THE NEWS MAGAZINE OF NEW YORK CITY HOUSING AND NEIGHBORHOODS October1982 $1.

50
ARTISTS'
BOUSING-Promise or Threat?
The Neighborhood Front
NEW YORKERS FOR
EQUITABLE DEVELOPMENT, a
broad-based alliance of
elected officials, church groups and
community organizations announced
its launching on September 8 on Clin-
ton Street in the Lower East Side. The
coalition, which aims to have an im-
pact on the city's policies for housing
development, issued a program state-
ment entitled , "Can' You Have a
Balanced Economy If All Your Eggs
Are Going Into One Basket?: Building
a New City Housing and Development
Policy. "
Spokesperson Paul Davidoff, _
director of the Metropolitan Action In-
stitute,which helped form the group,
cited the absence of a housing policy
for the city. "Instead of a plan to over-
come its problems," he said, "the city
lets the self-serving private developers
create a housing policy by default."
The group will push instead for shifting
tax relief away from wealthy luxury
housing developers and to those
developers of low and moderate in-
come housing.

The Rent Stabilization Association -
the landlord group charged with ad-
ministering rents in 900,000 apartments
- is in a busy season. It strongly de-
nounced the decision of the normally
quiescent Conciliation and Appeals
Board to grant injunctions against rent
overcharges that landlords cannot
justify in an effort to reduce its two-
year backlog of over 7,000 tenant pro-
tests. And it also filed suit against the
Rent Guidelines Board, which issued its
rent increases at the beginning of the
summer. The RGB, the suit says,
adopted its new guidelines in an at-
mosphere of mob rule and chaos,
thereby depriving landlords of their
right to due process because at least
two board members said they couldn't
understand what was going on because
of noise and interruptions.
The suit, brought September 1 in
CITY LlMITS/October1982
Ed Kulkin, right, Special Assistant to the Housing Commissioner, took charge oj keeping order at
the June rent board deliberations. Kulkin, shown here with a member oj the large police contingent
at the meeting, ordered the arrest oj one tenant demonstrator and the removal oj several more. An
equally boisfl'rous landlord group escaped unscathed.
Federal District Court, asks Judge
William C. Conner to block the
1982-83 rent increases, effective Oc-
tober 1, and to order a new meeting of
the RGB. At the June 25 meeting, the
board approved rent increases of 4 per-
cent for one-year leases, 7 percent for
two, and 10 percent for three. It also
disallowed the additional charge for va-
cant apartments - 15 percent last year
- normally permitted in the past. The
landlords had asked for substantially
higher increases - increases that the
RGB had found unwarranted.
The RSA, however, was reminded by
Housing Commissioner Anthony
Gliedman, after prompting by Manhat-
tan Borough President Andrew Stein,
that it is barred from using its member-
ship funds for anything other than ad-
ministering the Rent Stabilization Law.
RSA chair Sheldon Katz told Real
Estate Weekly that no funds from
members were being used for the suit.
The Rent Board's deliberations, carried
out before a boisterous audience in the
auditorium at Police Plaza, was inter-
rupted for an hour after demonstra-
tions by both tepant and landlord
groups.
2
Tenants of an SRO hotel, known by
its address at 161 East 23rd Street (City
Limits, August-September 1982), won
a major part of their battle to hold on
to that building and end the harass-
ment campaign of the owners. Housing
Court Judge Harriet George ordered
owners George and Stanley Rolnick off
the premises, reports the Eastside SRO
News of the city-funded Eastside SRO
Legal Services Project, and placed in
the hotel as a 7-A Administrator Ed-
ward Geffner. Judge George said,
following a visit to the building, it was
the worst she had seen in her five years
on the bench.
Geffner, from the Manhattan
Bowery Project - a social services
organization serving ex-alcoholics that
has managed city-owned buildings in
Brooklyn - has already made a large
dent in the work needed to be done in
the building, say the tenants, one of
whom told the SRO News, "I had
forgotten what it was t i k ~ to live in a
respectable, clean place." 0
Cover D1ustration by Louis Fulgoni
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Contents
The Front
Short Term Notes
Ninth Ave. Tenants Ask to Manage
Chinatown Residents I , Developers 0
Tax Reform Brought to Council
East New York Homeowners Win Tax Cut
Illegal Eviction Bill Passes
Puerto Rico Squatters Seek to Buy Land
New Yo!i( City's Pentagon Tax
New Yorkers buy more than their share of Pentagon armaments.
Welfare vs. Work
2
4
5
6
7
8
8
9
10
Government rules on income mean hard times for the working poor. The result?
More welfare.
Artists' Housing: Promise or Threat?
14
In New York , the an capital of the world, where artists locate high rents are not
far behind . Can cit y programs to promote artist lofts in low income
neighborhoods avoid that trend? Are they meant to?
Requiem for a Housing Policy 21
Are sales of tenantmanaged. cityowned buildings as low income coops getting
closer \0 shotgun weddings than fruitful pmnerships?
A Bronx Rehab
14
A loan to salvage a declining building means a new round of trouble for thest:
tenams.
Letters
Clinton Tenants Not ;Victims
27
A Conflict Over Contracts
18
When the Cit y contracts with housing groups for services, where is the line drawn
between politic, and performance?
No Respect for Tradition in Reagan's CD
It ' , a new CD year. and the old ways are gone.
CONFERENCE:
HOW TO GET
AFFORDABLE REHABS
--November 13, Hold the Date--
Sponsored by the New York State
Tenant and Neighborhood Coalition
and the Association of Neighborhood
Housing Developers, a conference will
be held to develop an agenda of state
legislative action to create
sources for affordable housing rehabil-
itation. Location to be announced. 0
34
3
How are the sale of City-owned alternative management buildings faring?
See "Requiem for a Housing Policy. " page 11.
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CITY Ll M ITS/October 1982
Short Term Notes
Ninth Ave. Tenants Ask to Manage
T
HE 38 STALWART TENANT
families and shopkeepers in Clin-
ton, who have won round one in their
fight with the city and real estate
speculators to keep their homes and
businesses on Ninth Avenue at 40th
Street, are gearing up for a rent strike
against their landlord - the city - for
non-delivery of essential services.
The seven buildings on the corner
property in question-541-47 Ninth
Avenue and 401-5 West 40th Street in a
neighborhood that for many years bore
the unfashionable name of Hell's
Kitchen are still city:owned as no buyer
materialized by the city's final deadline
of August 24 to redeem the properties
for the required $563,000 in back taxes
owed since the city took title in May,
1978, in a foreclosure proceeding.
The trustee for the property, John
LaGreco, who bought the right to
redeem the parcel from the estate of
Sam Stein's Ninth Avenue Meat
Market for $100 from the U.S.
Bankruptcy Court, failed to ensnare a
prospective buyer even though he had
shown the property to some interested
parties. In the final days before the
redemption deadline, the tenants, to
discourage the redemption, festooned
the buildings with a huge sign on the
Ninth Avenue frontage warning
LaGreco and friends to stay out if they
did not want to buy a tenants associa-
tion, a rent strike, court actions, and
242 building violations.
Anxious to become owners of their
apartments and stores, the tenants
association has submitted applications
to the city's Tenant Interim Lease pro-
gram at the Department of Housing
Preservation and Development and are
hopeful of being able to purchase them
at the city's 1979 stated price of $250 a
unit if this sales policy passes the Board
of Estimate at its October 28 meeting.
"There is no reason for the tenants
to pay rent to the city if they don't get
CITY LIMITS/October 1982
services," said Joe Restuccia, a tenant
organizer at the nonprofit, community-
based Housing Conservation Coor-
dinators, who, along with Bob Kalin,
has been aiding the tenants. "They
already have to provide their own hot
water at 547 [Ninth Avenue] and have
been doing this for over a year,"
Restuccia added. "This will just serve
to dramatize why the tenants, not the
city, should be the owners."
Asked about the tenants' applica-
tions for the TIL program, Assistant
Housing Commissioner Joan Wallstein
said, "I'm not familiar with those
buildings, but if they are part of a
package of ten pending applications,
they are being processed upstairs, but
the whole price issue is still very much
up in the air."
HCC has submitted the ten remain-
ing city-owned buildings in Clinton,
now in central management, to TIL for
processing. The seven are part of this
submission.
Wallstein also said that the agreed
upon price tag for these buildings will
depend upon the wording of the resolu-
tion that passes the Board of Estimate.
In addition, she speculated that
buildings in Clinton that are currently
in the TIL program-and have been
there "for a while" will have a "better
shot" at the low $250 price than ones
that have come into tile program
recently.
The city's deputy commissioner for
policy and government relations,
Ronald Marino, was less clear and ex-
tremely noncommital about the city's
plans for these Ninth Avenue
buildings. "The trustee never was able
to come up with the money or get an
interested party to redeem, and quite
frankly, I was pleased that he didn't,"
Marino said. According to him, it is
"still far too early" to say how this
land will be disposed of, but he added,
"I think by law we will have to have an
4
appraisal and a demographic study of
the people to figure out what the best
use of the land is."
The city has suggested that this pro-
perty has a potentially high future
value as it is located three blocks away
from the new convention center, which
is expected to open by mid-1984.
Asked about city plans to sell the
buildings by public auction, Marino
asserted, "Again, it's too early to say
how we will dispose of them. They
could be an RFP [Request for Pro-
posal], a UDAAP [Urban Develop-
ment Action Area Plan]. Until we have
all the basic information before us, we
just can't say."
"It's the big guy on top who's
always catching the big fish," said
Angelo Bono, proprietor of the Sea
Breeze Fish Market at 541 Ninth
Avenue. "He's the one who knows
what's really going on, but we're not
going to let him or them throw us out
just like that just because this is
becoming a good place to be. We
have a lawyer and we're fighting. 0
S.B.
- - - - - -.- - - - - -
ARSON PREVENTION
CONFERENCE:
A NEIGHBORHOOD APPROACH
A city-wide anti-arson conference co-
sponsored by the New York City Fire De-
partment and the Northwest Bronx
Community and Clergy Coalition, Inc.,.
Thursday, October 7, 1982, 10 AM-3
PM, at the McGinley Center, Fordham
University, Rose Hill Campus, Bronx,
New York (IRT #4 or IND D train to For-
dham Road, east 7 blocks to the campus).
The conference will address the issue
of arson and a variety of local communi-
ty responses.
For more information, please contact
NWBCCC, 2656 Decatur Avenue,
Bronx, NY 10458, (212) 933-3101.
Chinatown
1
Developers
o .
By Yvette Moore
The Special Manhattan Bridge
District and a developer's special permit
to build condominiums in the luxury
development zone were struck down last
month by the State Supreme Court. The
decision constituted a major victory for
a coalition of Chinatown tenants and
community groups in their fight against
the year-old rezoned district.
Lawyers for the coalition came before
Justice Ira Gammerman with a host of
procedural violation charges against
three respondents - the City Planning
Commission, Board of Estimate and
Overseas Chinese Development Cor-
poration. The complaint's cornerstone
was that the community had been inade-
quately notified of public hearings con-
cerning the zone prior to its establish-
ment, and thus denied its right to due
process. Consequently, the lawyers
argued, the new zone and a recently-
approved special permit allowing OCDC
to build high-rise, high-cost condomin-
iums within the district were illegal. The
court agreed.
Although the respondents published
notices of the related public hearings last
year in the City Record and in the Com-
prehensive City Planning Calendar, as
required by city regulations, most
Chinatown community residents learned
about the special district in Chinese and
English newspapers only after it had
been approved.
The court ruled that these notification
methods boiled down to "a mere formal
notice, not calculated to reach the
members of the community affected"
and therefore did not fulfill the intent of
Under the Manhattan Bndge in Chinatown.
the city regulation requiring a communi-
ty's notification of land use plans within
its borders.
Justice Gammerman called the
publications used for notification
"obscure" and more likely to be read by
lawyers and real estate developers than
by the average Chinatown resident. "If
residents of a local community are to be
put on notice, such notice should be
placed in a newspaper of general circula-
tion within the community," he stated.
"Indeed, when the developer wished to
find tenants for the proposed East/West
Tower, it advertised in Chinese-language
newspapers in general circulation in the
Chinatown area. The notice published in
two obscure publications, unknown to
most English-speaking New Yorkers to
say nothing of those who speak only
Chinese, is not the adequate notice man-
dated by the City Charter."
Gammerman stopped short of calling
the city requirement for prior notifica-
tion in the City Record and Calendar un-
constitutional on face value, however.
He said that while the city required that
notice be placed in these publications, it
did not say these should be the only
media used to reach the public.
The Chinatown coalition is un-
doubtedly pleased with the outcome of
the case, but members are not about to
put down their arms. "We think that we
have to maintain an even higher
vigilance," said Bill Chong of Asian
5
Americans for Equality. "They (the city) ~
will fight to keep the Special Manhattan ~
t::
Bridge District intact ... But we also ~
want the District rescinded. Let's go >..
back to square one. The civil rights of ~
Asian Americans were denied. Anything
short of having the Special District
rescinded is a sell out. "
Chong also said that the establishment
of the district has already inflated area
real estate values drastically.
Joyce Moi, attorney for the coalition,
said the group will soon me another ac-
tion against the city. In addition to
charges listed in this case, the coalition
now argues that the city failed to follow
its own requirement to submit an En-
vironmental Impact Statement before
approving the area for new construction.
A spokesperson for City Planning,
Catie Marshall, said an Environmental
Review was done, but that no Impact
Statement was completed. Marshall add-
ed that the city will appeal
Gammerman's decision.
Thomas Lee, president of OCDC,
said his company will also appeal this
decision. But the developer's problems
are coming from more than one direc-
tion. In May, the City Planning Com-
mission resolved it would rescind
OCDC's permit unless it can prove false
Department of Investigation findings
that the company forced tenants out of
buildings last year to make room for the
proposed condominiums. 0
CITY LlMITS/October1982
Tax-Break Reform Brought to the Council
Council member Ruth Messinger, Jlanked by Miriam Friedlander, Council member Jor the Lower
East Side, and Stanley Michels oj Manhattan's Washington Heights, at announcement oj the in-
troduction oj the J-5/ tax abatement bill.
CITY LI M ITS/October 1982
6
C
ALLING FOR THE MOST
sweeping reforms yet in the city's
controversial J-51 tax abatement pro-
gram, city and state legislators, sup-
ported by a broad array of
neighborhood housing groups, social ac-
tion, labor and other groups, announced
new legislation in the City Council to
restore the program to its original pur-
pose to rehabilitate substandard housing
for low and moderate income families.
"J-51 was never intended to fmance
the country's most exclusive apartment
buildings and cooperatives or to make
gratuitous contributions to a handful of
developers who clearly do not need
public assistance to turn a profit," stated
Manhattan Councilwoman Ruth Mess-
inger, an outspoken foe of J-51 abuses.
At present, the J-51 program is stale-
mated since state enabling legislation
needed for the program to continue for
the next three years was not passed this
summer by the legislature. There, a
nucleus of New York City Assembly
Democrats, catalyzed by Assemblyman
Jerrold Nadler, resolved to block
passage without "substantive changes,"
which the Koch administration refused
to approve. Immediate passage is needed
for renewal, said legislators and ac-
tivists, because J-51 plays an indispen-
sable role in rehabilitation by nonprofit
groups, now placed in jeopardy by J-51 's
limbo status.
The changes proposed in the City
Council include a $15,000 ceiling for
renovations per apartment unit for
eligibility for J-51 benefits, intended to
discourage the i'rogram's use for subsi-
dizing luxury development; an elimina-
tion of J -51 tax breaks for the conversion
of commercial and industrial buildings
to residential housing, to slow the drain
of manufacturing jobs in the city; a ban
on benefits to landlords who employed
tenant harassment to empty their pro-
perties; and omitting benefits for the
conversion of single-room-occupancy
hotels to residential housing, to counter
the displacement by coercion of estimated
thousands of persons. The$IS,OOOceiling
would be waived for nonprofit groups,
publicly assisted projects, and projects
fmanced through the State of New York
Mortgage Agency (SONYMA), Federal
Housing Administration (FHA), and the
Rehabilitation Mortgage Insurance Cor-
poration (REMIC) in neighborhood
strategy areas.
Noting that Mayor Koch has so far an-
nounced approval of only two of these
reforms-bans on benefits for SROcon-
versions and for landlords who have
brutalized tenants, which he announced
in July in a startling reversal of his
previous adamant stance-Messinger
said in an interview the $IS,OOO cap "is
the real issue" to test the Mayor's
sincerity for inside-out J-Sl reform. "It
says very clearly, 'Mr. Mayor, do you
think J-51 should be for renovation with
tenants in place for low and moderate in-
come housing or for any developer doing
any renovation at any cost?'"
Jose AcUI1a, executive director of the
Manhattan Valley Development Cor-
poration, speaking for a coalition of
neighborhood housing groups through-
out the city, spoke of J-Sl's invaluable
aid to neighborhood groups for ur-
gently-needed rehabilitation and affor-
dable housing for many communities.
Acuna called a block of Columbus
Avenue between West 105th and l06th
Streets "one concrete example among
many of J-Sl's improvements." There,
MVDC rehabbed three buildings, in-
cluding the first "sweat equity" building
in the area, and 16 families are ready to
own their own apartments in a low in-
come cooperative in two of the
buildings.
"Nbither the experience we've had in
Manhattan Valley or our needs are uni-
que. Community groups allover the city
use the J-51 program as we do to
rehabilitate and upgrade housing so low
and moderate income families have a de-
cent and affordable place to live."
Last year, the City Council enacted
minor curtailing of J-51, eliminating
abatement in prime areas of Manhattan
and reducing the amount of exemptions
in those areas, changes critics of J-51
said were merely the tip of the iceberg.
The Council also defeated an amend-
ment by Messinger to ban SRO conver-
sions in Manhattan south of 96th
Street. 0 Sharon McDonnell
East New York Homeowners Win Tax Cut
A
FfER A LONG AND CHAL-
lenging battle over the inequity of
high property tax assessments for low
and moderate income residents as com-
pared to their higher income counter-
parts, property taxes for 16
homeowners from the East New York
section in Brooklyn were fmally reduc-
ed from 28 to 20 percent. It was the
first time homeowners testified under
the new Small Claims Court Reform
Bill which Governor Carey signed
earlier this year. The property tax
assessment has not been revised for
over three decades. The bill allows
overassessed and overtaxed
homeowners to appeal their taxes for a
small $25 fee. The . city is required to
show sales data on similar homes, and,
if the homeowners can show he or she
is overassessed, then he or she will get a
tax break of up to $7S0.
The sixteen homeowners were
organized under the auspices of New
York's Public Interest Research Group
(NYPIRG). Gene Russianoff, a
NYPIRG representative, said, "The ci-
ty has over assessed one-third of the
S50,000 homes in New York City." He
went on to say, "NYPIRG thought the
property tax was 18 percent before
residents were charged 28 percent, and
now the hearing officers reduced it to
20 percent. "
NYPIRG published a report in 1980
on residential assessments,entitled
"City of Unequal Neighbors," which
compared data on one- and two-family
homes. It pointed out that of 26,000
homes sold in 1979, two out of three
homeowners' assessments were incor-
rect and the average assessment error
was almost fifty percent. The study
showed that approximately half of the
city's 260 neighborhoods were assessed
at a rate of two-and-one-half times
higher than wealthy neighborhoods.
Henry Kosta, chief assessor at
the city's Real Property Assessment
Bureau, said, "The property tax is
assessed at 20 percent for Tax Class 1
Property (i.e. one-, two-, and three-
faplily residential homes)."
Linda Thomas, one of the
homeowners, said, "Last year my
house was assessed at $16,000, and the
7
property tax was $1,400." After the
hearing, her property assessment was
reduced to $11,200, making the proper-
ty tax approximately $912.
Making numerous appearances in
court over the past three years, the
group was spearheaded by Maryann
Johnson, who noticed that blacks and
low and moderate income homeowners
were paying much more on their pro-
perty taxes than whites and high in-
come homeowners. The group grew
from one person to 32 and then finally
to 160 people.
Three years ago when Johnson first
went to court, her house was assessed
at $19,650, and her property tax set at
$1,759. The second year, her house was
assessed at $14,500, and her tax at
$1,228. This year, the assessment was
dropped again to $13,300, and her pro-
perty tax is $1,190. She is currently
seeking to obtain a rebate for property
taxes dating back to 1969, the year in
which she purchased the house. 0
Debra Alston
CITY LIMITS/October 1982
Puerto Rico Squatters Seek to Buy Land
I
N THE JUNE-JULY ISSUE,
City Limits reported on the squatter
movement in Puerto Rico-focusing in
particular on the fate of one Villa Sin
Miedo (Village Without Fear), located
about 10 miles east of San Juan.
On May 18, 1982, government police
had razed that entire community,
routing over 200 families and setting fire
to every building the group had built
during its two-year history. But the Sin
Miedo tragedy went far beyond the ap-
proximately 1,000 residents who called
the ' 65-acre-settlement home. As the
most self-sufficient and well-governed
of all Puerto Rico's squatter com-
munities, the colony had become the
heart beat of the entire squatter net-
work-a message of hope and progress
to at least 20,000 homeless, landless
islanders.
Although squatters exist allover the
United States, the situation in Puerto
Rico is particularly critical. According to
recent federal government reports, only
20 percent of the island's population can
afford even the cheapest available hous-
ing stock. Making matters a good deal
worse, Puerto Rico is at least 200,000
units short of meeting its housing needs.
Moreover, those who choose to solve the
housing problem by settling unoccupied
government land are often victims of
police brutality, as the Sin Miedo inci-
dent proved. .
Since the police burned, then bulldoz-
ed their homes, Villa Sin Miedo residents
have been living temporarily on a small
plot of land loaned to them by the
Episcopal church. (Villa Sin Miedo itself
is encircled with barbed wire and patroll-
ed by armed guards.) Despite serious
hardships at the temporary loca-
tion-the land is a mosquito-ridden
swamp that has helped spread disease
among the children-the conquering
spirit of the pioneers has prevailed. A
solid core group of the original settlers
remain together, strong as ever in their
desire to live a decent communal life.
In August, the refugees decided on a
specific solution to their housing pro-
blem-to buy a piece of land near the
Illegal Eviction Bill Passes
A year-old bill that could send a
landlord to jail for up to six months
and impose $100-a-day fines for illegal
eviction of tenants from any multiple
dwellings passed the City Council
September 14 and was expected to be
in effect by mid-October, at least two
weeks before the General Election and
well in time for the winter heating
season.
According to political observers, this
pro-tenant legislation, which received
full support from Mayor Koch during
the last leg of his gubernatorial cam-
paign, sailed through the council
because it had the mayor's backing.
A bill co-sponsored by
Assemblyman Richard Gottfried,
Democrat-Liberal of Manhattan, and
CITY LIMITS/October 1982
State Senator John Calandra,
Republican-Conservative of the Bronx,
had passed the Assembly in June but
never reached the Senate floor because
Majority leader Warren Anderson and
the real estate lobby opposed it. At that
time, the City of New York and the
Housing Authority also opposed this
legislation because they could not sup-
port the proposed criminal penalties.
In addition, city officials initially at-
tempted to limit any proposed illegal
eviction provisions to tenants residing
in single-room-occupancy (SRO) hous-
ing, asserting that there were already
adequate legal remedies for dealing
with the owners of other multiple
dwellings.
"This legislation is very timely and
8
Military police moving past
burning dwellings of
Villa Sin Miedo . .
old settlement a perma-
nent colony. Such an effort, according
to the San Juan Star, could cost the
squatters about $100,000.
To assist the squatters in reaching their
housing goal and to publicize the Puerto
Rican squatter problem, an effort is now
underway to bring Miguel Gonzales, a
leader of the Sin Miedo community, to
the mainland this fall. During his ten-
day stay, Gonzalez will with the
press as well -as foundation and church
groups, in an attempt to make contacts
for the squatters. If anyone has any sug-
gestions for making Gonzalez's trip a
success-press, funding sources, or
otherwise-please telephone the Youth
Project at (212) 875-8500.0
Jane Wholey
quite extensive, really more ambitious
than what we had first worked out,"
said Councilman-at-Iarge Edward
Wallace, Democrat of Manhattan, the:
original bill's author . .
Wallace also said that the bill has the
police department's full support since,
for the first time, officers on the beat
will be empowered to stop illegal evic-
tions before the crime is complete.
Currently, under civil law , the coun-
cilman explained, no tenant in
residence more than 30 days can be
evicted without a court order after a
court hearing. But, he pointed out,
many landlords, "especially those bent
on emptying buildings to take advan-
tage of J-51 tax benefits, have harassed
tenants out of buildings or locked them
out over holiday weekends when legal
help is not available." 0 S.B.
I
Ne\l1 York City's Pentagon Tax By Rev. Brian J. O'Connell
N
EW YORK CITY RESIDENTS and Katzman formula, New Yorkers will
are painfully aware of the local tax pay $7.9 billion for Department of
burden. Even during the fiscal crisis in Defense expenditures and $8.98 billion
the 1970s, there was little pressure from for all military expenses in 1983. This
any quarter to close the budget gap by in- compares with the $8.54 billion that
creasing taxes because of the tax over- . Mayor Koch anticipates in revenues
load. But few people are conscious of the from all city taxes in fiscal 1983, when
amount of money leaving New York City more money will leave the pockets of
to run the Pentagon. In fiscal year 1983, New Yorkers for current military spend-
by one estimate, the amount of dollars ing than for City Hall. And very little of
leaving the pockets of New Yorkers for the military money flows back into the
defense expenditures will exceed the city: New York receives only 1.9 percent
eight billion dollars-plus which the City of national defense contracts, and an
of New York expects to collect in all its even smaller percentage of military pay.
property, sales, corporate, stock transfer The gap between the defense tax and
and other taxes. the city tax will widen if President
One method of estimating the defense Reagan is successful in getting a desired
tax for New Yorkers is simply dividing seven to eight percent yearly increase
defense expenses by the total population after inflation in Defense Department
of the country (231 ,173,000 estimated by budgets until 1986.
the Census Bureau for 1982) and The defense tax of New Yorkers in
multiplying the per capita figure by the -fiscal 1983 will be more than enough to
population of the city (7,013,400 ~ forJb.e--.tllree biggest service lines in
estimated by state Department of Health- Koch's budget, namely, $3.4 billion for
for 1982). In President Reagan's propos- social services, three billion for educa-
ed budget for fiscal 1983, $215.9 billion tion, and $838 million for police:.
is allocated for the Department of
Defense. This amounts to $933 for each
person in the country, and $6.54 billion
from the residents of New York City. If
the other elements of actual current
military costs such as portions of
space research, foreign military
assistance and arms credits spending are
included, then the per capita cost for all
U.S. citizens is $1,103, and $7.7 billion
comes from New Yorkers.
::t
'"
W
00:
"-
lot
00:

::;:
The national per capita measure pro-
bably understates the defense tax for
New Yorkers. For' 1976, Charles Brecher
and Kurt Katzman calculated that New
York City contributed four percent of
federal tax revenues. Since New York Ci-
ty had less than three and a half percent
of the nation's population at that time,
New Yorkers were paying more than the
per capita national average. For 1975,
the Regional Plan Association estimated
that 4.9 percent of all federal, payroll
and corporation taxes came from New
York City. By this estimate, New Yorkers
were paying more than the national
average by a greater factor.
Using the more conservative Brecher
A comparison with church contribu-
tions 'provides another eye-opening
glimpse of the defense tax's magnitude.
Using figures calculated from the more
conservative Brecher and Katzman
estimate of New York's federal tax
share, New Yorkers would have paid
$614 per capita for the Defense Depart-
ment alone in 1979. Meanwhile, accor-
ding to the 1979 Catholic Diocese of
9
Brooklyn (which includes Brooklyn and
Queens), the 1,338,554 Catholics in the
diocese gave $55,475,475-
$41.44 per capita-contributions, be-
quests, and fund raising responses. For
each dollar put in the collection plate
that year, $14.81 went to the Department
of Defense through various taxes. The
ratio would be greater than $17.00 to
one dollar if all defense costs were in-
cluded. In 1983, New Yorkers will con-
tribute $1,082 per capita for the Pen-
tagon and $1,278 for all defense costs
(using the Brecher-Katzman estimate),
while it is unlikely that Church dona-
tions will increase proportionately.
We take defense taxes for granted
because they are such an established part
of our lives. Man1 New Yorkers fail to
look at the opportunity costs or the op-
tions taken away from us because so
much money is pre-empted for defense.
We have made the decision for guns
without much conscious awareness of
the costs. The fiscal problems of our
cities may be, in part, one of the long-
term costs of these easy decisions.
A consciousness of the total cost of
defense can be a healthy stimulus to a
critical evaluation of the military budget,
no matter what stance a person takes on
military policy. New York has been forc-
ed to tighten its budget even for essential
services partly because it could not im-
pose further tax burdens on its p e o p l e ~
During the fiscal crisis, hardly any
thought was given to the burden of tax
dollars leaving the city for the Pentagon.
Military spending increases of eight per-
cent over the cost of inflation for each of
the next five years could impose a burden
on New Yorkers far greater than any tax
or spending decision that is likely to be
made by the New York City government.
We can get comfortable in the belief that
the fiscal crisis is behind us, but this
drain for defense spending could be a
major factor in again bringing the city to
the brink of bankruptcy. 0
Rev. Brian J. O'Connell is an associate
professor .of sociology at St. John's
University, whose research areas include
urban employment and housing.
CITY LI M ITS/October 1982
-WORB
,
vs.
WELFABE
New Rules Promise
Hard Times
for the Working Poor
By Tim Ledwith
Photos by Laurie Peek
Cora Hagler quit her job last April 30.
The Bronx single mother of three says
her departure had nothing to do with any
problems at the Manhattan ,word pro-
cessing center where she worked as a
typist. Nor, says Hagler, did the move
result from the bother of a daily, two-
fare commute between work and her
Throgs Neck home.
Rather, she recalls, the decision was
prompted by Federal welfare rules
enacted this year that make it difficult
for working poor People to supplement
their low earned incomes with public
assistance - which Hagler used to do.
lt is now so difficult that, according to
a Congressional Budget Office estimate,
188,000 American welfare households
with outside income will have lost their
benefits due to the rule change by the
year's end. The budget office also
figures, perhaps conservatively, that a
third of those families will have been
forced by financial considerations to
leave the world of paid work and return
to full welfare benefits. Hagler has
already done just that.
Meanwhile, the Federal government
has directed state and local welfare agen-
cies to institute "workfare" re-
quirements. These oblige recipients to
CITY LIMITS/October 1982
}tOBIN HO
WAS
RIG
Redistribute America Movement member
work off their checks, either by accep-
ting mi n imum wage, generally unskilled
jobs or spending mandatory weekly
hours in search of employment. The re-
quirements are to be met under the threat
of losing welfare benefits, either tem-
porarily or for good.
In theory, both these measures and
numerous other new regulations that
took effect last January, are designed to
dampen the demand for public
assistance. The new rules particularly af-
10
feet Aid to Families with Dependent
Children benefits, since ADC is the 'ob-
ject of the deepest welfare budget slash
- from $7.6 billion nationally in fiscal
1982 to $6.8 billi9n in fiscal '83, which
started October 1.
And on paper, Washington's much-
heralded drive to thin out the rolls is like-
ly to succeed. But beyond that im-
mediate effect, in America today -
where 81 percent of all ADC households
are composed of single mothers and their
children, where the median income of
female-headed families is half that of
married couples with sole male bread-
winners and where unemployment has
reached Depression era levels - the
Federal effort's fallout may also settle
on workers who have never received a
welfare check. "Cutting people off the
rolls is one level," notes Theresa
Funi ci ello,a former welfare mother and
founder of a statewide welfare rights
organization, the Redistribute America
Movement. "The other is to lower the
whole wage scale in the country, and
especially among women."
Adds a Brooklyn welfare mother:
"More than ever, the system is designed
to keep a certain number of people
poor."
Walking Papers
The biggest offender in that regard,
say the new welfare regulations' critics,
is the reduction of supplemental benefits
for the working poor.
Until this year, ADC recipients
employed outside the home could
disregard some earnings and expenses
when figuring their net income. This net
figure, in turn, determined the level of
need. The "income disregard" provision
enabled low wage workers, particularly
single parents, to supplement welfare,
rise a notch above subsistence level and
gain work experience. "Income
disregard was probably the best work in-
centive program they ever came up
with," observes RAM's Funiciello.
Under the old system, clients figuring
their net earnings deducted $30 plus a
third of the remainder from money
made on the job. Work-related expenses
were discounted as well. Thus, total
household income often exceeded the
maximum monthly welfare grant by
$}OO or more.
But the guidelines implemented this
year changed all that, limiting the
come disregard provision to four rrionths
and placing monthly caps on child care
and work expenses - $160 and $75
respectively. So the welfare squeeze got
even tighter. Hagler of the Bronx pro-
vides a case in point:
Until last spring, the single mother
brought home about $690 per month.
This compares with the monthly welfare
Who's On Welfare?
New City's 495,000 welfare hou$ebolds exeeed the total population of
most American cities. Who are the New Yorkers now feeling the effects of the
Federal social servicles upheaval?
to the Human Resources Administration. they are 12 percent of
the cIty's IOhabitants, 8SS,OOO as of last March.
Welfare agency rl8W'es for that month 111,(0) New Yorkers receiving
benefit$lhrQU8b the Home adults
and ... ..
Hall of the system's 4OO,OO()..plus . under age six, the survey
saJd. Of a total 219,999 ADC households citywide, about 186,000 were headed
by single parents-182,000 by single mothers.
The same survey showed a pattern of ghettoization among welfare families'
nine of the city's 59 community distriets had more than 30 percent of their
population on public assistance, including three in the south Bronx and six in
central and northern Brooklyn. At over 19 percent, tbe Bronx had the highest
portion of its total populace on welfare; Staten lsJand showed the lowest por-
tion at 3.9 percent. (These figures don't include aaed. blind and disabled peo_
ple in the Supplemental Security Income prosram. That group amounts to 3.2
per:e
nt
of New York's overall popuia,tion, city welfare report.)
While HRA doesn't compile statistics on the ethnic distribution among welfare
clients, available the morning IiDfS outside virtually
any welfare center-lOdlcate the great majority of New York's welfare families
are black and Hispanic. Nationally. about half of aD public assistance clients
are people of color.
. Also nationally, about 13 percent of AOC families in any given have
mcorne earned outside the home, according to a 1979 Department of Health
and Human Services report. The same study went on to say that 62 percent of
all families that received ADC at some point during 1979 also earned income
from wages during that year.
. As Jackie Goings, a former welfare mother fromflatbush, Brooklyn notes,
there figures contradict a popular notion: that weJfarerecipients don't want to
work. "There are no damn jobs today," Going insists. "AndJ don't believe
that third generation welfare stuff you bear. That's buUshit. Who's going to
stay on for three generations? EverYbody I know who's Ollis trying their
damndest to llet off.-'O
total of $515 that New York City
families similar to Hagler's receive to
pay for basic needs and shelter. About
$100 of Hagler's monthly net was a
welfare supplement but, in effect, the in-
come disregard measure also paid for her
commuting and child care expenses.
When the belt-tightening rules took
effect, however, Hagler faced what must
have seemed an absurd choice. She could
stay at work, get a reduced welfare sup-
plement for four months, then lose her
benefits and bring home about $365-a
month-after taxes, work expenses and
11
child care costs. Or she could quit after
four months, apply for full welfare at
$51S and care for the children at home.
Angrily, she made her decision.
"I didn't see anything grossly wrong
with them helping me while I was work-
ing," Hagler says in retrospect. "I don't
think people in power even know what it
means to be poor."
Fixed Income
Many of the 855,000 city residents
Hagler joined back on the rolls would
surely corroborate that assessment. A
CITY LIMITS/October 1982
look at recent history, and the standard
of living afforded through public
assistance, tells why.
During a decade of rampant inflation,
until 1981, welfare grants in New York
State remained unchanged. Last year,
after years of public pressure, state
legislators raised the basic needs
allowance by 15 percent.
Though the hard-fought increase eas-
. ed the financial crunch somewhat, New
York welfare budgets remain essentially
out of step with the area's upscale
economy.
Monthly grants for basic costs except
rent now range from $108 for a one-
member household to $538 for a family
of eight. The Human Resources Ad-
n1inistratian, which runs the city's
welfare system, reported paying an
average household grant of $341 in
March, the most recent month for which
figures are available.
Additional benefits for housing start
in New York City at $152 monthly for a
household of one and stop at $317 for a
family of eight or more. And a 1981 city
report said well over half the area's
welfare families pay rent at or above the
maximum shelter allowance.
The fairly spartan living standard pro-
vided by these grants is augmented in
most cases by health care aid and food
stamps, but budget-trimming and
tightened eligibility have affected those
benefits as well. A recent study by the
Citizen's Commission for Children, for
reported that community
health budget cuts totalling $6.5 million
have compelled many of the state's
dinics to limit services and hike fees; in
the past year, food stamps have been cut
off or reduced for 63,000 New York
families. And for all welfare clients,
Federal austerity has insured an in-
definite freeze on benefit levels.
As the ebb of inflation erodes those
already lean levels in the near future,
more and more recipients will have to
make money outside the welfare system.
Even now, states Marcy May, director of
the Downtown Welfare Advocate
Center in Manhattan, "People generally
are on jobs in between being on
welfare."
. But with current guidelines making it
so difficult for welfare households to
supplement their grants legitimately, in-
creasing numbers of strapped
will probably spurn the mainstream
economy. "Either you get off the rolls
somehow if you can't hack it," asserts
Funiciello, "or you become part of the
underground economy... People on
Children on a Boerum Hill, Brooklyn stoop; the vast majorii; oj the city's, and country's, welfare
populal1on IS made up oj single mothers and their children.
CITY LIMITS/October 1982
12
welfare have to have some scams
going."
Working Papers
Ironically, such under-the-table
forays are one of the prime targets of the
current workfare campaign.
"Work Alternative Programs,"
which are optional for state social service
departments wishing to pursue the
Reagan workfare proposals outlined in
this year's Federal budget, are being
realized in 31 induding this one.
The New York version, known as the
Community Work Experience Program,
targets 14 counties, including
Westchester, Nassau and Suffolk-but
not yet New York City. Billed as a
research project, it could affect
over 14,000 ADC recipients each month,
the state estimates. One of the project's
main goals in serving those clients, stated
in a notice from the state welfare agency
to the Department of Health and
Human Services in Washington, is "to
remove from the . welfare rolls par-
ticipants ... who have hidden sources of
income."
To that end, CWEP entails placing
welfare applicants and recipients at work
sites, but denying them employee status,
workers' benefits or the rights to collec-
tively bargain and strike.
Another project goal is "to test a
variety of approaches," and it does,
varying methods dramatically among
participating counties: workfare-eligible
ADC clients include parents with
children over age. two (in two counties)
and minors age 16 18 who don't
attend school (in one county); at most
sites, the number of mandatory partici-
pant hours are to be determined by
dividing clients' total welfare benefits by
the minimum wage; and participants
charged with initially failing to cooperate
face the loss of benefits for 30 to 60 days
in different counties, while the second
and subsequent "non-c"'mpliances" can
draw sanctions of up to six months.
Though this form is new, the idea is
not. Numerous work programs have us-
ed benefits as leverage over the years,
and the approach has often succeeded in
cutting government social spending. In
one 1980 workfare demonstration pro-
ject conducted by the U.S. Labor
Department, for instance, a third of the
recipients scheduled to participate were
sanctioned by the loss of their food
stamp benefits.
The welfare bureaucracy's record in
actually training clients to take on per-
manent jobs is less impressive, however.
For example, New York State's I5-year
old job training and placement effort,
the Work Incentive Program, which
enrolled 100,000 ADC clients in 1979,
placed only eight percent of them in jobs
that year. And, notes Funiciello, "that
means placed for five minutes, not any
length of time."
In the absence of a serious commit-
ment to training, welfare advocates
argue, the new batch of workfare regula-
tions is bound for a similarly unspec-
tacular performance. And without an
emphasis on developing skills, they say,
mandatory job search requirements con-
stitute little more than penance for the
poor. (Scattered reports already indicate
job search abuses are occurring at local
welfare centers: in New Bedford,
Massachusetts, clients have reportedly
been directed to use the local Yellow
Pages as the prime resource for their
work searches; the Dutchess County
social services department has set up a
referral system' that requires clients to
check in with the U.S. Army recruiter in
Poughkeepsie as part of their quest for
employment.)
Overall, their critics argue, workfare
and job search requirements are counter-
productive, threatening the incomes of
not only welfare recipients but many
poor people working outside the home as
well. By providing a ready pool of
. minimum wage labor, Funiciello notes,
"workfare could seriously begin to
displace workers."
Women Need Not Apply
That prospect is most threatening to
women, who comprise the largest mass
of recent immigrants to the nation's
workforce.
According to the Massachusetts-based
Popular Economics Research Group,
one of every three female-headed
American households now lives below
the official poverty line (about $9,700
annually for a family of four), and about
half of all female-headed black and
Hispanic families are poor. Even as in-
creasing numbers of women are prompt-
ed by social and economic forces to leave
the home for the workplace, obstacles of
job discrimination and limited seniority
block the path toward financial
In fact, relative to the population as a
whole,. the living standard of female-
headed families is falling-.
Almost certainly, as long as govern-
ment efforts to limit public assistance ac-
celerate, so will that downward slide. If
current trends were to continue uncheck-
ed until the year 2000, the country's en-
tire SUb-poverty level population would
be composed of single women and their
children.

At first glance, many people see a con-
tradiction between the work ethic
Jackie Goings, coordinator of the Redistribute
America movement's downtown Brooklyn office.
13
rhetoric behind current welfare guide-
lines and their apparent effect-keeping
a large portion of the workforce eco-
nomically stagnant. But the system's
critics see that as an intended outcome.
In "The New Class War," their recent
book on the Reagan Administration's
attack on the welfare state, Frances Fox
Piven and Richard Cloward address this
point. "Large numbers of unemployed
exert a downward pressure on wages,"
they write, "because people under bid
the wages of those currently working. A
mass of unemployed also inhibits
workers from making other workplace
demands; workers are less militant when
there is a long line of job applicants out-
side the factory gates."
Adds Funiciello, with characteristic
bluntness: "The only contradiction is
that this is all set up to help poor people
out of their mess." 0
CITY LlMITS/October1982
CITY LIMITS/October 1982
City Limits Foeus
ARTISTS' BOUSING
'Promise or Threat?
By Chuck DeLaney
Over the past 30 years, New York City has become
the acknowledged center of the art world. Despite the
recent drop in sales at fme art galleries and auction
houses ~ t e r years of steady growth, the city remains a
focal point for all types of artistic endeavours. A por-
tion of everything Western culture currently produces .
that can be called art is "made in New York."
New York is also the home for a large number of
art manufacturers-artists. For all but the lucky few,
the high cost of housing and studio space presents a
tremendous challenge. Now, artists' housing
threatens to become a problem for other New Yorkers
as well, because artists often appear to playa role in
the process that causes various city neighborhoods to
rebound.
14
ln certain instances, such as the early lo.ft settlements in
Lower Manhattan, this has been a positive undertaking-the
artistic knack o.f making o.rder o.ut o.f chao.s has resulted in the
rejuvenatio.n o.f struggling neighbo.rhoods, principally co.m-
mercial and manufacturing areas fallen o.n hard times.
To.day, artists seeking ho.using are mo.re o.ften invo.lved in \1 ..
co.mpetitio.n fo.r space in neighbo.rho<>,ds that aren't primarily .
vacant, but ratherho.me to. the city's lo.w and middleinco.me . i
residents. In these situatio.ns the artists are o.ften co.ndemned?
as the harbingers o.f gentrificatio.n: suddenly there's a gallery
where there used to. be a wareho.use, a fern bar fo.r the local
painters, and then a neighbo.rho.o.d o.pen-studio. art sho.w with
to.urists and perhaps even a SCo.ut fo.r New Yo.rk Magazine . .
It's understandable that bo.th artists and neighbo.rhood .
residents feel threatened. Displacement has Co.st many
families their ho.mes while property values so.ar. Professio.nal
types visit the neighbo.rho.o.d, find it "safe" and "nice" and
buy in. It's an iro.nic twist that frequently the o.riginal artist
pio.neers are amo.ng the eventual victims o.f the displacement
which their arrival helped trigger.
The situatio.n has reached crisis pro.po.rtio.ns. The artist
po.pulatio.n in several Bro.o.klyn neighbo.rho.o.ds is gro.wing
rapidly; and as o.ne Bro.o.klyn activist explained, "The o.ld
peo.ple who. live in so.me neighbo.rho.o.ds wo.n't put up with
much o.f a fuss. They'll be glad to. see yo.ung peo.ple mo.ving in
right up until the mo.ment they're evicted; but in o.ther areas,
they might start sto.mping artists."
On Manhattan's Lo.wer East Side, the issue has
aro.und the city Ho.using Department's Artist Ho.meo.wner-
ship Pro.gram. The plan, anno.unced o.ver a year ago.,' pro-
mises the creatio.n o.f 120 lo.ft-style co.-o.ps o.n two. o.f that
neighbo.rho.o.d's battered blo.cks.The pro.gram, o.ppo.sed by
the local co.mmunity bo.ard, is being advanced by the city with
no. heed to. alternative suggestio.ns made by representatives o.f
the lo.cal co.mmunity. So.me area residents no.w vo.w to. use
every avenue o.f resistance to. thwartthe plan ..
Can these fo.rces be reco.nciled? Can artists mo.ve into. a
neighbo.rho.o.d in numbers witho.ut destro.ying it? Can city
pro.grams pro.vide co.nstructive help?
Further, are artists an essential part o.f the gentfificatio.n
disease o.r merely a symptom o.f its arrival?Can lo.cals chase
first artists to. arrive o.ut o.f the neighbo.rho.o.d, burn their
vans and to. be left alo.ne? Will artists start to.
leave New Yo.rk, fo.rced to. the Diaspo.ra by the juggernaut o.f
escalating rents and upscale develo.pment? New Yo.rk wasn't
always the art center o.f the entire wo.rld; co.uld its days be
numbered?
These questions lack answers as yet, but the lesso.ns o.f the
past and the present suggest so.me appro.aches fo.r the future.
Unless the current impasse is breached, that future is no.t like-
ly to. be pleasant.
What Artists Need
Like all inQividuals, artists need shelter and fo.o.d, but their.
inco.mes are o.ften minimal because artists wo.uld rather spend
time making art, rather at a jo.b that "pays the rent. "
Many artists alSo. need space fo.r their wo.rk, whether it's
The artists' very act of renewal,
left unchecked, turned around and
displaced them.
painting, sculpting, film, music. dance o.r perfo.rmance.
Many canno.t affo.rd separate living and wo.rking spaces, and,
hence, a lo.ft o.r o.ther o.pen space that has roo.m fo.r bo.th is
particularly attractive.
Artists need a place to. display their wo.rk, and o.ften a lo.ft
beco.mes an alternative gallery o.r perfo.rmance space to.
sho.wcase wo.rk that is as yet unsuited fo.r upto.wn co.mmercial
venues. Many peo.ple first visited a lo.ft building to. see a
friend's art exhibit o.r perfo.rmance.
So.me artists alSo. keep o.dd ho.urs,and a co.mmercial o.r
manufacturing building meets that need. If yo.u want to. start
up a table saw ai2 AM because yo.u have a new idea fo.r yo.ur
sculpture in pro.gress, then the co.mmercial neighbors who. are
there o.nly during the day wo.n: t mind. Since mo.st o.f tho.se
co.mmercial neighbo.rs alSo. make no.ise-printing presses,
sewing machines, etc.-no.ise during the day is o.kay, to.o.. If
so.meo.ne lives abo.ve o.r belo.w yo.ur lo.ft, it's likely ano.ther ar-
tist who. respects yo.ur need to. wo.rk at 2 AM within reaso.n.
Manufacturing lo.fts, wareho.uses, and so.lid o.ld co.mmer-
cial buildings pro.vide excellent raw space fo.r artists' living!
wo.rkirig lo.fts. If there are no electric or plumbing fixtures in
.
15 CITY L1MITS/October1982
"
the space, chances are the artist has friends who can help with
that conversion. Over the years, many artists created
reasonably comfortable places to live and work for ,minimal
investments.
Artists also need places to hang out-to see friends, relax,
or party. Artists and their friends created bars in
neighborhoods where earliet taverns had catered only to the
weekday drinking needs of blue collar workers. Along with
artists come collectors and art admirers. Man of these more
affluent people visited lofts where an artist held a party or a
show. They were drawn to the open space. Some t h o u ~ h t they
would like to live in such a place as well. The restaurants and
bars were already there, as were the artists . The
neighborhood was ready for middle-class dwellers who
would not have been attracted to that area before the artists
installed themselves and created amenities and ambience.
Affluent ' artists and better-heeled non-artists invested
many thousands of dollars at the same task of loft conversion
and created luxury showplaces. It didn't require too many of
these to captivate the media and the realtors. The loft
"boom" was on.
All of these elements came together in the first flourish of
artist-created loft neighborhoods-Soho and the Lower .
Manhattan districts.
- The Past Boom: Soho,
TriBeCa and Lower Manhattan
A
RTISTS, REAL ESTATE DEVELOPERS, CITY' AND
state officials frequently cite the influx ofloft tenants in-
to Lower Manhattan as a miracle. They exaggerate, but it is
true that these commercial and manufacturing areas fell on ex-
tremely hard times in the late sixties and early seventies. Many
owners were desperate to find any type of tenant for their emp-
ty buildings. The artists were perfect-they didn't mind the
lack of services, and they promptly set about making im-
provements in the property by converting it to residential use.
Bear in mind that these neighborhoods had already suf-
fered major catastrCiphes which threatened to destroy them.
The construction of the World Trade Center demolished a
long-standing marketplace for electronics partsimd supplies,
and many of these businesses closed. The little loft buildings
they inhabited became vacant. When the Hunts Point Market
opened, many of the buttJ:r and egg businesses left the
Washington Market area to move uP to the Bronx. The emp-
ty neighborhood that remained attracted artist tenants long
before it was dubbed "TriBeCa" (Triangle Below Canal
Street) by some idiot planner and re-zoned for residential loft
living.
From Canal Street north to the West Fifties, Manhattan's >-
t1l
West Side saw many businesses depart. Overall nearly ~
..J
600,000 manufacturing jobs left the city in three decades. ~
Small printers moved to better locations in New Jersey, or 1j
~
simply closed. The city's garment industry, still the city's is
largest single industry with an annual volume of $16 billion, ~
plagued by rising imports and non-union shops in the South, S
lost nearly 200,000 jobs. Taxes, bad transportation and the . if
CITY LI M ITS/October 1982 16
threat of New York's financial collapse all contributed to a
very poor business climate.
Manufacturers that remained sometimes consolidated i-nto
the bigger buildings that had decent elevators and adequate
space for manufacturing tasks. Artists in increasing numbers
moved into the smaller buildings, usually totally vacant ones.
They were welcomed oy owners who saw no other way to
keep their buildings solvent during lean times.
Thus, the original settlement of artists into Lower Manhat-
tan neighborhoods did not result in a great deal of displace-
ment. The calamities that forced out commercial and
manufacturing companies had already taken place.
, But, once the pioneer artists were in their new quarters, a
vicious reality became apparent-their very act of renewal,
left unchecked, turned around and displaced them. As the
neighborhood became popular and the galleries and. bars
begat tourists and boutiques, rents started to rise: Often,
unless the artists had enough foresight and cash to buy their
buildings, the neighborhood improvements ended up causing
their own displacement.
Since rental tenants in lofts held commercial leases, they
had no rights and technically were illegal occupants. The ar-
tists had created something they could not control.
As loft living became extremely popular in parts of Lower
Manhattan, displacement did result. The loft phenomenon,
widely touted in newspapers, magazines and movies of the
mid-seventies, turned to luxury residential conversion that
displaced healthy business, pioneer loft tenants and the un-
fortunate residents of old-law tenement buildings interspers-
ed through the loft neighborhoods.
Today, the 'pressure on these neighborhoods stems from
luxury residential conversion and the relocation of small
commercial operations -law offices, ad agencies and other
service businesses-that are being pushed out of rnigtown by
the incredible recent commercial rent increases there.
The passage this past,spring of the 1982 Loft Law was in-
tended to provide limited protection' for the . remaining
pioneer loft tenants in these neighborhoods. Whether the new
law will help preserve these tenants and manufacturing jobs
threatened by further luxury conversion remains to be seen.
However, the shock wave of residential conversion has
already passed through these neighborhoods. The gentry are
already settled in large numbers. On many blocks, "real" ar-
tists are scarce.
Many compare SoHo's West Broadway on a Saturday
afternoon to the Village's Eighth Street: shoppers and
tourists lured by a potpourri of imported quality goods and
complete junk coupled with the chance to gawk at the locals.
The Present Boom:
The Lower East Side
T
HAT POTENTIAL FOR TROUBLE HAS BURST
out most glaringly with the Department of Housing
Preservation and Development's Artist Homeownership Pro-
gram for East Eighth Street and Forsyth Street. The program
solicited development proposals from artist gro!lPs and out-
side developers who would sell the complete units to artists.
Out of twenty applicants, seven were selected-five artist
groups were given 51 units in seven buildings, and two
developers will create 69 spaces in nine buildings.
The program has generated a great deal of attention, and
media coverage has included both the positive and negative
responses to the program. Many questions remain
unanswered. It is unclear whether the homeownership pro-
gram could succeed in a nourishing climate, much less the cur-
rent one of suspicion and resistance.
Can these units actually be renovated at the projected
costs, and if renovation is possible,should the buildings
become loft co-ops artists rather than apartments for low
income neighborhood residents? Will the artists' presence
help or hurt the neighborhood?
Everyone agrees that the buildings are in sad shape. Some
HIf we'd proposed those buildings for family housing they
would have laughed at us. Then, without any commun-
ity input, they propose artists' housing for them. "
TriBeCa, while not totally dominated by ground floor
galleries and boutiques, has become the home of several large
cafes where limousines drop New York's qeautiful people
and high rollers for a visit. The Odeon, on West Broadway,
perhaps the strongest magnet for high society, was a favorite
of John Belushi's. Liz Taylor's daughter recently held her
birthday party at the Commissary, a few blocks north. These
new cafes reek of pretension; the latest entry is Acute Cafe,
named for the angles that grace the recently co-oped building
.above.
Many local residents spend less on food per week than the
cost of a deluxe meal at one of these watering holes. Most
SoHo residents scrupulously avoid West Broadway's Satur-
day sideshow, but the message is clear-if artists are
developers, unchecked development can lead to affluent
shopping and partying neighborhoods that bear little
to earlier times.
For most artists, this tendency to gravitate to
neighborhoods that are about to be developed is an unwanted
characteristic. They 'are in no position to take any advantage
whatsoever of the phenomenon. But, like the pilot fish that
point the way to schools of bigger fish, savvy neighborhood
residents can sense trouble startmg when the artists show up.
Development is likely on someone's agenda. Similarly,
developers know that if a neighborhood appeals to artists it
can probably be made attractive for other newcomers as welL
of the artist/ developers are confident that they can renovate
the buildings for the projected costs, while others in the pro-
gram admit that they are not sure whether it can be done, but
they are so desperate for housing that they're willing to take
the risk.
lndividuals,with experience in housing rehabiIitatioq are
not sure the risk is viable. Lisa Kaplan, a Lower East Side
resident who formerly w.orked with a Lower East Side com-
munity group called Pueblo Nuevo and who now works with
a housing group in Clinton, studied the plan when it came
before the local community board. She observes: "The
fascinating part is that the Housing Authority rejected the
Forsyth Street site for rehabilitation in 1978, issuing a report
that said it would make more sense to level the buildings."
She notes that the buildings on Eighth Street are in no better
condition, and concludes: "I don't believe it can work. It's a .
shot in the dark."
Kaplan points out that part of the financing for the pro-
gram consists of a $3 million loan to come from HPD's Par-
ticipation Loan Program (PLP), which combines low or no
interest federal Community Development funds with
market-rate bank loans. Last year, the city's entire PLP
budget line was $20 million. The Participation Loan Pro-
gram was designed to provide money for low and moderate
income housing and many local residents question whether
the projected loft co-op units qualify. .
Kaplan recalls a May 1980 meeting of Community Board
17 CITY LlMIIS/October 1982
Three where HPD's Director of the Office of Special Hous-
ing, Janet Langsam, fIrst presented the idea for the Forsyth
Street site. Kaplan says that community board members of-
ferd to help find alternative sites: "I had spent the prior eight -
" years working on housing programs for the Lower East Side,
and we had been to HPD for years begging for help to
rehabilitate old-law tenements. If we'd proposed those
buildings for family housing, they wpuld have laughed at us.
Then, 'without any community input, they propose artists'
housing for them."
It's that kind of contradiction that makes Lower East Side
residents (and some artists) recoil at the apparent cynicism of
the artists' program. Many community members see more
needs in the area than the creation of artists'
enclaves. They also question the motivation behind the
cluster format.
Other community board members recall offering to work
with Langsam to develop a plan that would provide artists'
housing in the area, but which would allow the community to
locate alternative sites, focusing on abandoned commercial
and manufacturing space rather than vacant residential
buildings. In a recent interview, Langsam stated that she
never heard such suggestions.
Currently, the buildings sit untended. The formal start of
the Uniform Land Use Review Procedure (ULURP), which
must take place before the city can sell the buildings to the ar-
tists, was August 23. The ULURP process will fIrst bring the
project back to Community Board Three, which has two
months to make a nonbinding recommendation. A public
hearing is expected in early October. Some board members
predict that the board will once again oppose the plan. Then,
., the proposal comes before the City Planning Commission,
and finally before the Board of Estimate. A total of six mon-
ths are required for ffnal approval. Only after that go-ahead
can the artists an,d developers actually take possession and
begin work.
Lower East Side activists vow that they will continue their
opposition beyond the advisory vote of the local community
board and carry the fIght to the Planning Commission and
the Board of Estimate, where a fInal vote cannot come before
February. 'If Mayor Koch is elected Governor in November,
it is unclear whether political enthusiasm for this controver-
sial project will be maintained.
What will it really"cost?
The press release that accompanied MayoIi Koch's formal
announcement of the selection of the artists and developers
" stated that the seven buildings to be renovated by the artist
groups should run each individual participant an average
price of $50,000, with monthly maintenance charges of about
$500. The slightly smaller units planned by the developers
would sell for an average of $26,000, with monthly
charges of around, $600. The $26,000 figure for
the developers' units was widely quoted in the initial barrage
of stories about the venture, but it turns out that fIgure is the
low end of a range of projected sales prices. Since the lofts go
from 950 to 1,800 square feet, it's likely that the larger units
will be $50,000 or higher.
If these units turn out to be much more costly than these
CITY LI M ITS/October 1982 18
. j'"
J
., "J. J. . . l
projections-a distinct possibility if Participation Loan
money is unavailable, or if interest rates shoot up before deals
are closed-then it's possible that many of the artists chosen
for the project will not be able to afford it and have to drop
out. I( the project goes on, the"n people who can afford
substantially more, say $75,000 or $100,OOO-a-unit, may buy
in. This would mean the project had failed to provide housing
for thr population for which it was targeted, and that the
fears of local residents that the project is a Trojan horse for
the gentrification of these battered blocks are correct.
So far, howeVer, that hasn't happened. And despite a
growing perception on the part oflocal residents that the win-
ners of this proposal contest are rich folks from uptown,
"discussions with those winners reveal a different identity,
These are not rich kids and trust fund babies, but mostly ar-
tists who have lived in New York for a period, are already suf-
fering from high rent and loft evictions, and who desperately
woul,d like a home with some security and a chance to concen-
trate on their work.
Aword about artists' incomes is in order. The real working
artist is driveh to toil at a lonely, frequently frustrating task,
The vast majority are neither rich nor bohemian. Their in-
comes, usually irregular, are often supplemented by teaching
or commercial art gigs. Very few artists make a living solely
from the sale of their work. Like diabetes or heart disease, the
urge to make art strikes people of all races, n;ttionalities and
income levels.
Lyn Blumenthal is one of the representatives of Group One
Artists, designated for 308-10 and 312-314 East 8th Street
where they plan to create 12 units. A sculptor and video artist,
Blumenthal arrived in New York 15 years ago from Chicago.
"I've always wanted to live over there," she explains. "I
moved here from Chicago and I was drawn to the Lower East
Side, but all the apartments were too small for my sculpture,
so I've lived in loft neighborhoods. But I've had friends in
that neighborhood for years, and I likcr the sense of com-
munity and its mixed quality."
Blumenthal has a feel for the neighborhood and notes that
real problems existed on the Lower East Side before the an-
nouncement. of this program. "Gentrification is an issue that
the artists will have to take up," she says. "I don't want to
live in a neighborhood that's filled with boutiques." She anti-
cipates her own future involvement and sees a legitimate side
to the community's concerns, but warns, "It will be bad for
the Lower East Side if this single project becomes the focus of
this neighborhood's activities as opposed to fighting the real
speculation that is going on."
The dilemma that Lower East Side activists could win the
battle against the homeownership program yet see the entire
neighborhood developed was noted by other observers as
well. Some think the area, given its proximity to Lower
Manhattan and midtown white collar jobs, is already slated
for the maximum impact of gentrification and that there is no
need for artists to grease the way for the more timid upper-
middle class. Others maintain that these two sites are the
gateway to speeding development of the easternmos.t
blocks-still no-man's land in the eyes of many ..
AnotheI"tdesignated artist is fully aware of what he might
\ , I
I
face on the Lower East Side because he lives there already. Ed
DiLello, a composer and choreographer, lives across from
the East 4th Street Urban Renewal area "in the only building
on this block that isn't city owned." DiLello, whq directs his
own music and dance company, notes that for his Winter '81
concert series he paid $1,000 for six weeks of rehearsal in
studios that rented from $6 to $10 an hour, and three even-
ings of performances that cost $100 a night. As he becomes
better known and his work reaches a wider audience, he finds
that he cannot afford a separate working and living space
without leaving the city. "So I decided to become a guinea pig
in this project."
DiLello was in Lee, Massachusetts,last summer when the
program was announced, teaching at the Jacob's Pillow
Dance Festival. A friend saw a newspaper article and called
him. "I started calling every artist I could think of who need-
ed a place to live." They formed a small initial group, studied
the proposal, and ended up forming a. co-op with friends.
DiLello's plans call for renovation of the ground floor of
178-80 Forsyth Street as a commercial space, and a friend's
growing lighting design business has committed to a lease and
maintenance agreement that should help reduce the carrying
costs of the residents upstairs. "We didn't want to plan a
quiche restaurant for the ground floor and the company
should be able to employ some local r:esidents," notes
DiLello. The group intends to employ the husband of one of
its members as constructic;m supervisor and hopes to firid
subcontractors from the area to work on the project.
DiLello dismisses the local fear that this project is for rich
artists as not relevant to his situation. He makes less than
$10,000 annually, and he will be asking for Ii loan from his
father, who.has bec:..n ~ waiter in New York for 35 years.
These artists appear ready to approach the project with en-
thusiasm and energy. They face considerable finanCial risk
and will undoubtedly spend a year or more of their time
working on their new homes, probably having little time for
their art work. Many are stretching their finances to the limit
in order to participate. Talking to them, one is moved to hope
that they are not about to embark on a housing Waterloo.
The Future Boom:
Brooklyn and Beyond
HE LOWER EAST SIDE CLASH IS JUST A POR-
tent of what's already underway outside Manhattan. In
1980, the Koch administration announced a far-reaching re-
zoning plan to regulate residential conversion in Manhattan's
loft territory. Lower Manhattan Loft Tenants, a citywide ad-
vocacy group for residential loft tenants' rights, criticized the
plan in part because it failed to protect areas in Brooklyn and
the outer boroughs that would come under greater pressure
once regulation in Manhattan began. The danger of spread-
ing the loft mess appeared certain.
The rezoning was given final approval by the Board of
Estimate in April, 1981, and the worst fears of loft tenant ad-
vocates have been confirmed. Monte Davis, the founder of
Brooklyn Loft Tenants, and a long-time tenant in the district
19 CITY LIMITS/October 1982
r
under the Manhattan Bridge, confirms that the number of
residential lofts in Brooklyn has doubled in the past two
years. One Williamsburg loft owner made the Village Voice's
"Ten Worst Landlords" list last year.
Lofts in Brooklyn exist in Greenpoint, Williamsburg and
in the waterfront neighborhoods further south. Some of these'
lofts are in manufacturing zones, many of which were recent-
ly designated study areas, where residential occupancy may
be permitted in the future. In these Nort'h Brooklyn
neighborhoods pressure is hardest on existing tenants in two
to five unit buildings that have no rent protection.
Some of the new Brooklyn loft . occupants are refugees
from the Manhattan loft wars, while others are newly arrived
New Yorkers. Friction has developed between the local
residents and the incoming artist in some cases. Last spring,
an art show called the" April Fools" show was organized in
Williamsburg. Local residents saw this as an act of self-
promotion on the part of recently arrived artists who they felt
did riot comprehend the far-reaching impact that past events
engendered in other neighborhoods.
While there have been a few meetings between the new-
comers and the long-time residents, communication be-
tween the two groups remains minimal.
The speculators haven't missed the phenomenon. Deeper
in Brooklyn, one developer has taken an active interest in
promoting artist housing, taking a tack not unlike the city's
homeownership program, but with vicious intent. Rather
than starting with abandoned buildings, he runs out the low
income tenants, demolishes a few walls, totals the meager
bathrooms and kitchens, and rents the rubble to artists as raw
commercial space. Of course, he offers a short commercial
lease. If the artists fix up the place, he'll kindly buy the raw
materials, and the work can be done without any of the
necessary permits. Needless to say, his new "commercial"
building is also removed from the roster of rent regulated
mUltiple dwellings as well.
Some of the new artists have offended residents-by pro-
claiming that the arrival of artists will save the neighborhood,
or that they are reclaiming "worthless" territory. Since the
areas in question are home for hundreds of families, in some
areas predominantly black, in others Hispanic or East Euro-
pean, such talk is ot well received. Far from empty, these
neighborhoods can only remain home to the old-time
residents if they are not "fixed up" by the eager artists. The
atmosphere for a hostile reception grows.

C
AN THIS BUDDING CONFRONTATION BE
avoided? If so, the unmet responsibilities on both sides
muSt be recognized.
Artists must realize that while the world may need their art,
their new neighbors may not need all their improvements.
They also should recognize that their presence may be mor.e
beneficial to certain neighborhoods than others, and plan
their homesteading accordingly. There are areas that genuine-
ly seek to have vacant areas rejuvenated. The Peekskill
Mayor's office contacted Lower Manhattan Loft Tenants to
inquire whether there would be any interest in founding an
CITY LIMITS/October 1982 20
artists' colony in the downtown area. HPD reports that they
have had requests from community groups in Harlem and
parts of Brooklyn to consider those places for future Artist
Homeownership sites.
While it is by no means certain that all the residents of
Harlem, Brooklyn or Peekskill would welcome artists' proj-
ects, there are a number of vacant areas within an hour's ride
from the Museum of Modem Art that would love to have any
kind of revitalization activity.
But where the influx is by invasion rather than invitation,
community groups seeking to oppose it must consider some
facts. Many neighborhoods are likely to see rapid develop-
ment with or without the artists. While Manhattan rents con-
tinue to soar, more and more people "discover" other areas.
While early gentrification was sustained by an artist-
generated ambience, it's not clear that stage is still essential.
Where opposition . is undertaken-particularly against
speculators playing unwanted host-community groups
must get a little smarter. Many times, protest is focused on
demonstrations and publicity, when there should be parallel
attention paid to enforcement of zoning and building con-
struction regulations. If conversion is taking place thaUs il-
legal, then activists should not hesitate to use every means to
stop it. One Brooklyn organizer complained that two artist
couples had bought a building, evicted several families, and
were setting about building homes and studios as well as
space to rent to other artists. No one had checked city records
to see if the project had approved plans and a permit.
Meanwhile, media sources can be expected to continue to
gush about new neighborhoods and the "freedom" of loft
housing. Artists settlement was city-sponsored in South Nor-
walk, Connecticut, and a recent New York Times piece show-
ed the spacious loft interior of two Portchester artists, while
quoting one's wish that "no one discovers the neighborhood."
Such a naive attitude, coupled with many artists' flair for
publicity, presents a real reason for objection to their
presence. But they must consider the long-range impact of
their choices, for everyone's future is 'affected.
As one artist who has faced eviction from a Lower Manhat-
tan loft for several years said, such planning is essential:
"Whether they get me or not, there will be hundreds of artists
displaced from lofts in the next few years, with or without a
law,. So far, my landlord has only knocked out one of my
teeth, but even if I can stay, the neighborhood around
Tribeca is turning into Beverly Hills. I don't know how much
longer I want to stay around all these rich people. It would
make sense to find a community that would really welcome
the artists and work with them. Maybe there's a totally empty
50-square block area somewhere. A foresighted government
might even be able to bring in the private sector, a housing
developer or a financial partner. Give half to the artists, let
them develop it, and own it, and maintain it, and sell new
housing on the other half to the rich folks that always seem to
flock wherever artists congregate, and let them put the bouti-
ques there." 0
Chuck DeLaney is a loft-dwelling photographer and a
member of the steering committee of the Lower Manhattan
Loft Tenants. .

fora
Housing
Policy
Selling
Alternative

By Bonnie Brower
O
N JUNE 16, 1980, NEW YORK CITY KICKED OFF
its long-awaited sales program for buildings in its
Alternative Management Programs. Champagne flowed that
day as the city sold the fIrst fIve buildings in its Tenant In-
terim Lease program as low income co-ops to the tenant
managers. Now, however, after more than two years and Ito
co-ops and community group sales, the city's Alternative
Management sales program more closely resembles a shotgun
wedding than a ship launching.
This dramatic change reflects the city's growing obsession
with sales statistics and revenue. It represents the city's silent
and, until now, barely noticed retreat from its professed
housing goals for city-owned buildings. Buildings in the city' s
Division of Alternative Managment Programs (DAMP),
especially those in the TIL, Community Management and
Management in Partnership programs, were once.proclaim-
ed to be a small but signifIcant permanent resource for par-
tially resolving the urgent housing crisis for low and moderate
21
ANDY EPSTEIN
income New Yorkers. Now, however, lip service to these pro-
grams as par} of a long-term housing policy has yielded to tpe
instant gratifIcation of sales mania. The city's focus has in-
exorably shifted from cost-effective tenant and community
management and modest rehabilitation to "disposition" by
any means necessary and at "market value."
A February, 1982, study by the late Robert Schur for the
Task Force on City-Owned Property reveals that the TIL
program has been particularly successful and cost-effective.
Rent collections in TIL in 1981 averaged 90 percent as com:
pared to 63 percent in city-owned buildings managed directly
by HPD; the costs to the city are $969 for occupied TIL apart-
ments as compared to $2,162 for those managed by the
Depar'tment of Housing Preservation and Development.
Rent collection and occupancy fIgures for Community
Management and MIPP are similarly striking. Buildings,
blocks, and portions of whole neighborhoods have been
stabilized through the presence of tenant and community
CITY L1MITS/October 1982
group-m{Ulaged buildings. There have also been heartening
success stories of the sales of DAMP buildings.
The history of DAMP has proved that tenant and non-
profit group management of city-owned buildings can
preserve and rehabilitate older, landlord-abandoned housing
stock and provide an important source of decent and affor-
dable housing to low and moderate income New Yorkers. It
has also demonstrated that, properly conceived and ex-
ecuted, DAMP sales can be a major vehicle for successfully
restoring many city-owned buildings to ' private, nonprofit
ownership. Unfortunately. however, the collective wisdom
of these experiences learned through tdal and error, success
and failure, is being swallowed but not digested in the rush
for sales.
Whatever the , source of pressure for the bulk sales of
DAMP buildings (many believe it was from HUD), it has now
developed a relentless dynamic of its own.
Other current policy initiatives mirror this change in the
city's attitudes toward the use and sale of DAMP buildings.
HPD is still pursuing its efforts to have the sale of city-owned
buildings legislatively exempted from the Uniform Land Use
Review Procedure (ULURP) in order to speed up sales and
eliminate the advisory oversight currently provided by local
community planning boards.
At the same time, HPD has initiated two important ad-
ministrative changes in its submission of ULURp applica-
tions. It has eliminated sales price from the ULURP submis-
sions for DAMP buildings; and it has begun, as a matter of
course, to begin the ULURP process without any prior notice
to the tenants of the buildings involved and without any
discussion or agreement with them as to the scope and
of necessary repairs. This latter policy reached its
logically absurd conclusion recently when the tenants of a
building that had not yet entered the TIL program accidental-
ly learned that HPD had submitted a ULURP application to
begin the process of selling the building to them.
Leaving aside the critical issue of changes in sales price
policy for a moment, other current administrative manifesta-
tions of sales mania are radically altering how DAMP pro-
grams function. In a classic bureaucratic turnabout, for ex-
ample, "intake" has become exclusively an "outtake' ..'
(HPD-ese for sales) device. Reflecting the shift in TIL from a
long-term tenant management program to a quick tenant
sales program, entrance requirements for TIL have become,
increasingly stringent and restrictive. In addition, HPD
neither notifies newly vested buildings of the existence of
DAMP programg., nor undertakes any outreach or organiz-
ing to attract buildings into the programs.
The resUlts of this passive practice are stark: between Jurie,
1981 and July, 1982, while 48 TIL buildings were sold to their
CITY LlMITS/October1982 22
tenants as low income CQ-Ops, only 30 new buildings were ac-
cepted into the program. Because of the increasing deifica- "
tion of "sales-readiness," twenty in rem buildings that ap-
plied for entry to TIL during this period were rejected
because of building conditions, and 17 additional buildings
were rejected because of insufficient tenant organization or
follow-through.
No Minimum Standards
Sales mania has critically comp'romised the physical
soundness of buildings in DAMP. HPD has, in fact, never
had uniform or minimum standards for the physical condi-
tion of buildings to be sold to tenants or nonprofit communi-
ty groups; the current press for speedy sales threatens to
create an even shorter fused time bomb of physically and/or
economically unviable buildings aw3.iting a mere spark to
become a disaster. Buildings have been routiriely sold without
structural support beams, with "crispy" wiring,
disintegrating plumbing, acute masonry problems and every .
other conceivable physical ailment.
In one classic building report, an HPD inspector wrote,
"Before this building exits the sales pipeline, it should be
either sealed or demolished." Not surprisingly, this report
was buried and another one written before the building was
sold to its tenants.
In an increasing number of instances, this problem is
becoming epidemic because of HPD's insistence that
buildings be sold before even agreed-upon repairs are com-
pleted, leaving tenants and community groups without
remedies for unfinished or badly botched repair work begun
by the city. Another wrinkle in the city's current repair
philosophy is to shift the cost of essential repairs and
replacements to the buyers by "encouraging" them to buy
first and then undertake the repairs themselves, using low in-
terest Article 8A loans available through HPD's After Sales
Support Program (ASSP).
Originally devised as a program to bail out former TIL
buildings that ran into "emergency" repair problems after
they became co-ops, this post-sales assistance is being more
routinely used to make low income tenant cooperators pay
for essential work that the city should have completed while
the buildings were still in its ownership. These repair loans are
frequently urged without regard for a building's ability to
carry the debt service for the loan, which is neither calculated
nor included in the building's budget. ' .
Even more troublesome is the freely-offered advice given
by HPD staff and others to such buildings that they will be
able to offset through J-51 tax abatements any increased "
charges resulting from repaying the loan. Such
. "advice" is based neither on knowledge of J-51 nor the
realities of a building's tax situation, as one building for-
tunately discovered at the eleventh hour. In that case, calcula-
tions revealed that because the building'S real estate taxes
were so low, the bulk of the estimated $333 to $414-per-
apartment increase in maintenance from debt service would
not have been cancelled out by J-51 benefits.
No Subsidies in Place
Finally, sales mania has resulted in HPD's insistence on
selling buildings before Section 8 existing rent subsidies are in
place. The devastating financial impact of this short-sighted
policy is rivaled only by the rush to sell physically ailing
buildings without making essential repairs. The situation
works like this: at the time HPD sets the fmal rents for
buildings before sale, it makes a preliminary determination
of the eligibility of tenants in the building for Section 8 sub-
sidies. Based on that determination, HPD enters into -written
agreements with tenants deemed eligible to pay 25 percent of
their family income instead of the higher actual rent until the
subsidy is obtained to make up the difference. Even though
HPD itself now processes Section 8 for DAMP buildings,
thus controlling the process, it has refused to postpone the
sale of buildings with large numbers of Section 8-eligible
tenants until after the subsidy is in place.
This policy renders the financial information contained in
the co-op offering plan for any TIL building with one or
more Section 8-eligible tenant inaccurate and misleading, if
not fraudulent, since the plan includes no mention of the
agreements sigued or the actual rents being paid by tenants -
rents that HPD itself designated to be eligible for the rent sub-
sidies.
More importantly, ' it has forced tenants to take over
buildings with substantial revenue shortfalls. One building is
reputed to have been forced to sale with 47 percent of its ex-
pected rent revenues uncollectable because of the
unavailability of Section, 8 funding. This is truly sales with a
vengeance. One building that, on the eve of purchase, had
been collecting 14 percent less rent than expected because of
tenant with HPD learned that the building itself
had been certified as ineligible for Section 8 long before HPD
entered into the Section 8 tenant agreements; HPD, however,
had neither informed the tenants association of this fact nor
corrected the situation. Upon learning ofthis problem tenant
leaders HPD to have the building recertified before
they took title to it. HPD's response? "We'll deal with it after
y, buy." -I
Sales Price
Finally, there is the other side of the sales mania coin, to-
day's most explosive sales issue: price. It is here that the city's
shift in policy becomes most palpable. Despite' two resolu-
tions of the Board of Estimate (March, 1979, and February,
1980), that firmly established the City's general, sales price
policy of $250-per-apartment in TIL and Community
Management buildings and despite its hysteria to sell some of
these buildings,the administration has been steadily trying to
erode this general price policy - first, on a building-by-
building basis, and now. on a neighborhood basis.
The first targeted community was Clinton, where $250 was
replaced in March, 1982, by ' the "offer" of $9,000 to
S13,500-per-apartment. Other neighborhoods where HPD is
desperately trying to replace $250 with some equivalent of
market (or slightly below market) value prices include
Chelsea (where the offer is $17,OOD-per-apartment), the West
Side (prices have varied from $1 ,000 to $3,I00so far), and the
"upper" Lower East Side (the offer is just under $2,700-per-
apartment).
In the aftermath of the explosive July 22 Board of Estimate
hearing on 12 Clinton and six West Side buildings, HPDsent a ,
23
memo, dated August 9th, detailing price options for those
areas. This memo fully captures the city's schizoid approach
to the sale of city-owned properties. The most striking - and
damning - features of the memo include the following:
The complete omission of "housing" and "housing
policy" as factors to be considered in setting sales prices
for these buildings and the exclusive focus on revenue.
The revenue obsession is ironic given the city's repeated
recognition in dealing with private, for-profit developers
that revenue from purchase is only one factor it should
consider in accommodating luxury development
schemes. Indeed, in Clinton itself, the city awarded a
purchase contract to a Gulf and Western real estate cor-
poration for the luxury development of three buildings
(around the corner from one of the TIL Twelve) that was
for a price substantially below appraised value. In fact,
the price was $1,500 to $6,000 less a unit than the city
CITY liMITS/October 1982
tried to extract from Clinton's low income TIL tenants,
despite the fact that DAMP sales were supposed to save
- not make - money for the city.
The effort to pass of f a startling new formula- the
setting of TIL sales prices based on a portion of a
building's appraised value rather than $250 - as the
city's "current policy" for "strong market area1."
(Quotations in the' original.) HPD's only evidence of
this "current policy" is a handful of isolated, aberrant
buildings sold at higher than $250-a-unit. In point of
fact, 99.4 percent of all units sold to Article XI (non-
profit housing) corporations under the Alternative
Management sales program have been sold for $250.
The arrogance of its revisionist description of these
unique sales as "current policy" is heightened by the
. fact that this "current policy" (as distinct from the
few individual such sales) has never been publicly
presented, debated or approved.
The patently bogus argument that this ne:.v formula for
"strong market areas" is wholly consistent with the $250
general sales policy passed by the Board of Estimate. The
Board of Estimate's resolution does contain a clause giv-
ing HPD's commissioner discretion to set a sales price
other than $250, but the context and the language make
it crystal clear that the power to make discretionary
recommendations is the exception, not the rule, and is to
be exercised by submitting written reasons justifying it.
That has never been done.
A Bronx Rehab:
HPD's explicit acknowledgement that the administra-
tion's sales price policy for these buildings "will have im-
plications" beyond Clinton and the West Side.
This last acknowledgement - . that prices for any Alter-
native Management buildings higher than $250 per unit will
affect Alternative Management throughout the city - is
really the key. Clinton is but the first skirmish in the war over)
how the city will use and dispose of city-owned property. On
October 28, the Board of Estimate will hold hearings on sales
resolutions containing as-yet unknown prices for the Clinton
and West Side buildings. ,
As Clinton has shown, efforts to save Alternative Manage-
ment and to improve DAMP sales must be done through
grassroots neighborhood and citywide organizing and coali-
tion building. The issues are too critical and the countervail-
ing forces too strong to leave the fight to either isolated
buildings or individual neighborhoods.
The development and implementation.of a sound,
equitable and humane housing policy for city-owned
buildings will require sophisticated, ongoing struggles. The
stakes are no less than a battle for the city's bricks and mortar
- its buildings and neighborhoods. It is a struggle whose
time has come. 0
Bonnie Brower is Executive Director oj the Association oj
Neighborhood Housing Developers. From September, 1979,
to December, 1980, she 'was Deputy General Counsel Jor
Sales at the city Department oj Housing Preservation and
Development.
The Tenants Always Pay Twice
By P.J. Kamens
I
N WILLIAMSBRIDGE, AT THE
northern tip of the Bronx, a group of
tenants met recently to prepare a list of
grievances for a meeting with their
landlord. They gathered in a tiny living
room whose fresh paint failed to hide the
seams and bulges of the plaster beneath.
The list began to take shape: "Lack of
heat and hot water, leaky roof, exposed
pipes and electrical wires ... " The
grievances continued: heightening the
irony that the tenants' buildings hfld
recently undergone extensive rehabilita-
tion at city expense, and at certain future
cost to the residents. Had city officials
communicated more effectively with
each other and with residents when the
rehabilitation was being considered, the
tenants' meeting-and much i n c o n v e ~
nience-might have been avoided.
CITY LIMITS/October 1982
The three buildings in question,
711-721 East 228th Street, are 16-unit
walkups, similar to many sprinkled
throughout the predominant one and
two family houses in the community.
During recent years, like many buildings ,
of their age and size, the three had
entered a state of dilapidation.
The demise of these buildings' major
systems and those of similar apartment
dwellings in Williamsbridge, was ac-
celerated in the mid-1970's when, accor-
ding to former North Bronx
Neighborhood Stabilization Program
Director, Al Drummond, over a hun-
dred realtors appeared on the scene.
They descended on the stable communi-
ty of black middle class and Italian im-
migrant families, intent on creating a
panic to intensify sales activity among
the area's one- and two-family homes.
24
;
Thus began a process that would tip the
neighborhood's racial balance and dry
up the area's access to ctedit. Hispanic
and West Indian black families who
moved into the area found that mortgage
and rehabilitation loans were no longer
available. "The area's problems are
largely due to the fact that people's
credit needs are not being met," Drum-
mond notes.
Meanwhile, in 1976, the three
buildings on 228th Street were foreclos-
ed by the bank holding their mortgage
and entered a period of receivorship. In
August, 1978, they were sold to their cur-
rent owner, Tenant Management
Systems, Inc., whose principals are
Frank, Robert and Tony Mafes. Though
the purchase price was $135,000, only a
$7,500 downpayment was required.
In December that year, the new
owners signed a voluntary agreement
with the city Department of Housing
Preservation and Development and cor-
rected 97 of the 130 housing code viola-
tions in one of the buildings. It seemed
possible the deterioration could be turn-
ed around.
But the Mafeses presented another
face to the buildings' residents. In
November, 1978, building residents
received a letter containing the following
warning: "Those of you who are paying
under $100, you know damn well its not
..J
..J
UJ
Cl
Z
UJ
:::Il
~
Entrance to 711-721 East 228th Street in the north Bronx.
fair ... Therefore, if you see there's no
heat or hot water this winter do not call
the office, call the city. If you do call the
office, I will just have to remind you ~ f
the low rents you are paying."
In February, the Mafeses had informed
the buildings' rent controlled tenants
their rent would rise by 8.5 percent,
without first obtaining the necessary
authorization.
Later that year, the owners used
another method to raise the prices of rent
controlled apartments; this time the tac-
tic was legal. The brothers Mafes applied
25
for a government-assisted loan through
the city's Article 8A loan program to
finance work on all three buildings' ma-
jor systems.
The 8A program offers three percent
loans for the rehabilitation of
deteriorating systems, including plumb-
ing, heating, electrical wiring and roofs.
To be eligible, a building must be oc-
cupied by low income tenants and the
landlord must be unable to obtain
private financing because of the
building's age or location. Under the
program, which is tailor-made for the
old housing stock and tight credit in
CITY LI M ITS/October 1982
areas like Williams bridge, owners may
legally "restructure" rents-including
those in rent controlled apartments.
The city housing agency's initial
report on the Mafes's SA loan applica-
tion did not reveal anything unseemly. A
check with HPD's litigation unit in the
Bronx revealed that only one tenant in-
itiated legal action had been commenced
against the Mafeses. and had been
satisfactorily resolved. This was not
enough to flag the Mafeses as problem
landlords. In November, 1979, a
$194,460 SA loan for Tenant Manage-
ment Systems was approved. ....
Progress on the rehabilitation was
slow, causing the tenants some frustra-
tion. One tenant did the work required in
his kitchen himself; the Mafeses, content
with the rehabilitation funds they receiv-
ed to perform this work, graciously
deducted $100 from one month's rent. A
tenant who asked for repair of her leaky
bathroom pipes was told they would be
fixed-but only if she agreed to a mon-
thly rent increase.
Violations and Foreclosure
HPD officials were also unhappy with
the delays. Then they learned" through
the Attorney General's office, that the
Mafeses were attempting to sell the
buildings by lottery, thus violating their
agreement under SA's terms to sell only
wifh the city's prior approval.
When HPD officials began to look
more closely at the buildings, they found
that, since the loan's approval, three or
four tenants had initiated actions against
the for failure to provide essen-
tial services. HPD's Emergency Repair
Program had spent approximately
$7,000 for fuel deliveries because the
Mafeses would not supply heat, accor-
ding to Jackie Windisch, who began
working with the tenants through the
North Bronx Stabiliza-
tion Program. By November, 1981, says
Windisch, the tluee buildings had a total
of 224 violations, including 36 health-
impairing conditions.
, In January, 19S2, HPD's Bronx litiga-
tion office went to to compel the
to provide heat. Finally, shortly
thereafter, Windisch took Bob Perisco,
the SA loan coordinator for the three
buildings, on a tour of the premises.
CITY LIMITS/October 1982
Windisch says Persico was not prepared
for what he saw.
Plumbing pipes were sticking out of
the walls in tenants' bedrooms, Win-
disch remembers; these pipes have since
been covered with wooden boxes. Ex-
posed wires dangled from fuse boxes and
fixtures, the new doors didn't have locks
and the windows didn't fit their frames.
Leaks in the new roof had caused ceil-
ings and walls to' buckle.
The Mafeses put some of the blame on
HPD, noting that the contractors were
obtained from HPD's approved list.
Since sufficient money was not allocated
for the work, they claimed, the plumbing
contractor walked off the job, leaving
the landlords to complete it.

Confronted with the buildings' pro-
blems, the city housing agency referred
the matter for foreclosure proceedings,
according to Robin Weinstein, director
ofthe SA loan program. But, because on-
ly one attorney is for all
HPD's foreclosures, the process may
take years to complete, according to Joe
Shuldiner, assistant commissioner of
HPD's Evaluation and Compliance
unit, of which SA is a part. In the mean-
time, the Mafeses remain responsible for
providing services, completing the
rehabilitation work and collecting the
rents. "We're trying to locate a reliable
buyer," says Shuldiner, "but so far no
one has been interested."
Since they still own the buildings, the
are enjoying the numerous '
benefits of the SA loan recipient. So far,
the owners have received $173,464 in
loan proceeds. They have also received
the J-51 city tax abatement benefits that
are available for multiple dwellings im-
proved by HPD loans, if the agency cer-
tifies tlie absence of hazardous condi-
tions. Despite the violations posted on
the building, the Mafeses were certified
Cliigible for approximately $157,400 in
J -51 credits against Feal estate taxes. This
is the equivalent of 90 percent of con-
structions costs, to be taken over a
period of up to 20 years. The abatement
could result in complete relief from real
estate taxes for over 16 years. Under
J-51, the property is also exempt from
tax increases attributed to its enhanced
value after rehabilitation. The value of
the exemptions alone is $346,000. So the
Mafeses -could receive tax abatements
26
totalling $503,000 through the J-51 pro-
gram.
Also, under the city loan package,
owners can raise rents to recover
rehabilitation costs. While SA officials
have refused to restructure the rents until
the improvements are completed in the-
Mafes case, monthly rents will eventual-
ly go up as much as $100 per month for
rent-controlled tenants, and perhaps
double that for rent-stabilized units.
Since 8A regulations no longer ensure
that rents will not be raised beyond
tenants', financial capabilities, tenants
may find themselves unwilling or unable
to remain in the area.
According to Weinstein and
Shuldiner, the Mafes's property is
unusual: of the approximately 250
buildings presently in debt service, only
about five percent have problems, they
say. Because of the nature of the pro-
gram, landlords are bound to be "high
risk. "
, Precisely because of this, critics say,
SA loan coordinators should more
carefully evaluate 1..1Odiords than the
present review of credit ratings, past
criminal behavior and unpaid city
charges. Had HPD, for example, con-
tacted the North Bronx NSP office,
located only a few blocks from the
Mafes's buildings, they could have
reviewed Windisch's thick file, which in-
cludes threatening letters to tenants and
tenants' harassment complaints.
According to Weinstein, community
groups and tenants usually welcome SA:
"It's a chance for tenants to get essential
services and remain in the area. The pro-
gram is mostly used in the outer
boroughs, providing at a relatively small
cost work on those buildings systems
that are most expensive to replace and
upgrade." But Windisch feels that
tenants may resent the program because
"It raises the rent for services that should
have been provided all along." It may
also seem odd that tenants pay for 100
percent of the rehabilitation through
restructured rents, and the city pays for
90 percent by J -51 abatements. As
Shuldiner notes, "The loan is for the
benefit of the tenants. If the owner
makes money, that's life. Profit is not a
.four letter word." 0
P. J. Kamens is an attorney who fre-
quently works with housing issues.
Clinton Tenants Not Victims
To the Editor:
The article, "Sales Price for Clinton Buildings Is Still a
Secret" (Aug.-Sept. City Limits) serves as a handy
reminder of the truth of the printed disclaimer that "Ar-
ticles in City Limits do not necessarily reflect the opinion
of the sponsoring organizations." This sponsoring
organization is writing to express its disagreement with
several aspects of the article.
1. Contrary to what might be viewed as the tone of the
article, Clinton's residents are not victims on the receiving
end of the City's stick. They have organized themselves in-
to a large, cohesive and articulate force that has had the
foresight and perseverance to both pull together many
diverse groups in the community and to enlist and obtain
the organized support of other communities throughout
the city. Although the July 22nd Board of Estimate was in-
deed a frustrating experience, what the article describes as
a "general chaos of hooting and yelling" was instead ex-
perienced by many present as a well-focused, well-
disciplined display of anger and protest. It was a protest
that was powerful, not chaotic, and that fact was certainly
communicated to the members of the Board of Estimate.
2. Any evaluation of the significance of the' 'sense of the
Board" resolution introduced by Botough President Stein
must take into account the context in which it was done.
The context includes: 1) an opinion by the Corporation
Counsel that only a mayoral agency, not individual
members of the Board, can introduce an actual sales
resolution at the Board; and 2) HPD's continued failure or
refusal to introduce such a resolution for the Clinton and
West Side TIL buildings. In light of these facts, itis simply
inaccurate to state that the resolution did not represent a
"break-through". This is not to inflate the significance of
that resolution; if passed, it would have carried no legal
authority or sanction. Yet it must be recognized that its in-
troduction-and the support organized around
it-precipitated the promise by Deputy Mayor Leventhal
to ensure that HPD will introduce sales resolutions by the
October 28th Board meeting. Since the terms of any sales
resolution introduced by HPD can be completely altered
and revised by vote of the Board, the' 'political maneuver-
ing" by Clinton has, in fact, resulted in a concrete payoff:
a definite date for resolution of the $2S0 issue for the Clin-
ton and West Side buildings. (The fact that the date for
resolution was cynically set for after the primary does not
diminish the significance of obtaining a firm timetable.)
3. The attribution to Stein's representative, Jesse
Masyr, of the statement that there "wasn't any support
for the 'sense of the Board' resolution" is erroneous in two
respects: Mr. Masyr did not make that statement and the
statment is wrong. Clearly, the Mayor's representative
would not have agreed to a firm date for the introduction
of a sales resolution if there were not majority Board sup-
port for the Stein resolution. This was confirmed by
Masyr's statement to the crowd at the Board. Winning
support for the Stein resolution is a testament to the
strong, well-organized grassroots efforts initiated by Clin-
ton that won support for the resolution in the face of over-
whelming opposition by the Administration.
4. The article conveys the mistaken impression that
City Council President Bellamy has withdrawn her sup-
port for the $2S0 sales price for Clinton when, in fact, she
has recently reaffirmed her support.
S. The failure to highlight the breadth and depth of
support for $2S0 for Clinton from neighborhoods and
community groups from throughout the city gives the arti-
cle a slant that misses the mark. Letters before July 22nd
and testimony at the Board hearing from people represen-
ting "upgrading" and "declining" neighborhoods in
Brooklyn, Manhattan and the Bronx clearly indicate the
widespread recognition throughout the city that the defeat
of $2S'0 in Clinton and the West Side will toll a major
defeat for communities fighting for self-preservation and
revitalization-instead of gentrification and displace-
ment. $2S0 for Clinton is viewed by communities in all
parts of the city as a major test of the City'S commitment
to its promise of retaining city-owned buildings as a per-
manent housing resource for long-term low and moderate
income residents of the City's neighborhoods.
It is critical, especially in these times, that City Limits,
"The News Magazine of New York City Housing and
Neighborhoods"continue to keep its focus on the extraor-
dinary efforts of people in New York's neighborhoods to
save their housing and their communities. That is exactly
what the people in Clinton are doing-with a little help
from their friends.
Bonnie Brower
Executive Director,
Association of Neighborhood Housing Developers
27 CITY LI M ITS/October 1982
I
A CONFIJCT OVER CONTRACTS
The city contracts with over seventy community housing groups
for services. Is there a dividing line between performance and
politics?
S
INCE THE REAGAN ADMINIS-
TRA TION began its relentless
assault on the programs and funding
that sustain the work of community
housing organizations, those groups
have been scrambling for funds to fill the
holes. They were buffeted hardest by the
loss of CET A's Public Service title which
had provided funding for the everyday
organizing necessary to salvage distress-
ed housing and to plan for what could
replace what has been lost.
The steady disappearance or' this
government assistance has made city
housing groups increasingly dependent
on local and state grants. There are a
number of these pots of money around
- most of them meager and all of them
dwindling. The two chief sources for
operations funding ~ the dollars needed
to keep organizers in the streets and
tenements - are the state's Neighbor-
hood Preservation Companies Program
and the city's Community Consultant
Contracts. Both of these funds,
developed in the mid-70s as housing
groups pushed their political represen-
tatives for greater government support
of local housing revitalization efforts,
are restricted in availability and possibly
on their way out: groups getting state
NPP dollars are capped a maximum ag-
gregate grant of $300,000; city CCC
groups almost lost all of their funding
last spring when the city omitted the con-
tracts from their federal Community
Development Block Grant budget.
Pressure for its reinsertion got the con-
tracts put back in.
As these local funds become increas-
ingly more ~ u c i a l to small, community-
based housing groups it is especially
troublesome that the political price New
York City demands of groups receiving
funds is being upped.
This fall the city's Department of
Housing Preservation and Development
will start dispensing over $2.8 million in
community consultant contracts to a
record 77 organizations. The contracts, ,
now in their fourth year, range from
$20,000 to over $100,000. Their use is
aimed at giving the groups the
wherewithal to tackle the housing prob-
lems of low and moderate income
families in their area. Groups provide
services ranging from tenant organizing
and landlord counseling to project plan-
ning and private investment recruitment.
Much of the work is undertaken in
conjunction with city housing depart-
ment efforts: local groups are expected
to work along with the city by watchdog-
ging troubled privately-owned multiple
dwellings and interceding where
necessary; they are expected to monitor
the performance of court-appointed ad-
minstrators of buildings and help keep
track of no-heat situations. Groups are
also expected to help in the development
. of plans for the neighborhood and get in-
formation about city programs. When
the city launched a new low-interest
home improvement program last winter,
it looked to its community consultant
contractees to help sign up loan ap-
plicants.
But it is hard to fInd where to draw the
line between those services for which the
city clearly contracts and support and
participation by the groups of plans they
disagree with. Although virtually none
will say so openly, ' and some larger
organizations say it isn't so, the contract
makes it diffIcult for the groups to op-
pose city policies. They do so at their ap-
parent peril.
One group that is being left out of this
year's crop of consultant contracts is
located in the heart of one of the city's
hottest real estate markets and has been
in the forefront in numerous public
forums opposing city policies in that
area. Housing Conservation Coor-
dinators, an organization located on
Tenth Avenue and West Fifty-third
Street in the Clinton section of ......... ,' ....
tan, will not receive any of the $35,000
it go.t last year from HPD under the
consultant contract. The contract,
said HCC Executive Director
John Glynn,
part of our tenant orgaruzmg. It's the
single niost diffIcult part of our opera-
tion to get funding for from other
sources. " .
HPD administrators insisted tht-
reasons behind HCC's defunding were
strictly administrative. The group's
problems developed out of an inability
to perform adequately, said Assistant
Commissioner for Community Develop-
ment Manuel Mirabal. The group, he
said, ran afoul of the complicated
vouchering system whereby contractors
are reimbursed for expenditures - a
procedure so unwieldy and complex that
it has sparked organized rebellions from
consultants each year. (During the past
year, many groups balked at sending
HPD the originals. of invoices as
demanded by the agency. The require-
ment was dropped after the Comp-
troller's offIce agreed it was an irregular
and untenable bookkeeping practice.)
Mirabal also said the group had failed
to follow through on drawing up volun-
tary agreements with landlords- an ar-
rangement whereby in certified
Neighborhood Preservation areas (Clin-
ton is one) landlords sign voluntary
agreements to repair their declining
buildings, usually in order to qualify for
a city loan. The practice is supposed to
Continued on Page 30
Anthony Glie'dmlln
Housing
CITY LIMITS/October 1982 28
L...-________________________________ ~ ________________ ~ t
/ .
Community Consultant Contracts
L
ISTED BELOW ARE THE COMMUNITY CON-
sultant Contract awards for this year. In most cases,
the amount of the contract represents five-sixth's of the
contract received by the same group last year. This reduc-
tion is because of the abbreviated ten-month Community
Development year (see report elsewhere in thii issue). There
are some exceptions, however, and the awarding of the
contracts raises the issue of whether this federally-supplied,
city-administrated funding is being spent on behalf of low
and moderate income families as the federal legislation
provides. This year the Borough of Queens surpassed
Manhattan in the amount of CCC money received, with
$555,868 to Manhattan's $543,326. Census income figures,
which are still awaiting an update from the 1980 census,
show Queens with some 11,500 families below the federal
poverty level-less than five percent of the borough's
population; Manhattan has some 47,500 poverty level
families at over 13 percent of all its families. The sharpest
increase for any group this year is for the Forest Hills
Community House Which went from $33,646 last year to
$94,000. City housing officials disclaim responsibility for
this jump, saying the extra funds were put in at the last
moment when the budget was being finished in the Board
of Estimate. The boost gives one of the city's highest in-
come communities-Forest Hills had over $13,000 median
in 1970 as opposed to the citywide median of $9,700-one
of the biggest grants to serve a low and moderate income
population of 470 families. 0
Indicates new this year .
BRONX
Applicant
B.R.A.S.H.
Council of Bronx River Assns., Inc.
Fordham Bedford Housing Co.
Jewish Community Council of Pelham Parkway
Kingsbridge Heights Neighborhood Assn., Inc.
Northwest Bronx Community & Clergy Coal. Inc.
People's Development Corporation
SEBCO Development, Inc.
The SENECA Center Housing for People Inc.
South Bronx 2000 LDC
West Bronx Jewish Community Council
BROOKLYN
Astella Development Corp.
Brooklyn Neighborhood lmI'rovement Assn.
Bushwick Stuyvesant Heights Housing Rehab. Cnt.
Canarsie Development Corp.
Charles Drew Neighborhood Health Center
Flatbush Development Corp.
Flatbush East Community Development Corp.
Flatbush Tenants Council, Inc.
Midwood Kings Highway Development Corp.
Ocean Parkway Community Development Corp.
Oceanfront Development Corp.
Opportunity Development Assn.
Pratt Area Community Council, Inc.
Prospect Lefferts Gardens Neighborhood Assn.
_ ~ d g e w o o d Bushwick Sr. Citizens Council, Inc.
Amount
$25,400
25,000
28,909
29,023
29,750
29,166
25,000
25,000
37,500
54,167
50,000
$358,915
$45,829
25,000
25,000
29,167
25,980
101,953
29,153
75,000
50,000
25,000
55,833
25,000
37,500
25,000
25,000
29
Applicant
St. James Cathedral, Inc.
St. Nicholas Neighborhood Preservation & Hsg. Rehab.
Southern Brooklyn Community Organization
Southside United Housing Development Fund Corp.
Sunset Park Development Corp.
The People's Firehouse, Inc.
MANHATTAN
Bradhurst Avenue Tenant & Block Assn.
Clinton Housing Development, Inc.
Coalition of Hamilton Heights Tenants Assn.
Development Outreach, Inc.
East Harlem Council for Community Improv. Inc.
Good Old Lower East Side, Inc.
Hope Community, Inc.
Lenox Hill Neighborhood Assn.
Lower E. Side Coal. for Housing Development
Marble Hill Neighborhood Improvement Corp.
Milbank-Frawley People's Council, Inc.
116th Block Assn., Inc.
Renigades Housing Movement, Inc.
Strycker's Bay Neighborhood Council, Inc.
United Jewish Council of The East Side, Inc.
Washington Heights Inwood Coalition, Inc.
West Harlem Community Organization
West Harlem Group Assistance
QUEENS
The Better Community Civic Assn., Inc.
Downtown Flushing Development Corp.
Elmcor Youth & Adult Activities, Inc.
Forest Hills Community House
Gateway Community Restoration Corp.
Greater Jamaica Development Corp.
Greater Ridgewood Restoration Corp.
Hellenic American Neighborhood Action Comm. Inc.
Jackson Heights Community Development
Pomonok Neighborhood Center, Inc.
Queens Community Civic Corp.
Queens President's Council, Inc.
STATEN ISLAND
Northfield, LDC
Stapleton Community Corp.
W. Brighton Community Local Dev. Corp.
Citywide & Innovative
Bedford Stuyvesant Real Estate Board
Chinatown Plan/ling Council, Inc.
Cornell U\1iversity Co-op Extension
East Midtown Community Council, Inc.
Foundation for the Community of Artists, Inc.
Metropolitan New York Coordinating Council of
Jewish Poverty, Inc.
N. Y. Foundation for Sr. Citizens
Operation Open City, Inc.
People's Housing Network, Inc.
Progress of People's Dev. Corp.lCatholic Charities
Research Foundation on Behalf of NYC College
Snug Harbor Cultural Center
25,000
25,000
75,000
25,000
25,000
29,167
$804,582
Amount
$25,000
26,323
25,000
25,728
27,273
27,917
29,167
35,244
28,225
20,675
2.4,999
41,667
23,942
26,991
25,000
76,667
25,000
28,508
$543,326
$29,167
82,782
29,167
94,000
25,000
88,000
37,500
56,250
25,000
29,104
29,167
25,731
$550,868
$56,309
26,936
25,000
$108,245
Amount
25,000
56,250
30,000
105,000
13,960
53,333
28,333
34,805
29,167
18,895
35,000
25,000
. $454,743
CITY LI M ITS/October 1982
shortcut going into court, although
many tenant lawyers view them as unen-
forceable and worthless.
The group's more major sins, believes
Glynn, have been its refusal to back city
development plans for the substantial
parcels of city-owned land in Clinton,
and its vocal and power:ful support for
the right of tenants managing city-
owned buildings to buy their apartments
for $250 apiece.
Most of its dealings with the city hous-
ing department regarding Clinton
development are through the Clinton
Neighborhood Preservation office
which has spun off several development
schemes for the area. A plan to sell city
buildings to a real estate subsidiary of
Gulf and Western was publicly de-
nounced by HCC,as was a plan to allow
what the group felt was a dangerous
precedent by giving a waiver for a com-
mercial enterprise on a second floor in a
city building being developed. Mirabal
. admits that the group's "poor working
relationship" with the preservation of-
fice has been part of the problem but
denied that its stance on the apartment
sales issue was in any way involved.
Ironically, just last June, Housing
Commissioner Anthony Gliedman gave
HCC a plaque on behalf of the Settle-
ment Housing Fund for "Providing
critical leadership of residents in Clin-
ton's Tenant Interim Lease Program."
"You've been ' doing a heck of a job,"
Gliedman told the group at the time.
T
HE MAJORITY OF 30 GROUPS
receiving contracts that were polled
said they knew of instances of arm-
twisting by HPD of either their own
organization or others, yet none wanted
to have accounts attributed to them.
Some organizations said adamantly they
had never been coerced nor felt con-
strained in any way by receiving the city
contract. Asked why they had never felt
concern, a number of organizations said
their own political clout was enough to
protect t h e ~ .
The importance of the contracts also
varies according to the size of the group .
"These contracts are barely lunch
money for some outfits," said a Bronx
organizer. The contracts range from less
than three percent of some budgets to the
greater share of those of smaller groups.
These last must be considered the most
vulnerable to pressure.
One way to avoid the potential for
conflict, suggested one participant,
would be to have the city spell out the
reasons for not funding groups which
are performing a set list of functions.
Another director of a small organization
said she would prefer to have local politi-
cians have a stronger and clearer role in
granting the contracts, although she
pointed out certain groups and neigh-
borhoods where that could result in even
greater pressure.
No matter how the funds are awarded,
it seems likely that political considera-
tions will never be totally removed from
the decision. And there are those
organizations which believe it's a
mistake for any group to accept the
money. The experience of Housing Con-
servation Coordinators this year,
however, is sure to increase the ap-
prehension of small housing groups. 0
T.R.
The Defunding of Cooper Square By SUSAN BALDWIN
T
HE FUNDING PLIGHT OF THE
23-year-old Cooper Square Com-
munity Development Comnlittee on the
Lower East Side is a troubling tale that is
still unfolding.
At a widely attended, community-
sponsored demonstration late in May in
support of saving this historic, polyglot
low income neighborhood against real
estate speculation, Cooper Square
marched with a banner proclaiming that
it is "Here Today. Here to Stay." It is
still here today but is finding itself in a
serious financial crisis, having received
its final payment from a three-month ex-
tension of a corpmunity consultant con-
tract from HPD in December, 1981.
The organization is currently sub-
sisting on membership dues from
neighborhood residents and modest fees
from private contracts. It is hard pressed
to make ends meet.
Cooper Square has always operated
on a tight bUdget. From its creation in
1959 until 1972, when it first received
CITY LI M ITS/October 1982
, I
funding from the city, Cooper Square
functioned as a voluntary, activist
organization committed to preserving
the rights of low and moderate income
residents to remain in this prime real
estate area. In the heyday of urban
renewal in the mid-1960's, it hoped to be
instrumental in providing new low-cost,
solid housing for its multi-ethnic and
racial families crowded into de-
teriorating old law teneJ1.1ents.
Prior to being awarded its first com-
munity consultant contract with the city
in 1979, Cooper Square served, along
with a dozen community organizations
citywide, as a Project Area Committee
(P AC), a citizens' advisory group
authorized by the federal government
under HUD to serve as a watchdog and
represent the community's needs in the
fulfillment of the urban renewal contract
for the designated area. In Cooper
Square's case, the boundries were and
still are 14th to Delane e y Streets between
First and Third Avenues.
30
"We are a thorn in the city's side
standing in the way of progress - real
estate development, particularly on
Third Avenue," said Val Orsellio, the
organization's director. "They want to
kill off Cooper Square by stopping the
funding, but it won't happen. We'll still
be here because we've been here too long
to give up now I "
In order to survive when it became ap-
parent that there was little hope of
receiving further funding from HPD,
Cooper Square entered the neigh-
borhood political sweepstakes in June,
1982, by submitting an application for a
grant to the Community Development
Administration (CDA) under the city's
Human Resources Administration.
Cooper Square had never tangled with a
political animal such as CDA before,
and it would quickly learn that its
membership criteria were far less focus-
ed than HPD's.
On August 18, the group learned that
it was being rejected by CDA, although
no reasons were given for the decision.
Following CDA's rule book, the group
appealed the decision, charging that
CDA had failed to abide by its own rules.
Joining with another Lower East Side
group, also denied funding by CDA -
It's Time - under a Freedom of Infor-
mation Act claim, Cooper Square found
iliat both groups had been summarily
denied funding even though they were
rated higher than five groups that did
receive CDA grants.
Two groups, with some overlapping
directorship, the Association of Com-
munity Service Centers, Inc. and the
Puerto Rican Council (EI Concilio)
Multi-Service Center #6, managed to get
the lowest CDA ratings but were award-
ed $146,988 and $115,121, respectively,
two of the largest grants in the agency's
total $863,900 allocation. to 13 Lower
East Side groups.
Last year, It's Time was forced to g6
directly to the federal Community Ser-
vices Administration to receive full back
funding in August, 1981, after CDA
repeatedly refused to fund the organiza-
tion, despite orders by CSA and die
courts to do so.
After a special appeals hearing August
25 before CDA's Chief of Staff John C.
Donahue and other staff members serv-
ing in the place of the area policy board,
which cannot raise a quorum, Cooper
Square and It's Time were once again
denied funding, but two other groups
that had appealed from the first rQund
- the Good Old Lower East Side and
Chinatown Planning Council were .
awarded $22,000 and $30,000, respec-
tively - money that was reportedly
taken from the $262,109 awarded the _
Association and the Council.
A cursory review of the 20 proposals
submitted to CDA revealed that the
evaluators gave the Association
weighted points for a blank response to
the section entited "statement of need."
In several other areas, the Association
and the Council submitted the same con-
fusing and incoherent responses, even
referring to HPD by its former initials,
HDA (Housing Development Ad-
ministration), a title abandoned over
five years ago.
Both organizations, under the
heading, "hot lunches," filed the
following statement: "This program, if
" approved, will need to be able to develop
the following: Desk with chairs, one
typewriter, one telephone with three ex-
tensions, one file cabinet, stationary
(sic), crayons, art paint, knitting and
embroidery ... "
Of the wide discrepancies in the pro-
posal submissions, Donahue asserted,
"That's the art of proposal writing. All
20 are community based and come in
various stages and arrang,\ments. They
vary far and wide."
Cooper Square and It's Time plan to
exhaust the appeal process guaranteed
under CDA's guidelines and to challenge
any decisions in' the courts, if necessary,
to expose what they charge is the
"misuse of public funds on agencies
which do not serve the needs in their
catchment areas and do not have worthy
track records. " This means that they will
\ go before Donahue a second time for
another hearing and possibly to the state
under the Office of Community Ser-
vices, which this year under the Reagan
administration's New Federalism has
taken over the federal CSA role as final
arbiter in assigning this block grant
money.
31
Both Cooper Square and It's Time are
members of the Joint Planning Council,
the neighborhood group that sponsored
the May 22 demonstration as well' as
other hearings and rallies against the
Seward Park and Grand Streets
developments, gentrification, displace-
ment, upgrading the zoning on Third
Avenue, and the proposed artists' hous-
ing. The organizations contend that their
funding problems are part of systematic
political attack by city hall on groups in
this area that are working primarily to
ensure minority rights and against .
displacement of low and moderate in-
come residents.
Commenting on the CDA imbroglio,
Frances Goldin, a member of Cooper
Square said, referring to the . track
records of the community groups funded
by CDA, "Without the money these
groups would be dead in five minutes.
But we have a historical perspective.
We've been here since 1959, and we'll
continue to be here ... Besides, this is not
supposed to be patronage money we're
talking about, but rather federal anti--
poverty money that is supposed to be us-
ed to serve the poor." 0
CITY LIM ITS/October 1982
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This 44:page handbook covers organizing for self-
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32
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Project of A.N.H.D.
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New York, NY 10001
WorkShop
POSmONS AVAll..ABLE
Parttime Administrative Assistant: Immediate opening
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Must have background in tenant organizing
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Send resume to:
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SECRETARY jRECEPTIONIST
For community-based housing management com-
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Send resumes c/o Ms. P.ankins, People's Firehouse,
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33
Urban Housing Specialist
Job Description: The Urban Housing Specialist assists
the Director in the coordination,
planning, evalllation or administra-
tion of the day to day operation of
the Corporation's Housing Program.
Qualifications: A baccalaureate degree from an ac-
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time paid experience satisfactory to
HPD in housing, community organiz-
ing, urban development, urban plan-
ning or related field.
Salary: $12,500 per annum
Building Management Specialist
Job DescriptiQn: Under supervision, the Building
Management Specialist performs
specialized housing maintenance
and management assistance duties
including housing research and in-
vestigation of building conditions.
Qualifications: Five years full time paid experience
satisfactory to HPD in general con-
traction or in building systems in-
stallations, or in related building
trades; or in the management of
residential properties including
responsibilities for management of
maintenance operations; or in
related fields.
Salary:
Send resumes
to:
$11,500 per annum
Ben Jennings, Dir. of Operations,
Peoples Development Corporation,
Inc., 1162 Washington Ave., Bronx,
N.Y. 10456
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EXECUTIVE DIRECfOR
Local, not-for-profit housing and community develop-
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in area of personnel management, government contract
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fundraising. Sensitivity to needs of low and moderate in-
come households. Salary commensurate with experience.
Send resume to:
Harry DiRienzo
c/o Consumer Farmer Foundation
101 East 15th Street
New York, N.Y. 10003
CITY LI M ITS/October 1982
\
Conununity DeveloplJ1ent
Under Reagan
.NoRespect
for Tradition
BY' Brian Sullivan
S
EPTEMBER JUST WASN'T THE
same for me this year, not since
they changed the federal Community
Development Block Grant year to coin-
cide with the beginning of the city's fiscal
year on July 1st. I know for some people
September means a Yankee stretch drive
for the pennant. For others, it's the
beginning of the football season. But for
me, it's always meant the annual letter of
approval from HUD to the Mayor of
New York authorizing the beginning of
yet another rollicking, roisterous CD
year.
For seven years, this letfer has been an
highlight for the vast CD
bureaucracy. Admittedly, it's a purely
symbolic gesture (uriless it secedes from
the Union, the city is virtually guaran-
teed to get its CD booty each year), but
then so is the lighting of the Olympic
flame, the ball dropping on New Year's
Eve in'Times Square and Crazy Eddie's
Christmas Sale in August.
Like so many other time-honored
traditions, however, the September CD
year kickoff has been sacrificed to the
crass commercialism o( our times. In
order to squeeze some 41 milliori in addi-
tional CD dollars out of HUD, the city
shortened the CD 7 year to only ten
months, thereby creating an instant
"rollover" bonanza Of two months
worth of funding to be added to CD 8
which began without fanfare on July 1st.
Contrary to appearances there's no-
thing illegal in all this. It just means that
the city has postponed the day of reckon-
ing for the CD program for another ten
months. Rather than face Reagan's CD
budget cuts this September, just before
the primary election, the city now has
until next June to figure out yet another
scheme. By then, if all goes according to
Mayor Koch's political timetable, it will
CITY LIMITS/October 1982
be somebody else's problem, specifically
Mayor Bellamy's. And you thought only
accountants cared about things like
Fiscal Years!
But the September CD year was only
one of a number of traditions that have
fallen by the wayside since Reagan took
office. They've also don.e away with the
Annual N .S.A. (Neighborhood Strategy
Area) Beauty Contest (first Bert Parks,
now N.S.A.'s). No longer will we be
treated to' the spectacle of low income
neighborhood representatives strutting
their stuff at City Planning Commission
and Board of Estimate hearings, gaudily
made up in multi-year comprehensive
revitalization plans. Instead, the once-
glamorous title of "N.S.A." has been
rendered meaningless by changes in the
HUD regulations governing CD.
. Therefore, in a gesture more ironic than
generous, the city has simply bestowed
N.S.A. status on all 32 neighborhood .
areas in the running for the designation.
Simultaneously, however, the city made
it clear that N.S.A. status will not carry
any weight as far as priority or
preference for CD funding or programs
are concerned. To paraphrase Casey
Stengel (or some forgotten but never-
theless immortal baseball pundit) getting
34
an N.S.A. designation this year is
"about as exciting as kissing your
sister. "
S
EVERAL OTHER LESS WELL
known, but equally' important
traditions bit the dust since Reagan took
office. Remember the old 75 percent
test? The city used to be required by
HUD to show that at least 75 percent of
its CD budget directly benefitted low and
moderate income households-no
more! As long as the city can say with a
straight face that its CD bucks will be us-
ed to "eliminate slums and blight" or
meet some other "urgent need," HUD
will hand the entire CD grant with
no bothersome prior review of the city's
CD program. And who can forget
HUD's requirement that CD recipients
develop an anti-displacement strategy as
an integral part of their plan? Apparent-
ly. everybody can, since HUD rescinded
that requirement outright.
How about the ten percent ceiling on
how much of the CD budget can be
diverted to funding the cost of municipal
services normally provided for in the
city's own expense budget? That's been
waived too, and just in time! Reagan's
cuts in CETA and other job programs
have to be made up somewhere. This ad-
ministration's approach to CD is to cut
all the other programs that benefit low
income people and their neighborhoods
and then open up the gates to the shrink-
ing pot of CD money. This approach is
based on the assumption that low in-
come people will be so busy fighting each
other for the few remaining CD dollars
that they won't notice the billions being
siphoned to the Pentagon.
So you see, even as the old traditIons
fade, new ones are found to take their
place. But, lest you think that all of
HUD's time-honored CD ceremony has
been abandoned, there are a few items in
the city's CD 8 budget that remain con-
sistent with the program's recent history.
A few examples should reassure those of
you suffering from that queasy feeling of
CD future-shock that some things will
never change, at least on the local level.
Again, HPD is the big gainer in
this year's CD budget with an over-
all increase of about 6 percent up
to $208 million-over 72 percent
of the total CD budget. Even more
impressive is the wopping 30 per-
cent increase in the budget line for
HPD Administration!
The Participation Loan and Arti-
cle 8A rehab loan programs get
substantial increases for CD 8
-up to $25 million and $15
million, respectively.
Community Improvements are
reduced with Community Consul-
tant Contracts dropping to $2.8'
million from $3 million and Per-
manent Site Improvements being
virtually eliminated.
Central Management of in rem
properties is up by over $2 million
with slightly more money going in-
to repairs and supers' salaries.
DAMP is down by about $1.5
million with the combined TIL and
7 A line losing about $850,000 and
the combined MIPP and Com-
munity Management line losing
about $250,000. (Note: CD budget
figures do not reflect accruals from
unspent CD 7 rehab funds . Nor
any adjustments negotiated with
the Mayor's Office after the
budget was submitted to HUD).
One small victory for the forces of
enlightenment (that's us in case
you'd lost track) is that the City
has finally taken the pothole repair
program out of the CD budget and
put it back in the Mayor's Ex-
ecutive Budget where it has always
belonged.
But even if some of the rules of the
game have changed, CD will remain a
big favorite of the city budgetmakers.
Where else can you find over $250
million every year without having to
raise city taxes even one cent? Besides,
the regulations are now so loose, or so
loosely enforced that CD money can be
spent on virtually anything without
HUD lifting a finger to stop it. They'll
probably just ask the city to submit
another form next year documenting
how they plan to rip the program off
even more. On second thought, they
probably won't even do that-accoun-
tability was another old tradition HUD
did away with this year. 0
Brian Sullivan is a long distance runner
employed as a senior planner at Pratt
Institute Center jor Community and
Environmental Development
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