsCopyright 1979. Al l rights reserved. No portion or portions o j thisjournal may be reprinted without the express written permission oj hepublishers.This issue was funded by New York Community Trust.

Cover drawing by Louis Fulgoni


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CITY RENEGES ON $250 SALES POLICYASKSFAIRMARKETPRICE

by Susan Baldwin"I think it's wrong to give someone your word and

get up your courage to stay in a neighborhood, and thengo back on this word. It really isn 't fair."Elsa Guzman, an outspoken young mother of fourgrade school children, summed up the hazards of trusting a city policy which is undergoing changes tha t mayprice her out of her affordable, city-owned apartment inClinton on Manhattan's West Side. "You know, youmake your commitments to the neighborhood, theblock and your school, and then they tell you to moveout because they can make money."Guzman is the head of the tenants' association at 459West 35th Street, one of two dozen buildings in Clintonand about 200 citywide currently in a city housing program that, as projected, would permit tenants in lowincome neighborhoods to buy their buildings from thecity for $250-per-unit once they had successfully managed their building for 11 months, using the rent roll tomake repairs and pay for fuel.Four months ago the city passed this $250 salespolicy, which low and moderate income residentsthought was firm but which is now being eroded inneighborhoods such as Clinton and Chelsea where there

is political pressure from City Hall to sell the propertiesat much higher rates.City officials have explained the Koch Administration's apparent reneging on the $250 commitment asbeing potentially politically embarrassing if low incometenants are permitted to buy buildings at low rates andthen turn around and sell them at a much higher profit.One city housing official, Assistant CommissionerPhilip St. Georges, said that City Hall feels it could beunder fire if it negotiated a 10'" price for the properties,only to find out that the same land was worth $500,000as a parking lot.Critics charge the city with backing down on acommitment. They say the city worries too much thatlow income people will make a profit at the same time itprovides subsidy programs such as the J-51 that encourage wealthy developers to become even wealthier. Thisyear alone the J-51 program rewarded owners with$74.8 million worth of tax exemptions and abatements.They also maintain that tenants would have a hard timemaking windfall profit since under the guidelines of lowincome, non-profit corporations that tenants must formto buy their buildings, there are strict requirements regarding income levels and resale of the properties.Guzman is one of a large number of housing activistsin Clinton and other neighborhoods attractive to realestate interests in the city who are concerned that they

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will be displaced from their homes because the city hassent them a new form of agreement to sign, makinglegal the eventual sale of the buildings at "fair market"value. These observers are concerned that while the citymay now only be having second thoughts about lowprice sales in certain desirable neighborhoods, thispolicy of reneging may extend to any neighborhood thatreal estate speculators find desirable.The Board of Estimate unanimously adopted the$250-per-apartment unit price policy in low and moderate income or Community Development eligible areas atits July 19 meeting, But ever since then, interim-leasetenants of buildings, primarily in Clinton, have been receiving a letter from HPD asking them to sign an agreement that releases the city from the $250 commitment.The letter, signed by HPD Deputy CommissionerCharles Raymond, says in part: " I f you have successfully completed the management period, which will bedetermined by HPD, we will initiate discussions withyou to purchase the building. While we cannot give yourgroup art option to purchase your building at this timeor confirm what the sale price will be, we will give yourgroup first consideration to purchase the building at afair market price to be determined .. .You should beaware that it is currently HPD policy to sell city-ownedproperties located in viable private market areas atmarket value. Such market value may be determined byappraisal, public auction, or some other mechanism tobe determined by HPD at a later date.""As far as we are concerned, this letter kills the interim lease buildings," said Sondra Thomas, director ofthe Clinton Housing Development Corporation, one ofthe non-profit housing groups helping neighborhoodtenants in their struggle to preserve their housing. "And

if you look at it even more closely, it sounds as if they'regetting ready to kill the other alternative programs."What they are really suggesting is that the interimlease is a Mickey Mouse program-in order to be in ityou have to have an A-I building and an A-I tenants'

organization that's willing to work hard to make it succeed," Thomas said. "And then there are no guaranteesthat your good work will payoff."Five buildings on West 46th and 48th Streets in Clinton that were pioneers in the interim lease program arebefore the local community board for review of theirland use plans. I f there are no problems with their applications, the buildings could be sold to the tenants withinthe next few months at the $250-per-unit price.But three other buildings-455, 457, and 459 West35th Street-that were part of this original package to


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be submitted to the community board have been stalledin HPD, although the required paper work on them wascompleted at the same time by the tenants.After talking to a number of HP D officials, includingformer Commissioner Nathan Leventhal, City Limitsconfirmed the existence of the fair market letter andalso learned that the West 35th Street properties werenot on the community board's agenda. Leventhal is currently deputy mayor."They did everything they were asked to do . Therewas nothing defective about their ULURP [UniformLand Use Review Plan] application," said Bruce Sykes,director of sales in HPD's alternative management unit."It's true that they are located a few blocks away fromthe proposed convention center, and I guess someonehad a problem about selling them the buildings for $250. . . I don't know of any particular planned developmentfor that area, but I do know that a report was prepared

and sent to former Commissioner Leventhal." The convention center is planned for the area bounded by West33rd to 37th Streets and West Street to Tenth Avenue.Asked to comment on the "fair market" sales policy,Leventhal said, "W e have said four times over that ourgeneral policy is to sell buildings for $250 per apartment. At the same time, there are exceptions, and we reserve the right to negotiate a price." Raymond calls$250-per-unit "a guideline."Elsa Guzman and James French, of 316 West 36thStreet, head of the Coalition of Concerned Citizens ofClinton, have other answers to negotiating prices .

"I can't afford $20,000 for this apartment, and Iwon't pay it any way," argued Guzman, who has vowedthat she will not move .

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"It's ridiculous for them to come down here and tellus we have to sign this agreement," French complained."It ' s totally written to protect HP D . In the meantime,they' re telling us, 'I f you don't do thi s or tell us aboutthat , it 's your responsibility.' Where does the buckstop? We make all the repairs, and then they sell thebuilding out from under us."According to French and others who attended aheated Clinton town meeting with Mayor Koch in lateAugust , the subject of fair market rents was raised andthe mayor said the administration would not permittenants to buy apartments for $250 and then turn-- aprofit. At that meeting he also said that certain Clintonproperties were worth more than $250 a unit and shouldbe sold for more .

Tenant outrage at this assertion was still echoing inthe question Elizabeth Cuevas.of 433 West 46th Streetasked a recent visitor. "The city gave up on this building

a long time ago, so why are they telling us that the priceshould be different," Cuevas demanded to know. Hersis one of the five buildings before the community boardto be considered for sale to the tenants.

" The only reason we're here is because of the workwe've done, and the only help we got was the rentmoney," Cuevas said. She and other Clinton residents,although fearful of losing their properties to outside realestate interests, are committed to staying in their neighborhood."When someone comes in here snooping around andasking who the owner is, I just chase them away,"Cuevas laughed.

"There is a lot of work to be done on our buildings,and we've been doing it all by ourselves. No city help,"

continued on page 13


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GROWTH: AN AGENDA FOR THE 1980'SI f the preoccupation of community-based organizat ions in the 1970s was the painful process of getting s tarted,the pressing issue of the 1980s is likely to be how well groups control and manage their growth. A two-part series

on growth concludes this month in City Limits. Part I looked at the ways community organizations have grownand how expansion has affected both the administration and the mission of groups. Part II identifies some positive and negative forces that influence growth, examines the roles government, technical assistance agencies andfoundations play and suggests recommendations for helping organizations take more control of their development.by Bernard Cohen

"When you've starved for a long time, you rememberthat, so when the money comes around it's hard to sayno. You don't want to say no because maybe you'll needit tomorrow. "

The temptation to say yes to funding is considerablefor most community-based organizations in lowerincome neighborhoods, where "tomorrow" is dreadeduntil it actually arrives. The frustrations, the insecurityand the fear of failure over years of struggling to establish themselves have left a lasting impression on theseorganizations-as Harry DeRienzo, director of agrowing South Bronx group-describes so vividly. Together they spell desperation, a panic that time is beinglost and that doing something is better than doing nothing. Meanwhile, government is finally turning out a mixof programs after years of all but ignoring the achievements and potential of these organizations.A new set of choices are presenting themselves, and atleast some community group directors and other expertsare coming to the conclusion that saying no or at leastmaybe may be the healthiest answer if the program thatis being offered is beyond their capability, unrelated totheir primary activities, poorly designed or inadequatelyfunded. It is an attempt to control growth internally,based on a new awareness of the awesome impact programs have on organizations.

"The failure of most organizations is that they takeon too much' too soon. Something breaks down," saidMargaret McNeill, executive director of the West Harlem Community Organization . " You can't reach out forevery grant available. We have turned down somethings. I'm at the point where .. . if it meant writing aproposal for a new program, we would not be encouraged to seek those funds."This line of thinking is confined to a relatively smallnumber of organizations. Most groups are still in thestage of responding to resources, what one communityleader calls "growth related to crisis."

For example, New York City's housing agency turneddown about 35 applications for the community management program-in which non-profit organizationsmanage city-owned buildings under contract-.becausethe groups were not qualified or otherwise not eligible."What some groups do is the buckshot approach,"meaning that they submit one proposal for many programs, hoping to score with one, said Asst. Commis-

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sioner Philip St. Georges. " I would characterize it as'going fishing.' " Other examples are not hard to find: Before its near collapse, the Peop le's DevelopmentCorp. in the South Bronx was running at least 11 different programs using funds from four federal agencies,two state agencies, two city agencies and numerousprivate sources, most of them acquired in the past twoyears. After 10 years of tightly controlled growth, the Bedford Stuyvesant Restoration Corp., one of the largestand most sophisticated community-based organizations in the country, took over a job recruitment program this year. Since job recruitment was not a priorityof Bedford Stuyvesant and since the takeover createdhard feelings with the neighbor organization that hadbeen running the program, the move puzzled some whosaw it as a reflex inconsistent with past practices . The South Bronx Community Housing Corp. has a$1.7 million contract to manage 236 units of city-ownedhousing. SBCHC's president says the organization doescommunity management because the program is available, but that given the choice he would probably do adifferent housing activity with the money.

Housing Conservation Coordinators in Manhattanoffers a legal clinic, sponsors a food cooperative, hastwo solar demonstration projects going and provides aboiler repair training course, in addition to its housingduties. "Our question is one of focusing as opposed toproblems of expansion," said one staff member.Representatives of other groups told similar stories oftaking on programs they were less than thrilled with forsurvival. "W e respond to events instead of having clear,thought out plans about what we want to do and theway we want to go," said one. Another said, "W e don'tcontrol the total process. We depend on HP D for programs, on HUD for brick and mortar and others forfinancing . Unfortunately, we have to react to whatexists, we grow as a result of our involvement with whatexists ."Community organizations are faced with a whole newset of growth problems which up to now have been arelatively silent issue. "What has happened is that tosome extent, a lot of us, and individuals in governmentwho are supportive, have not raised critical issues whenwe should have," said Ron Shiffman, director of thePratt Institute Center for Community and Environ-


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mental Development. He and others said that pressurefor productivity, the constant need to prove the validityof neighborhood-based efforts to foundations and thegovernment and fears that one failure could tar thewhole movement had fostered an overprotectivenessand inhibited their ability to face such problems square-ly.

One of the most serious problems for organizationshas been that government contracts usually do not coverthe full cost of running the programs, leaving the groupto make up the difference ou t of its own often meagerbudget. Since there is no standardization among govern-ment agencies, groups with multiple contracts have theirhands full meeting complicated financial and programreporting obligations that have varying deadlines, some-times inconsistent rules and differing performance stan-dards-often without sufficient funds to do the job.

"A small community group that might have grantsfrom DHCR (state Division of Housing and Community Renewal), CETA, Division for Youth, HP D (cityHousing Preservation and Development) and community management and a staff of five or six might have toundergo four audits in one year," said BernardMcDonald of the Ford Foundation. "General Motorsdoesn't undergo four audits in one year."A study last year by the Greater New York Fundfound that for every $100 in government funding, vol-untary agencies have to spend an additional $16.40 oftheir own money to meet indirect costs not covered bythe contract. Dr. Nelly Hartogs, who headed the study,said the amount today is probably closer to $20.

The study cited a series of non-reimbursed, indirectadministrative costs such as expenses from having to ad-just bookkeeping procedures to meet government re-quirements, chronic delays in receiving payments andadministrative time needed to insure continuation of thefunded program.

The conclusion of that study was borne out in inter-views with directors of community organizations andgovernment officials. "No business organization wouldexpend the dollars that both the federal and stategovernments have done without sufficient funds formiddle management," said Sybil Phillips, a HUD offi-cial familiar with contracts to community-basedhousing organziations. "Unfortunately, contractsprovide for deliverables, not management funding."

Hartogs said voluntary organizations need to bemuch better prepared when they sit down to negotiate acontract. "Voluntary agencies are not sophisticatedenough nor do they take a business approach to whatthey are doing. They are so anxious to get the govern-ment contract and see those green dollars that theyaccept and sign a contract without knowing what's init," she said.The emphasis by funding sources on supporting "newand innovative" projects also pushes groups into takingon new activities they may not need or want. "No onewants to give money to sustain efforts under way," saidShiffman."Groups have to find a new way to packagetheir activities or change what they are doing. It's astupid game."

The potential for subtle manipulation by foundations, technical assistance agencies or consultants is alsocited as a danger. They may be more interested in promoting their own agendas than in responding to whatthe group really wants. I f it means funds, the group maygo along. " I t is hard for a group to say no when clearlyif they say yes they stand a good chance of getting themoney," said Nancy Castleman, grants administratorof the Fund for the City of New York, a foundation. " I ttakes a fair amount of sophistication to say no."continued on page 19

drawing by Dan Stern


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HUD OKAYS $269.9 MILLION CD5 PLANby Brian Sullivan

HUD has announced approval of New York City's$262.9 million CD Year 5 application, attaching onlyminor conditions. This continues HUD's historic aversion to strongly challenge or take any substantive actionto change the CD program in light of citizen complaints.The CD 5 figure includes more than $21 million in unspent funds carried over from CD 4, which ended August 31.There are some conditions cited by HUD in its approval that are worth noting, for better or for worse.Among them are constructive requirements that the citysubmit a more detailed Economic Development Strategy;further refine its target areas within the 10 neighborhoods already designated CD Neighborhood StrategyAreas; designate four specific Section 8 NSA neighborhoods as CD NSA's so that there is geographic uniformity under these two programs; and implement its newEqual Employment Opportunity Program bySeptember 30, 1979.

On the weak side, the city will not be required to meetthe minimal HUD requirement that five per cent of itsstated housing needs be addressed in CD 5, nor will it beallowed to offer Section 312 rehabilitation loans in certain CD-eligible areas, despite having advertised to thecontrary. Details of these and other conditions follow:Economic Development-The CD 5 application contains no clear economic development strategy that addresses issues of unemployment or long-term impact onneighborhood economies . Instead, the city has optedfor a shopping list approach, stating that it will take upto two years to formulate a strategy. HUD wants it nextyear.

CD NSAs-Ten neighborhoods have been approvedas CD NSAs, but the city must further refine its targetareas within these neighborhoods by April 30, 1980.Paradoxically, these neighborhoods are being deniedcertain resources on the grounds that as CD NSAs theyare eligible for special CDtargeting. At the same time,the NSA assistance has yet to materialize because of aweak commitment by HPD. Catch-22.Section 8 NSAs-Four neighborhoods that are targeted for extra Section 8 funds are not designated as CD

NSAs. They are Far Rockaway in Queens, CrownHeights in Brooklyn and Hamilton Heights and Gateway to Harlem in Manhattan. HUD wants them namedCD NSAs next year.Adequate Resources-The designation of additionalCD 6 NSAs will depend upon adequate resources beingavailable after In Rem, NSA and other prior commitments are met. The city has publicly committed itselfto phasing in 10 to 12 new NSAs this coming year.Chairman Robert Wagner of the City Planning Com-Brian Sullivan is asenior planner a/thePralllns/i/uteCenter fo r Community and Environmental Develop-

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mission is reported to oppose a formal selection of asecond round of NSAs, however.

Target-Certain activities must be targeted to CDNSAs: unsafe building demolition and seal-up; facadeand street improvements; street repairs; community artsdevelopment programs; historic preservation; Section312 loans.Public Services-Public services begun outside NSAswill continue through CD 5 after which all new publicservices must be within designated NSAs. This meanseligibility for one more year of Model Cities areas in theBronx, Harlem, East Harlem and Central Brooklyn.In Rem-Use of CD funds for city-owned buildings isapproved, but the city must continue to consolidate partially occupied buildings, reduce the intake of new InRem buildings and pay all fuel, utility, vesting and disposition costs froto its own funds, not CD. The first two

points play into the hands of Mayor Koch and his ."planned shrinkage" policies.Section 312-Although the city has been advertisingthe availability of low interest Section 312 rehabilitationloans in any CD-eligible area, HUD says they must berestricted to the following areas: federal urban homesteading areas; federal urban renewal and NDP areas;CD NSAs; Section 8 NSAs; REMIC areas and Neighborhood Preservation Program areas. This leaves outother neighborhoods that could effectively use 312 loans.Benefits-The city's CD 5 plan is "presumed" toprincipally benefit low and moderate income peoplesince the application budgets 94 per cent of the CD 5

funds to low and moderate income areas and/ or activities. Examples of programs cited as not benefitting suchhouseholds are: Participation Loans, 20 per cent;Article VIII-A Loans, 15 per cent; Sweat Equity Loans,13 per cent; HPD project support, 16 per cent; aleigh-borhood commercial revitalization, 27 per cent.Housing Needs-HUD requires cities to compile theirhousing needs and take steps to address five per cent ofthem in CD 5. New York City claims it cannot do betterthan four per cent, and HUD has caved in. The city'sclaim is a farce in light of the fact that it has actuallyspent only 45 per cent of the $580 million in CD funds ithas received since 1975.

Equal Employment-The city must implement itsnew Equal Employment Opportunity program bySeptember 30, 1979 .Expenditures-The city must reprogram funds out ofslow-moving programs into more productive programsto remedy its disappointing overall expenditure rate.Citizen Participation-The city must inform the

public-now or when is not made clear-of all of theabove as well as any other changes or clarificationsrelated to CD 5. 0ment a n ~ director oj the New York City Housing andCommunity Development Coalition.


9/22

COUNCIL EYES RENEWED J-51 PLANFOR EVEN BIGGER TAX GIVEAWAY

by Susan BaldwinA city program that in 1979 will reward owners whorehabilitate buildings for multi-unit housing with $74.8million worth of tax exemptions and abatements couldbe a still bigger giveaway in years to come, if City Hallhas its way.But, City Council insurgents have mounted a challenge to the city's business-as-usual proposal to extendfrom 12 to 32 years owners' exemption from increasedtax assessments and to swell tax abatements from 90 to100 per cent of owners' costs.These critics charge that Section J-51 of the city'sadministrative code, which governs the tax-incentive

program, is already too generous to owners whosedevelopment plans drive out small businesses from loftbuildings made into apartment houses, and force lowand moderate income residents, including s i n g l e ~ r o o m -occupancy (SRO) tenants, to leave their homes. Thepresent law expires December .31,. 1981, unless reenacted.

The proposed legislation, Intra. 751, went before theCouncil's Housing and Maintenance Committee in midAugust and could be voted on by the full Council beforethe end of October. It seeks to amend New York City'sadministra tive code in three principal ways: (1) It wouldpermit a 32-year real estate tax exemption plus an abatement for moderate rehabilitation of occupied multipledwellings; (2) it would limit to 50 per cent the tax abatement for conversions of non-residential (commercial)buildings to multiple dwellings; and (3) it would increase certified reasonable costs eligible for abatementup to 100 per cent.

I f approved, the new legislation would be extendeduntil December 31,1984.

The insurgent alliance of Council members hopes toamend the bill to protect low and moderate income tenants and small businesses from displacement. Untilnow, the reformers have not been able to modify orblock housing proposals of the Koch administration inthe Council.According to a financial report prepared for theCouncil, the city's total J-51 tax exemption and abatement costs for 1979 are estimated at $74.8 million.In addition to the 32-year real estate tax exemption onthe increased property valuation resulting from therehabilitation, the ,owner, under the proposed legislation, would be permitted a 20-year abatement for the"certified reasonable cost" at 100 per cent value, to becomputed, as current law provides, at 8Y3 per cent,equalling about 95 per cent of the actual rehabilitationcost.

How the change might payoff for the owner of a 41-

9

unit, five-sto!y walkup can be seen in this exampledrawn from figures provided by one of the dissidentCouncilmembers. At current tax rates, without eitherexemption or a b a t ~ m e n t , such an owner would pay$245,000 in property taxes over a 20-year period on anassessed valuation of $140,000.Under the present J-51 system, if his cost is certifiedat $185,000 and the rehabilitation has raised his assessment from $125,000 to $140,000, the owner pays only$73,075 in the same period, a tidy saving of $171 ,925.But a real bonanza awaits the owner who gets a J-51under the proposed scheme. He would pay a mere$5,524 in 20 years, all of that in the last year. His taxsaving (and cost to the city in lost taxes) would be$239,475, or nearly 98 per cent of all potential taxes onthe property.Although the opponents believe that certain of theseproposed changes in the J-51 provision are small steps inthe right direction-for instance, requirements that thetax abatements may not exceed taxes owed for a 12-month period and that claims of fraudulent improvements will be challenged-they are still concerned thatthe law will not serve neighborhoods and small ownersthat should benefit from its provisions.

"What has been happening on the East Side on 78thand 67th Streets, for example, is offensive," said Councilwoman Jane Trichter (D-Man.) at a recent Councilhearing. "These are perfectly habitable buildings wherethe landlords are making significant profits and drivingout tenants, and then the landlord is renting a one bedroom box at $200 more per month ."Trichter and others have questioned the legislation'sdefinition of "moderate rehabilitation," noting thatthere is no provision in the law that protects tenantswhile work is allegedly being done with the tenants inresidency.They have also pointed out that well-maintained SRO'sare an important housing resource for the working poorand elderly and are, in fact, a housing option that hasserved thousands of New Yorkers for years.

SRO Housing CrisisCommenting ..on the crisis in SRO housing stock,Stephanie Glickman of the Murray Hill SRO Project,said during the Council hearing, "This crisis has beenprecipitated by J-51 . . . SRO is the preferred housing ofchoice here . . . Since 1975, we have lost 15,000 units .And with almost no vacancy in low-cost housing, therewill definitely be an increase of bag ladies and baggentlemen.' ,

Glickman and other supporters ofSRO housing arecontinued on page /6


10/22

IADMINISTRATION

DEPUTY COMMISSIONERWilliam Elmicke 2293

RELOCATIONOPERATIONS

ASST.COMt-4Manuel Mirabal"3930,3931Urbln Aenew.l.ndProperty M.nagemenlPublic: Improvem entRetOCItionEmergency HousingAclh l_

IFISCAL AFFAIRSA S S T ~ ~ M M

1OFFICE OFPROPERTY MANAGEMENT

OEPUTY COMMISSIONER5610, 4983.

MANAGEMENTOPTIONSASST,COMM.

Philip St. Georges'0582, 0584CommunityM.nagem.ntSo,""'teJlm L Prog,..m

"75 Malden Lane

IMOT. SERVICESIINFO. SYSTEMS

DIRECTORAndrew Cooper 2356

IN REM PROPERTYMANAGEMENTASST. COMM.Charles J. Poldomanr1820,1821

In-R.m Property (I I of 811178)Management

MaIn 0ftIce-100Gold S t r " '

CITY UMlTSIOctober1m

DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT

IINSPECTORGENERALGeorge Dole54541

REHABILIATIONASST. COMM .Joff Heintz0620

,.rtlclpatlon LOins,SHIP, Section 312 LOIn,JS1 TIll. Ex.mptlonlT,x Aba;t.ment421 T EXlmptlon

COMMISSIONERAnthony Glleclnwn566-2324

OPERATIONSDEPUTY COMMISSIONERRoliirt 0..,10 8841

IOFFICE OFDEVELOPMENT

DEPUTY COMMISSIONERTo Be Announced 6557. .

COMMUNITYDEVELOPMENTASST. COMM.Charles Re iss

5146Community ServiceNeighborhood P, . . vltlonA,.. OffiCIProjKt Pt.nnlngProtect Denfopmenll ind A cquII I_ endAppIo/II"De. . ..I-Up MIMII I I I ~

HOUSING DEVELOPMENT1-----1 CORPORATION (HOC) II EXEC. DIRECTOR I-----________________ J 480-1203IL---J REHABILITATION MORTGAGE IINSURANCE CORP. (REMIC)EXEC . DIRECTOR Roger SimonI .25-9351POLICY AND GOVERNMENT

RELATIONSDEPUTY COMMISSIONER

Ronald Marl nO' 5b3s

I IGENERAL EQUAL PROGRAMlCOUNSEL OPPORTUNITY MGMT. ANALYSIS

Robert Robbin ASST. COMM. EXEC. DIRECTOR2310 Lil la long 2486 Bruce Gould 6125

IRENT STABILIZATION ASSOC. OFFICE OFRENT GUIDELINES BOARD RENT AND HOUSING MAINTENANCECONCILIATION & APPEALS BD . --(Independent Bodle.)

HOUSINGSUPERVISIONASST. COMM.Ruth Lerner6478

M.nllgem.nt Supel'YlslonRent.1 Subsidies andSection 8 ContractsS u ~ r v l a l o n MltchellLama RetlNlnclngTechnical SeMC.. Bure.u

EVALUATIONAND COMPLIANCE

ASS'.COMM.Joseph Shuldiner5800Article IA lOinaVolunt.ryAgreementaRecel.,.,..hlpHousing lItiglUon Bure.uERP RecoupmentM.Nlgement AIMt'naUMICwnollC--"",UnIt

DEPUTY COMMISSIONERDanlol Joy '1037

CODEENFORCEMENTASST. COMM .Frank Oell 'Alra6974

Houalng Code and OtherInapecUon.Cent ..1ComplaintEmergency Repair ProgramDemolition SealUp

RENT CONTROLRobert Muniz

5076 (110 Church St.)Maximum Ba.. RentTraditionalRentAdJu.tment.EYlctionsHardlhipand RlntStNcturlngPro .. .L l t I p_E . . . ._ C___ Ea_____ Il I--.....,


11/22

SMALL BUILDING?LOOKBEFORE YOULEASE

by Joan M. BrintonMany tenants find the idea of living in large apartment buildings cold and dehumanizing. They are convinced there exists a stock of owner-occupied brownstones kept in perfect condition by landlords who consider their buildings as homes rather than as investments

and who are looking for good tenants who willappreciate their buildings rather than a fast turnover oftenants who can pay whatever the market will bear.These are often the same people who believe thatManhattan still has a score of fine French restaurantswhere dinner with wine costs less than ten dollars.When Mike Weaver moved to Greenwhich Village in1977 he wanted to live in a small building because hethought it would be "like a nice pseudo-family environment." He was happy when he found an owner-occupied four-family home on West II th Street, although hethought $390-a-month a bit high for a dark studio.After two years of helping his elderly landlady in various ways, of sharing meals and fixing things, he wasshocked when she refused him a three-year lease, then atwo-year lease and finally said the rent would have togo to at least $450. When he replied that the priceseemed steep but that he did not want to ruin a friendship over a few dollars, she said that it was "a few hundred" and threatened to make his life miserable.Weaver said she soon gave him two months to vacate sothat she could move into his apartment and rent out herown for $1,000.Kathy Casey took an apartment in a five-unit buildingin Chelsea two years ago . Her studio is tiny, but the sundeck and friendly landlady of 50 years sold her on thebuilding. Within six months, she said, the landlady hadsold the building, and the sundeck had rotted beyondthe edge of safety. She said she kept on asking the newowners to fix it and even went to a lumberyard for anestimate. The owners thought her $500 estimate toohigh but promised to attend to it soon. Casey was reluctant to call the city's housing agency and complain because "it sounded like such a middle class problem, mysundeck is so rotten I can't use it, when others have noheat or hot water. But my apartment is small, and thedeck was like another room in good weather."

The owners finally tore ou t the rotten wood and retarred the surface, but they never replaced the deck orthe fence, according to Casey. Left with sticky tar andan unusable terrace after two years of patient efforts,and then hit with a $50 rent increase, Casey refused topay anything until the deck was replaced. A short timelater she was served with an eviction notice.

Many New York City neighborhoods are lined with

II

small buildings, ranging from old-law tenements toclassic limestones. They have an appeal that easily obscures the special problems confronting tenants whoprefer life at a smaller scale.

The majority of tenants in New York City live in rentcontrolled or rent stabilized apartments for which ~ n t and other important conditions of tenancy are regulatedby law. However, these protections do not extend to260,000 residential apartments (14 per cent of the rentalhousing stock), most of which are in buildings with fiveor fewer units. With two exceptions, landlords of smallbuildings have the freedom to set rents at whatever levelthey want, raise them whenever they please, refuse toissue leases and evict tenants with just 30 days' notice.Only the dwindling number of apartments with rent controlled tenants and the increasing number of buildingsrehabilitated with the benefit of city tax abatement programs are subject to regulations.

In general, harassment of tenants in small buildingsis not uncommon and is often intensified by the proximity of the feuding parties. Also, it often takes longer toarrange a city inspection of small buildings, and citylawyers are reluctant to pursue a contempt proceedingagainst a landlord when four tenants are affected instead of ISO.

"Small buildings are purely bad news-dangerous,"said Sharon Gray, director of social services for the Caring Community, an agency that advocates for seniorcitizens. "I 'd rather be protected by the law then rely onsomeone else's goodness."Her agency recently tried to help a Brooklyn couplewhose landlord wanted their rent controlled apartmentfor relatives. When a judge threw the case out becausethe family already had taken over both the other rentals,the landlord decided not to wait for the terminally illtenant to die. According to Gray, he bought two savageGerman Shepherd dogs and installed them on thetenants' landing. This traumatized the elderly couple,unable to leave the apartment for food or medicine. Butthe plan backfired when the dogs attacked family members. The landlord did win the apartment when the wifedied and the husband became afraid to stay in the building alone, Gray said.

"When it's one or two people against a whole family,it can get pretty rough," said Mary Schneider, an organizer with the St. Nicholas Neighborhood Preservationand Housing Rehabilitation Corp. in the Williamsburgsection of Brooklyn. She said she knows of cases wherechildren were thrown down stairs, utilities cut off andstreet gangs encouraged to move into a building to forcecontinued on page 20


12/22

CAR ENGINES TO SOLAR ENERGY:'I COULD TRY ANYTHING'

by Selwyn EiberWhen Joan Altman was 16 years old and still attending high school in White Plains, N.Y., her hobby was

buying old, beat up cars and repairing them. Mostly,she concerned herself with basic maintenance work suchas replacing shock absorbers or setting:he gap on sparkplugs so they would fire properly. Occasionally, Altmanwould buy automotive manuals and giver her cars tuneups. During her senior year she bought a '64 Opel for ahundred dollars that "had a lot of problems." Oneproblem was that the ball joints on the wheels had to beinstalled so she figured out how to do that and droveoff. "I thought I had them in right," says Altman,"and then the wheels caved in. I stuck them back in andwent for another two miles but they caved in again. Ispent so many hours trying to do it right and I'm sure ittook only fifteen minutes for someone who knew whathe was doing. But I was arrogant in those days. I couldtry anything."Still taking chances, Altman, 26, is now being trainedfor a career in a new field whose future is both brightand uncertain. She and 11 men make up a crew that islearning how to install solar energy collectors on singlefamily homes and multiple dwelling buildings throughout New York City. Providing the training is the EnergyTask Force, a non-profit, technical assistance organization which focuses primarily on solar energy uses forlow income housing. The crew will complete twelve systems in all, ten hot water and two space heating, under a$467,000 project called SUEDE (Solar Utilization/ Economic Development and Employment). Bob Bedell, theproject coordinator for ETF, said SUEDE was the onlylarge scale, intensive training program for solar installation in New York City. And no one is more proud tobe a part of it than Altman.

To hear Altman describe how much she enjoys working in this relatively new field of installing solar systems,one would think that this match-up of the right personfor the right job is the stuff fairy tales are made of. Herface lit up when she said that "it's incredible having ajob where I can think things out and produce. I can'timagine a job that would be righter. And then doingsomething with solar that lets people pay less for oil andheat. And then doing something for low income peopleis the icing on the cake."

In mid-September, Altman and the other five solarmechanics on her crew had just completed work on theirfirst installation, a hot water system for a single familyhome in Springfield Gardens, Queens. Altman wasagain working on a single-family, this time in East Elmhurst, Queens where she was busy installing the hotwater tank in the basement, and connecting and solder-

ing the pipes which would run up to the collector panelson the roof. In the upcoming months, Altman will construct and mount metal racks which will hold the collectors, attach the collectors to the racks and connectthe plumbing.Despite the fact that Altman appears comfortablewith her work and jokes easily with the men on thecrew, she is very much aware of the added difficultiessurrounding the job because she is the only woman onthe crew. "Sometimes I get real frustrated," admitsAltman. "Maybe someone else could pull a stuck pipefitting of f with his hands and I can't. I have to use acouple pairs of channel locks. I can do the same job asthem but I have to use tools . That doesn't mean I can'tdo it."

12

Tightening a mix ing valve on a hot water tank in the basement.Nevertheless, Altman, who is five-feet tall , believes

that the men on the .crew occasionally try too hard tohelp if she appears to be struggling. "Sometimes peopletake tools or a fitting right out of my hands and I haveto stop them. I f I ask for help that's another matter."But this chivalrous zeal oh the part of the crew hasdiminished almost to the point where Altman is considered just one of the boys. When Dave Bellach, a solarmechanic on the crew, was asked how he felt aboutteaming up with a woman he said, "I hadn't noticed.People work; people work." Richard Day, anothersolar mechanic, put the situation in perspective saying,"We're all here for one purpose: helping each other."Yet despite the occasional unwanted extra help, she iselated to be working as a solar mechanic especially aftera string of full-time and part-time secretarial positions.Altman, who was born in Newark, N.J., would sometimes earn extra money building loft beds or bookcasesin between the courses she was taking at BrooklynCollege. She has never had a regular job in the construction trades, although last March, she waited on line at

.!!lQj3=..'0...,u$


13/22

Solar mechanics, left to right: Dennis Martinez, Bill Riley (SUEDEconstruction supervisor), Dave Bellach, Joan Altman and RichardDay.

four a.m. to apply for the carpenter's union. Hernumber was so high that she didn't think she would behired for at least two years . However, she was persistentin seeking out opportunities listed at employment agencies, which is where she first heard of the solar mechanictraining course offered by ETF.Altman, who is hard working and extremely optimistic about solar energy, thrives on the challenge of learning a new career. When she fiI:st interviewed at ETF shewas a novice at plumbing bu t was eager to learn, saysconstruction supervisor Bill Riley, and she knew how touse tools. And even though she took longer than anyoneelse that afternoon to complete her plumbing test, herproject didn't leak while many others did. "I was sure ithad 50,000 leaks," recalls Altman, "and 1 was reallynervous and my heart was pounding." She was hiredthat day.The future? ETF hopes to start up a full serviceenergy company next spring staffed by the solar mechanics they are now training. Bedell envisions thecompany as being a for-profit arm of ETF involved withenergy audits, weatherization, and boiler check-ups inaddition to installing and maintaining solar systems.For Altman, the question of what to do when fundingfor SUEDE runs out in July, 1980 is easy: " I want towork with alternative energy. 1don't know whether it'sgoing to happen. 1 don't want to sit in some office. 1might feel differently when it's wintertime and it's 20degrees and I'm up on some roof." 0

Selwyn Eiber is a VISTA volunteer with the Associa-tionforNeighborhood Development in East Harlem.

13

$250 SALES POLICY continuedasserted French. "And we're not interested in the citysuggesting that we are the idle rich down here ready tomake a windfall profit on our buildings. Unemploymentdoesn 't make you rich. We are a majority of low incomepeople struggling stay in our homes."Although Clinton is viewed as a special neighborhoodthat, like Chelsea and the Upper West Side, is changingrapidly, city officials agree that these transitionalneighborhoods are problem areas for saving low incomehousing.

"There's no question that Manhat tan is getting to bea problem area," said HPD's Sykes. "But you have tolook at it building-by-building. There are some no onewould touch. There are bad areas, and then there arebuildings where it would be crazy to sell for $250 . . . Wehave to protect low income people, but if you can'tdraw the line somewhere, you'll have people coming inand buying a $100,000 building for $10,000. It's an extremely difficult situation."But another observer questioned the city's long-termcommitment to neighborhoods and their residents."We have to wonder if the Board of Estimate is sopliable that it can be persuaded to accept a differentfigure each week for selling the buildings," asked BrianSullivan of the Task Force on City-Owned Property."All this dancing around makes it and HP D look verystupid, and you have to ask yourself if any of. theseofficials would be willing to sign an agreement like theone they're asking people to sign. 1doubt it." 0

NEW PUBLICATIONSReforming The Community Development Program:The Key To Housing Rehabilitation. Published by theCommunity Service Society of New York, 105 East 22ndSt., New York, N.Y. The study examines the planning,decision-making and implementation of the Fifth YearCommunity Development Program and suggest reformsto expedite use of the CD funds. Two housing programs, Participation Loan and Community Management, are analyzed in depth.Multi-Family Housing-Energy Conservation Workbook. Available from the New York State Energy Office, Agency Building 2, Rockefeller Plaza, Albany,N.Y. 12223. This is a guidebook in six sections designedto help people assess opportunities for energy conservation. The sections are entitled: Energy Measures Costand Payback Table; Operational and MaintenanceTable; Energy Survey Worksheets; Energy MeasuresOperational/Maintenance and Modifications;analytical Methods; Test Procedures. The workbooksays that based on past experience, it is not unusual todiscover energy savings as high as 25 per cent.


14/22

MEMORIES ARE ALL THAT REMAINOF ONE-TIME 'LITTLE PITTSBURGH'

by Penny WolfsonLarry Rose is driving around East New York in his silver Cadillac. He is a large man with silver grey hair andhe knows this part of central Brooklyn like the back ofhis hand .He should. He was born and raised here and has run a

hardware distributing business in East New York'sindustrial area for more than 40 years."See that block there?" he motions in his broad generous way. He is pointing to a small deserted street nearthe Brownsville-East New York border, where severalramshackle houses stand. "I was born there. I kept thathouse a long time. I just sold it recently.""And that," he continues as we drive past severalHousing Authority projects and burned-out blocks, "i smy elementary school. Lots of famous people went

there. Sam Levenson-he went to the other school, backthat way."He drives past two large lots, overgrown with weeds.

"These were all apartment buildings. I f you can imagine. All up and down the block. Filled with buildings.Now there's nothing.""And there-" he points to the shells of twobuildings on opposite corners, one burned out, the othervacant. "They were pharmacies. You couldn't buy themfor $100,000 in those days; they were worth that

much."He sighs. We're on Sutter Ave. now, still a fairly lively commercial block. "These were fancy stores. People

from all over would shop here. Beautiful stores."You can see the remnants. A large clapboard housethat used to belong to a well-to-do doctor. But now theporch slopes and some of the steps leading to the houseare broken . An industrial building that used to employdozens of East New Yorkers. Now the factory buildingis empty and only a faded in s-:ription over the door givesa hint of what it once was. Rows of well-kept one andtwo-family homes, still sporting neat gardens and whitefences out front. But even these are marred by therotting building next door, the tinned windows, therubble-strewn lots that reveal steady, unalleviatedblight.

For the East New York Larry Rose grew up and prospered in is a place of the past. The area, which straddlesthe Brooklyn-Queens border, with Brownsville directlyto the west, and Woodhaven, Ocean Park and HowardBeach to the east, was once a thriving Jewish and Italianworking-class community and a commercial center forall of Brooklyn.But fear, corruption and government incompetencehelped to drain the area of its resources. The block-busting efforts of the 50s and 60s, the influx of low-income

14

blacks and Puerto Ricans, who, displaced by urban renewal in Brownsville, flooded into East New York forreplacement housing, and the final death blow of theFHA mortgage scandal, transformed East New Yorkinto one of the city's most troubled neighborhoods.Primarily because of its wealth of one and two-familyowner-occupied housing, East New York was the hardest-hit FHA-foreclosed area in the entire city. The FHAprogram, which required low down-payments and insured mortgagers against loss, encouraged unscrupulouslending practices among corrupt speculators, brokersand government agents, who falsified appraisals andcredit checks to rook unsuspecting buyers.The FHA scandal left some 1,000 abandoned, vacantand deteriorating homes in the East New York area.About 3,000 homes in the area have come into city andfederal hands through tax and mortgage foreclosures.In addition to the huge housing problem, East NewYorkers must face another nagging difficulty: the loss ofbusinesses and jobs in an area that was once wellsupplied with both. East New York, once called "LittlePittsburgh"because of its heavy concentration of industry, has in the last 10 years, lost 1 000 of the 3,500jobs it supported on its 75 acres of industrially zonedland.

It was largely in response to these problems that theEast New York Development Corporation was formedin 1968. The corporation, the result of a merger betweenthe East New York Community Association and theEast New York Industrial Corporation, represented amix of community interests-industrial, business, banking, community groups, social service organizations,block associations, etc . The organization was headed byJohn E. Williams, now director of the East New YorkMental Health C1inic,and Ullman Rosenfield, then anexecutive for Ideal Corporation, the largest employer inthe area.

"W e were trying," says Williams, now the presidentof the corporation, "to bring some stability to the areaby forging a healthy marriage between community andbusiness interests. "Since that time, some inroads have been made, primarily in the area of housing . In 1973, ENYCD enteredinto a "Sales Exclusivity" contract with HUD, underwhich HUD rehabilitated and the corporation marketed50 one- and two-family homes. The East New York Savings Bank provided the mortgage pool. Later the corporation became the first group in the city to participatein the Small Home Improvement Program (SHIP).Under this program, HPD used CD funds to rehab 26FHA-foreclosed one- to four-family homes in a six-


15/22

EASTNEW YORK continuedblock target area bounded by Blake St., New Lots Ave.,Pennsylvania Ave. and Bradford St. ENYDC selectedthe tenants and sold the houses. In a second stage of theSHIP program, which began this June, the corporationwill be both developer and marketing agent for 14 oneto four-family homes within the target ~ r e a . The group is 7 A Administra tor for two buildings, andwill manage 150 housing units under the city's Management in Partnership program. It is also negotiating withHUD for the rehab of 45 multiple-dwelling units acrossthe street from Jefferson High School, a project forwhich they have received tentative approval.

The corporation has also provided home ownershipand home repair counseling, as well as default and delinquent counseling for home owners having difficultykeeping up with mortgage payments.Yet even corporation members are not satisfied thatthey have made a dent in the housing problem. "It's agigantic task," says ENYDC Chairman Rosenfield. "Idon't think, in spite of all that's been done, that we'vefound a way to halt the decay."

The frustration of getting so little done in a community that needs so much was one reason Martin J. Warmbrand, ENYDC's director of seven years, finallydecided to resign last March. "One hundred and seventyfive homes were being abandoned each year," Warmbrand says. "And we only managed to save 75 altogether. It was immensely frustrating."Some corporation members, like Marvin Bouzer, acting director of the group, feel that city and federal government agencies have not been responsive enough tothe needs of this blighted community. Bouzer says thegroup was bitterly disappointed that only 40 homes arebeing rehabbed under the SHIP programs.The corporation had requested 100 under each of the two programs.

The corporation has been even more frustrated in thearea of economic development, where it has even less topoint to in the way of concrete accomplishments.The corporation entertained a number of plans fordrawing industries to the "northwest quadrant" of EastNew York, which is commercially zoned and has excellent transportation facilities. Yet none of these plans,which were to be handled by local Model Cities administrators , ever got of f the ground.The corporation has also been able to do very little

about the worst problem industry faces in East NewYork: security. One of the chief reasons businesses haveleft the area is because of crimes against property andemployees. The corporation did spark a coalition between the 75th Precinct, Citibank and a local gypsy cabcompany which provides a civilian motor patrol. Andefforts have been made to beef up patrols by the policeprecinct. But Rose says that security has not improvedmuch, that he doesn't see a single police car all day nearhis business on Snediker Ave., and that businessesaround him are still con.cerned that they will be robbed

Penny Wolfson is a/ree/ance writer with an interest incommunity news.15

and that their employees will be endangered.The precinct says it is experiencing the same problemsof precincts all over the city, rising crime and shrinkingmanpower. "We're just not able to patrol areas the waywe used to," a spokesman from the community affairsoffice of the 75th precinct says.Still and all, the corporation is managing slowly andsurely to convince government agencies that East NewYork can and should be salvaged. In the commercialarea, ENYDC has recently been awarded a grant of$40,000 from the state to conduct an extensive survey ofbusiness and industry in the area, the first step towardsrevitalization .In addition, the Port Authority of New York hasselected an area directly to the south of East New York'sSpring Creek Industrial Park (below Linden Boulevard)as one of three sites in the city it will possibly develop asan industrial area .In the area of housing, East New York may also soonhave a real future to look forward to. The City PlanningCommission and the Housing Authority have come upwith a plan to revitalize the area through a program ofselective demolition and seal-up, maintenance of existing housing through the 312 loan program and the rehabof FHA-foreclosed homes, and greening of interimsites. 0

On a street targeted fo r revitalization, an abandoned building and ahouse renovated under the SHIP program stand side-by-side. ENYDCplans to rehab U more buildings under SHIP.

AdvertisementThe Mitchell-Lama Council is seeking an organizer toservice its present membership of 65 co-operative housing developments, and organize in both co-ops andrentals in this moderate-income subsidized housingprogram in New York City. Required abilities includemobilizing people to work together around housingissues, writing and producing organizational materialsand fund raising . Involves much evening work coveringfive boroughs of New York City. Salary negotiable.Please send resume to Mitchell-Lama and Allied Housing Council, Inc., Rm. 612, 799 Broadway, New York,NY 10003. 0


16/22

J-51 continuedcalling for a moratorium on using the J-51 legislation toconvert the hotels to small luxury apartments.

The J-51 program was instituted in 1955 as an incentive to help owners of cold water tenements to complywith the city's new building codes.In an analysis of the program, Councilwoman RuthMessinger (D-Man.) said that "Over the years the program was broadened to include the conversion ofcommercial buildings and SRO's to apartments . . .While the J-51 program was established to aid owners inreplacing boilers or plumbing in occupied buildings,today the program is increasingly being used by developers who vacate a building and then perform a gut[substantial] rehabilitation that turns a low or middleincome building into a lUxury building as the city paysthe bills. "

Joined by other J -51 critics, Messinger also chargedthat developers take apartments that are suitable forfamilies and reduce them into small studio and one-bedroom apartments that can be rented at much higherrents. Examples of such rents on the Upper West Side,for instance, begin at over $400 for a studio apartment.

In addition, the Councilwoman reported, "Developers have told me that J-51 benefits are so great that theprogram encourages the rehabilitation of buildings thatare not structua rally suitable. Buildings may now be receiving gut rehabilit ations due to the J-51 program wherethe useful life of the building is less than the 20-yearperiod of benefits."According to available statistics, more than 55 percent of the J-51 benefits are going to middle and uppermiddle income neighborhoods such as Greenwich Village, the East Side and the Upper West Side in Manhattan, and Brooklyn Heights and Park Slope in Brooklyn. Certify Repairs

Councilman Leon Katz (D-Bklyn.) is supportingamending legislatIon that would prohibit awarding J-51benefits to Manhattan neighborhoods south of 60thStreet. Councilman Stanley Michels (D-Man.) is proposing J-51 reforms that wou!J ask owners receiving thebenefits to certify each year that they had made certainrepairs and that their buildings' systems are in goodworking order.

" I f they did not do what they said they did," headded, "they would be subject to a $1,000 fine. Wereally shouldn't horse around with them . . . The city isnot doing inspections of these buildings and it should.This program, if used correctly, could benefit a numberof marginal neighborhoods, such as WashingtonHeights and Crown Heights, where the older housingstock needs help."

Other amendments proposed for the extended legislation include proh ibiting benefits to owners who harrasstenants during the rehabilitation period, providing relocation benefits for tenants who are displaced by renovation, guaranteeing at least 20 per cent two-bedroom

16

apartments in a dwelling of more than 20 units afterrehabilitation, filing a statement of intent before construction begins, and submitting complete and itemizeddocumentation of the costs for the work for which J -51benefits will be claimed. At the present time, the city hasno system for monitoring the cost of repairs and improvements that owners claim to have made to theirproperties.In the meantime, organizations such as the Community Housing Improvement Program (CHIP), which represents some 2,500 owners of more than 400,000 apartment dwellings in New York City, have gone on recordsupporting conversions that would displace some businesses through rehabilitation of non-residential buildings.

"W e well understand that there is a problem withrespect to owners of commercial buildings evicting smallbusinessmen from loft space in order to convert thesestructures to multiple dwellings," said William A.Moses, chairman of CHIP. "However, much of thisloft space is inefficient, dilapidated and in need of conversion to other usage. ""This is why I'm very adamant about postponingsuch a serious vote on J-51 until we know all the facts,"argued Councilwoman Miriam Friedlander (D-Man.) in

an interview. "There are just too many unansweredquestions . . . This whole issue of moderate rehabilitationis sticky . . . Is a moderate rehab closing down the boilerfor three months in the winter time while the tenantsfreeze? . . . Is a conversion closing down 600 jobs insmall business for the unskilled and semi-skilled onlimited incomes that need these jobs? We need to knowa lot more before we extend these benefits. J-51 cannotbe treated lightly."

Repeated efforts to speak with Housing CommitteeChairman Thomas Manton, who has introduced theproposed legislation at the request of the mayor, provedfruitless. 0DISPLACEMENT SEARCHA new Anti-Displacement Project connected with theNational Housing Law Project is interested in hearingfrom people and organizations who have informationbased on experience with this issue.The research will report on the nature and extent ofdisplacement throughout the United States and will pro

duce an Action Guide offering community groups practical advice on how to resist displacement-causing activities.

Ou t of the Anti-Displacement Project may emerge anational conference and permanent network.The people to contact are Chester Hartman, 360 Eliz

abeth St., San Francisco, Cal., 94114 (415) 282-1249, orEllsworth Morgan, P. O . Box 8211, Newark, N.J. ,07108. Studies or other research materials should besent to Hartman. 0


17/22

HEW REFUSES CfI'PlEA TO EXPANDlWO-PARTYWELFARE RENT CHECKS

The federal government has turned down New YorkCity'S request to place thousands of additional welfarerecipients on a two-party check system where their rentswould be paid automatically to the landlord.The decision by the Department of Health Educationand Welfare was a victory for welfare and tenants rightsorganizations that had contended the required rentpayments would be a windfall for landlords, deprivetenants of their legal right to control their incomes andnot result in better housing.Deputy Mayor Nathan Leventhal made it clear thatthe city has no intention of dropping the two-partycheck plan. Leventhal told City Limits on Sept. 26 thathe expected to include the proposal-as is-on a listrequested by the White House of actions pending inWashington that could be helpful to New York City.HEW's decision was based on "technical grounds," hesaid.In proposing the "demonstration" more than a yearago, Mayor Koch listed three reasons: housing is deteriorating severely; more than $500 million of publicfunds goes toward shelter for welfare recipients, andsome welfare recipients do not pay their rent. "A program to require welfare clients to pay their rent in returnfor improved building maintenance will benefit tenantsand owners alike," he said.Under a two-party check system,. rent checks cannotbe cashed without the signatures of both the tenant andthe landlord. Refusal by the tenant to sign can result in adirect payment to the landlord, called a vendor check.Opponents of the demonstration say welfare tenantsare the victims, not the cause, of slum housing. Thousands of rent-paying welfare tenants live in intolerablehousing, they argue, and guaranteed rent paymentremoves the only real incentive landlords have to provide services-a fear of not getting the money. In addition, the demonstration was attacked for how it proposed to put recipients onto two-party checks.An HEW spokesman in Washington said the demonstration was rejected because the proposal contained noevidence that the increased cash flow to landlords wouldbe large enough to significantly upgrade the buildings; itidentified no control group of tenants to allow a comparison of delinquency rates among welfare and nonwelfare tenants; and it set no mechanism for weighingseparately the impac of promised code inspections andthe impact of the two-party checks themselves. "A s faras I know, I think it's a dead issue at this point," thespokesman said.In addition to tenant and welfare rights organizations, many elected officials, the New York City chapterof the National Association of Social Workers, the re-

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gional head of HEW and officials of the Department ofHousing and Urban Development opposed the plan .Former HEW Secretary Joseph Califano was reportedlyready to approve it, but left the decision to PatriciaHarris, who succeeded him as part of President Carter' scabinet shakeup in July. She is said to have carefully reviewed the proposal.There are 355,000 families and single persons in NewYork City who receive public assistance-250,OOO underthe federally funded Aid to Families with DependentChildren and 105,000 under the state's Home Reliefprogram. Restricted checks are now issued to 40,000 recipients under AFDC and to 10,500 under HR, according to city figures.HEW approval of the demonstration would have enabled New York City to place thousands of welfare tenants in two areas of the West Bronx on two-party checksby liberalizing the conditions under which such a stepcan be taken and by lifting the existing ceiling on thenumber of recipients whose control over benefits can berestricted.In creating the AFDC program, Congress establishedthe principle that poor people have the same right tocontrol their incomes as other Americans. Therefore,recipient control of AFDC benefits may be restrictedonly when there has been a finding by the public assistance agency that the adul t recipient has not managed theincome consistent with the welfare of the children.Welfare rights groups have long maintained that NewYork disregards the law by placing tenants on two-partychecks on the landlord's sayso, without asking recipients if the rent has been paid and, if not, why not. Furthermore, they argue, since welfare benefits have notgone up since 1974-when only a small increase based

on 1972 cost-of-living figures was granted-failure topay a month's rent may not be improper if the moneywas used for some other important purpose, such asmedical bills. They saw the demonstration as a furtherextension of this policy.Asked to respond to this claim of illegal practices,State Social Services Commissioner Barbara Blum said,"M y belief is that this is not the current practice." Blumsaid she supported the demonstration because she believed it would lead to better housing and because manywelfare clients have not had success using rent-withholding to "leverage the system."Asked about HEW's criticism of the design of thedemonstration, Blum said, "W e felt additions wouldhave strengthened the proposal, but the city felt thatcontrol was not feasible, and they were anxious to getsomething up fast." 0


18/22

WINTER continued150 per cent. Other officials say the reality is that thereis not going to be nearly enough money to take care ofthose who qualify at 125 per cent. Using the lower figure, officials estimate that there are 733,000 eligiblepeople in New York City. One guess is that maybe 10 percent of them will be assisted with the available funds .Another kind of measure suggested by one state officialis that it cost about $100 to heat one room per year atApril, 1979 prices. With the fuel price increase, that figure will be about $150 per room by this winter. Thatmeans a four-room apartment will cost $600, or $200more than the maximum payment under the program.A second serious problem is that the regulations wereobviously not drafted with renters in mind. Last year,applicants had to show a disconnect or turnoff noticeand then the money was paid to the vendor, not theapplicant. That hampers relief for tenants, whose heat isincluded in their rent. However, tenants are billed separately for gas and electric, but there is concern that bymaking utility bills eligible, the program gives tenantsincentives to buy space heaters or to use their stoves forheat, both dangerous options.To improve the program for tenants, state and cityofficials were working on a possible plan that wouldenable landlords of multiple-dwelling apartment buildings in low income census tracts to obtain assistancebased on the number of their income-eligible tenants solong as there was an agreement by the owner to providenecessary repairs to the building and not pass along thefuel costs to the tenants. One official said this wouldrequire exemption from the federal regulations, whichrequire recipients to be income-eligible.These are some of the major problems that remainedunresolved two weeks before the deadline for submittingthe state energy plan to Washington.WEATHERIZATION ASSISTANCE PROGRAMThis program was set up to protect buildings housinglower income people from the effects of cold weatherand to conserve energy by providing funds for insulating, sealing air leaks, weatherstripping windows, replacing broken window panes, improving heatingsystems and other forms of weatherization. This program, too, has had serious difficulty in spending itsmoney. More than $1 million, enough to have weatherized more than 2,800 apartments, was available for NewYork City well before last winter. It was not until thisspring that some of the money began to be spent, on 18projects totalling 759 units . When that money has beenexpended, an additional $7.9 million for 9,500 moreunits will be available for New York City. A major shareof the funds is earmarked for a "demonstration" thatattempts to circumvent regulations that make the program extremely difficult to implement in large, multiplefamily buildings. The operative guideline in the demonstration will be that if 75 per cent of the tenants in abuilding qualify, then the entire building is eligible forup to $800 per unit in weatherization improvements.

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The target date for beginning the work is January, 1980.The funds for this program come from the U.S.

Department of Energy through the state's Departmentof State. Officials said an effort would be made to coordinate the weatherization and the crisis payments programs so that buildings in which tenants were receivingassistance would also benefit from improved energyconservation.

SPECIAL ENERGY ALLOWANCES-PresidentCarter has asked Congress to approve $1.2 billion forthe first time to provide lump-sum payments to publicassistance recipients through such programs as Supplemental Security Income, Aid to Families withDependent Children and assistance to disabled persons.In New York State, it would provide one-t ime increasesof $116 for single individuals and $232 for families.Carter's request is contained in a supplemental appropriations bill for Fiscal Year 1980. Asked about itschances, U.S. Department of Health, Education andWelfare official said, "There is no one who is not concerned. I can't imagine Congress not enacting it. Itcould be done in two days."She said there is nothing in the bill to prevent publicassistance recipients from receiving the benefits of boththis program and the Crisis Assistance Program.

EMERGENCY REPAIR PROGRAM-Under thiscity-run program, tenants living in heatless apartmentscan call a 24-hour central complaint telephone number-960-4800. Once a city inspector responds to verify thecomplaint, the landlord has 24 hours to correct theproblem or the city will step in to restore the heat andbill the landlord for the repair or fuel delivered. Lastyear, $5.1 million was budgeted for ER P and $7.7million was spent making 22,454 repairs, a 22 per centincrease over the prior year's workload. This year, $6.1million is budgeted, but HP D says it will probably needcloser to $7.5 million. Owners of all multiple dwellings,plus anyone and two-family homes that had heat problems last year, must certify to the city that their heatingplants are either in good condition or will be within afixed time period. These certifications must be submitted to HP D by October 22. As of late September,about half of the 140,000 owners had filed, according tothe agency. According to the mayor's ManagementReport for FY 1980, the average for completing repairsunder ER P was slightly under two weeks.IN REM BUILDINGS-New York City owns andmanages 4,086 occupied buildings. Of the 3,000 that aremultiple-dwelling buildings, HP D estimates that thereare about 2,200 separate heating plants. To provide heatto some 33,000 tenants, this year the city figures it willneed about 35 million gallons of fuel oil at a cost of$27.7 million, for which federal Community Development funds cannot be used. About 25 million gallonswill be needed between October and March alone.Since last spring, teams of city inspectors have evaluated 1,800 of the estimated 2,200 heating plants, leading


19/22

WINTER continuedto major repair orders for 940 of them and less extensiverepairs to 318, according to a recent report by HPD. Afull picture of the condition of the heating plants fromthe report is hampered by the fact that this informationwas omitted on many of the summary sheets submittedby the burner repair teams to central HPD. Raymondwas careful to note the limitations of effectively evaluating burners and boilers under summer conditions andsaid the real test will be in December and January. "Wehave no illusions about the problems we face thiswinter," he added .A substantial portion of this year's crisis assistancefunds appears to be headed for the city. A pool of $1.25million (half of it crisis assistance funds from CDA andhalf CD funds from HPD) will be used to repair heatingplants and do some weatherization in 500 city-ownedbuildings. This works out to $2,500 per building. Anadditional $535,000 in crisis assistance funds (whichHPD will match in the form of repairs) will help the cityoffset some of last winter's fuel costs. Negotiations between HPD and the state for a similar arrangementusing $1.87 million in crisis assistance funds are goingon currently.Raymond said HPD is trying to get several milliondollars in DOE funds to do additional weatherization,plans to replace the heating plants ($15,000 to $25,000each) in 120 buildings, has put all of its real estatemanagers through a maintenance training program, isinstalling dampers that will help to contain heat normally lost through the chimney and may experiment withinstalling electric heat transfer panels in a few buildings. DGROWTH PART II continued

Finally, many progr:ams turn out to be difficult toimplement because of poor design. A federal low interest loan program to finance sweat equity housing rehabilitation in New York City had to undergo 19 majorchanges before it was usable, according to one participant in the program. The six-year-old community management program is only now establishing guidelinesand standards for productivity.What this adds up to, in the minds of many people, isan orientation away from capacity building, and that,they say, is a formula for failure. Critics say a lot of theresponsibility lies with the funding sources, and thatgovernment generally is more concerned with makingsure its money is all spend than in assisting in buildingup the capacity of community groups to fulfill all theircontract requirements. Some suspect there is a lot thegovernment does not want to see.Many in government agree, but say there is not muchthat can be done. " I t is my general belief that to rely onthis agency for technical assistance is a mistake," saidSt. Georges. "It is in the nature of government to startprograms, spend money and produce something,"leaving no time for capacity building."Too often we just give the money away," said Karen

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Kollias of HUD's Office of Neighborhoods, VoluntaryAssociations and Consumer Protection in Washington .There is some burden on the federal government, sheadded, to be sensitive to the problems of meeting itsrequirements and to provide the necessary financial andtechnical assistance to strengthen the organization. She,too, said there are limits to what government can reallydo. Many cited the need for more and better technicalassistance at the local level.Not all government agencies and programs are insensitive, of course. Two of the better ones, according tothose in the field, are the Neighborhood Housing Services program (sponsored by the federal NeighborhoodReinvestment Corp., a quasi-governmental agency),which provides incremental funding rather than unloading large grants, and the federal agency ACTION,which gives seed money to help groups plan for how touse larger amounts. The CETA (ComprehensiveEmployment and Training Act) and Law EnforcementAssistance Administration programs were cited as eithertending to understate costs or overwhelm organizations.Kollias said a new HUD program lets community organizations, rather than the government, decide what thefunds should be used for. " I t makes it harder for us,"she said, "but more beneficial for the people outthere."There is no simple solution for the problems associated with growth since community organizations havedifferent goals and structures and since key factors lieoutside their control. There is plenty of room for differences over approach and priorities. But interviews withmore than a score of people on both the giving andreceiving ends have produced general agreement on anumber of recommendations.

ORGANIZATIONS-Organizations need to have aclear set of goals and a plan for achieving them. Thiswill help them decide what programs are useful andwhat are not. A stable and well informed board of directors that sets p

city limits magazine, october 1979 issue

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