City Limits Magazine, August/September 1983 Issue

Contents
The Pass-On Increase ............................. . 2

Opinion
New York's New Rent Law .....................
3
Short Term Notes
Preservation Program Extended .................... 5
Nix City Rent Hikes ............................ 5
City Commercial Tenants' Rents Go Up .. .. .. ..... 6
Dispute Over East Side City Building ..... .. ........ 7
Townhouse Groundbreaking ....................... 7
Undeveloping Avenue K ........................ 8
Who Benefits from Williamsburg Plan .............. 9
Indictments Miss Rehab Link .... ... ...... , ..... .. 10
Chicago's CDBG Victory ...................... 11
Landlords
Propose
a 'Pass-On'
Increase
Tenant Group Picks Boston Candjdate ...... . ..... .. 11
How J-51 Was Curbed ......... . ..... . .......... 12
Partnership Housing Costs Questioned .............. 14
City Prepares to Close Cumberland .. ..... ........ 16
TENTH STREET'S CO-OPS, TEN YEARS LATER .... 17
Ten years after some of the flrst low income co-ops opened, what are
the results? What are the lessons?
WHAT HATH REAGAN WROUGHT! .... . .......... 22
Reagan's budget was going to put development groups on the road to
self-sufficiency. Bufthis study found most had little
fuel for the trip.
Organize!
How Tenants Could Influence Loans ... . .... .. ... 24
Letters .............. . ...................... .... . 26
Resources/Events ................................. 27
Review
Once Charitable Institutions . .......... . ......... 28
Follow-Up ..... . ................................. 30
restrain them when a tenant attacked
RGB chairman Marvin Marcus with a
cane.
Three men were arrested in the attack
on Marcus, who was released unharmed
from Bellevue after an examination.
One landlord on the scene blamed
socialized medicine for the problem.
"Medicare favors the tenant," he charged,
adding that most of the protestors were
"aged New Dealers."
By John Richardson
The New York Times: The Real Estate
Business As Usual Section
rentIy protected under the SCRIE or
Senior Citizens Rent Increase Exemption
law.
The Census report cited by the RSA
showed that since the establishment of
rent controls in the city, people in rent-
controlled apartments have lived 3.2
years longer. People living in rent-
stabilized apartments have only lived an
average of 2.4 years longer. Said William
Solomon, president of the largest in-
dependent landlord organization in the
City, the Building Owners Benevolent
Association (BOBA) , "The loss of
millions to building owners through pro-
longed lifespans contributes significantly
to the abandonment of 25,000 apartments
a year."
June 1, 1984
Citing a recent Census Department
report, landlord groups in the City
charged yesterday that elderly tenants
had been maliciously prolonging their
lifespans to take advantage of rent con-
trol. The rents of senior citizens are cur-
The Rent Stabilization Association
called for a 20 percent "Malthus In-
crease" in all apartments occupied by
tenants above the median death age of
68.
The landlord proposal caused a group
of enraged senior citizens to mob the
ongoing hearings of the Rent Guidelines
Board until police called in to
CITY LIMITS/August-September 1983
2
Tenant groups charged that the study
failed to note a decrease in the lifespan
among low and middle income tenants.
Mayor Koch supported the measure,
saying that tenants who were unwilling to
die should move to Queens.OJohn
Richardson is a writer who lives in New
York.
'.
(OTYUMITS) The New Rent Laws By_Md ...
Volume VllI Number 7
City Limits is published ten times per year, monthly
except double issues in June/July and
August/September, by the City Limits Community
Information Service, Inc. , a nonprofit organization
devoted to disseminating information concerning
neighborhood revitalization. 1be publication is spon
sored by three organizations. The sponsors are:
Association of Neighborhood Housing Developers.
Inc., an association of over t\\"O dozen community-
based, nonprofit housing development groups,
developing and advocating programs for low and
moderate income housing and neighborhood
stabilization.
Prall Institute Center for Community and Environ-
mental Development, a technical assistance and ad-
vocaey office offering professional planning and ar
chitectural services to low and moderate income
community groups. The Center also analyzes and
monitors government poliey and performance.
Urban Homesteading Assistance Board. a technical
assistance organization providing assistance to low
income tenant cooperatives in management and S\IIeat
equity rehabilitation.
City Limits welcomes comments and article contribu-
tions. Please include a stamped. self-addressed
envelope for return of manuscripts. Material in City
Limits does not necessarily reflect the opinion of the
sponsoring organizations. Send correspondence to:
CITY LIMITS, 424 West 33rd Street . New York,
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City Limits, 424 W. 33rd St ., New York. N.Y. 10001.
Editor .
Second-class postage paid
New York, NY. 10001
City Limits (ISSN 0199-0330)
(212) 239-8440
. .. Tom Robbins
Assistant Editor. .. . . Susan Baldwin
Marketing Director ............. Jim Mendell
Design and Layout. . Louis Fulgoni
Copyright 1983. All Rights Reserved.
No portion or portions of this journal may be
reprinted without the express permission of the
publishers.
Cover photos by: Jim Mendell ;
Keith Boro'; Michael Powell ;
Tom Robbins ,
Rent Guidelines Board meeting in June.
M
AJOR REVISIONS to the Emer-
gency Tenant Protection Act were
enacted into law at the close of the 1983
regular session of the New York State
Legislature. In the early morning hours of
June Zl both houses passed the bill, S.6959,
by large bipartisan margins, 51-7 in the State
Senate and 105-40 in the Assembly. Gover-
nor Cuomo signed the measure into law
June 30 (Chapter 403, Laws of 1983), just
hours before ETPA was due to expire.
The bill is the product of eight weeks of
intensive negotiations between the two
houses. It represents an extraordinary
tripartite agreement between Assembly
Speaker Stanley Fink, Senate Majority
Leader Warren Anderson, and Senate
Minority Leader Manfred Ohrenstein to
take over the administration of New York
City rent control and rent stabilization, and
to put some teeth into the enforcement of the
system. Once the three legislative leaders
reached this agreement, it was difficult for
the Governor to reject it, although it would
seem that he was less than wildly en-
thusiastic about taking over the volatile
program.
The bill also makes significant conces-
sions to both landlords and tenants, leaving
everyone somewhat unhappy-classic
Albany compromise legislation.
But it can be, if administered properly, the
3
Mallhmfllll A.nemhlymall Jerrold Nadler.
beginning of a true system of rent regulation,
instead of the non-system of the recent past.
The new bill raises the promise of expan-
ding tenant protections and increasing tenant
political power, by bringing in additional
areas of the state and now-unregulated
classes of housing, if tenants organize and
pressure their legislators.
State Control
The centerpiece of the bill is state takeover
of the city programs (always dependent on
state enabling legislation in any case) and
consolidation of administration. Effective
next April 1, the state Division of Housing
and Community Renewal, which already
administers ETPA and state rent control in
the "three counties" surrounding New York
City (Nassau, Rockland and Westchester),
will assume administration of the two city
laws, thus placing all rent regulated tenants
in the state under one administrative agen-
cy. According to Ohrenstein, this move
represents the permanent enshrinement of
rent stabilization within state government,
putting an end to the real estate industry
decontrol.
Like most other Albany legislators,
Ohrenstein is aWare that this bill is likely on-
ly the beginning, and that growing tenant
political pressure can force additional
changes in the next two years before ETPA
once again expires.
While everyone was less than fully pleas-
ed with the final product, most legislators
nevertheless felt it was preferable to a
straight four-year extension of ETPA, which
was the only alternative. The Senate
Republicans, under increasing attack on the
issue, desperately wanted a compromise bill
that would satisfy tenants while not
alienating their real estate contributors.
Anderson made it clear that if the negotiated
bill did not pass, he would pass a four-year
extender and leave town. An immediate
result would have been the eviction of
tenants in buildings owned by non,profit in-
stitutions, who had been removed from
ETPA by a recent court decision; Anderson
made it clear he would not pass a separate
bill to reverse this case.
dream of phasihg out rent controls that Unfortunately, none of the players feltthat
began with the 1971 enactment of vacancy the Flynn-Dearie bill, which tenant groups
CITY LIMITS/August-September 1983 4
were pushing, was a viable option, partly
because of provisions that risked being
found unconstitutional, and partly because
few of them believed that a building-by-
building system (in particular the one laid
out in Flynn-Dearie) could be made to
work. Aware of the risk of having the state
take over administration, they were not
ready to take the additional risk of doing it
under a system they believed doomed to fail.
While there are obvious problems with the
Flynn-Dearie bill which would have to be
rectified if it became law, it would be a novel
situation for legislators to have to fix a bill
that erred on the side of overprotecting
tenants.
A serious question during the negotiations
and following passage of the bill was
whether DHCR could be expected to take
over the statewide administration of rent
control and make it work. Part of the
legislative motivation was universal disdain
for the New York City Conciliation and Ap-
peals Board and the feeling that anything
would be better than leaving administration
in its hands. But it was also apparent that the
~ bill would force the Governor to reform
~ DHCR, a shambles of an agency.
~ Even though the bill is a mixed blessing
~ for tenants (the hardship formula is a real
danger), there was one clear victory: the
ETPA was extended for only one year and
ten-and-a-half months, until May 15, 1985.
The Senate Republicans had insisted on a
four-year sunset, until 1987, but the
Assembly and Senate Democrats held out
for, and won, a two-year extender. This in-
creases the chance for pro-tenant amend-
ments in 1984 and 1985. Moving the sunset
up six weeks from the traditional June 30
to mid-May will also help tenants, forcing
the Legislature to deal with ETPA under a
spotlight as opposed to the end-of-session
rush when dozens of other important issues
command the attention of the public and
media.D
New ETPA Summary Available
A copy of a summary of the new
Emergency Tenant Protection Act pro-
visions (Chapter 403, Laws of 1983)
compiled by the New York State Te-
nant And Neighborhood Coalition is
enclosed with this issue for all New
York state readers. Those who did not
receive it and wish to do so, should
send a stamped, self-addressed
envelope to: ETPA-City Limits. 424 West
33,.d Street. Nell" York. N.Y. 10001.
"
State Neighborhood Grants Extended
By Charles L. Jones
I
N A VIcroRY for housing advocates,
state legislation has been enacted which
will permit local and upstate nonprofit
neighborhood groups to continue receiving
state aid for community preservation efforts.
Previously, organizations receiving
money under the Neighborhood and RUfaI
Preservation Companies Act faced a cut-off
of funds once they had reached a total of
$300,000. As a result, many groups faced
serious staff and program reductions. Sup-
porters of the approximately 200 groups ,
statewide now funded under the act lobbied .
successfully to extend that cap. Led by
members ofthe New York State Tenant and
Neighborhood Coalition, and the Associa-
tion of Neighborhood Housing Developers,
groups offered evidence that state money
had been constructively used to help create
thousands of new or rehabilitated housing
units across the state. Moreover, they con-
vinced state legislators that funds would
allow groups to continue their vital non-
construction activities - tenant organizing
and assistance and housing maintenance and
management services.
Under the new legislation, some 40
groups which were about to or had already
reached the $300,000 cap will be allowed to
receive up to 75 percent of their largest
previously awarded contract. Yearly con-
tracts are limited to $100,000.
Under the earlier provision, groups
reaching the $300,000 limit were presum-
ed to have become able to generate their own
revenue. This "self-sufficiency" assumption
was seriously challenged by neighborhood
groups who said such a goal was largely
unattainable.
Rural nonprofit organizations par-
ticipating in the Rural Revitalization Pro-
gram received a $750,000 appropriation for
community development activities. The
bulk of the funds, however, will provide
small development - "brick and mortar" -
capital seed money for projects.
Despite these gains, leaders of the
neighborhood preservation groups suggest
that several issues remain to be resolved.
These include the establishment of iden-
tiftable perfurmance standards, the designa-
tion of criteria for group "self-sufficiency",
and the of eligible activities
in which nonprofit development corpora-
tions may participate.
Local groups which had faced a cut-off of
state dollars include: in Manhattan,
Manhattan Valley Development Corpora-
tion, Hope Comm,unity, Metro-North
Association, Pueblo Nuevo Housing and
Development, Lower Eastside Coalition,
Clinton Housing Development; in the
NeiRhborhood pnservation group
Bronx, Banana Kelly Community Im-
provement ; in Brooklyn, St. Nicholas
Neighborhood Preservation, Los Sures,
Flatbush Development Corporation, Peo-
ple's Firehouse, Sunset Park Redevelopment
Corporation, Midwood Development Cor-
poration, Ridgewood-Bushwick Housing
Corporation and Erasmus Neighborhood
Federation. 0
Charles L. Jones is policy and budget
analyst for the Association of Nrighborhood
Housing Developers.
Assembly housing comminu chair Pete Grannis is at head of table. Bronx Assemblyman John
Dearie is seated to his right.
Court Rules Against City Rent Hike
T
ENANTS IN CITY-OWNED in city-owned (in rem) buildings.
buildings don't have to pay rent in- According to one of the plaintiffs in the
creases, for the time being, according to an motion, Dolores Hancock of 698 Hancock
unexpected court ruling on a tenant-initiated Street, the decision to a major
suit. victory for tenants who bve m city-owned
The June 28 ruling by the New York State She of us are on
Appellate Division granted a motion and we Just t pay the rent m-
brought on behalf of six Brooklyn tenants creases. Rent for the slX Brooklyn
to annul rent increases they had been went from $157.50 to $295.65 while the
ordered to pay by the city's Department of building was in a city management program.
Housing Preservation and Development. Bonnie Grant, a spokesperson for the
The effect of the court order is to reinstate Union of City Tenants, stated that the man-
a decision reached in the case of Laureano ner in which the city has raised is un-
vs. Koch. Last November, Judge Sheldon S. constitutional. The tenants' umon has
Levy ordered HPD to promulgate rules, spearheaded and legal
regulations and procedures governing rent challenges to the City s m rem management
increases before reinstating any rent hikes methods.O
5 CITY LIMITS/August-September 1983
I

...
A Sudden Rent Hike for C
Commercial Tenants
By Zelda Yarmuk
T
HE CITY IS calling for rent increases
of from 400 to 1600 percent for 180
commercial tenants of city-owned land that
has been designated for urban renewal. The
first part of the two-stage rent hike is due
September I, 1983.
The urban renewal areas affected by the
rent increases are all in Manhattan. They are
Cooper Square on the Lower East Side, and
Cathedral Parkway, Strycker's Bay and Clin-
ton all on the West Side. Commercial tenants
there have been running their businesses
without leases since 1969.
Because of the city's month-to-month ar-
rangement, the commercial tenants, most-
ly small, local businesses who have pro-
vided the areas with stability, service and
jobs, have had to shoulder all responsibili-
ty for heat, maintenance and renovation. Jim
McPartlin of the 53rd Street Service Station
pays $1,000 each quarter for the Holmes
Protection Service, which includes day and
l'uul Novll0rod of Claremont Riding Academy. a
adverse effect on the housing stock in Clin-
ton, among other reasons, the proposals are
still active for the area.
night protection. His out-of-pocket expenses The city sees the rent hikes differently.
have included almost yearly waterpipe- "We are going to market rate;' said Joseph
breakage repair, new pavement, new black- Shuldiner, deputy commissioner of the
top, a new electric conduit breaker and Department of Housing Preservation and
more. Paul Novgorod of the Claremont Development's Office of Property
Riding Academy on West 89th Street pays Management.
$40,000 in heat annually and has had to put "We have wanted to raise these rents,"
$70,000 into repairs during the past two Shuldiner said, "to reflect commercial reali-
years. ty for a long time, but waited to obtain in-
"The city has no commercial relocation dependent appraisals of the value of the pro-
plan for commercial tenants on these sites. perties. The September rent increase
Most of the businesses will be forced to represents only 50 per cent of the difference
close their doors," said McPartlin, whose between the present rate and the fair market
rent will go from its current rate of $1,000 rate. The 180 commercial tenants in
to $2,800 in September, 1983, to $4,600 in Manhattan are paying $730,000 a year, while
January, 1984. One firm, Masterpiece the appraised market rate is $3.3 million.
Woodwork Company at 500 West 52nd That's a lot of money the city can use."
Street, has already announced its closing. Shuldiner invited each business affected
"I was dragging my feet for a long time," to apply for administrative review. For the
said Eleftherios Moussas, proprietor. "But not-for-profit businesses, such as La Mama
when attacked by high rents, I cannot be at 74A East 4th Street, INTAR, 508 West
competitive." 53rd Street, PAL Duncan Center, 552 West
McPartlin charged that the city is trying 52nd Street, and Women's Interart Art
to get commercial tenants out of the way to Gallery, 549 West 52nd Street, he promis-
make room for high-rise luxury buildings, ed a rent set according to their ability-to-pay.
McPartlin said. In 1982, the city issued Re- For commercial tenants, the rent will reflect
quests for Proposals to developers to sub- the true value of their property, as well as
mit plans for Sites 8 and 9C in the West Side their contribution to the neighborhood and
Clinton Urban Renewal area. Although the space. Shuldiner said that his office in
Community Board 4 rejected all the devel- raising rents, was carrying out a September
opers' plans because the fair market prices 10, 1980, memorandum from Mayor Koch
of the luxury buildings would have a highly which said that the city can no longer should
not continue to subsidize the use of city pro-
perty for any purpose not necessary to the
performance of governmental function.
Commercial tenants are banding together
to plead their case: the right to stay put in
the neighborhood and pay a fair rent in-
crease; the right to a lease from the city, and
recognition of their worth to the city's
stability, tax base and character. They are
winning support from community groups
and politicians such as Richard Gottfried,
Franz Leichter, Manfred Ohrenstein, Ruth
Messinger and Ted Weiss. Their group,
CCURf- Cultural and Commercial Urban
Renewal Tenants - is demanding a morator-
ium on proposed rent increases, as well as
a meeting with the mayor.
Edward C. Sullivan , Democratic
Assemblyman from the 69th District in
Manhattan,wrote to the New York Times
June 25, 1983:
"Many businesses represent years of hard
work - 18 hour workdays, Sunday after-
noons spent going over the books, personal
self-denial so that profits could be put back
into the business - all dashed at the word
of the landlord that on the next lease the rent
will be quadrupled . . .
"By what right , . . . does a landlord say to
a tenant: 'Now that you have increased the
value of the premises you occupy, I'm go-
ing to throw you out so I can take better per-
sonal advantage of that value.'''O
Zelda Yarmuk writes a regular column for
the Clinton Coordinator.
".
Lower East Side Disputes City Plans
for First Street Building
L
OWER EAST SIDE RESIDENTS and
organizations have again found them-
selves at odds with the city housing depart-
ment over development policies for that
neighborhood's city-owned property.
Currently at issue is a prominent five-
story vacant building at the comer of Second
A v e ~ e and East First Street known locally
as the "Cube Building." The city is seeking
proposals from developers for the renova-
tion of the site into market rate housing.
A group of low and moderate income
would-be homesteaders, who sought to use
their own labor to offset development costs,
had been negotiating with the city for over
a year to use both government loan pro-
grams and rent subsidies to renovate the
building. The group's proposal , however,
was rejected last March by the housing
department which cited a lack of funds.
The homesteaders, along with tenant
groups and the local community board, have
contested this, pointing to over $3.5 milJion
in Participation Loan funds that the city had
put aside for its ill-fated Artists' Home
Ownership Program on the Lower East
Side. That program was defeated by the
Board of Estimate in February.
~ l f J/;
. [ IE- ~ J T I ( ;i
'"
~
~
~
Carlos Perez of Cooper SqUiJre Commillet' at 'Cube ~
Building ' demonstration.
The group's proposal included architec-
tural and financing plans prepared for the
homesteaders by the Pratt Institute Center
for Community and Environmental Devel-
opment and the Urban Homesteading Assis-
tance Board. It called for using the city's Par-
ticipation Loan program along with Section
8 moderate rehabilitation rent subsidies.
The private developers the city seeks to in-
terest in the building would be entitled to no
public subsidies other than tax abatements.
A tour of the building for developers
planned by the department of Housing
Preservation and Development was met
with a picket line on June 21st formed by the
homesteading group as well as by members
of the Cooper Square Committee and other
Lower East Side organizations. Valerio
Orselli, director of the Cooper Square Com-
mittee, noted that since the area's communi-
ty board had sought a moratorium on the
outright auction of the city properties in the
district, the city's request for development
proposals was a backdoor means of evading
that ban. The city is "ignoring the
neighborhoods need for affordable housing,ft
he said.OT.R.
New Homes Open on West Side
A
s MAYOR EDWARD I. KOCH laid
down his shovel at a recent ground-
breaking in Manhattan Valley on the Up-
per West Side, he shared his own home-
spun brand of gentrification philosophy
with local celebrants.
Gesturing to the tum-of-the-century row
houses across the street from where 76 con-
dominium-style town houses are to be built
with federal Section 235 funds, the Mayor
said, "These houses ... are of landmark
qUality. In Chelsea [a gentrifying area fur-
ther downtown] . . . they would sell for
several hundred thousand dollars. Anyone
want to give me $200,000 for the one across
the street? They will be worth that amount
and more because of these [new] houses."
Sponsor of the Manhattan Valley Town
Houses that will sell to income eligible,
moderate income families and offer con-
siderably reduced mortgage rates is the
Manhattan Valley Development Corpora-
tion, a 15-year-old nonprofit housing
organization in this neighborhood.
During his speech, Koch cal1ed for the
reestablishment of the Section 235 program
which he said he had vigorously supported
while in Congress.
Noting that it was a "very successful"
program across the country while it lasted,
the Mayor quipped, (When I was in Con-
gress under the Lindsay Administration)
"only six houses were bui1t in New York
in the Rockaways . . . and the guy who bui1t
them went broke."
But, he continued, the city under his ad-
ministration finally got involved with this
low-interest home ownership program and
recaptured some of the last 2,000 approv-
ed units for New York City.
"We got the last of those houses, and 76
of those houses are going to be built right
here," he asserted.
About half of the condominium buyers
already live in Manhattan Valley. The
homes will be built on Manhattan Avenue
between West 100th and 105th Streets near
where MVDC has already rehabilitated
some 450 low-cost units through the federal
Section 8 and other subsidized programs.
During his speech, the Mayor also
reiterated his favorite stance against the
construction of high-rise buildings, stress-
ing that the city shou1d abandon plans for
such construction unless these plans are so
far advanced that a design change would
be financially unfeasible. He neglected to
mention that architects for the city and
sponsor of the proposed Frederick
Douglass Houses, now in the earliest stages
of planning at a nearby site, are talking
about constructing condominiums as high
as 24 stories.OS.B.
7
Developing
and
Undeveloping
Midwood's
Avenue K
T
HERE'S A CLASSIC before and after
view to be had right now at the comer
of Avenue K and East 12th Street in
Brooldyn's Midwood section. On two cor-
ners sit recently completed Section 8 rehabs,
gleaming with steam-cleaned facades and
fancy new grillwork. On a third comer, the
increasingly derelict 1202 Avenue K stands
out in sharp contrast. Plywood covers many
windows; the entrance doors are broken and
ajar: clearly this building is headed either
out or up. And in this case, it's both.
Both parts of the view are the handiwork
of builder-developer Abraham Salomon
who has matched his rehab talents with
government subsidy programs in over a
dozen projects in Brooldyn and the Bronx.
He has completed six Participation Loans
where the city has anted up half the cost of
his projects, and he plans another such loan
at 1202 Avenue K where he has long had an
option to buy the property.
Unfortunately for the tenants of that
building, Salomon's plans apparently don't
include. them. Amid the overwhelmingly
white and Jewish Midwood neighborhood,
the all black tenants of 1202 have received
few services from their current landlord, a
Salomon employee named Egbert
Blackmoore. Leaders of two local com-
munity groups suggested that Blackmoore,
who also is black, is "fronting" for Salomon.
Blackmoore has acknowledged that at
Salomon;s behest, he ordered workers from
the rehabs across the street to start gutting
out seven vacant in February.
While cutting heat through the winter, refus-
ing repairs, and filling the courtyard with
a mounting 15-foot pile of rubble from the
demolitions, Blackmoore went from door
to door telling tenants they would have to
move.
Instead, residents contacted a local
Abroham Salomon, in hat at left, at groundbreaking for Section 8 rehab projects on Avenue K last year.
sought a 7A administrator to manage the
building. But what they have gone through
thus far, say tenant leaders Antoinette War-
ren and Dave Evans, both of whom have liv-
ed at 1202 for over 20 years, is a replay of
what took place across the street. There,
unable to organize successfully against
harassment, the mostly black tenants were
driven out before the rehab.
Community Sponsor
Jose Velez, director 'of the Midwood
Development Corporation, a nonprofit
community group which co-sponsored the
Section 8 rehabs, said his group is also part-
ners with Salomon in the proposed rehab of
1202. Salomon, says Velez, has tried to
make Avenue K his showplace to overcome
bad publicity he received on other projects.
tenants group, filed harassment charges Charles Schumer, far right, Housing Commissioner Tony Gliedman, third from right, and
against the owner in housing court and Brooklyn Borough President Howard Golden, sixth from right, join Salomon at groundbreaking.
In Flatbush, Crown Heights, the Fordham
section of the Bronx and in Far Rockaway,
tenants have said harassment preceded and
accompanied Salomon's rehabs.
"The Corporation and the community
support [Salomon] 100 percent," says Velez.
MDC has shown its concern for the embat-
tled 1202 tenants by sending Housing Court
Judge Gerald Banks a letter stating that ap-
pointment of the 7A administrator would
jeopardize the participation loan. "A [7A]
would create problems for HPD and the
banks," said Velez. "In a sense, that would
be the end of Avenue K."
But to 1202's residents like Evans, War-
ren and tenant association treasurer Baxter
Burgess, the pursuit of the rehab will mean
the end of their lives in Midwood. The black
community along Avenue K is a small
enclave and vacancies in the Section 8
rehabs across the street, tenants say, have
gone largely to Russian immigrants. Their
attempts to get help from local City Coun-
cilman Noach Dear whose office is around
the comer on Coney Island Avenue, and
Assemblyman Mel Miller got no response
they say.
Salomon, questioned by reporter Peter
Wehrwein of the Kings Courier, called 1202
a "welfare house," a characterization Jerry
O'Shea of the Flatbush Tenants Council who
has helped to organize the building says is
far off the mark.
Housing Preservation and Development
Inspector General Steven Shapiro, whose
office has been carrying out a months-long
investigation of Salomon, declined to say
when his unit would make a recommenda-
tion on future dealings with the developer.
Salomon has ridden out earlier investiga-
tions and gone on to more projects.
In 1980, officials of the Neighborhood
Stabilization Program of the City Human
Rights Commission requested that HPD
restrain Salomon or stop encouraging his
loans. Salomon responded by dropping out
- at least from the forefront - of three
buildings he had planned to rehab and mov-
ing on to others. In 1982, the Rights Com-
mission made Salomon pay $500 and iward
an apartment to a black applicant he had re-
jected from his Bronx participation loan
project at Botanical Square.
Meanwhile, Salmon has been holding off
from a fonnal participation loan application
on 1202 Avenue K until his financing for the
project is lined up. Like other developers,
Salomon has learned that strong bank sup-
port is the surest response and can outweigh
HPD's other doubts.
Salomon declined to discuss 1202 Avenue
K or other projects with City Limits, citing
earlier coverage in the magazine he said was
biased. "Why should a pUblication like
yours," he said vehemently, "condemn a man
who is fixing up garbage?"OT.R.
Who's Benefitting from Williamsburg Plan?
L
AST APRIL, MAYOR Ed Koch un-
veiled his administration's plan to ac-
commodate both market rate housing
development and low income shelter needs
in the divided north Brooklyn Williamsburg
community. There, the large Hasidic Satrnar
community has long vied with Hispanic
groups over power, land and funds. Koch's
plan called for a cross-subsidization be-
tween the two, with city property sales pro-
ceeds going to assist the creation oflow in-
come housing.
Critics noted that while substantial num-
bers of market rate housing units would go
up, it was highly unclear what, other than
150 public housing units pledged by Koch,
the plan would yield for the low-cost
housing-needy Hispanic population.
Since the announcement, no public hear-
ings have been held on the city's scheme,
which represents a major change in plans
for two Williamsburg urban renewal areas.
But despite the lack of a formal community
examination, the city has plunged ahead.
First in line to benefit from the new plan
have been some of the same landlords
Hispanic organizations such as Los Sures,
a Southside neighborhood development
group, have been warring with for years.
Although the city Department of Housing
Preservation and Development promised
that requests for proposals would be issued
for the new development projects signalled
by the plan, in an unprecedented move, it . "The tenants aren't about to just take his
offered three vacant in rem buildings for sale word for it," responded Schliff. "They1l con-
at its May residential auction as a single tinue with their rent strike."
package with stricter than usual purchase Part of that dubious attitude sterns from
requirements. another building owned by Harfenes and his
The buildings - at 875 and 908 Driggs father, Nuchem Harfenes. That building,
Avenue and 146 South 9th Street - went at 125 Division Avenue, was emptied of its
the auction for the base upset price of tenants while the Harfenes owned it and has
$45,000, just slightly over their combined now been submitted to the city for a Par-
as-is valuation. The sole and successful bid- ticipation Loan to create co-ops. Financing
ders for the properties were Martin for the plan has yet to be put together, said
Harfenes and Isaac Rosenberg, both of Harfenes, and HPD said it had yet to look
whom are currently involved in court bat- into possible harassment at the site.
tles with tenants of buildings each owns. Isaac Rosenberg, Harfenes's current part-
Although the partners have yet to submit ner, is the owner of Certified Lumber, a
disclosure statements detailing their real Brooklyn construction supplier, and is
estate histories as required by the city's auc- closely tied to the United Neighborhood
tion regulations, those statements would Development Corporation, the Hasidic
show that Harfenes is currently co-owner of community's housing development arm.
two Clymer Street buildings from which Rosenberg is in a similar situation with the
tenants are currently resisting displacement. ten remaining tenants ofhis 35-unit building
The Hispanic and Jewish tenants of those at 145 Taylor Street. Those tenants are also
buildings, according to Los Sures organizer in court to protest Rosenberg's rehab of the
Barbara Schliff, are in housing court against vacant apartments while ignoring deterio-
Harfenes and co-owner Louis Fried. rating conditions in occupied units.
Harfenes, who phoned City Limits to find The consolation of Williamsburg resi-
out why inquiries were being made at HPD dents for the accommodation of developers
about his auction purchase, claims he is the such as Harfenes and Rosenberg, say city
junior partner with Fried and has been housing officials, is that the $45,000 pur-
prevented from making repairs he admits chase price for the.buildings is going into
are needed in the buildings. A receiver a fund for low income housing. That amount
recently appointed to run the buildings is somewhat less than the average cost of
would go ahead with those repairs, Harfenes rehabilitating or building a single new apart-
said, and all violations would be removed. ment.OT.R.
9 CITY LiMITS/August-September 1983
Did Arson
Ring Profit
from
Rehabs?
O
N JULY 12, eight alleged members
of an arson-for-profit ring were in-
dicted in federal court in Brooklyn. The
charges stem from a two-year investigation
by the office of the U.S. attorney for the
Eastern District of New York that began in
the wake of indictments of some of the same
individuals in the Bronx and Brooklyn for
arson conspiracy. The new federal charges
focus on the schemes used by the ring to
heavily insure their buildings, burn them
and collect payments.
But while the federal indictments begin
to unveil that murderous cycle, it is still on-
ly part of the arson-for-profit story -
perhaps even the lesser part. For arsonists
have gotten much more sophisticated about
how to tum the housing they have helped
make into slums into more and different
kinds of profits.
Beyond milking an apartment building,
insuring it, and torching it, this group knew In August of 1978, Bald and Katkin sat
that lucrative government-funded housing down in the law offices of former deputy
subsidy programs could add a whole new mayor and city planning commissioner John
dimension of profit and exploitation. It is not Zuccotti with William Hubbard, a Section
surprising then, that of the 17 separate loca- 8 developer who wanted to purchase the pro-
tions in the Bronx, Brooklyn and Manhat- perties. There, a deal was struck, whereby,
tan the eight are charged in the indictments in exchange for an option on the buildings,
with burning, five resurfaced as federally- Bald and Katkin would share in the sale of
funded Section 8 low income rehab projects. $1.5 million tax shelter the project presented
And, on at least one of those jobs, the to wealthy investors.
landlords parlayed their capital and their This was just three months after Katkin,
real estate skills into positions in the along with Abraham Slochowsky, according
to the federal indictments, caused three fires
1403-1425 Grand Concourse in the in 1425 Grand Concourse for which they fil-
Melrose section of the South Bronx, where ed phoney insurance claims.
a 156-unit Section 8 rehab project opened According to Hubbard, whose Center for
in 1981, was previously owned by convicted Housing Partnerships ultimately renovated
arsonist Joe Bald and his sole partner in the buildings, Bald and Katkin defaulted on
M&B Management Corp. , Henry Katkin. their agreement both to provide interim
Bald, who still faces trial in the Bronx and management of the partially occupied
Brooklyn, is widely believed to be buildings (the ones they were burning) as
cooperating with federal prosecutors and to well as $15,000 in legal costs for the syndica-
have provided evidence that led to Katkin, tion of the tax shelter. But before they ex-
among others, being socked last month with ited Bald and Katkin collected $25,000 from
11 counts of racketeering and fraud. the Center for Housing Partnerships and an
1144 Rockaway Parkway in
Brooklyn: owned by Henry &tkin
and Joe &fd.
flJUfU!rous suspicious
fires occurred from 1976-1979.
equal amount from Peter Edelman, a syn-
dication broker they brought in.
Those payments came courtesy of the
U.S. government which allows the
developer, Hubbard, to make the property
acquisition cost part of his federally insured
low-interest mortgage, and Edelman's tax
shelter purchasers a deduction from other
earnings.
There are numerous indications that the
Grand Concourse project is just one of
many, and that arsonil;ts like Bald frequently
leveraged their still smouldering buildings
into government-bestowed bonanzas.
Pieces of the arson-subsidized rehab link
have been surfacing for several years. Most
notable was an initial study of the problem
by the city's Arson Strike Force which the
city reluctantly made public last year. A
final version of that study is due this month,
and, if its findings confirm the earlier pat-
terns, and city officials are willing to con-
front that data's import, it could point the
way towards severing those links.DT.R. -- ~ - - - - -
Washington Wins Chicago's COBG Battle
A
HEFfY CHUNK of the voter surge
that catapulted black Congressman
Harold Washington over his politically en-
trenched opponents to become mayor of
Chicago came from his campaign pledge to
empower that city's long forsaken
neighborhoods. While most coverage of
Chicago since the election has focused on
the very real battle between Washington and
the machine-controlled city council, the
equally major achievement of his young ad-
ministration in rerouting some municipal
power to the neighborhoods has been widely
overlooked.
The July issue of The Neighborhood
Works, a Chicago monthl y, carries a fasci-
nating account by reporter Hank DeZutter
of how Washington forced reallocation of the
city's $147 million in federal Community
Development Block Grant funds, a pot of
money previously known as "the mayor's
sugarbowl."
Chicago's use of its CDBG funds under
its three previous Democratic administra-
tions was marked by its concentration on
displacement-causing big downtown
development projects, politically-connected
park projects, and diversion into the regular
government administration. Former Mayor
Jane Byrne frequently shifted money from
neighborhood projects to such housekeep-
ing tasks as snow removal , storm cleanup,
even the school operations budget. Through
it all , writes DeZutter, the machine alder-
men remained quiescent. Only neighbor-
hood groups protested.
In his campaign, Washington charged that
only 20 percent of CD funds reached their
intended low and moderate income recip-
ients; the remaining 80 percent went to city
employees and destructive urban renewal
projects.
This spring, however, after consulting
with CD activists, the new administration
totally reshaped the CD budget : $13.5
million went out of city payrolls and into
neighborhood revitalization and economic
development programs; multifamily hous-
ing rehab went from $1 million to $14
million. To get those budget shifts,
Washington won council and neighborhood
support by creating a built-in accountabili-
ty system for both aldermen and the public.
To help create an overall neighborhood
'"
~
~
" ~ I 1 .... I i " " " " " ~ ~ ~ ~
Chicago Mayor Harold Hbshington during his campaign.
policy, Washington appointed longtime
community organizer Joe Gardner to head
the moribund Department of Neighbor-
hoods with instructions to transform it into
a vital policy-making tool for the city's
communities.
These early rumblings make the Windy
City good viewing for other urban com-
munity activists who have long been in CD
tugs-of-war with stingy city halls.
The Neighborhood Works is a five-year-
old monthly information service published
by the Center for Neighborhood
Technology. Subscriptions are $18 per year,
$2 for single issues. The July issue also con-
tains a good up-to-date analysis of events at
the National Co-op Bank. Write: 570 West
Randolph St., Chicago, lli. 60606.0T.R.
Boston Tenants Group Chooses Anti-
Abortion, Busing Mayoral Candidate
I
N EARLY JULY, the Massachusetts
Tenants Organization announced its sup-
port for one ofthe eleven Democratic Party
candidates looking to replace outgoing
longtime Boston Mayor Kevin White. MID,
a statewide group, chose city councilman
Ray Flynn, who, prior to his current vocal
support of rent and condo conversion con-
trols, was best known as co-sponsor of the
anti-abortion Doyle-Flynn bill. That bill,
passed in the late 1970s when Flynn was
a state representative,and still in effect, pro-
hibits the use of state medical insurance
coverage for abortions.
Although it is not unusual for tenant
groups to narrowly confine their political
support to those with sympathetic housing
positions, Flynn's stance on other issues has
been equally prominent. During the hottest
period of Boston's school busing controver-
sy, Flynn threatened to defy court bussing
orders. As recently as 1980 he spoke at
public rallies of the virulently anti-busing
South Boston Marshals.
What makes the MID's endorsement
choice even more striking is that the group
passed over another strong housing can-
didate to tap Flynn. The sole black candidate
in the race is Mel King, also a former state
representative who finished third in a field
of six for the mayoralty in 1979. King, a
thirty-year veteran of community struggles
in Boston's South End, has built his 1983
campaign around programs for employ-
ment, affordable housing development and
equal quality education.
In 1982, King and the Boston People's
Campaign got referenda placed on the ballot
in five Boston districts which called for strict
rent controls and conversion curbs. The
issues passed overwhelmingly and set the
stage for the council resolution.
The MID's preference for Flynn over
King has also apparently frozen the Boston
chapter of Democratic Socialists of America
from making any endorsement. DSA
members are widely represented in the
tenants organization.OT.R.
11
How J-51 Was Curbed
By Michael Henry Powell
S
HORTLY BEFORE the end of the
legislative session this June, the state
Assembly and Senate finally passed a new.
reformed J-51 tax exemption and abatement
law. Afterwards, legislative sponsors of the
bill hailed it as a modest but important im-
provement on the old law, which was sup-
posed to encourage rehabilitation of hous-
ing units for low and moderate income
tenants but instead encouraged tenant
displacement and allowed windfall profits
for developers. Now, however, as copies of
the new law circulate among various com-
munity groups, some activists are finding
that it does not meet their expectations.
"The bill is a modest reform on the old
insisted Frank Domurad of the New
York Public Interest Research Group, a
complaint echoed by other critics of the bill .
"It has several ticking time bombs that could
eventually prove to be very damaging. It is
not what we originally pushed
However, amid carefully catalogued
reservations, community and legislative
critics concede that the new bill still
represents a victory of sorts. Careful studies
and the construction of a loose, though ef-
fective, community-legislative coalition had
publicized a previously obscure issue. In the
process, that coalition effected changes in
a law dear to the heart of many developers
and city officials.
Once an Unassailable Law
Two years ago, the old J-51 law and other
programs. including the Industrial and
Commercial Incentive Program which was
ostensibly supposed to encourage job crea-
tion through tax breaks for participating
employers. were sources of seemingly
unassailable tax giveaways to large firms.
real estate interests and developers.
Although the City was foregoing millions of
dollars each year in potential tax revenues
- a NYPIRG study documented how large
Manhattan development firms received a
total $80 million in tax reductions under J-51
in fiscal year 1982 - Mayor Ed Koch and
City administrators steadfastly refused to
alter or amend the programs.
Nor did the City Councilor state
legislature appear to provide a solution. City
and real estate industry lobbyists, aided by

"The lobbying, the scare tactics around
the formation of that bill were incredible,"
?r':"h. said Messinger. "The Community Preser-
vation Corporation [a banking consortium
,': that provides loans for neighborhood
;?L. rehabilitation) tried regularly to suggest that
some nonprofit groups seemingly uncon-
cerned by the displacement issue, had effec-
tively headed off legislative reform. And
perhaps most important to the struggle for
legislative amendments, few people, in-
cluding many in the housing movement,
were really aware of the total damage caus-
ed by the J-51 program,
However, this, began to change several
years ago. NYPIRG and Manhattan West
Side Councilmember Ruth Messinger
released two reports - "How Am I Doing:
Business and Tax Breaks in Np.w York City"
and "The Rich Get Richer: J-51 Tax Breaks
in New York City, 1981-1982" - documen-
ting J-51 abuses. And Brooklyn Assembly-
man Frank Barbaro's unsuccessful 1981
Mayoral campaign along with Mario
Cuomo's successful 1982 gubernatorial
campaign drew public attention to the
giveaways arising from the J-51 program,
"NYPIRG and Domurad were really the
leaders in bringing these issues before peo-
ple." recalls Bonnie Brower. herself a critic
of the new bill and executive director of the
Association of Neighborhood Housing
Developers. "There was a real sense that the
programs were giveaways to developers.but
the numbers were not in place. The studies
did that."
The next step for those interested in J-51
reform was obtaining the support of various
community groups. Many organizations.
especially those based in low and moderate
income sections of the outer boroughs, saw
the J-51 program as an integral part of their
neighborhood rehabilitation efforts. These
groups, as well as their elected represen-
tatives, had to be convinced that reform ef-
forts would not destroy the program
completely.
limitations would hurt individual projects.
'i\nd the city, especially HPD, kept in-
sisting that any changes would halt low and
moderate income rehabilitation," she con-
tinued. "Of course, this was nonsense and
we had the numbers to prove
Legislative Allies
Gradually, neighborhood nonprofits
rallied behind the reform effort. Spearhead-
ed by NYPIRG, ANHD. the Community
Service Society, Catholic Charities and the
New York State Tenant and Neighborhood
Coalition, the loose coalition quickly found
sympathetic legislative sponsors. Manhat-
tan Assemblymembers Pete Grannis, head
of the Housing Committee, Dick Gottfried
of the Real Property Taxation Committee
and State Senator Franz Leichter willingly
led the fight for a reform bill.
"Basically, we wanted to turn the bill back
in time a bit." commented Grannis. "We sat
down with Domurad and others and tried to
draft a bill that would truly encourage low
and moderate income housing rehabilita-
tion. The lobbying against us was extreme-
ly intense. And there were those very pom-
pous editorials in the Daily News and Times
about how we were holding up the bill and
playing games. Then. when it passed. we
got a small blurb in the paper."
The question now is whether they suc-
ceeded in drafting a strong bill. Grannis and
Gottfried believe they did. And the dif-
ference between their perception and that of
the bill's critics illustrate the inevitable pro-
blems a community-legislative coalition has
when the action moves entirely to Albany.
"Don't forget. there is a Republican-
controlled Senate up there and some
members of our own party who were not
crazy about the bill." Grannis said. "The im-
portant thing was that we set the outside
parameters, the caps on the amount of
money you can spend per unit, that sort of
thing. We left the rest to the City Council
to decide. The Council wanted us to do all
the heavy lifting on the bill, specify
everything, but that was not possible. Don't
12
j

forget , it was the Council that threw this
whole thing to us."
Now the battle over the all-important
details of the J-5\ program shifts back
to the City Council, where decisions on
which areas will be exempted from the new
law must be made. Domurad has already
been in touch with members of the coalition
and plans to carefully monitor the bill's pro-
gress and application. And, though many
problems remain, Gottfried inadvertently
touched on the distance travelled on the issue
the last few years when he said, "In late 1981,
we were really just facing a simple extender
ofthe J-51 bill. The city thought they could
just kick it through again. But, this time peo-
pie were more attuned to the program's pro-
blems and it was not difficult to reach out
for help."O
Michael Henry Powell writes frequently for
the Brooklyn weekly, The Phoenix.
What's In The New J-51? .
B
RIEFLY, THE new bill sets a
cap on tax exemptions for pro-
jects with per-unit rehabilitation costs
priced above $38,000; exemptions are
set on a sliding scale beneath that
figure, with 100 percent exemptions
offered when per-unit costs are less
than $18,000. In addition, landlords
convicted of tenant harassment cannot
apply for the program. Lastly, the
new law denies all benefits to
developers converting single room oc-
cupancy buildings to residential
housing.
Objections center on three specific
sections of the new bill . One seem-
ingly allows benefits to be calculated
in a way that encourages arson. Basic-
PAYING
TOO
MUCH
ally, this section states that the greater
the discrepancy between the before
and after rehabilitation costs of a unit,
the greater the J-51 benefit. As
Councilmember Ruth Messinger said,
"This is an inducement to start as low
as you can. Or, in other words, to
burn out tenants."
Another section of the bill alJows
the City Council, with non-binding
recommendations from local com-
munity boards, to lift the tax exemp-
tion ceiling in any part of a
Neighborhood Area.
While most of these areas are in low
and moderate income neighborhoods
not in danger of rapid gentrification,
three areas - in Clinton and the
Lower East Side in Manhattan, and
Park Slope and Sunset Park in
Brooklyn - are considered ripe for
tenant displacement. As NYPIRG's
Domurad said, "It was in large part
because of the J"51 abuses in those
areas that we began to study this
program."
A third area of concern is the sec-
tion that allows Housing Preservation
and Development Commissioner Tony
Gliedman considerable discretion in
waiving the exemption limits. Under
this provision, if a developer can
demonstrate that a project will pro-
duce low and moderate income hous-
ing units and that it is not otherwise
financially viable, Gliedman can
waive the $38,000 limit on exemp-
tions.OM.H.P.
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The West Side Questions Costs
of the Partnership's Housing
DouX1uss Circle. corner of W. /10th St .. and Central Park West . in 1970.
By Susan Baldwin
T
HE PUSH FOR the New York City
Partnership housing, in clearing
through city bureaucracy for approval, has
stumbled on Manhattan's Upper West Side
on the issue of income affordability.
During a stormy but sparsely attended
public hearing June 21 at the Harlem State
Office Building, plans for the construction
of at least 400 units of middle income hous-
ing geared to family incomes of less than
$50,000 overwhelmingly passed both Com-
munity Boards #7 and #10 with only one -
a member of #7 - opposed.
Since the vote was taken, Community
Board #7 is seeking to have the proposed in-
come eligibility level lowered on the
grounds that only seven percent of the ad-
jacent neighborhood, to the south of the site
in Manhattan Valley, would be able to
'Qualify for the housing.
The 15-year embattled Frederick
Douglass Circle renewal site, where the
housing is planned, is located at the intersec-
tion of Central Park West, Frederick
Douglass Boulevard (Eighth Avenue),
Cathedral Parkway West (West llOth Street),
and includes portions of Manhattan Avenue
and West l09th and lllth Streets.
At present, the only surviving develop-
ment on the site is commercial, as for many
years, until it was tom down, this land hous-
ed the overpass of the famous Ninth Avenue
"El."
The Partnership's plans are expected to go
before the August 18 meeting of the Board
of Estimate. They are currently under
review by the City Planning Commission.
A coalition of some of the world's most
powerful banks, corporations, trade unions
and politicians, the Partnership, headed by
millionaire-banker David Rockefeller, is
currently involved in a special three-year
program to build 5,000 homes for families
earning less than $50,000 a year. It is using
a total grant of $52.5 million from the
Federal government's Urban Development
Action Grant program to "write down" or
subsidize the cost of the home. In this ven-
ture, the Partnership is operating under its
spin-off arm - the Housing Partnership.
A maximum of $15,000 per home is
available from the federal government for
each family. For those meeting the income
eligibility criteria, this amount will further
be supplemented by a maximum of $10,000
in capital budget grant money from the city's
$25 million pool.
In April, the Partnership received $4.8
million, its first UDAG installment, to build
325 homes, mostly in Brooklyn. Early in Ju-
ly, it was awarded a second round of $1.4
million to underwrite 132 homes, 90 of
which will be built on the controversial
Charlotte Street site in the South Bronx.
High Rise Condos Planned
At Douglass Circle, the Partnership, in
cooperation with the Department of Hous-
ing Preservation and Development and the
Harlem Urban Development Corporation,
eventually hopes to build some 400 units of
low; mid; and high-rise condominiums to
be known as Frederick Douglass Homes.
These will be accompanied by substantial
and sorely needed commercial
development.
A state agency whose parent organization
is the Urban Development Corporation,
HUDC was originally designated to devel-
op the northern section of -the site as mid-
dle income housing. At one point, it also
looked into using the now dried-up federal
Section 8 funds for low income housing.
The southern section, for the past 15 years,
was to be developed as low income housing,
preferably by a local nonprofit housing
organization.
Without subsidy, the condominiums are
projected to cost from $61,000 for a one
bedroom unit to almost $110,000 for three.
Those who would qualify for the subsidiz-
ed price would pay from $15,000 to $28,000
less for the same housing.
Under the subsidy formula now being us-
ed by the Partnership, a family would not

pay more than 28 percent of its income for
the housing and must earn a minimum of
$22,000 to $41,000 for the different-sized
units.
According to Kathy Wylde, vice president
of the Partnership's nonprofit housing com-
pany and a main assembler of this program,
the income levels are flexible. At present,
her organization, she reported, is looking
into all available funding sources to make
the housing affordable. She did say,
however, that the project needs city approval
in order to attract the financial communi-
ty's support, and, hopefully, lower the costs.
During the special joint hearing June 21
to approve the land disposition agreement,
or the Uniform Land Use Review Pro-
cedure, numerous community groups spoke
in opposition.
"I speak on behalf of the people who live
on my block, people who cannot, by any
stretch of the imagination, afford to live in
these condominiums, the construction of
which will probably, by forcing up real
estate values in the area, force these same
people, my neighbors, off the block in
Manhattan Valley, and out of Manhattan
altogether," said Liz Sostre, head of the Mor-
ningside Renewal Council (MRC) and a
resident of West 109th Street.
Sostre said that her board, with early en-
couragement from the New York Housing
Partnership, had gone ahead and proposed
local architects and developers - Manhat-
tan Valley Development Corporation and
the West Harlem Community Organization
- to draft plans for the site that would pro-
duce affordable housing for the communi-
ty. Both MVDC and WHCO are local non-
profit community housing organizations ac-
tive in Community Development-funded
projects in the immediate area .
Others, including representatives for the
local elected officials, spoke in favor of the
plans and the need for middle income hous-
ing to attract families back to Harlem or to
help residents who are in need of housing
but are "over-income" for government-
subsidized housing to stay in the area.
But one local politician, Assemblyman
Edward Sullivan, Democrat of Manhattan,
questioned the project, noting that it in-
troduces an element "much more towards
gentrification than was proposed [earlier]
by the MRC'
"I have trouble," he went on, "understan-
ding why the other project held together by
poor people and others concerned in the
district got stalled for 15 years while this one
that goes from middle to rich is being rush-
ed . . . greased through the system. It does
not represent the efforts of the larger number
of people in the district who were here try-
ing to do something before" the Partnership
appeared on the scene.
Housing Authority Plans Dropped
In addition to the community plans for
both sides of Frederick Douglass Circle, the
New York City Housing Authority also held
an option on the land until three years ago
when it relinquished its interest, according
to spokesman Tim Sullivan. Prior to that
time, the site had had Board of Estimate ap-
proval for 340 units oflow income housing;
the NYCHA had attempted to work out a
development agreement with the communi-
ty, but talks broke down over design and in-
clusion of commercial space.
In a 15-page descriptive package prepared
by the Housing Partnership and the city, the
Frederick Douglass Houses, as the project
is known, is touted as "the first moderate in-
come new construction project in Harlem
in over a decade." It is also referred to as "an
opportunity to redevelop a pivotal parcel to
showcase the resurgence of Harlem as an
economically viable community."
The Carver Federal Savings and Loan
Association, a member of the Partnership
board, will serve as the "lead" bank in at-
tracting other backers to the project, said
Howard Dabney, vice president in charge of
the loan office. According to his account;
Carver expects to invest between $3 and $5
million in mortgages for the site. He
estimates the development to cost anywhere
between $30 and $50 million.
Frederick Douglass. It also spelled out a
more permanent involvement of communi-
ty board representation in the Article XI
housing company that will control the
project.
According to Wylde, however, the Part-
nership has established a "good faith"
understanding with both boards and plans
to work with them to achieve a shared goal.
Appearing at the City Planning Commis-
sion and the Manhattan Borough Board in
mid-July, Ethel Sheffer, chairwoman of
Community Board #7, requested that the
Partnership lower its income eligibility for
the proposed condominiums. She reported
that if the same guidelines that were follow-
ed for Federal Section 235 housing applied
to the Frederick Douglass Houses, about 25
percent of the Manhattan Valley communi-
ty would qualify.
Wylde said she is looking into the
availability of deeper federal subsidy as well
as state subsidy to bring down the costs.
Other Partnership Progress
Meanwhile, in the July UDAG funding
cycle, most of the $1.4 million grant -
$945,000 - will be spent for underwriting
the construction of 90 ranch houses in the
Charlotte Gardens development under the
direction of the South Bronx Development
Organization.
The other units to be funded are as
follows : in the Bronx, the sec-
tion, 20 units, and Tiffany-Fox, two units;
Brooklyn, Ft. Green, 16 units; Queens, East
Elmhurst, four units.
According to a city housing official, the
units funded at this time are only for firm
buyer commitments. In all the areas fund-
ed in this cycle, more units are expected to
be built.
Commenting on problems with the land Also, in addition to submitting the
disposition vote on June 21 and subsequent Douglass Circle package in its next UDAG
misunderstandings, R i na Garst, who heads proposal sometime in mid-September, if it
Board #7's housing committee, said that she is approved by the Board of Estimate, the
and other board members had been disillus- Partnership is hoping to introduce two ad-
ioned because an agreement that had been ditional Bronx sites - one in the South
worked out mutually between both boards Bronx Beck Street area for 150 units and
#7 and 10 had been dropped. another in Soundview section for 64 units
Under this understanding, lower purchase - and two more in Harlem. One is for 110
prices and resale restrictions as well as a units on an old Section 235 site near Striver's
substantial contribution - a minimum of Row in the historic St. Nicholas Park area.
three percent of the total development fund The other is for up to 500 units in Harlem
- would be used to improve the local sub- in the area running from 100 to 122nd Streets
way stop and to commission a statue of and bounded by First and Fifth Avenues. 0
Cumberland Hospital to Close
Fa
. GREEN RESIDENTS in Brooklyn
are pushing forward to save outpatient
24-hour health-care services at Cumberland
Hospital. Even though the city's Health and
Hospitals Corporation is on notice to clean
up its act at its vastly over-budgeted $320
million Woodhull Hospital , it is still attemp-
ting to close Cumberland without formal
permission from the state.
First scheduled to close in March,
Cumberland has remained open indefinite-
ly because of a devastating report issued in
April by the State Health Department
regarding the unsanitary and irregular
health conditions at the then five-month-old
Woodhull Hospital. In mid-July, however,
the hospital population was rumored to be
less than 50.
After the issuance of the report, August
30 had been mentioned as a closing date for
Cumberland, since it is a very heavily used
hospital in an area where very few other
health-care options exist.
Also, although Woodhull is expected to
provide some 640 hospital beds when it
reaches full capacity, it still is only providing
146. According to Phil Petrie, at the Health
and Hospitals Corporation, Woodhull ex-
pects to open up 250 more beds with the
closing of Cumberland.
The neighborhood community board for
Cumberland appeared before the City
Council June 30 for public hearings. At that
time, community activists raised the issue
of community participation in the closing of
the facility. On June 'lJ, Alfred Thousand,
the chairman of the community board,
wrote to Health and Hospitals Commis-
sioner Stanley Brezenoff noting that the city
was not negotiating with the community in
good faith regarding the establishment of
adequate replacement health-care facility at
a Neighborhood Family Care Center on the
grounds at Cumberland Hospital .
Supported by its local elected officials, the
community for some time has been attemp-
ting to get a firm commitment from the city
for a full-care, 24-hour mini health-care
center to be housed in the separate, more
modern facility at Cumberland.
The city supports the idea of some form
of family care at an on-site center but is
pushing for a far more limited program in
one of the older buildings associated with
the original Cumberland Hospital plant.
The hospital plant was remodeled in the
1960s.
"I don't know why they won't consider the
newer building for the NFCC, except that
maybe they feel they can sell it more easily
than the older ones, but it would make more
sense to use it for a community facility," said
Joann Thompson, head of the Religious
Committee on the New York City Health
Crisis, a nonprofit technical assistance
organization that has been helping health ad-
vocates in Brooklyn in their struggle against
hospital closings and deteriorating neigh-
borhood services.
Health and Hospitals Corporation got
emergency permission from the state to
close the pediatrics and obstetrics services
at Cumberland at the end of June on the
grounds that the hospital was understaffed.
Cumberland's affiliation contract with
Brooklyn Hospital also ended June 30 with
no plans to extend or renew it, even with the
ambiguity surrounding the hospital's
closing.
Community critics have expressed dis-
may at the way in which the Cumberland
phase-in with Woodhull is being handled.
"You would have thought that they would
have learned from the Greenpoint ex-
perience, but they didn't," said Thompson,
adding, "This is being handled following the
same pattern. No consultation with the com-
munity, no staffing at the hospital, and
understaffing at Woodhull." Earlier this year
the city shut down north Brooklyn's Green-
point Hospital as Woodhull was opened.
In that neighborhood, plans are moving
forward with community input from a com-
munity task force ' for the opening of a
substantial family health-care center on
Manhattan Avenue and India Street. The
center is expected to open early in January,
1984.
In addition to the Manhattan Avenue site,
HHC is committed to a smaller clinic at
Maujer Street and another more substantial
"satellite" facility in the Bushwick area.
"I don't know whether any of these clinics
would have come into play if we hadn't
demonstrated. They really don't like bad
press," said Fran Sugarman, one ofthe task
force organizers at the People's Firehouse. 0
S.a
Energy Audits, Specifications and technical
aSSistance, Investigated contractors. Complete line
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BROOKLYN ENERGY COOPERATIVE 562 Atlantic Ave. (near 4th Ave.) 858-8803
'Late!

The Co-ops of Tenth Street
ww income tenant co-ops are still considered an experiment. Ten years since their
launching, this group offers an experience to draw on.
II tenant of the East Tenth Street Co-ops.
By John FaIk
T
EN YEARS AGO THIS PAST SPRING, THE FIRST
(to my knowledge) "moderately rehabilitated, low in-
come was officially christened at a ceremony held in
front of the building, 414 E. 10th Street on the Lower East
Side. A tree. donated by the Consumer-Farmer Foundation,
WdS planted to commemorate the occasion. The formal
ceremonies were followed by a noisy block party, ending a
thoroughly exhilarating day. Along with other members of
MFY Legal Services' Community Development Unit, I was
there to celebrate the culmination of many long hours spent
helping the tenants of 414 E. 10th.
Tenth Street. between Avenues C & D.underwent rapid
change in the years following the grand opening of 414 E.
10th: tenants established 3 more co-ops at 416, 404 and 408
E. 10th. A city housing official was bold enough to predict
future progress in the neighborhood which would result
from the "ripple effect,"
Those of us who knew how hard it was to nurse these
projects from start to finish realized the tidal wave was a
long way off. It took six years for MFY's Community
Development Unit to complete eight tenant-sponsored co-
ops on the Lower East Side. From organization to comple-
tion each project took between 12 and 18 months. During
these years other projects fell by the wayside; two had
received mortgage loan commitments before disintegrating.
But the momentum that grew on 10th Street was
exceptional.
It seemed like the tenants on this block were a particular-
ly hardy bunch - their endurance was amazing considering
that they had to share bathrooms and kitchens as one new
plumbing line after another was replaced during construc-
tion. Tenth Street was our "model block: and it could not
have been accomplished without Gus Permuy, a resident of
414 E. 10th before it was co-oped and the co-op's president
today. During the 1970s Gus was also the indispensable te-
nant organizer in MFY's Community Development Unit.
When I called this March to ask if I could meet some
cooperators and see the buildings again, Gus happy to
arrange a tour. After leaving Legal Services in 1979, I had
resolved several times to make a return visit; a phone call
from Bruce Gould's office earlier in March provided the
necessary push. Bruce is now Executive Director of HPD's
(Department of Housing Preservation and Development) Of-
fice of Program Management and Analysis. He wanted to
set up a meeting between me and a professor of Urban
Studies at Queens College who had been hired to do a
study of low income co-ops formed in the early 1970's. A
major goal of the study was to evaluate how these co-ops
were doing ... was the city's municipal loan money (which
had been diverted from private landlords to non-profit
organizations) well spent? . What did the experience of ear-
ly co-ops indicate ' about future policy directions?
As I contemplated having to address these weighty ques-
tions, I remembered with some amusement that the housing
program now being scrutinized didn't have an official status
until a year or so after it was born in then-City
Development Director Bob Schur's office at 2 Lafayette
Street. I found the confusion of these early days mirrored in
an MFY Community Development Unit report, dated
December, 1971:
"The municipal loan applications for the 'United
Tenants of 311-317 East Third Street' and tenants of 414 E.
10th St. ran into considerable difficulty due to fiscal con-
straints and new policy guidelines issued by the recently in-
stalled Commissioner of Rehab Finance. A high level meeting
with representatives from the Office of Special Im-
provements; the Office of Rehab Finance and the Office of
Housing Sponsorship all in attendance resulted in their pro-
mise to rationalize loan procedures in the future."
Eventually, the program,with an enlarged staff, including
"project managers," was moved to 100 Gold Street. The pla-
que on the door read "Office of Cooperative Conversion." I
would estimate that it took several years before city
guidelines on how to sponsor and develop low income co-ops
became reasonably settled. But most broad policy issues were
decided in the first year or two.
Hopes for Tenant Management
From my perspective the key issue was financing. and by
1972,it was an accepted premise that enough money had to be
spent on rehabilitation to make low income co-ops viable.
This premise had the following underlying assumptions:
tenants would not invest in a co-op unless they saw a
dramatic improvement in their physical environment; the
"moderate" rehab, at a minimum, had to replace or upgrade
decayed major systems - plumbing, wiring and heating; the
rent roll after rehab and co-op conversions could be restruc-
tured without subsidies (other than tax abatement) to cover
debt service and maintenance; and higher rents would be ac-
cepted as fair by grateful and newly committed cooperators.
A major issue that was not settled at the beginning of the
program was how to manage low income co-ops. Gradually.
"tenant" or "self-management" became an accepted, even
preferred, management plan.
If Bob Schur's critics thought spending city money on "old
law" tenements was an outrage, they were even more
outspoken about tenant management : this idea. they insisted,
was plainly nuts. MFY's Community Development Unit ad-
CITY LIMITS/August-September. 1983 18
Gus Permu)' in his 10th Strut apartmelll.
vocated tenant management more out of necessity than con-
viction. There was simply no alternative to self-management
on the Lower East Side. The only "professional" management
companies which had offices within shooting distance would
not touch our projects - the co-ops were too small, therefore
uneconomic, and they promised too much trouble.
When I met Gus Permuy at the storefront bodega in 408
East 10th Street I was wondering what I might discover about
the city's two policy directions: had moderate rehab made a
difference? Was tenant management successful? In the limited
time I had for Gus's guided tour, I decided to focus on the
presence or absence of "stability." The buildings' outward con-
dition would provide some superficial evidence; signs of the
cooperators' satisfaction would be more telling. As we started
on the tour, I noticed that the tree planted ten years ago was
still there. alive and well. by Gus's account. Gus wanted to
start on a high note. so he took me first to 404 East 10th for a
visit with Wanda and Rosendo Matos.
Wanda. the president of 404 E. 10th for the past 51!2 years.
told me that her building's eleven apartments were occupied
by four "original " tenant-cooperators. and that threc others
had been there Illore than f()ur years. Wanda and R o ~ e n d o
have been in their apartment seven years. Rosendo. who is
the super for both 404 and 414 E. 10th. had donc a beautiful
job of painting the wall moldings a handsome shade of blue.
c-Ontrasting with immaculatc white walls.
Rosendo indicated that thc rehab was holding up well.
Therc had bcen no major problems but. not unexpectedly. the
reconditioned boiler had required some repair work. For-
tunately. Gus and Rosendo had found a reliable boiler ser-
vice. Overall, the big difference was that serious, perennial
problems with plumbing, wiring and the roof had been
eliminated by the rehab. .}
Wanda described the way the co-op was run. There was not
a lot of democratic participation. Essentially, she and Frances
Goodman, the treasurer, had been entrusted years ago with
operating the building; she could not recall having a member-
ship meeting in the past two years. The cooperators let them
handle tenant selection - the key, according to Wanda, was
keeping drugs out of the building,including the "quiet" (no
music) social club which rented the storefront for $300 a
month. Children were not a problem: six families with a total
of four pre-teens and seven teenagers coexisted peacefully
with the others.
Over the years there had been only occasional, minor rent
arrears. Two cooperators needed Section 8 rent assistance
and, after a long wait, got it with a lot of help from manage-
ment. Until their subsidies came through, rent arrears were
treated as technical and absorbed. At one point Mrs. Good-
man felt that the building's finances were solid enough to of-
fer 416 E. 10th Street a loan for fire insurance.
The history of 414 E . . 10th was in many ways similar. Gus
Permuy accepted most of the responsibility for managing his
building since its christening 10 years ago; he handles the job
easily now during his off-work hours. His magic is the wide
respect he has earned in the neighborhood.
Like Wanda Matos, Gus runs a tight ship: no drugs in the
building; the front door is locked at 4 P.M.; maintenance is
taken seriously. Currently, none of the 28 units at 414 E. 10th
are vacant; new cooperators are selected from a long waiting
list by Gus and three other board members. Recently the
board met to resolve an"'airmaiI"garbage problem. For months
preceding this issue, no action was required and no meetings
were called. As at 404 E. 10th, a consensus supports the
board, without much ongoing democratic input. This is not
surprising considering that 10 of the 28 units are occupied by
original cooperators.
fortunately, the rehab has held up, although considerably
less apartment redesign was done compared with 404 E.
10th, where bathtubs had to be removed from the hallways
and 11 new units replaced of the original 22. Statistics kept by
MFY's Community Development Unit indicate that $161,420
was spent on "brick and mot:tar" at 414 E. 10th, averaging out
to $5,765 per unit . The brick and mortar total at 404 E. 10th
was $107,000, averaging $9,700 per unit.
Making the Numbers Work
80th projects were within the cost guidelines of the co-op
conversion program. These guidelines provided a $2,000 per
unit maximum for acquisition, and a flexible standard for
rehab costs. For example, the average brick and mortar costs
of the eight projects assisted by MFY ranged from a low of
$3,800 per unit to a high of $9,800 per unit.
Projected "restructured" rents really determined the size of
the loan. In the early 1970s, we figured that between $30 and
$40 per room could be afforded by the future cooperators,
many of whom we knew well because they were the tenants-
in-possession throughout organization, development, con-
struction and co-op conversion. Most of them had low paying
jobs with incomes between $5,000 and $7,000; some were on
public assistance. Working "backwards", using 25 percent of
income and the maximum rent allowances of the Department
of Social Services as guideposts, we calculated the size of an
"affordable" loan. Needless to say we often were under
pressure to pare the "scope of work" down to the minimum;
only one of our eight projects provided some breathing room
due to a significant amount of commercial income from
storefront businesses.
To justify "economic feasibility", which had to be approved
by HPD's Municipal Loan Committee before a loan commit-
ment was issued, we projected maintenance and operating ex-
penses as low as possible. There was little leeway for cost
overruns or the impact of inflation,and most of our projects
had to fuce both of these problems almost as soon as their
completion. Yet cost overruns were endemic to the program
due to the complexities of the City's financial condition in the
early 1970s.
The important point was that construction delays, which in-
variably resulted from slow HPD processing of requisitions
for partial payment, caused more interest to accumulate on
the construction loan than had been anticipated. This interest
expense overrun 'started most of our projects in the hole
since the program did not provide for refinancing the con-
struction loan which simply became the permanent mortgage.
Another pecularity of this type of financing bedevilled the co-
ops a few years down the road: the mortgage interest rate was
pegged to the City's short-term borrowing costs, not unlike
today's "variable rate" mortgages, so as the City's borrowing
costs increased, the co-ops found their mortgage bills creep-
ing up. A couple of the early loans which started out at 4 per-
cent are now approximately 8th percent.
Management at 404 and 414 E. 10th Street met these pro-
blems, and the crushing experience of oil price escalation, in
a responsible way. Expenditures were prioritized as cash flow
was mandated and rents were increased. Today the rent for a
4V2 room apartment at 404 E. 10th is $219 compared with a
start-up rent of $171 for this size unit. At 414 E. 10th, a
similar apartment now rents for $200 compared with $137 in
1973.
Income received from the purchase price of co-op member-
ship has never been a fuctor in the overall financial viability
of these buildings. There is no "profit tax" received from the
co-op on the turnover of an apartment, nor is there "profit" to
the outgoing cooperator, because the co-ops were established
under the Not-for-Profit Corporation Law to keep apartments
affordable by poor people. The average purchase price of an
apartment at 414 E. 10th was $406 when the co-op was form-
ed and remains the same today.
A Rockier Road for Two Co-ops
Based on conversations I had with officials in HPD's office
of audit and finance, the co-ops' weakened financial condition
is viewed as primarily the result of tenant managment that
"hasn't been tough enough." Gus Permuy and Francess Good-
man have a different point of view. From my perspective,
faulting tenant management is a gross oversimplification of a
complicated set of circumstances.
... ..

A superficial investigation of the by
416 and 408 E. 10th Street might conclude that tenant
management was the prime culprit. The. 90iop at 416 E. 10th
"" bocn ""ky from the """ - it ha.<=ed much
more turnover in its leadership and te : . - ,' : , neither 404 or
414 E. 10th. Only two of the "original ' " a
hopeful sign is that 16 of the 30 units a' by
cooperators who have been in the building at least four years.
Ironically, having to fight the city for title to the building
may have finally brought the cooperators together. 416 E.IOth
went to the brink before it was released from In Rem tax
foreclosure in July, 1981, by the Department of General
Services.
The story went something like this: a now-depiirted tenant
manager, mistakenly believing that their tax abatement
also exempted the co-op from water and sewer taxes, threw
out these bills as they came in. Over the years the bills ac-
cumulated and triggered tax foreclosure. After foreclosure
was commenced, months passed before a persistent group of
cooperators worked out a release agreement with the City.
HPD officials did not intercede at the iiiiie the release
agreement was concluded and J51 benefits were not restored.
The odd practical result of two city working at
cross-purposes is that 416 E. 10th estate taxes it
should not be paying and, to afford
mortgage payments.
During the battle over In Rem the lity suffered:
the board elected to reduce the price of co-op membership,
and although there are currently no vacant units, rent arrears
have continued to be a problem with ab,g,\I ' of the
tenancy. 'J :
The experience of the co-op at 408 ; . ' treet -
altttough difficult to unravel - was, sadly, Similar to 416 E.
10th without the hopeful turnaround. 408 E. 10th has been
managed by the City since June 1981 after going In Rem.
Rent collection by the HPD manager is ' al; Con Ed
has turned off the electricity in some
,squatters have taken up residence.
It seems that everything that could gone wrong, did go
wrong. Blame can be parcelled out liberally. Technical
backup, which might have staved off was not
available after MFY's Community Unit was
disbanded in 1979, a casualty of budget and a
reordering of priorities. MFY assigned a law student intern to
help in 1981 but it was too late to prevent the City'S takeover.
In an August, 1981, memo to the tenants of 408, the intern
put the blame for In Rem on HPD. His memo states that if
the City hadn't lost the co-op's J51 application, no taxes
would have been due until 1994.
MFY never received permission to file a new retroactive
J51 application on the co-op's behalf. Perhaps, HPD didn't go
to bat for the tenants because the buildin$ already had large
arrears.
For their part, the tenants never managed to organize a,
group to pressure the officials at HPD of
General Services and make their demai1QlM.gWn. The con-
cern that energized 416 E. 10th at the cruCial moment was
missing at 408. .)
East Tenth Street tenants.
Tenant management sputtered at 416 and failed at 408 but it
would not be difficult to find fault with each of the three
crucial "support systems" - tenant leadership, communi,y
technical assistance, and HPD supervision-all of which'were
needed to bring low income co-ops into being.
When all three support systems failed, 408 E. 10th went
under. An obvious point about the problems of 408 and 416
E. 10th, which the tenant managers of 404 and 414 seem to
understand, is that cooperators can't rely on anyone else to
get them through administrative obstacles; and they are likely
to face such obstacles because the program which brought
them into existence was complicated.
co-op CONFLICTS
An interesting and, I believe, related postscript to the story
of 10th Street appears in a memo dated March, IfJn, from
Nancy LeBlanc, then head of the Agency, to the staff ofMFY
Legal Services on the subject "Co-ops and MFY
Representation":
The issue has again been raised whether MFY as an
agency can possibly represent building co-ops and other
organized tenant groups at the same time it represents
tenants. I believe that it can and that it should. There
are, however, very real potential conflict of interest situa-
tions and there are also, I concede, philosophical
problems.
Conflict is inherent in the nature of a co-op. An attorney who
represents a co-op corporation faces a conflict of interest if
a co-op member requests legal assistance in matter adverses to
the co-op. MFY resolved this potential conflict by referring
co-op tenants faced with eviction, for example, to another
agency for representation. While MFY avoided conflict in this
manner, many people in the agency were uncomfortable with
this solution and were philosophically opposed to blurring
MFY's image as a strong advocate of tenants' rights.
For a cooperator, conflict is unavoidable because there is
no responsible way of wearing only one hat. Co-ops that pay
for outside management can at least put the execution of con-
flict resolution in someone else's hands.OJ.F.
- -
Thus the schizophrenic story of the Tenth Street co-ops ten
years later, offers no easy answers to the questions raised
earlier. Did moderate rehab make a difference? Unques- .
tionably it did for the co-ops at 404 and 414 E. 10th,but
statistics show little correlation between the amount of money
spent on brick and mortar ($9,000 on an average unit at 408
E. 10th and $7,000 at 416 E. 10th) and the degree of tenant
satisfaction and stability. Has tenant management been suc-
cessful? It seems to me, HPD audit and finance notwithstan-
ding, that tenant management is the greatest strength of 404
and 414 E. 10th Street. At the same time, it may well have
been the greatest weakness of 408 E. 10th, which no longer
survives as a
Something of a mystery remains after my visit to Tenth
Street this spring. My guess is that some answers to this
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mystery lie within the fragile concept of a cooperative, in
which a resident' tenant nor landlord, but some
measure of individuals, the challenge of this
unfamiliar path to leadership, new skills and
an enhanced others, it is an unwanted respon-
sibility and a trap,
In the ten years since we partied in celebration of 414's
launching, landlord arson and tax foreclosure
ravaged many of the' Sarrounding blocks. Tenth Street, bet-
ween Avenues C & D, however, has largely held on. It would
not have fared as well without its low income co-ops, and the
tenants who have struggled to sustain them.O
John Falk is an attorney in private practice. He was formerly
head of MFY Legal Service's Community Deve/cpmenJ Unit.
21
REqUEST FOR PROPOSALS
The Homeless Housing and Assistance Program,
established under Chapter 61 of the Laws of 1983, provides
state fi for the construction or rehabilita-
tion of homeless and to provide services
related An appropriation of $12.3 million
is being the NYS Department of Social Ser-
vices for ID!!; 'P..!;1lP!:>se.
The State of Social Services will enter into
contracts with not-for-profit corporations, charitable
organizations qr municipalities to develop and operate
Projects which are primarily intended
to serve homelessness is chronic or likely
to services to improve family, social,
mental or physical functioning, are not provided.
The range of projects that will be considered include
emergency shelters, transitional shelters, supported and in-
dependent housing, and licensed facilities.
for capital development expenditures
and may funding for essential non-housing
services Projects must be able to detail con-
tinuing finandatfeasibility and must be able to operate for
a minimum 9f seven years.
to projects which have community
specific community needs, propose
housing for the homeless, leverage
..:JVemmental funding or financing with the
state funds, innovative models for the provision of
appropriate supportive services, and are ready for early
implementation.
Copies of the. Request for Proposals and applications will
be available, :beginning July 22, 1983, by contacting:
Nancy Travers, Division of Adult Services
NYS Department of Social Services
Two \\brld Trade Center, Room 2986
New York, NY 10047
Telephone: (212) 488-2952
be received by September 2, 1983.
,," .
'. '\
S/AIUQust-lSeotember 1983
Neighborhood Initiatives
What Hath Reagan Wrought?
By Rick Cohen
A
CENTRAL TENET of the Reagan Administration's
philosophy has been that the hand of Washington suppresses
local creativity and grassroots volunteerism. Slashing the federal
budget and terminating governmental programs would unleash
a groundsweU of neighborhood-level initiatives to solve the ur-
ban social problems that government had not.
With two years of experience, has the Reagan theory succeed-
ed? A survey of more than eighty neighborhood development
organizations across the country suggests that the federal budget
cuts have been counterproductive even in the Reagan Administra-
tion's own terms. Rather than devising c r e ~ i v e new initiatives,
neighborhood development organizations have become preoc-
cupied with organizational survival- and reducing services and
programs for lower income urban residents along the way. This
is what the survey discovered about urban neighborhood develop-
ment groups in the aftermath of a fiscal policy of federal cutbacks.
22
Funding Neighborhood Development: Most neighborhood
development groups rely extensively on government resources,
even after the extensive budget cuts which started in 1981. Less
than a quarter of the nonprofit development groups surveyed
received membership dues from neighborhood residents, and less
than half received any sort of contributions from individuals. None
boasted income from selling shares of stock, the highly touted
funding mechanism for Community Development Corporations
in the 1960s. Neighborhood development groups remain as depen-
dent as ever on federal, state, and local government funding.
Lost Resources: The major cut felt by a majority of the groups
was CETA, the job training program scuttled by the Reagan Ad-
ministration after charges of waste, corruption, and inefficiency.
For development organizations, the elimination of CETA wipes
out the bulk of their staffing, frequently the funds used for hous-
ing construction and weatherization crews, building maintenance
staff, office personnel , and community organizers. A significant
number of groups reported losing other governmental resources,
including Neighborhood Self-Help Development grants, Law En-
forcement Assistance Administration community anti-crime
grants, HUD housing rehabilitation loans (Section 312), Economic
Development Administration grants, and Section 8 rehabilitation
and new construction rental subsidies. Many groups noted that
they were currently spending funds from governmental programs
slated for eventual termination, or using Section 8 subsidies still
in the "pipeline" - the remnants of assistance already allocated
prior to Reagan rescissions and retrenchment.
Programs Curtailed: While almost half of the groups were able
to maintain their current program repertoires relatively intact, the
others reported a range of cutbacks, particularly in human ser-
vice delivery, job training, and neighborhood planning and
organizing. The neighborhood effects of the budget cuts have hit
"soft" services first, with bricks and mortar program terminations
catching up as the Section 8 rehab and new construction pipeline
dries up.
Retrenchment Strategies: What have neighborhood groups
decided to do to recover from current cuts and hedge against future
rescissions? Topping their lists were plans to return to grassroots
fundraising- doorknocking, bake sales, raffies, carnivals, etc.-
the schemes they used years ago to get off the ground, now view-
ed as replacements for six-figure governmental grants. Other
hedges included engaging in real estate management as a com-
mercial venture, investing in real estate development with income
streams from syndication of tax shelters, and creating for-profit
businesses at the neighborhood level.
New Initiatives: Those groups able to establish new programs
during the past two years of cutbacks reflected the priority of
retrenchment thinking. Major areas of new initiatives were tax
syndicated developments of rental property, development of for-
sale homes and condominiums, and neighborhood commercial
revitalization. The thrusts of both the organizations' retrenchment
plans and their actual new initiatives matched a frequent charge
levelled against the Reagan Administration: the cuts are not only
shifting resources away from lower income groups but also chang-
ing the focus of neighborhood nonprofits to service a higher in-
come clientele.
Economic Development: Pressed into economic development
instead of human services and housing development by the Reagan
Administration, neighborhood groups have given it strange in-
flections. For most organizations, it has meant neighborhood com-
mercial revitalization. Some groups in this survey boasted spon-
sorship of commercial malls which are displacing local merchants
with national chains. Moreover, each of the neighborhood malls
sponsored by the groups depended on extensive federal subsidies
- Community Development Block Grants, Urban Development
Action Grants (UDAG), Economic Development Administration,
and others - to hold together their shaky multiple private sector
partners. In each case, the neighborhood group was strongly back-
ed by a "development intermediary" with as strong an influence
over the content of the group's venture as any previous federal
bureaucracy. The Ford Foundation's l.ocallnitiatives Support Cor-
poration (LISC) was frequently such a necessary background
partner.
Profit-Making: The distinguishing characteristic of LISC's
assistance is to spur groups to generate income and profits from
neighborhood programs. This national survey found the nonprofit
to for-profit transition of neighborhood groups taking hold very
slowly. The few groups which could report income-generating
activities basically relied on fees and profits from property
management , rents, and housing development rather than the
establishment of new commercial business ventures. Most actually
reported potential profits from newsletter advertisements, raffles,
monte carlo nights, thrift shops, commemorative plates, and
neighborhood tours - marginal activities a far cry from the in-
come streams LISC and the Reagan Administration imagined
these groups capable of creating. Relatively few neighborhood
groups - less than one out of five - have established for-profit
subsidiary corporations to handle profit-making activities.
rT'ublic/Private Partnerships: Like his predecessor, President
Reagan has asked the private sector to take up the slack caused
by government cutbacks, partly by entering into partnerships with
neighborhood organizations to carry out specific development
projects. Despite a few highly publicized examples, most
neighborhood development organizations are far from ready to
enter partnerships with private sector developers where both share
resources and risks. Almost half the groups surveyed had no part-
nerships with the private sector to report. Only one fourth of the
more than 80 groups reported joint venture" partnerships, the rest
citing service contracts and bank loans as evidence of
public/private partnerships. When asked to identify their role in
partnerships, groups most frequently cited their access to govern-
ment loans and grants, a bargaining chip likely to decrease in value
as additional federal budget cuts take effect.

Once past the hoopla of federally publicized success stories,
the real performance of the neighborhood-level voluntary sector,
represented by neighborhood development organizations, reflects
the searing impacts of across-the-board federal budget cuts. Most
organizations are in holding patterns, trying to wait out a hostile
budgetary environment and, in the meantime, scramble for foun-
dation grants and corporate contributions to survive as organiza-
tions. There is really no evidence that neighborhood development
organizations are flourishing since the removal of the heavy hand
of the federal bureaucracy.
Rather, most groups, despite their entrepreneurial individualism
in difficult neighborhood environments, decry the effects of the
budget cuts. As one of the most successful development groups
in the country described its current circumstances, "If we are able
to survive ... by necessity the bottom line will become the only
ruling force in making development decisions ... This will mean
that the real needs and concerns of the neighborhood and its
residents will be pushed aside." Clearly this national survey of
neighborhood development groups suggests that stimulating
neighborhood-level voluntary activity is inversely related to cut-
ting back federal governmental assistance for urban areas. 0
Rick Cohen is a planner in Jersey City. The survey of the impact
offederal budget cuts on neighborhood groups - which was a-
pected to reveal the flourishing movement of development groups
into apanded private entrepreneurial and public service roles -
was commissioned andfinanced by the U.S. Department ofHous-
ing and Urban Development.
New York's Neighborhood Groups
Half of the neighborhood organizations in the survey were
from New York State. Nearly all receive state government
assistance (92.9 percent) compared to only 35.7 percent of non-
New York development groups, but a higher proportion of the
latter receive CDBG assistance (71.4 percent compared to on-
ly 54.8 percent of New York groups) . Only 12 New York
organizations utilized Section 8 rehab and new construction
subsidies (28.6 percent) compared to 18 non-New York ones
(39.9 percent) .
Out of state groups do significantly better than New York
groups in tapping private sector funding sources:
23
New York State groups did a bit better primarily in corporate
and bank contributions and in membership dues. The result
is still one of greater dependence by New York State organiza-
tions on government resources.
New York City's neighborhood development groups average
full-time staffs of 14 persons compared to only seven persons
per group nationwide, and only a little over five per group in
upstate New York. Nearly 40 percent of the New York City
organizations reported annual budgets greater than $500,000
compared to only 11 percent of the upstate groups and 25 per-
cent of all organizations in_the survey.
Both the New York City and the upstate organizations seem
better prepared for partnerships or joint ventures with the
private sector. More than 22 percent of upstate groups and 24
percent of New York City groups have established for-profit
subsidiaries compared to only 16.9 percent of all g r o u ~ s na-
tionally.DR.C.
Ways for
TeIl8llIs 10
IDflaeDce
Behab
LoiUIS
Tenants of 555 Ocean Avenue demonstrate outside management offices of owner Ulwrence &uJ/c.
W
HEN THE TENANTS of 486
Brooklyn Avenue, a six-story
building with 108 apartments near the cor-
ner of Lefferts Avenue in the Crown Heights
section of Brooklyn, first learned that their
building's new owners planned a renovation
using government subsidies, they im-
mediately sought to learn more. A delega-
tion went to look at other local buildings the
owners and developers Nathan and Milton
Eiges had completed.
"We were shocked," recalled Bessie
Steinberg, a IS-year resident and secretary
of the tenants association. "We saw shoddy
materials, poor workmanship, new windows
without caulking, removal of better sinks
and cupboards and their replacement with
inferior quality items. Not to mention the
utter disregard for the tenants' possessions.
We didn't want this happening to us."
They asked the city housing department
for details. The city was considering the
Eiges brother's application for a participa-
tion loan which would use a one percent
government loan to reduce the cost of a
market rate bank loan. The loan would pro-
vide funds for renovation as well as to
refinance the building's existing debt .
But, reported Steinberg, "We could get
nothing from the city. Nothing." When the
owners, along with representatives from a
bank and the city came for a meeting with
the tenants, the loan was rejected by a vote
among the residents. "The landlord still
wanted us to reconsider," said Steinberg,
"and asked for a paper ballot We agreed."
But again, the vast majority voted against the
loan under the terms being offered. "They
wanted us to take another vote," said
Steinberg, "but we refused. The tenants, we
said, had expressed themselves."
But,like many of the tenants in buildings
where owners have sought government sub-
sidized renovations, the residents of 486
Brooklyn Avenue found themselves in a
quandary. On the one hand they recogniz-
ed that their building needed repairs. But
they also felt the cost of the loan - both in
the resulting rent hikes that would hit all
tenants as well as in potential disruption of
their homes - wasn't worth it.
After the initial vote, tenant association
co-chairs Francine Rivers and Barbara
Beldo wrote to the city's participation loan
unit: "We want it clearly understood that the
tenants did not reject renovation of the
building. The tenants want renovations of
basic services that are essential to make our
building habitable."
What they urged their landlords to do in-
stead was to apply for a smaller loan - an
Article SA which allows a maximum of
$5,000 per unit of repairs as opposed to the
$11,000 average of a participation loan.
Although that application has been made,
it is still pending. But in the meantime,
tenants have been successful in getting
repairs from the landlords who are betting
on an oral pledge from the city that their SA
application will be approved. They have in-
stalled new mailboxes and a new boiler and
burner.
"If you fight," says Bessie Steinberg
proudly, "you get what you fight for."
Putting Repairs On Hold
The dilemma facing the 486 Brooklyn
Avenue tenants is shared in many of the oc-
cupied buildings which enter the pipeline for
participation loans. For some, the dilemma
is sharpened by the limbo which many enter
as the owner awaits word on the loan ap-
plication. Requests for repairs are rebuff-
ed, with the response that they will be made
when the loan is approved.
That attitude might be expected to pro-
duce an eagerness on the tenants' part to get
the rehab okayed and underway. But it is
more likely to instill a belief that even if the
loan is approved, management won't be any
more cooperative.
Brent Sharman, an organizer- willi- the-
Flatbush Development Corporation in
Brooklyn, is currently working with tenants
of two Flatbush buildings caught in that
bind: both have rehab loans pending, fast
growing lists of much-needed repairs, but
both want the owners to start meeting basic
needs right away.
One of these, 131-141 East 21st Street, has
been in landlord/tenant court with the
owner, Morris Gross, for over two years.
Complaints have focused on heat and hot
water, security and general deterioration of
the spacious art deco buildings just off
Church Avenue. At a tenant rally held in the
large courtyard last May, residents describ-
ed their continuing problems obtaining
services.
"I moved here for the safety," said 65-year-
old J.Y. McKay, a former building
superintendent. "I pay $250 a month rent
and I'm on a fixed income. 1 don't like to
complain, but rve told him about the repairs
for a year now and he hasn't done anything.
So 1 don't think he's going to."
A few blocks away, at 555 Ocean Avenue,
tenants are engaged in a similar campaign.
They too have been told that the answer to
their needs lies in the city's approval of the
loan application by developer Stanley
Riefer. Riefer's go-ahead would trigger the
sale of the building by the current owner,
Lawrence Rezak. Rem, say Sharman and
the tenants, let violations on the building
reach 220 by May of this year.
When tenants brought an action in hous-
ing court this July, the landlord's attorney
responded by waving a copy of the loan ap-
plication. "Your honor," he told the judge,
"there's a rehab right around the comer for
this building. We don't see why we should
be compelled to make these repairs now."
Even more disturbing to tenants of the
buildings is that both are in the top ten of
those with suspicious or incendiary fires in
the North Flatbush area, according to Mary
Breen of the Flatbush Development Arson
Prevention Project . Together, 131-141 East
21st Street has suffered 15 fires since July,
1980, three of which were suspicious or in-
cendiary and most of the others of unknown
origin. 555 Ocean Avenue had ten fires dur-
ing the same period, three of which were
suspicious or incendiary. Lack of
maintenance, say the Flatbush organizers,
is a sure invitation to arson.
A Tenant's BiU of Rigbts?
Working along with the tenants and other
city organizations, Sharman has come up
with a kind of bill of rights for tenants who
live in buildings that are slated for loans. The
thrust of the recommendations is to open up
the process so that tenants can know how the
loan will affect them, as well as to give them
greater impact on how the loan is shaped.
These are some of the points made:
Building management should improve
from the date of the application: HPD
should monitor the building and make clear
that no loan will be approved unless the
building is up to par.
The landlord's other buildings must
undergo improvements if they have multi-
ple violations and bad management records.
Displacement of tenants should be
monitored through lists prepared quarterly,
with an explanation for changes in tenancy.
Notice of the loan application and ac-
cess to information concerning the loan
should be made available to tenants and local
community groups.
One of the problems - compounded by
current federal policies - is the availabili-
ty (and adaptability) of federal Section 8 rent
subsidies for qualifying low income tenants.
Section 8 certificates,whir.h are supposed to
accompany every participation loan, are
becoming scarcer und don't go high enough
to cover many rents resulting from rehabs.
Nevertheless, HPD's program is predicated
on providing that r e n ~ protection. Sharman
and others, however, report increasing in-
stances where certificates no longer cover
the rent or are unavailable. They recom-
mend that:
Well before projected loan closings
tenants should receive a report on the
amount of restructured rents and which
tenants will be eligible for Section 8
assistance.
The recommendations also include a pro-
viso that those tenants who do not qualify
for Section 8 certificates, but still cannot af-
ford the rent increases required by the loan,
should not be displaced. Ways to do this
would include reducing the scope of work,
skewing the rentals so that some rents are
lower than others, or through a direct owner
subsidy using profits from the lucrative syn-
dication of the tax shelter.
Overall, as the city increasingly concen-
trates its Communiry Development funds on
participation loan ventures, it can be ex-
pected to get increasing scrutiny from tenant
and community organizations. The Associa-
tion of Neighborhood Housing Developers
recently began an examination of the loan
program with an eye towards making the
loans maximize their benefit for low and
moderatc income residents, according to
director Bonnie Brower.OT.R.
Free Insurance Appraisal
Richards and Fenniman, Inc., specialists in insuring tenant and community
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For a free insurance appraisal of your building and an evaluation of your current
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156 William Street, New York, New York 10038
25
Letters
Whose 'House Sense'?
To the Editor:
This past spring an impressive array of
persons in high places - other than the
educational establishment - expressed con-
cern about the imminent termination of the
"House Sense" Program for five- to 13-year-
olds in the New York City schools. Bruce
Gould, executive director of the Office of
Program and Management Analysis in the
Department of Housing Preservation and
Development , described the possible ter-
mination of the privately funded program as
a "crisis situation" and sought money from
foundations. Councilman Luis A. Olmedo,
chairman of the City Council's Youth Ser-
vices Committee, appealed to Mayor Koch
for budget funds because "it could save the
city millions." Jerome Belson, president of
Jerome Belson Associates, a real estate
management concern, said that funding the
program was "one of the most exciting
adventures we can undertake."
One must deduce that these people real-
ly believe the "House Sense" Program ad-
dresses itself to New York City's housing
problems; and that they really believe that
significant solutions to New York City's
housing problems lie in the education of
five- to 13-year-olds in "House Sense." If not ,
how else can one explain this orchestrated
effort to keep the program going?
In view of the publiCity given to the pro-
gram, it might be helpful to recall some
details about the course. The program, for
children ages five to 13, has sections design-
ed to alert children to the landlord's respon-
sibility to provide heat when the temperature
falls below 55 degrees, and to inform
children how to complain to city officials
about housing problems. Also, " ... most of
the 70 schools that volunteered to use the
program are in neighborhoods that have
already started deteriorating." (my em-
phasis) , according to a New York Times ar-
ticle last year. Furthermore, some com-
ments by Mayor Koch regarding "House
Sense" are noteworthy. Last December, at
a ceremony in Manhattan opening the pro-
gram, the mayor said, "New York City has
a very gross housi ng shortage ... We have to
make sure that the housing we have is main-
tained. The children can learn how to in-
struct their parents to be good tenants. If
they learn good habits, it makes sense that
the houses they live in will last longer."
(again, my emphasis)
Isn't that fantastic? New York City's little
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:,'.'
children, five to 13 year olds, are going to
attend to the housing stock problems! Where
do they live? Most of them live in
neighborhoods that have already started
deteriorating. The very children who live in
neglected, deteriorating buildings are being
asked to help solve the plight of neglected,
deteriorating buildings and neighborhoods!
If the city is so desperate that it must enlist
the aid of five- to 13-year-old children in
solving housing problems, an alternative
program should be started in high income
housing neighborhoods, where the children
oflandlords, city officials and other "good"
tenants are apt to reside. Some of the sec-
tions of this course would alert children to
the landlord's culpability in allowing hous-
ing to deteriorate and would inform children
of the responsibility of city officials to en-
force landlord compliance with housing
laws.
Mayor Koch's stated objective in the
course, "House Sense; is to have children
who live in low income neighborhoods
Which City Limits?
To the Editors :
teach their parents to be "good" tenants. The
objective in the new program would be to
have children who live in high income areas
teach their parents to be responsible
landlords and city officials. Then little
children in low income housing would not
need the "House Sense" program to learn
how to check up on landlords or how to
complain to city officials.
Messrs. Koch , Belson, Gould, and
Olmedo, please note: If landlords could
"learn" to maintain housing, and if city of-
ficials could "learn" to enforce housing laws
in low income neighborhoods, the city
would not have to ask children to take over
adult responsibilities.
Sylvia Orans
Manhattan
Sylvia Orans is a former Curriculum Con-
sultant for the New York State Education
Dept.
I used to read City Limits from cover to cover each month. Strange-
ly enough, when changes were made in format and paper stock back
in 1982, I found that I never got around to reading it anymore. Even-
tually, I let the subscription lapse.
Now I feel out of touch with what's going on and want to renew
the subscription. I hope that , if you haven't already, you'll consider
going back to the old style which was much more attractive and
readable.
Wendy Reitmeier
Brooklyn
-'--- ------- -

THE LAND PROJECT
S
INCE 1975 the Trust for Public Land has
been offering community organizations
assistance in obtaining and controlling real
property. Nationally, its projects have
ranged from large rural tracts to inner city
vacant lots. Its aim has been to facilitate both
the tax breaks sought by sellers and the
resources desired by recipients. The Trust's
northeast regional office, based in New York
City, has announced a new program that will
provide both assistance and training to
groups in the city interested in acquiring
buildings.
The group's Land Acquisition for
Neighborhood Development (LAND) pro-
gram, which has been funded under a grant
from the New York Community Trust and
the Fund forthe City of New York, will help
groups obtain properties at below market
value by soliciting donations or through
"bargain" sales by private landowners or cor-
porations looking for tax deductions.
The Trust's services are for community
nonprofits, and the buildings to be acquired
must be put to use in a way that benefits
neighborhoods residents. Buildings could
provide low and moderate income housing,
small business or industrial space, a non-
profit office or space for cultural events.
Assistance is provided on a contractual basis
with grants received by the Trust helping to
subsi dize work with the community
organization.
The Trust is currently working with the
Community Service Society's Ownership
Transfer Project, the Council of New York
Law Associates, the Vera Institute of Justice
and others. It is also providing consultation
to the Lower East Side Joint Planning Coun-
cil on city-owned properties in that
neighborhood. The Trust expects to take on
between three and five additional projects
and conduct three citywide training
workshops.
For information on LAND, contact
Steven Schwartz or Lisa Cashdan at (212)
563-5959.0
A Teen-Tenant Connection: In an attempt
to both acquaint tenants of a new West Side
Manhattan senior citizens' apartment pro-
ject with the neighborhood, and at the same
time give training to local teenage residents,
a program called the Teen-Tenant Connec-
tion is being operated this summer out of the
Goddard-Riverside Community Center.
Under the program, teens run a welcoming
committee, conduct neighborhood tours to
show transportation and stores, work on
joint garden projects and help put out a te-
nant newsletter. The project also offers a
series oflabor market skills workshops and
weekly film and theatre performance events.
For more information call 799-9400 or
0088.0
Need A PORTER
HANDYMAN

Highly motivated adults with many years of
experience, some with own tools, and
graduates of a training program concerned
with the needs of Housing Groups and
landlords who want responsible, competent
employees to look after their investments are
now ready to work.
Skills Area Taught
The Building Superintendent as a
Professionar.
Responsibilities to his employer, his role,
tenant relations
The Building Superintendent as a
Technician
Carpentry repairs, electrical repairs, plumbing
repairs
* Preventative maintenance of oil burners &
control systems
* Preparation for air pollution and #6 oil
burner permits.
27
This Course is:
* Approved by the NYC Department of
Housing Preservation and Development.
* Taught by instructors who are tradesmen
with extensive teaching experience.
* Administered under auspices of Bronx
Community College Office of Community
Services & Adult Education.
For further information on how you can
hire our graduates, call Mr. Carlos Ramirez
(212) 220-6353. Referrals will be
prescreened to meet your requirements. Our
placement service is free.
Voluntcuy Hospitals
Once Charitable IaslilDtiollS
By Susan Baldwin
By liS l'lIrly liS 1920. hospifll/S l1eeded 10 lIdl'ertise their COIII/I1U1lity benefit.
A ONCE CHARITABLE ENTERPRISE:
Hospitals and Health Care in Brooklyn and
New York, 1885-1915, by David Rosner,
published by Cambridge University Press,
234 pp., hardcover, $29.95.
A Once Charitable Enterprise is more
than a chronological history of the changes
in hospitals and health-care delivery in
Brooklyn and Manhattan during the Pro-
gressive Era. And it is not a history of
medicine - of medical advancements and
achievements through the use of science and
technology at the numerous health institu-
tions that took root in the two boroughs dur-
ing this period. Rather, it is an absorbing
study of the growth and transformation of
the hospital as a social institution, and, as
such, a reflection of the "tensions, problems,
and conflicts" that characterized the emerg-
ing, industrialized American city at the turn
of the century.
Using a social history approach, David
Rosner deals primarily with the changes in
access to health-care delivery in the private
or voluntary hospitals from 1885 to 1915.
Built by philanthropy and governed by a lay
board of trustees, the voluntary hospital
flourished in the United States but was prac-
tically unknown in Europe (with the excep-
tion of Great Britain) where the overwhelm-
ing majority of hospitals are maintained by
tax funds, be they state or local, or both.
Although New York did have a number
of publicly sponsored or municipal institu-
tions, like Bellevue Hospital in Manhattan
or Kings County Hospital in Brooklyn,
these public hospitals tended to be organ-
ized generally, Rosner notes, as adjuncts to
almshouses or prisons to serve those that
were deemed "unworthy" of the charitable
facilities.
Unlike our present day health institution,
the 19th century "charity" hospital was more
than a medical facility. Often it provided
"shelter, fOod, and care for those in need"
for little or no charge. Run like a church or
a home, it was deeply entrenched in pater-
nalism. Trustees interacted with patients,
helped them "improve" their moral char-
acter. But as the society became more indus-
trialized, and more and more people found
themselves unemployed and homeless, par-
ticularly following the Great Depression of
1890, many of these charitable facilities
found themselves hopelessly in debt. Some
of them, especially the larger ones, were
able to survive by attracting private, paying
patients and more benefactors, but many
more were forced to close.
Brooklyn's smaller hospitals, Rosner
reports, had fewer alternatives for handling
financial crises than those in Manhattan
where benefactors tended to be wealthier.
"When their supporters donated, they
donated substantial amounts," Rosner
writes. For instance, in addition to leaving
New York Hospital land in the "Bathgate"
section of the Bronx, Charles Bathgate Beck
gave $359,000 to the hospital between 1899
and 1907.
In contrast, Brooklyn Homeopathic
Hospital with only $70,000 in outstanding
debts almost went out of business in 1900.
At the last minute under pressure from
homeopathic physicians and lay persons, the
recently consolidated City of New York
(1898) took over the hospital, assumed the
debts, and reopened it as a municipal facility
in 1913. Renamed Cumberland Hospital, it
is again threatened with closing. (See page
16).
In the tradition of Lincoln Steffens's
Shame o/the Cities and Jacob Riis's How the
Other Half lives, David Rosner painstak-
ingly details the development of social class
distinctions in services in the voluntary
hospitals in New York and the growing bias
- primarily but not exclusively because of
economic expediency - against the poor.
His study also shows the effect of in-
dustrialization and commerical develop-
ment on Brooklyn hospitals and doctors -
early "suburbanization" of services and
abandonment of the poor. As the white-
collar middle class moved inward to Bed-
ford and Crown Heights, and north and
south of Eastern Parkway, the smaller health
institutions moved with them even though
the need to maintain adequate health care in
the newly industrialized, overcrowded older
areas was greater than ever. In Greenpoint,
for instance, the death rate was 50 or more
in 1,000, while in other parts of the city it
was as low as 16 in 1,000.
A Once Charitable Enterprise abounds in
colorful anecdotes that reinforce the human-
ness of this social history. We learn that a
cake sale at Mrs. Sidney Sternbuck's house
netted $69 for the hard-pressed Brooklyn
Maternity Hospital and that Mrs. Plummer's
"Familiar Talk on Egypt and Palestine"
brought in $80.
We also read that in 1910 a group of 30
physicians, about to be displaced from
downtown Brookl yn, protested to the Kings
County Medical Society. Seeking aid from
that agency, they charged that not only their
homes but also their livelihoods would be
destroyed by the planned demolition along
two blocks on Schennerhorn Street to make
way for a new courthouse and plaza. They
lost, and whatever passed for a bulldozer or
wrecking ball then prevailed - in the name
of progress and development.
Power politics were also at issue in the
hospital's development, especially with the
arrival of more and sophisticated physicians
on the facility's staff. One way hospitals
learned to survive was to attract doctors
who, in tum, encouraged their private,
wealthier patients to use these facilities. "As
the number of physicians affiliated with the
hospital rose," Rosner writes, "doctors did
begin to realize their potential for power in
hospital. [But] Generally they first attemp-
ted to exert their authority over trivial issues,
and quickly met finn opposition from the
trustees."
At Eastern District Hospital in Brooklyn,
for example, the trustees accepted the
resignation of three members of the medical
staff rather than acquiesce to their request
for the removal ' of fish ball soup from the
daily menu. This prompted the New York
Times to report in October, 1896, Rosner
notes, that the "status of fishball as an arti-
cle of diet suitable for hard working physi-
cians and surgeons is likely to be establish-
ed in Williamsburg."
Even real estate development and
speculation comes into play in the changing
hospital panorama during this era. They
become important issues in the battle over
land use in Morningside Heights on Man-
hattan's Upper West Side where landlords,
speculators, politicians, and the hospital -
in this case, New York Hospital - tangled
for more than a decade before the hospital
was forced to move its Bloomingdale Insane
Asylum off the land to Westchester in the
late 1880s and early 1890s.
But, according to Rosner's account, the
hospital's governors "relinquished the land
in ways which guaranteed that the neighbor-
hood would be maintained largely as a bas-
tion of middle- and upper-class respect-
ability within a city that was being inundated
by Catholic and Jewish working-class
groups."
Between 1889 and 1920, the hospital's
governors sold large tracts to Columbia
University and Barnard College. "Scattered
blocks and lots were sold to private devel-
opers with the proviso that only residences
for the wealthy would be built." Hence, the
hospital played an important role in shap-
ing the social make-up of this neighbor-
hood. The 35-acre tract between West IlOth
and 120th streets which had housed the
asylum would become a Protestant elite en-
clave and would serve as a barrier between
Harlem, which was then mostly Italian and
Jewish, and the other parts of the West Side,
which were mostly Irish Catholic,
Rosner delights in quoting from sources
of the time to illustrate that "politics as usual"
haven't changed much in nearly a century.
Referring to legislation pending in Albany
that would cut a public access street at 116th
Street through the property of the asylum,
now the heart of the Columbia campus,
Rosner writes: "Despite solid support from
Assemblyman [John] Connelly, the mayor,
and1leatfy all the major newspapers, this bill
met extraordinary opposition from the
powerful governors who lobbied among
upstate RepUblicans." Rosner alludes to
reporting in the Herald March 8, 1888,
acknowledging that the bill was still in the
Assembly's Committee of Cities, and". .. It
has slept there for five weeks under the
powerful soporific adminstered by Com-
modore Elbridge T. Gerry [the word "gerry-
mandering" derives from his family's name]
and the Board of Governors of that wealthy '
and money-making institutions for the
opulent insane."
The book concludes on a moral and some-
what wistful note: "It is paradoxical perhaps
that just as New York was emerging as a
working-class city, its charity and other
health institutions began to turn away from
the poor and to remodel their services
around the needs of the wealthier clients."
Drawing from inferences as well as facts
that pervade the text, Rosner asserts: "From
the perspective of Progressive Era America,
these changes in the health system were
necessary and good ... But from our present
perspective, the redirection was perhaps
tragic. The chance to develop a viable set
of free-standing ambulatory-care centers in
poorer neighborhoods disappeared. The op-
portunity to make social services an intrin-
sic and important part of health-care ser-
vices responsive to local communites was
lost.
"Indeed, the very class distinctions that
characterized relationships in the outside
society were brought into the hospital and
came to characterize distinctions in
services." 0
Commercial Conversions Threaten Tenants
T
HE TENANTS OF TWO buildings in
Manhattan's West Side Clinton section
fear that the illegal conversion of their rent-
stabilized middle income apartments into
commercial units will set the precedent for
a city wide trend among landlords. A de-
cision on the matter is pending in State
Supreme Court. Already, over the past four
years, the owners of these two buildings,
Park Towers Associates, have successfully
converted almost half of the 300 residential
units into office space for real estate finns,
film production agencies, and other
businesses. As commercials, the landlords
are able to charge "sky-rocket" rents since
the units are no longer protected under the
rent stabilization guidelines.
Since 1979, tenants in the buildings, 315
W. 57th St. and 330 W. 58th St., which are
connected by a joint lobby, claim that the
owners have harassed residents wishing to
renew their leases, pressuring them to either mercial units in December, 1979, the owners
move to higher floors, accept commercial contested the fines citing conflicting zoning
space, or move out. Residents also claim and rent regulations. According to the pre-
that the presence of commercial tenants has sent zoning law, landlords have the right to
overtaxed building services. convert apartments on the first floors into
Tenants say the landlords are violating the commercial units. At the same time, rent
buildings' Certificates of Occupancy which stabilization law says that existing residen-
require that commercial units only be al- tial units must be kept on the market, except
lowed on the first and second floors. Tenant for demolition.
leader Richard Solay told City Limits that Local Community Board #4 recently
neither the Conciliation and Appeals Board, passed a resolution to amend the zoning
the rent stabilization system's enforcement code to allow commercial units on the
agency, nor the Building's Department have ground floor only. That move must also be
done much to stop this illegal activity. passed by the city, however.
The C.A.B.'s deputy counsel, Nat Geller, Tenant leader Steve Dickennan believes
said his agency did not intervene when the that if the State Supreme Court should ap-
tenants initially complained about the situa- prove the Park Towers Associates's request
tion in 1979 because such a move was up to for commercial conversion, "it will be an
the Buildings Department. open invitation to every landlord in mixed-
Although the Buildings Department zone areas to replace residential homes with
issued over 40 summonses for illegal com- commercial units."ORachel Sanchez
NEIGHBORHOODS CHALLENGE BANK CLOSINGS
H
ow MANY commercial bank branch
offices will close their doors as
bankers look elsewhere for profits? While
Citibank, which was the first to shutter half
a dozen outlying Brooklyn branches, sought
to reassure residents that the closings did not
herald a new redlining era, opponents look-
ed for relief from widespread sources, in-
cluding the federal Comptroller ofthe Cur-
rency, the state legislature, and even New
York Yankees owner George Steinbrenner.
The Citibank branch closings ("Not Bank-
ing in June/July 1983) are feared
to be the opening round of commercial bank
neighborhood abandonment as those lend-
ers transform themselves into money service
and management businesses. Those fears
were heightened when Chase Manhattan
also suddenly closed six branches, two in
lower Manhattan and four in Brooklyn.
But Citibank officials. meeting with the
reinvestment committee of the Northwest
Bronx Community and Clergy Coalition,
said that there would be no more branch
closings for the rest of the year. However,
the citywide Coalition Against Redlining
announced that it will retaliate against the
closings by challenging, under the federal
Community Reinvestment .Act, Citibank's
plans to open a new midtown office at 485
Lexington Avenue. CAR is also protesting
at the Federal Reserve Board the purchase
by Citicorp, the bank's parent entity, of the
American State Bank of Rapid City, South
Dakota, an enterprise which would allow
the bank to become an insurance seller.
At a meeting with the Northwest Bronx
group that was focused on the neighbor-
hood's reinvestment needs, Citibank of-
ficials said the wave of closings was over,
at least for the time being. Joe Muriana, staff
of the Coalition's reinvestment committee,
said that Citibank had advanced a lending
program in response to the group's demands
which represented "a big step
"We felt there was a significant
DEEPENING TBE SPLIT FOB SOUTH aBOn BOllES
M
OVING DAY for the first group of
home purchasers in the Crotona-
Mapes 109-unit Section 235 development in
the South Bronx is still being held up. with
the Con Ed strike adding to the project's
many construction delays. The first-time
homebuyers joined together, before their
new settlement was even a reality, to force
builders to correct design changes and con-
struction deficiencies ('The South Bronx's
Troubled New Homes ," May, /983) . The
homebuyers' other chief concern stemmed
from the racial division created betw".!n the
Crotona-Mapes site - almost totally black
and Hispanic families - and another
42-home Section 235 site just four blocks
away.
At that site. known as Quarry Road,
which sits along the southern border of the
largely Italian Belmont community, 34 of
the families who purchased were white and
many nearby blacks and Hispanics say they
never got a chance to buy. Both sites were
planned by master builder Ed Logue's South
Bronx Development Organization.
One sweetner for disgruntled neighbors
was the prospect of joint community spon-
sorship of a $331,000 recreational field to
be built at Quarry Road with federal Com-
munity Development funds. The Crotona
Community Coalition - sponsor of the
Crotona-Mapes homes and allied with the
families in their demands on the developers
- was told by Logue it could share in spon-
sorship of the field with two groups from
Belmont: the Arthur-Belmont Local
Development Corporation and the Belmont
Soccer League.
But the city's Department of Housing
Preservation and Development is getting
ready to sign an agreement with only the
Arthur-Belmont LDC. The Crotona Coali-
tion was told by Logue's office the reason
was that a group with a track record was
needed, although the Belmont LDC is only
two years old, as opposed to the Coalition's
eight years of successful partnership with
HPD. Other groups. including the Coalition
and the homeowners of Crotona-Mapes.
would have to pay a user's fee yet to be
calculated.
Since the other would-be sponsor. the
Belmont Soccer League, does a thriving
said Muriana. "But we told them we would
continue to oppose the wholesale closing of
the branch structure - by any bank."
State assemblyman Herman D. Farrell,
Democrat of Manhattan and chair of the
Assembly Banking Committee, held hear-
ings on July 15 at which both community
complaints and lending industry responses
were aired.
In East Flatbush, Brooklyn, where
Citibank has closed two branches and Chase
Manhattan one branch, the chair of Com-
munity Board #17 called for a Citibank
boycott.
"At a time when Citibank assets have quin-
tupled to $130 billion since 1970, Citicorp
wants to save a few nickels and dimes by
closing branches in Brooklyn," said chair
Lew Fidler. Fidler also appealed to Yankees
owner George Steinbrenner to intervene.
Citibank, noted Fidler, is a major Yankees
advertiser and he called on Steinbrenner,
whom he described as "civic-minded" to
"use his influence and help Brooklyn stay

business in Belmont, the prospect of users'
fees doesn't appear to be a problem. But for
low income organizations, such as the
Coalition, losing sponsorship will mean not
only a financial burden but will also repre-
sent a further strain on the already tense race
relations in the neighborhood . So far.
however, HPD hasn't shown a willingness
to intervene in Logue's South Bronx
plans.DT.R.
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Employment position available. Immediate opening.
Weatherization coordinator. Duties: administer low in-
come weatherization program. Manage bidding, contrac-
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To apply send resume to: Angela M. Battaglia, Housing
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(366-3800).
31
CLERK/TYPIST
Type 40 W.P.M., filing, good phone skills, some
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TRAINEES
Are sought to participate in a seven-month training
course to qualify for the management and administra-
tion of SRO Hotels in 7A administratorship. The course
will consist of both classroom and on-site instruction. Par-
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including repair, bookkeeping and tenant relations. Train-
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Graduates qualify for 7A SRO management.
Qualifications: Trainees must be 18 years of age or over,
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CITY LlMITS/August-September 1983
Saga of the West
Side Squatters
Growth Agenda for
the Eighties, Pt. I
(Pt. II photocopy in.
eluded with this
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NOVEMBER 80
The Cityowned
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order in Housing
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The Pass-On Increase ............................. . 2

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