city limits magazine, november 1981 issue

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

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THE NEWS MAGAZINE OF NEW YORK CITY HOUSING AND NEIGHBORHOODS NOVEMBER 1981 $1.

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( './\ .SQUAmRSOR HOMESTEADERS?Lobbying for Good RepairsEast FlalbushRehabilHation

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Short Term NotesSmoldering Smoke DetectorsT HOSE WHO LIVE -IN NEWYork City apartment buildings,rooming houses and hotels should, bythe New Year, be comforted by the sightof a smoke detector afftxed to the ceilingof bedroom or living room. A good dealof that safe feeling should stem fromCity Fire Commissioner Joseph Hyne'sanalysis that those detectors would havespelled the difference between life anddeath for 70 percent of those who perished in flres this year.But that important added protectioncould be marred, say some healthadvocates, by the type of detector theowner installs under the new law thatmakes them mandatory as of January 1,1981. Two basic types of smoke detectorsare available on the market: one is basedon ionization and detects the presence ofsmoke in the room. The cheaper versionsof this type of detector are susceptible tobeing set off by a very smoke-filledroom. The ionization detector also emitsa minute amount of radiation-notenough from a single u n i ~ to make a difference to an individual but, as the NewYork City Council on the Environmenthas noted "any amount of radiation istoo much." The other type of detector isphoto-electric. This unit detects particlesin the air-say from a burning couch ordrapery. Unlike the ionization model itcan't go off from cigarette smoke and itis totally harmless. It also costs more.Under the new law, owners can recoupup to $10 of the expense of purchasingand installing a detector from eachtenant. Tenants are also responsible fortheir upkeep and maintenance whichthey should be able to learn from themanufacturer's instructions that theowner is supposed to provide.But what the manufacturers' instructions for ionized detectors, which mostowners it is presumed will opt forbecause of the reduced cost, won't telltenants is that these units have abiological half-life of 200 years duringwhich time radiation will still be emitted.CITY LIMITS/November 1981

Nor will it mention that there is no wayto determine if the detector is faulty andis possibly emitting more radiation thanit should. The ionization detectors areclassifled by the Nuclear RegulatoryCommission as radioactive waste ."There's no way to see if they will beproperly disposed of," said JenniferBrown of the Council on the Environment.

In a letter to Fire CommissionerHynes, the Council raised the prospectof the accumulation of hundreds of thedetectors in vacant lots where buildingsare demolished, and pointing out thatbecause of the availability of non-radioactive detectors, using the ionizationmodels was unnecessary.

According to one distributor of bothphoto-electric and ionization detectors,Acoman Industries in Long Island City,the cost difference in the wholesale priceto owners is approximately $5-$6, al-2

though, depending on the sophisticationof the device, it can be much more.Landlords, said Shirley Wasserman ofAcoman, will opt for the cheaper modelsunless pressured by tenants to buy thehigher-priced photo-electric type.At hearings ileld by the City Councillast spring on the bill that made thedetectors mandatory for all but one andtwo-family homes (even these are notexempt if they are still in construction orunbuilt as of January 1) arguments onboth sides of the safety issue producedscientiflc evidence to boost either a proor anti-ionization detector clause in thelaw. But while specialists disagreed aboutthe radiation threat, there was unanimitythat flre warning devices in individualapartments were vital and would savelives.They were not vital enough, however,to warrant making the owner's failure tocomply with the new law a 'C ' or rentimpairing violation. When the Councilpassed the bill it failed to put the absenceof a smoke detector in the same leaguewith no heat or a cascading leak. 0

CORRECTIONIn our October issue two printingerrors appeared in the article "PublicHousing: Making the Choice" byWilliam A. Price. The number oftotal Boston Housing Authoritypublic housing units should have beenrecorded as 16,500, not 165,000.

At the end of the article, the fullquote from New York City HousingAuthority Chairman Joseph J. Christian should have read: "We are now .in a position to incorporate all wehave learned, from our successes andfrom our failures, into the design ofhousing and communities which willset new standards . . . Let"us recapturethe crusading zeal which began publichousing-and let us add to this thehard experience of the years."0


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Building a Hole in Fort Green'eMuch to the dismay of the yelpingdogs in adjoining backyards-not to

mention neighbors, the local community board and at least one member ofthe U.S. House of Representatives-acity demolition crew recently showedup at 30 Fort Greene Place in Brooklynand, as it's their business to do, built avacant lot. The late September execution of number 30 was efficientenough; within days, all that remainedof the abandoned three story brownstone was a small pile of rubble and aneatly plowed dirt patch. But theoperation was marred by one smallpoint: months earlier, CommunityPlanning Board 2 had requested thatthe building be sealed as part of ahard-fought plan to retain the originalcharacter of Fort Greene Place and twoadjacent blocks.

CONTENTSVolume 6, Number 9

The major component of that plan isthe new construction of 96 units worthof federally assisted housing, in theform of ow houses that are to beconsistent with the neighborhood'solder stock, on six vaCflDt lots in theTri-Block area. "The whole idea ofinfill housing is to fill," Janet Matloff,Community Board 2 Housing Committee chairperson told the Daily News."Now we have another hole."

The Department of Housing Preservation and Development told the Newsthat it proposed the demolition earlierin the year and it was approved by theCommunity Board. But both theBoard's records and those of Rep. FredRichmond, Democrat of Brooklyn,who has been involved in the Tri-Blockproject, show that local residents never

returned an approval form to let thew r ~ k i n g ball swing. The razing evi-dently resulted from a lack of communication between HPD's demolitionand development divisions.The Fort Greene infill housing project is being fmanced with the aid offederal Section 8 rent subsidy commitments. According to the Tri-Blockplan, the ow and moderate incomefamilies to be housed in the new buildings will buy into a cooperative corporation and, all told, will hold a 20percent share of the properties. It willbe the first such Section 8 subsidizedco-op in the state. And barring anyfuture mishaps at the city housingagency, it is hoped the new buildingswill stand for many years tocome. DT.L.

CCITYUMI1S)Short Term Notes . . . . . . . . . . . . . . . . . . . . . ! ....... 2AnUn-FAIRPlan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Market Pr ices for Mitchell-Lamas? . . . . . . . . . . . . . . 6Eying an East F1atbush Rehab . . . . . . . . . . . . . . . . . . . 8Alternative Management Plans Merge . . . . . . . . . . . . 12The Out-of-Towners . . . . . . . . . . . . . . . . . . . . . . . . . . 14Squatters or Homesteaders . . . . . . . . . . . . . . . . . . . . . 15A Dim Con Ed Future? . . . . . . . . . . . . . . . . . . . . . . 18Lobbying for Good Repairs . . . . . . . . . . . . . . . . . . . .20A Food Project Sets its Thble . . . . . . . . . . . . . . . . . . 22

Coyer pi.oto CRAIG E. BLAIR

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City Limits is published monthly, except June/July andAugust/September double issues, by the Association of Neiab-borhood Housing Developers, Pratt Institute Center for Community and Environmental Development and the UrbanHomesteadinl Assistan u Board. Articles in City Limits do notnecessarily reflect the opinion of he sponsoring organizations.Subscription r a t e s ~ SlS per year for businesses and sovernmentoff'lhds; $9 per year for individuals and community-basedo ~ o n s . All comsponcience should be addrCssed to:CITYLIMITS.424 We 33rd SU'eC!t. New York, N.Y. 10001(212) 2 ~ 9 - 9 4 2 J , 9 4 2 4 Pt>$tmQ$ter send change 0/ address to: City Umiu. 424 WarjJrdStret!t. New York, N. Y. I(}()()I.. . SeCond.:ciass PQSta8e paid New York, N.Y. 10001City Limits (ISSN 0199-0(30)Editor . ... . ... , . . . ... Tom RobbinsAssistant Editor . . . . . . . . . . . . . . . . . . . . . , . . . .Ttm LedwithAssistant Editor . . . . . . . . . . . . . . . . . . . . . . . . . . Susan BaldwinBusinessManager. . . .. . . . . . . . . . . . . . . .. . .. . R.onnie SpenceDesign and Layout. . . . . . . . . . . . . . . . . . . . . . . . ' Louis FulgoniCopyrighll98J. All rights nserved. Noportion orporti


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State Nixes an Un-FAIR PlanW HEN "HIGH-RISK"property insurance was instituted in 1968, nobody anticipatedhaving to worry about what to do withthe profits. The state-sponsoredinsurance "pools:' composed ofnUmerous member companies, weredesigned to provide basic coverage forinner city property owners unable tosecure conventional voluntaryinsurance. Though rates in these FairAccess to Insurance Requirements(FAIR) plans were considerably higherthan conventional rates, it was expectedthat the member companies would, atbest, break even on the deal, and provisions were made to subsidize anyoperating losses they might incur.But it appears things have changed:in late September New York StateAssembly Attorney General RobertAbrams and Superintendent of Insurance Albert Lewis had to obtain acourt order to stop what they called an"unconscionable" effort by the NewYork Property Insurance UnderwritingAssociation (NYPIUA-this state'sversion of the FAIR plan) to distributeSS2 million in assets to its membercompanies. A joint complaint, filed bythe two officials in state SupremeCourt, charged that the NYPIUA'smove to transfer assets to its 317members, who would use the funds fortheir own investments, endangered thecontinued sound operation of the insUJ1lIl,CC association. The court challenge also charged that the move violated state insurance and business lawsand could irreparably harm claimants,policyholders and taxpayers.

Accordina to the challenge, the SS2million in question came fromNYPIUA investments of policyholders'premiums, investments enhanced of lateby sky-high interest rates. Representinga large portion of the Association'stotal assets-reportedly $76 million asof May 31, 1981-the SS2 millionshould, said the state challenge, be heldin reserve to cover future claims and

operating expenses. Abrams and Lewisalso asserted that some of theinvestment income could be used to ,lower NYPIUA rates, which are now, 20 to 40 percent higher than voluntaryinsurance premiums.The law requires that all of the Ass0-ciation's income, including investmentincome, be used to make up for operating deficits. Transferring any suchincome to member companies, it wascharged, would "paint a misleadinglyunfavorable fmancial picture andartificially create a deficit." Last yearNew York State had to ante up S17.Smillion to cover alleged NYPIUAlosses. This money came from a stateSecurity Fund paid by a special tax onvoluntary policyholders' premiums. Somuch for "high risk" insurance.

Most AdMIt RoleThe FAIR plan f ~ , which has

cast the state Insurance Department inits most activist,role in recent memory,. surfaced on September 21 when Superintendent Lewis got a one sentenceleltelt from Richard Brueckner, president of the NYPIUA, stating that themulti-million dollar transfer wouldoccur one week thence, Though DO de-tails on the causes or possible effects of4

this siphOning action were provided, itwas later ascertained that it had beenapproved, without dissenting votes, atSeptember 17 meeting of the 13 mem-ber NYPIUA Boar,d. 10 members ofthe Board, the subsequent legal chal-lenge pointed out, are executives ofmember companies that would benefitfrom a fund transfer.On September 23, citing his legal

objections and the Association's failurto provide background informationabout the distribution plan, Lewis directed that the effort be halted. Thenext day, Brueckner told the InsuranceDepartment the transfer would gothrough anyway. On the 2Sth, by nowclearly incensed, the 'Superintendentnotified Association officials of a midiOctober departmental hearing to determine whether disciplinary action wascalled for. The temporary court orderblocking the transfer scheme wassecured by Lewis and,the AttorneyGeneral several days later and, pendina scheduled late October SupremeCourt hearing, the Insurance Departm ~ t hearing was postponed.

As this legal battle wore on, somecommunity organizations started to re-examine the FAIR plan's potential forneighborhood reinvestment. At leastone group, the Northwest Bronx


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Community and Oergy Coalition, hadapproached the NYPIUA earlier thisyear about possible financing.for ahousing rehabilitation project.The current controversy "really undermines the argument they were usingthen," said Jim Buckley, who worksfor the Coalition. "They said they

All-SaversMortgages?THE FIFTEEN MONTH BUYINGbinge for the new All-Savers certificates was launched October 1 amidstone of the great advertising drives oflending industry history. A media blitz tosell the certificates that offer tax-free interest up to $2,000 was offering someunprecedented late and evening bankinghours to sweep in new investors.The dust hasn't settled enough yet tosee exactly how popular the savings instruments are, but predictions have beenwidespread that total national investment could wind up doubling the initialestimate of $250 billion. All of which isfme for the investors, great for the lending institutions, who get an enormousshot in the arm, but a potential problemfor government which could end up witha tax shortfall twice what it anticipated.Yet, what about the residential loanseekers who, according to the legislationthat created the certificatesas part of theNational Economic R ~ o v e r y Tax Act of1981, were supposed to be a major beneficiary of the plan? Those looking forhome mortgage loans on single-familyhouses, co-ops or multiple dwellings, ormerely home improvement and rehabilitation loans were told to look forward tosome relief in the mortgage-parchedlending terrain. Rates could be expectedto drop 2 or 3 points below their presentlevel, Congress had said, as the lendersplowed their All-Savers profits back intothe housing loan market.But, the regulations Congress wroteinto the Act stipulating that performancewere not too well screwed down. Banksand savings and loans associations were

couldn't do long term lending becausethe money would only be around for ayear." He added that the NorthwestBronx group-which has enjoyed much.success securing financing for neighborhood projects from conventionallenders, including insurance companies-was taken by surprise when news of

told that either the proceeds from thesale of the certificates during a calendarquarter or the amount of "new" moneycoming into the bank during thatperiod-the amount deposited above thetransfers made from the now far lessattractive savings accounts and timedeposits-whichever is less, had to go tothese types of loans. .The regulations leave the banks with arather large amount of discretion aboutwhat kinds of loans they will make.While the lower rate paid to savers on thecertificates helps keep the institution'scosts down there is no guarantee thatsavings will be passed on in lower interestrates.The Savings Association League ofNew York State has estimated that thusfar 20 to 25 percent of the All-Saverspurchases have represented new deposits. " I f anyone thinks we're going to take

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the asset transfer broke. "W e knew theFAIR plan made a profit last year,"Buckley stated, "but we didn't knowanything about this." In light of theNYPIUA's apparen t eagerness tospread the wealth, Buckley said hisgroup plans to hold another meetingwith the Association in the near future.

OT.L.

that money and put it in long-termmortgages when it's only going to be ondeposit for one year, they should thinkagain," said Ed Kraemer, the League'sspokesman.Under the regulations the growth canbe invested in mortgages, but ones thatare far from home.Iowa's state attorney general feltstrongly enough about where All Saversdollars were being channeled in his stateto sue 14 out-of-state investment institutions. Local groups won't have thatkind of clout and will have to work hardto get even small piece of the All-Saversaction for their neighborhoods. Theregulations also allow the lenders todecide whether they are living up to theirobligations under the act. There are nostandards to meet and no regulatoryagencies will monitor the use of theseearnings. O T.R.

CITY LIMITS/November 1981


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" ' . " i ~ I .." ....-Lama CO+opS?

T HERE SEEMS NO LIMIT TO NEW YORK CITY'Sco-op market. Condos and cooperatives, launched allover town including the unlikeliest of neighborhoods, commanding prices for individual apartments that could havepurchased the entire building a few years ago, have capturedwhatever there is of a housing market in this city.But many of the biggest co-op buildings in the city, accounting for some 67,000 apartments in all, haven't been ableto cash in on the bonanza-at least not publicly. Those buildings are the Mitchell-Lama cooperatives, the balconied highrises clustered in former urban renewal areas and elsewherethroughout Manhattan, the Bronx, Brooklyn and Queens.Built as limited profit housing under legislation advanced in1955 by MacNeill Mitchell in the state Senate and AlfredLama in the Assembly, the projects were developed toprovide housing for low and moderate income .families.Income limitations require families of three or more to earnno more than seven times their annual rent and six times therent for individuals and smaller families. In addition to theco-ops built under the Mitchell-Lama bill, there are thousands of rentals as well.

Key to making the co-ops affordable were the low purchaseprices, many of them made more affordable by a low interestloan fund. That fund is long depleted and the rest of theCITY LIMITS/November1981 8

Mitchell-Lama subsidy cupboard has been fairly barren foyears, replenished only when year-to-ye;:tT bail-outs ararranged for the projects.Meanwhile, the legislature, particularly the Republicancontrolled Senate, has made bail-out money harder andharder to get. And, at the same time, Mitchell-Lama tenanthave chafed under the resale restrictions that keep the co-oowners from realizing anything more than the amount theoriginally paid, plus their amortization, when they sell.Now, a plan has been advanced by Governor Carey anendorsed 'by state housing officials that would allow thcooperatives to be resold at a market rate while splitting thprofit three ways. Half of the' profit above the owner'original purchase price and amortization will go to a speciaProject Loan Fund to provide energy conservation assistanc'to Mitchell-L,ama developments and to Ieplenish the HOPEloan fund that would provide loans for the down paymenton apartments. Twenty percent would go to the cooperativand thirty percent to the seller.But this plan designed to make all parties happy, includinglegislators who would like to be relieved from the yearly bailouts, came in for some stiff criticism and numerous suggestions for changes at hearings held by AssemblymanAlexander "Pete" Grannis, Democrat-Liberal of Manhattan


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in late September. As a result, the sponsors don't expect thebill to go anywhere in the special session now underway andbefore it re-emerges next year in the Assembly it may readsignificantly differently from the way it does now. " I t justwasn't the right time for it," said Michael Lenane, housingspecialist for Grannis.James Garst of the Mitchell-Lama Council, which endorsed the bill as a starting position for negotiations,characterized comment on the bill as "a wide spectrum ofopinion ranging from unacceptable in context to unacceptable in form."The most thundering opposition came from therepresentatives of the Metropolitan Council on Housing whosaid the bill spelled not.hin& less than a total retreat from thekind of low and moderate income housing the Mitchell-Lamadevelopments represented. That cautionary warning aboutpreserving the original intention of the state's biggest ventureinto subsidized housing was echoed in other testimony butfew others were as inextricably opposed to any easing of theresale restrictions.

Among those who agreed with the bill's concept butrejected its particulars was the City of New York which holdsthe mortgages on 163 projects and has provided tax abatements to all the Mitchell-Lama developmeQts within itsborders. Housing Commissioner Anthony Gliedman said theCity was interested in recouping some of its tax abatementinvestment. The Commissioner promised to develop aposition paper on the subject soon. Other speakers urged arearrangement of the split along various combinations so thateither state, owner or cooperative got a bigger piece.

A One-Thne BUpSponsors of the bill had no projections of what impact thebill would have on apartment turnover in the developments,

or what levels prices would reach i f uncapped. The bill's passage would "catalyze decisions to move and sell," said Garst.But those sales, he said, would be "a one-time blip on thegraph. After that it would flatten out once you've establisheda new market price for the apartments."But wherever prices levelled out that would still be wellabove their present cost and out of reach of many, if not most.of those for whom the housing was originally targeted. Criticssuch as the Metropolitan Council have argued that the Governor and others are redeeming their own politicalinvestments in the Mitchell-Lama program at the expense ofthe program's integrity.The bill's fashioners counter that present carrying chargesare well below the 25 percent of income used as a basis forwhat tenants can afford. Therefore, they say, buyers couldafford to add a purchase money mortgage atop their monthlyrent and still be affordable.

And since part of the projected sales profit is to be plowedback into a low interest loan fund,they say, lower income pur-7

chasers won't be shut out. Details of this fund are not yetworked out and provisions in the bill are markedly vague asto who would qualify for the loans and how much therewould be available.

I f enacted in some form, the u n I e a s ~ g of Mitchell-Lamaco-op prices would have varied effects on different projects.The newest in the program, those on Roosevelt Island alreadyhave rents close to $180 per room. Other projects are locatedin such high demand areas that, once offered on the openmarket, prices would presumably soon match the astronomical amounts comparable units are ~ o m m a n d i n g .

Still the Best BuyFor all their management and construction problems,Mitchell-Lama projects have long been one of the best buys inthe city. And it has been charged repeatedly that some co-opowners have found ways to parlay that bargain into salesprices well above those allowed. The new bill presumably

would put an end to most under the table deals and cut thestate and the cooperative company into the deal as well.One problem it might not solve, however, is the glaringracial stratification that has long characterized manyMitchell-Lama co-ops. At least one massive Mitchell-Lamaco-op, Warbasse Houses in Coney Island, is currently thetarget of a federal class action suit charging manipulation ofthe waiting lists to keep the development overwhelminglywhite."There are still a number of unanswered questions," saidMichael Lenane. "How do you work a limited market pricewaiting list with open market sales? Go down the list to seewho can afford it now?" Overall, Lenane said, the questionshould be asked, "I s it in synch with the Mitchell-Lamaprogram to all of a sudden have sales of $90,OOO?"O

CITY LIMITSINovember 1981


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East Flalbush Eyes a Project'sRehabilHaflon by Tim Udwitb

V anderveer Estates, a 30 year old housing complex thatdominates four full blocks and houses . about 10,000people in .the East F1atbush section of Brooklyn, has beendeteriorating for almost as long as it's been in existence. So-vhen owner Faymor Realty announced last January thatVanderveer would get a multi-million dollar shot in the arm,in the fonn of a federally insured rehabilitation loan for mostof the complex's apartments, many area residents had highhopes. Hailed as the largest "tenants-in-place" rehabilitationproject ever undertaken in New York City, the Vanderveereffort, its planners say, won't lead to displacement. Despitesuch assurances, some of the development's tenants andothers in East F1atbush are keeping a close watch on the rehabwork itself, and on Vanderveer's chances of remaining a reasonably-priced rental complex.Known as a "tandem" loan, the $24 million project'sftnancing arrangement involves banks and federal housingagencies. Citibank, through its subsidiary Citicorp Community Development corporation, is providing a short tenn construction loan to cover costs during the complex's plannedCITY LlMITSINovember 1981 8

one year renovation. After the work is done, the departmenof Housing and Urban Development will provide Vanderveer's owners with long tenn ftnancing, in the fonn of a 4year, 7Y2 percent mortgage. The mortgage will come from thGovernment National Mortgage Association, a HUD-sponsored low interest mortgage pool, and is to be insured by thFederal Housing Administration. It will be serviced bAnchor Savings Bank.

Over $11 million of the total $24 million Vanderveer loan ibeing used to payoff the development's previous mortgageThe rest, at an average of $6,500 per unit, is for repairsincluding the installation of new heating plants, over 15,00new windows, and bathroom and kitchen f ~ t u r e s . Projecteenergy cost savings of 20 percent and a "J-51" city real estattax abatement, the plan's sponsors say, will keep renincreases for current residents at a rnil$num once threnovation -is complete.Although Faymor's negotiators originally approacheHUD with plans to rehabilitate the entire Vanderveer complex, the fmancing package had to be placed in a lottery with


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proposed loans for other projects around the country. Toimprove its chances, the Vanderveer plan was broken ,intofive "blocks." By the luck of the ~ r a w , three were approved.Ken Patton, a vice president of the giant Helrosley-Spearreal estate firm, helped negotiate the deal and has taken anactive role in managing the rehabilitation work, which beganlast spring. Patton describes his role as that of a "facilitator"trying to "help coordinate the work that needs to be doneamong the various parties involved." He believes Vanderveer"beat the odds dramatically" in the federal lottery As for the1,0000plus apartments in the two remaining unlucky.sections,Patton asserts their renovation will be fmanced "b y luck orwit." He says fmancing plans for the two sections will besubmitted to the next HUD lottery in January. Failing there,Patton says, a city Participation Loan interest subsidy will besought for the rest of the project.

J udging from the optimism Patton exudes, the odds ofsuccess at Vanderveer seem good, but for many people inthe 59 building complex and the neighborhood of one andtwo family houses in its shadow, all bets are still off.Their skepticism stems at least in part from the complex'srocky past. Locals say Vanderveer, built by Faymor Realtyin 1949, suffered the effects of inadequate maintenance earlyon and in the project's first 20 years, its mostly white tenancywatched the gradual deterioration that resulted. During aperiod of rent decontrol in the early '70s that coincided withan intense block-busting campaign in East Flatbush, a massexodus of long-time Vanderveer residents occurred. By themid-'70s , the complex-like the neighborhood-housed aprimarily black, middle class population.As the decade advanced, so did Vanderveer's problems.

" I t was a pretty common strategy," says Lamar Williams, aformer organizer with the local Neighborhood Stabilizationprogram \vho worked in Vanderveer. "You move in blackfamilies, decrease services, and play on the racism that'sinstitutionalized in society anyway." Security became a majorproblem at the complex. A management scheme which offered a month's free rent to new residents attracted asubstantial transient population. Rifts between American andimmigrant Carribbean blacks hindered tenant organizing,Williams recalls. Residents' incomes dropped and the complex's deterioration accelerated.

Neighborhood concern is based largely onthe alleged mishandling of a moderate rehabilitation planthree years ago, when Faymor negotiated a refmancing dealwith the New York Bank for Savings, holder of Vanderveer'soriginal mortgage. The 1977 agreement freed up two milliondollars for an itemized list of capital impr.ovements to becompleted by January, 1981 but according to the local Neighborhood Stabilization office and the non-profit Flatbush EastCommunity Development Corporation (FECDC) only$100, worth of improvements were ever made in thecomplex. FECDC has registered complaints with both thebank and its federal regulator, bu t neither has initiated actionon the matter.

By the time HUD approved the development's renovation9

plan early this year, conditions at Vanderveer prompted PhilGallagher, an East Flatbush resident and co-chair of theBrooklyn Committee for Better Housing, to protest thefederal agency's decision. In a February letter to the agency'sArea Office, he acknowledged the protest's seemingly paradoxical nature, but said the HUD approval, in the absence ofa close look at Faymor's record and ability to handle theambitious plan, was viewed by area residents as "controversial at best, and seemingly hasty and ill-considered." Theowners' performance at Vanderveer, wrote Gallagher, hadlong been characterized by "terrible management and cal-culated negligence."

I n mid-October, FECDC, the Neighborhood Stabilizationoffice and the Vanderveer Estates Tenants Associationcalled a meeting to see if the current rehabilitation effort wasfaring any better. About 50 tenants attended, and, while it'sclear from what they said that work is well under way thistime around, some of them seemed to wish it wasn't.Concerns were raised at the two hour session about thequality of some materials being used in the rehabilitation, andpoor maintenance was an ongoing issue. But the most vehement complaints involved work scheduling; one resident'shome was reportedly robbed when, without notice, someoneentered the empty apartment at rnid-day to work and apparently left it unlocked. In addition, tenants said, because

CITY LIMITSINovember 1981


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safety precautions were lacking, window installation andother rehab work was hazardous to residents.Project "facilitator" Patton concedes that "there's beenproblems" with some contractors, but insists "the overallquality of the work is fme."As the work goes on for better or worse at Vanderveer,many people who live in and around the development aregenuinely baffled. Why is such an ambitious project beingattempted now, they wonder, after so many years of neglect?

Why has a real estate executive well-versed in cooperativehousing appeared on the scene? Why has Citibank chosenVanderveer as its ftrst East Flatbush community developmentproject? Some of the area's more suspicious residents can'thelp looking for clues in neighboring Flatbush, whereCitibank is now ftnancing co-op conversions.

Patton says co-oping at Vanderveer "is not necessarilyprecluded" by conditions of the federally-aided rehabilitation

CITY LIMITS/November 1981 10

fmancing, "but it's not intended." As for the possibility ohis own Helmsley-Spear taking the reins at Vanderveer afterenovation is complete, says Patton: " N e v ~ r . " But he addthat Faymor may soon share or even give up ownership of thcomplex. "We're actively looking for a new managementeam," Patton acknowledges. "We keep that possibilitopen."

Meanwhile, a rehabilitation monitoring committee, madup of representatives from management, Citibank, FECDCNeighborhood Stabilization, and the Vanderveer tenantsgroup, continues the fairly regular meetings it began lasspring in order to keep communication lines open. "Somebody's got plans for Vanderveer that they're not telling usabout," observes Michelle Corbin, executive director aFECDC and a monitoring committee member. She may beright, but Corbin, like a lot of other people in and around theVanderveer, is doing all she can do while the sawdust flieswaiting and watching. 0


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Getting Aid to 7A AdministratorsGetting the judge to replace the landlord of a declining building and install anew manager to tr y and make thingswork solves part of a building's problem

-bu t only a small part. The next crucialstep involves repairs-usually catch-uprepair work that may be backed up formonths, if not years.The city housing department providesa number of tools for these buildingmanagers-or 7A administrators as theyare called for the section of the law underwhich they are appointed. One such toolis a no-interest "Financial AssistancePayment" of up to $10,000.Since 1978 the city has been offeringthese loans with terms so reasonable theyare almost closer to grants, but until lastyear their success had been limited. Administrators have encountered difficulties wading through mounds of paperwork and also persuading contractors todo work when the city is paying thebill-at a time schedule that virtuallyalways meant months of waiting.

In July, 1980, with assistance fromtwo private foundations, a new loan fundwas piggy-backed atop the FinancialAssistance Payments program: operatingas a revolving loan pool the programwas to provide administrators with quickpayments once contractors have completed their work and the job has beeninspected and approved by the housingdepartment.As of September 30, 1981, $311,000had been spent in 7 A-managed buildingsthrough the program. Another $509,000in loans has been committed. This buzzof activity has prompted the Departmentof Housing Preservation and Development to give the program its owndirector, Susan Carr, and a staff of four .

York Community Trust and $10,000from the Fund for the City.In spite of the steady growth innumbers of 7As using the Financial Assistance Payments program-formerlycalled 7A Seed Money-loans havetended to be clustered, going to buildingsand a d m i n i s t r ~ t o r s in Manhattan and theBronx.According to Carr, one reason for thisis that few community groups inBrooklyn, where only three loans weremade in the first year of the acceleratedloan program, have focused their attention on getting these funds for buildings.A number of tenant advocates in theBronx and Manhattan, on the otherhand, have been eagerly pursuing theloan pool, she said.Another possible reason is that someadministrators and tenant advocates remain skeptical of the advantages of theprogram pointing out that while payment of contractors after inspection may

have increased, getting the city out to inspect and approve the work is still alengthy process. The city has acknowledged this bottleneck and has assignedan inspection team to focus particularlyon the 7A payments program.Repayments of the assistance loan areset according to the building's needs andability to pay, said Carr. Paybacks range.from $50 per month to $400 per monthstarting one month after construction iscomplete. These rather lenient terms arean acknowledgement, says Joseph Shuldiner who heads the housing department's unit overseeing the 7A program,that most of the 7 A buildings will windup in the city's hands anyway for backtaxes. "The key," he says, "is to get the7A administrator the cash flow he needsto run the building." 0Tenants and 7A administraton caninquire for more lnfonnadon about the7A Financial Assistance Program at556-7772.

~ i I ~ According to a study by the Fund forthe City of New York which administrates the quick payment program, mostadministrators who received an advancepayment from the revolving pool, whichis then later reimbursed by the city, wereable to meet their bills some five weekssooner than they would have without theprogram. The loan pool originated witha $40,000 contribution from the New ~ - - - - - - - - .. -----------------.. Q

11 CITY LIMITSINovember 1981


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AHemative ManagementPrograms Merge By SUSAN BALDWINOne of a number of experimental programs launched bythe city housing department two years ago to improve

management in city-owned buildings and pave the way fortheir sale to tenants or groups is quietly being phased out andfolded into another older program.The Management in Partnership Program, under whichcommunity groups manage tax-foreclosed residential buildings under the supervision of a private management firm, willgradually be replaced by the sometimes controversial nineyear-old Community Management program.The new program will include five groups from the twoyear-old MIPP program, who will be granted a number ofthe privileges of the current 14 Community Managementgroups for a probationary one-year period."Over the course of this year, these MIPP graduates willmerge with Community Management," said Bruce Dale,director of the rehabilitation bureau for all the alternativemanagement programs at the city's Department of HousingPreservation and Development. "Our goal is to tighten up theperformance of all the groups in this division as soon aspossible because we have no idea how tight the Reagan 'squeeze will be. But we do know the bullet will be bit."Under MIPP, once touted as the most successful alternative program, community groups wit}1 no experience inmanagement, rent collection, repairs, and rehabilitation spenttwo yJlrs as community-or junior-partners working andstudying under private managers-senior partners-to learnthese skills. Compared to Community Management, MIPPwas considered by many city hall observers to be more costeffective because the private companies with track records inthe business world were presumed to be more efficient thancommunity groups. But one problem MIPP community participants cited was the lack of rehabilitative work done. As aresult, they said, the buildings need more intensive repairsbefore they can be sold and put back on the tax rolls.

As of October 1, three MIPP graduates-People's Firehouse in Brooklyn and Banana Kelly Neighborhood Improvement Association and the Alliance for Progress, both inthe Bronx-joined the Community Management ranks withthe stipulation that they must work under the scrutiny of oneof the former senior partners-Coalition Management Training Corporation (CMTC)-in developing repair and rehabplans. Two other groups-Manhattan Bowery Project inBrooklyn and the Community League of West 159th Street inManhattan-are expected to become Community Manage-.ment provisionals late in November. They will also report toCMTC, the management arm of the New York UrbanCoalition.Two Brooklyn groups-Ministries for Intergroup Action(MIA) and Crown Heights Management and MaintenanceCorporation (formerly a Community Management participant)-have been dropped because of irregularities in theirCITY liMITS/November 1981 12

offices. A thi rd-Bronx-based Morris Heights NeighborhooImprovement Association, also a former Community Management part icipant-was also eliminated from MIPP. And fourth-STRESS, Inc. in Manhattan, has been reassigned toBelson Management Associates, a senior partner whoscontract ends in eight months, for more intensive trainingThe contract for the last of the three senior partners-SoukInc. (a subsidiary of the Jackie Robinson ManagemenCompany)-expires in November and will not be renewed.

Supervisory RoleA focus of controversy during the summer was the approval by the city of the CMTC contract before the Board oEstimate vote in late August. Some community groups werangered by this promise of a consultant contract to CMTCnoting that normal procedure would call for them to enter thcompetitive bidding process. After some debate, the Boardid approve them as a demonstration project for six monthat $196,000, not the $500,000 originally requested, with thproviso that they must be reviewed in the next three to foumonths. Their contract began October 1."We have just so much money to spend [$322,000] and 10units to rehab," said Ron Webster, head of the People'Firehouse management program. "We'll probablconcentrate [the funds] where the tenants )Vant to buy thbuildings. But face it, if we have to spend $10,OOO-a-unit tfix up a building, then we're only talking about rehabbing 3apartments. "The MIPP rehab contracts fall into the more modest category of the People's Firehouse, while the more 'establisheones amount to $1 million or more with the highest being $1.million. The total Community Management contract for thiyear comes to $17,841,50l-a figure that includes thCommunity Development allowance ($13,912,021) and estimated rent collections ($3,929,490).Harry DiRienzo, of Banana Kelly, is less optimistic abouthe program. A graduate of MIPP under CMTC's tutelagehe asserted, "There has already been too much overlappinand waste. MIPP shouldn't have lasted two years. Twomonths would have been more like it. And now before anything happens, any work is done, we're being asked to restructure rents-for some apartments at $65-a-room. That'too much for the people up here, and we won't collect it untithe Section 8 [federal rent subsidy] is in place to cover thincreases. ""For some of these places here," DiRienzo continued

"the initial jump they want in rent is from $160 to$350-a-month all in one shot. I know we wouldn't have gotten into Community Management without being in MIPPThis was politically helpful, but we just won't evict people fononpayment of these rents. It's against our principles regard


13/28

ing shelter." little as a 3O-day turn-around period.According to Dale, the MIPP and Community Management staffs will probably be merged within the next sixmonths. In the meantime, Denise Caldwell, a formerCommunity Management coordinator and director ofMIPP,is making firm contract commitments between CMTc' andthe MIPP graduates in an effort to get work carried out in as

"We've had complaints from tenants about their b ~ d i n g s while in MIPP, and they're absolutely legitimate," she explained. "We are not going to make these people buy theirbuildings before they're ready for sale, and we're not going toleave the graduate groups holding the bag for work that is notdone."0 .

ThousandsSeekHarlemBrownstones

More than 5,000 applications havebeen sent by the city housing departmentto city residents who have shown someinterest in the 12 vacant landmarkbrownstones in Harlem that are to besold by lottery sometime in December.The deadline for applying was October21.

The proposed upset prices for thebuildings range from as low as S5,000 to$42,000 for a fashionable late 19th century structure designed by StanfordWhite on Strivers Row on West 139thStreet.Minimum household income for qualifying must be S20,OOO-a-year. Lotteryparticipants must present proof ofincome in the form of tax returns or W2forms in order to enter the lottery. Butthe Department of Housing Preservationand Development has said that incomesof $40,000 to S50,000 would be preferable as families in this income bracketwould have an easier time handling theexpense of carrying the proposed2O-year, low-interest loan and mortgage

costs. HPD has reserved S1 million fromits old Section 312 funding-federal onepercent construction loan funds-tocover this pilot project.Following an outpouring of Harlemresidents opposing the lottery at a stormyJuly meeting, the l30ard of Estimate voted six to five in favor of the lottery planwith the stipulation that residents ofManhattan Community Boards 9 and 10where these properties are located wouldhave their names placed in the lotterypool three times, while outsiders' nameswould only be entered once. Also, a resident must rehabilitate the property within a two-year period and live there a minimum of three years before reselling it.

"We are not happy with the decision,but it went through and we can't stop itnow, but we certainly can monitor it,"said Lois Penny, a local homeowner andleader of the Anti-Lottery Committeethat attempted to block its city hall approval. "And you better believe we'll

13

know whether it's a fair lottery," sheadded. "We're t finished yet. We certainly are not lying down and playingdead."

The lottery foes see the auctioning ofthese 12 vacant brownstones as the beginning of a possible major displacementmovement in Harlem where the city isestimated to own somewhere between7,000 and 12,000 properties, many ofwhich are occupied.

Two of the vacant brownstones are inthe Community Board 9 area, while theremaining ten are located in Board 10'sterritory. The thirteenth building thatwas scheduled to be sold in the lotterywas redeemed by the original owner, butthe city had no record of this transactionuntil several weeks ago.

Both the local Den:lOcratic Councilman Fred Samuel and the CongressmanCharles Rangel "enthusiastically" support the lottery as well as future sales inHarlem. 0 S.B.



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Rent Complaint Board:The Ouf-of-Towners

The 'Conciliation and Appeals Board,responsible for enforcing the rent stabilization law in about 800,000 New YorkCity apartments, is frequently cited bystabilized tenants as one of the weakestlinks in a generally weak regulatory system. CAB members and staff blame theBoard's shortcomings on chronic underfunding and short-staffmg. Its landlordfunded sponsor, the Rent StabilizationAssociation, was in fact charged by thestate Attorney General in June withfailing to adequately fmance the enforcement agency. Others, including the NewYork State Tenant and NeighborhoodCoalition, an organizing and lobbyinggroup, have attacked the system's performance on the grounds that it isinfluenced more by political machinations than any intention to providesound tenant protections. In an illustration of this point, NYSTNC has chargedthat at least two CAB members liveoutside New York City, in violation ofthe Public Officers .Law. According tothe Coalition, these and other Boardmembers, mayoral ap intees all, werechosen on the basis of their political ties."It's not a bad deal-$15,000 a year forone afternoon a week," NYSTNCspokesman Bill Rowen said of the CABpositions. "These are patronage plums."

Tenant and Landlord MembersThe two members charged with violating residency requirements are MarcGoodman representing tenants andFrank Barrera, a landlord representative.The nine member Board is equally splitbetween owner and renter members,

along with a Chairman. Goodman, anaccountant and former president ofSchool Board 11 in the Bronx, has servedon the CAB since 1974. Barrera, a realestate attorney who has worked for theBrooklyn and New York State Boards ofRealtors, has been on the CAB since1969 and is said to be planning to leavethe agency at year's end.Goodman is listed in the Bronxtelephone directory with a CO-OD CityCITY LIMITS/November1981

address, but could not be reached therein repeated calls. His wife was reached ata New City number listed, in her name,in the Rockland County directory. Aftersome hesitation, Mrs. Goodman said herhusband didn't live in New City andsupplied the Bronx listing. In AugustGoodman told the Westsider he owned"a vacation horne upstate," insistingtha t he voted and paid taxes in New YorkCity. But according to Bill Rowen, whoheads the NYSTNC Tenant ProtectionsCommittee that raised the residencyissue, "Everybody in the Democraticorganization in the Bronx knows hedoesn't live in the city."Barrera, reached at a Garden City,Long Island number and queried aboutthe NYSTNC charge, conceded: "No, Idon't live in New York City."

utters to KochThe residency issue was raised byRowen in a series of three letters toMayor Edward Koch sent in March,May and August, all of which questioned the two members' legal status inlight of the Public Officers law, which

requires that such positions be filled bycity residents. The letters also pointedout that four of the Board members'four year terms, including those ofGoodman and Barrera, officially expiredon December 31, 1980, but the membershave been allowed to remain. Rowenurged that tenant organizations be provided the opportunity to recommendnew appointments.On August 14, shortly after the thirdletter was sent, Rowen and the NYSTNCcommittee got their frrst response from

City Hall, in the form of a letter fromDeputy Mayor Nathan Leventhal withan attached opinion from the cityCorporation Counsel. The opinion saidCAB members are indeed mandated tolive in New York. Leventhal stated in hisletter that, in 'light of the legal opinion,"all candidates for appointment to theCAB will be required to be New YorkCity residents." Leventhal stated therewas nothing illegal about members serv-

14

ing beyond their terms' expiratioWhile stressing that Board decisionwere legally valid even if some membeviolated the residenc requiremenLeventhal added that he had asked CAChairman Emmanuel "Wally" Popolzio (who hails from the mayor's Greenwich Village D e m o c r a ~ c club) to finout whether any current members liveoutside the city. Anybody found to beviolation of the law, 1!.eventhal wrot"will no longer be allowed to serve. assure you," he concluded, "that detemination will .be made within the nexfew days." Goodman and Barrerare still full- fledged CAB members.

In order to reappoint Board membewhose terms have expired or will expiat the end of the year, and to appoinreplacements for as many as foumembers who may be l ~ v i n g the CABthe mayor will soon submit recommendations to the City Council Rules Committee. After that committee holdpreliminary hearings, the matter must breferred to the full Council for confirming vote.The Rules Committee hearingsRowen said, will provide tenants with aopportunity to challenge improper appointees and relate "CAB horrostories" to Council members. NYSTNCand other tenant groups have lonassailed the Board for failing to fulfill itlawful responsibilities. Major complainthave included the CAB's inability

and!or reluctance, to closely monitoservices in stabilized units, compeowners to inform new tenants of previous occupants' names and rent levelsand handle rent overcharge complaintin a timely, effective way.OT.L.


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Lower East Side Tenants:SQUAmRSOR HOMESTEADERS? By Tim LedwitOUTSIDE, IN THE LATE MORNing sun of October 20, a fresh coatof paint dried on the street level facadesof the solid looking Lower East Sidebuildings. Inside, in a crowded livingroom turned tenants' office, members ofthe 272, 274 and 278 East 7th StreetTenants Association met with friendsfrom the community to talk about thethree city-owned buildings' uncertainfuture. Residents told of their two-frontbattle against years of neglect in thebuildings and a current effort by the cityhousing agency to evict them. As thestory unfolded, the gathering of.50seemed to become convinced that itseventual outcome will bode well or badlynot only for the occupants themselves,but for the fate of Loisada, as theirneighborhood is called, and the lot of inrem tenants in neighborhoods all overNew York.While a gas range flared to warm thecrowd, the East 7th Street tenantsannounced a plan to put the heat on theirmunicipal landlord. They demanded in apress release distributed at the meetingthat the Department of Housing Preservation and Development sue the City ofNew York for failing to provide essentialservices in the buildings, located betweenAvenues C and D. The demand dramatized the tenants' contention that, in theabsence of responsible management onthe city's part, the three buildings havesurvived only through residents' homesteading efforts. " I f it wasn't for tenantsmaintaining the property, " chargedtenant spokesman Rolando Politi, "thisplace would have been gone long ago."Liz Gonzalez, the East 7th Street residents' legal aid attorney, added that an"Article 78" proceediQg would beinstituted against the city for its handlingof the three buildings since May, 1978,when they were foreclosed for tax arrears. Gonzalez said the legal action,which is used to challenge local governments to follow their own mandatedrules and regulations, would essentiallybe based on "the fact that they took over

15

. ~ . ~ ' 1 ~ _,. t_

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16/28

properties that were in bad shape andmade them much worse by not doinganything with them." To emphasize thepoint, she produced three HP D computer print-outs listing housing codeviolations found in the buildings over thelast three years; unfolded, each wasseveral feet long.Two days after the meeting, while 22of the occupants were scheduled to appear in Manhattan HousQlg Court on aneviction proceeding brought by the cityhousing agency, Article 78 papers weremed in state Supreme Court. The aggresSive legal strategy's immediate effectwas to postpone the eviction case for twoweeks. At month's end, the SupremeCourt case was still pending.

Legal ScrambleThe late October legal scramble

marked anew, decisive phase in the East7th Street properties' tumultuous recenthistory. The buildings went in rem afteryears of declining services, deterioration,suspected arson, landlord-tenant struggleand changing ownership-forces thatfrequently pave the way to abandonment. After tax foreclosure, HP Dinformed the tenants they would be relocated and the buildings closed down aspart of the agency's "consolidation"program for city-owned property. Buthere communications appear to havefailed: legal tenants were still in thebuildings when water service was cut of fin two of them, and code violations wentunrepaired. As setvices declined, so didoccupancy. According to current residents, the number of tenanted apartments plummeted from 62 (of a total 72)in January, 1977 to as few as 10 twoyears later. By late 1980, the situation onEast 7th Street reached such a drasticpoint that the housing committee ofCommunity Board Three recommendedthe properties immediately be put up forauction by the city.Meanwhile, new residents were begin-ning to take over units in the threebuildings. Though progress was slowedby internal dissension fostered by thevagueries of ownership and control, byearly 1981 the occupants were expandingtheir ranks and some repair work wasunder way. Tenants association memberssay they removed four tons of debrisfrom the buildings and unclogged aCITY LIMITS/November 1981

backed-up drainage and sewage system.On February 8, a bank account tocover operating and repair costs was

opened by the association, and residentsstarted paying into it monthly rents of$100 per unit. By I the end of June,recognizing the tenants' progress, thecommunity board reversed its previousstance, voting to support the tenants'request that HP D spare their buildingsfrom the auction block and let them intothe Department's Tenant Interim Leaseprogram (TIL, an in rem alternativemanagement program, offers tenants an11 month lease and some money forbuilding system repairs, and is intendedto lead to the purchase of apartments bylow income residents).

On July 9, the city housing agency toldCommunity Board Three the East 7thStreet properties wouldn't be admitted tothe interim lease program and, becausenew occupants were ineligible for relocation under the consolidation program,they would be evicted. As summerpassed without litigation being initiated

1R

against the occupants b HPD, the tenants association sought a meeting on thematter with Housing CommissionerAnthony GlieclIDan. In an October 3 letter to tenant representative Politi,Gliedrnan nixed the meeting request,saying his understanding of the East 7thStreet situation was that two of thebuildings had already beep closed due topoor conditions and the third was "i nthe process of being closed."

As for their prospects of entering anygovernment-aided rehabilitation program, the commissioner indicated thethree buildings would require work thecity can no longer afford. Though hecited the "revitalization of empty deteriorated buildings" as ~ ' a matter of highpriority for this Agen , " Gliedmansaid "the amount of [section 8] fundsavailable for the gut rehabilitation ofbuildings has been cut drastically by thefederal administration." He suggestedthe East 7th Street tenants might submitproposals for the housing agency'sUrban Homesteading an Sweat Equityprograms next year, cautioning that"this will be a highly competitive Citywide competition.'"

EvictionConfmning HPD's previously stated

intention to clear out n ~ w occupants,Gliedman added that "the only remaining tenants, with one or t""o exceptions,are not legal tenants and are being evicted by this Agency."The tenants flatly reject the implication that they are squatters, describingtheir membership which the associationputs at around 70, as a mixture of homesteaders, legal tenants and self-helpdevelopers. "Squatting is an insultingterm," said tenant s p o ~ e s m a n Politi,who has lived on East 7th Street sincelast winter. "I t sounds like you're sittinghere doing nothing. We are doing preservation and development here. " TheHP D position fails to consider thatpoint, he charged. "They're justthinking in terms of dollars once again."

That charge is echoed by other residents, who say a drift toward gentrification in Loisada is being encouraged byhousing agency Policies. Said DeniseMiller, who has lived in one of the East7th Street buildings since February:


17/28

Supporters and tenants gather at East Seventh Street buildings meeting.

"This place is crazy with speculators.- The city wants to sell the buildings tosomeone big." Decision-making poweron questions of in rem auctioning,consolidation and rehabilitation assistance, another resident added, "needs tobe given to people in community groups,community boards and communitymanagement groups.". The case's broader implications apparently haven't been lost on n e i g h b o r ~ hood activists in the Lower East Side andelsewhere: 46 housing, civil rights,church and political organizations gavetheir support to a position statement re--

leased by the East 7th 'Street group inearly October; following the October 20meeting, numerous organiZations joinedthe residents' Article 78 proceeding as"friends of the court."While that case was pending in Supreme Court in late October, and allother legal action involving the threeproperties remained on hold, so didmajor repairs in the buildings. I f thetenants are able to stay in place, the workahead will be major: the buildings needextensive roofmg, plumbing and' heatingsystem overhauls. A city estimate placedthe prospective renovation cost at17

$300,000 per building. The occupantswho recently commissioned an architecto do their own estimates, believe theycan make the repairs for half thaamount. .Such questions, the occupants contended even as the legal battle wore oncould best be resolved through an out ocourt settlement with the city housinagency. "TherC:s still no open communication with Gliedman's office:" Polilamented. Efforts like those of the Eas7th Street tenants, he added, constitut"an alternative for poor people and thcity itself, but they don't want to recognize it."D

CITY LIMITSINovember1981


18/28

'. ~ . . ; ; . . - . ...... _ . . I ,.'"

; ... - '}.. II r APanel Sees a Dim Con Ed FutureTWO-AND-ONE-HALF-YEARSafter- it was formed to seek solutions to New York City's astronomicalenergy costs, a study panel has reachedan unpublicized and unheralded decision, The Public Utility Review Boardvoted 5 to 3 last June that the logicalstep was to have the state's powerauthority take charge of the generatingand transmitting equipment currentlyowned and operated by Con Edison.The difficulty the Board had reachingthat decision may be a good indicationof how difficult it will be to achievethat goal, ,PURB was created by resolution ofthe New York City Council in late 1978to study methods of providing electricity at the lowest feasible cost to NewYorkers. The PURB bill would havepassed several weeks earlier but theMajority Leader's staff had misplacedthe stenographer's copy of the legislation, apparently the only copy inexistence. Recovering from that setback, the City Council leadership, notyet nationally reknowned as an architect of balanced political bodies, usedits formidable gifts to sculpt a BoardCITY LIMITS/November 1981

By RICHARD SCHRADER

impervious to political or economicleverage.Among the initial nine boardmembers were vice presidents of bothCon Ed and the Long Island LightingCompany, the Executive Director ofthe New York Chamber of Commerceand the president of a gasworks localwhose members stood to lose theirrights to strike 'if the utility werepublicly owned. Within the f i ~ s t sixmonths of PURB, the Con Ed representative asked that the Board bedissolved, Eugene Mastropieri, thechairman of the council committee tha tdesigned PURB was indicted for fraud,embezzlement and conspiracy, PURBstationary was printed after arduousnegotiating with Majority leaderThomas Cuite and the Rev. MortonVan Allen, PURB's first chairperson,resigned in anguish after he too,suffered indictments for fraud, embezzlement and conspiracy. Rev. Van 'Allen went to jail (having just concluded an introductory Business Ad'ministration course at Harvard),Councilman Mastropieri took leave ofhis council seat, and Mr. Cuite, ever

18

attentive to matters of s tecraft,assigned his staff in the rovision ,oflegal and secretarial service to PURB.Martin Seham, the leg counsel forthe Owners Commitee, a.tt association

of large commercial bull . g ownersincluding thel Empire Stae Buildingand Rockefeller Center, ecarne thenew chairman. Theodore Barry andAssociates were selected t prepare PartOne of the study, "Caus s of HighElectric Rates." Barry atfHbuted themajor causes of hig}} electricity rates inNew York to: a low load factor, bur- ,geoning underground dis 'bution costs,higher local taxes and fue costs. InJuly, 1980, the Board awarded Barrythe contract for the secon half of thestudy, "Economic,Electri Supply."The law firm of Berle Bu ell and Casewas hired to study meth of aidinglow income customers through rate reform and direct as'sist&nce programs., Members of POWER (feople Outraged With Energy RateS) the coalitionof church, tenant and senibr citizenorganizations that origin y lobbied theReview Board bill throu the CityCouncil, testified before tHe PURB


19/28

concerning a wide range of energymatters. Slowly, painstakingly, all thedisparate fragments of New York'senergy policy began to assume morecoherent patterns. Before many alternative scenarios, be i t conservation,cogeneration, recycling, equalized rateschedules or future methane production, stood Con Edison's intricateftnancial arrangements. Each policypossessed a dazzling array of uncertainties, some fraught with troublingftscal implications. But only thoseinvestments that enhanced the Company's earnings per share, price/earnings ratios and stockholder dividends received serious attention fromcompany management or utility regulations. And always, those plants thatwere most capital intensive, ftt thetaxing needs of the company's accountants and lent itself to centralizedconstruction spurred managemententhusiasm. To replace 5,000 megawatts of power in the early 1990snearly half the installed s y s t e m - C o ~ Ed envisioned building on the banks ofthe Hudson in Ulster County four coalplants and resurrecting the ghost ofnuclear power. The entire tab wouldrun to $20 billion.

T HEODORE BARRY'S PARTTwo forgot its meatier predecessor. Load factor and distributionnetwork were curiously absent from thenew text. Instead through a series ofconvoluted graphs, the engineering ftrmsought to stir rather tired waters: relieve the Company's property taxburdens, waive the prohibition on coal,and remove any remaining restraints onCon Ed's right to shower the city beneath a rain of sulfur oxides, particulates an4 carbons of all varieties.

POWER had raised the issue ofpublic power early in the Board'sdeliberations. In this context, publicpower came to mean an acquisition ofthe Company's 'generation and transmission system by the Power Authority, of the State of New York (PASNY) a .s t a t e - o w n ~ utility that already supplieselectricity to the MTA, municipalhospitals and most city buildings.P ASNY hardly offers a haven forthose who would trod the soft path;proud owners of the Indian Point III

MEMBERS OF THE PUBUCUTILITY REVIEW BOARDMartin SebalD Chair-legal counselfor the Owners' Committee, an association of large conunmercial buildingowners.Edward Livingston-Con EdisonVice-President in charge of Community Relations.Amalia Betanzos--President of theWildcat Corporation, a job trainingagency that places ex-offenders.Ira Freibeher-Lilco Vice President.

Robert Emerick-President ofPOWER, a coalitionofchurch, tenant,trade union and senior citizen organizations.Charles Hughes-President of Local372, District Council 37, AmericanFederation of State, County and Municipal Employees.William Kirnme-President of Local101, Transport Workers Union.Rev. Floyd Flake-Baptist ministerfrom Jamaica, Queens.

Donald Moore-Director, N. Y.Chamber of Commerce.

nuclear factlity in Peekskill, the agencymost frequently dons the corporate veilas submissive business partner to moreassertive investor-owned utilities. Still,cogeneration, hydro, and conservationprograms have all received openresponses from the agency.

PURB's fmal recommendations cameat a stormy meeting last June. Theusual banter ensued: predictable outbursts by Con Ed, coupled with yetanother suggestion to dissolve theBoard; windy diatribes'by consUmeradvocates and antagonists alike; andoverall, a faintly veiled hostilitybetween the utility representatives andeveryone else.After the endless debates, the scoresof charts and numbing statistics, afterthe meticulously prepared testimonies,the calculation of advantages, the cir-cuitous investigation of risks, throughthat murk only a single thought pos.sessed much clarity: a future with ConEd meant only more rate increases,degraded environments, abused

I 19

customers and disastrous mishaps. SoPURB spoke with the bifurcated consciousness that the City Council hadgiven it. Burn coal, slash the fuel useand gross receipts tax but Con Edshould no longer be in the business ofgenerating or transmitting electricity.When Seham of the Owner's Committee cast the ftfth and deciding vote fora PASNY takeover calling theAuthority a "last, best hope" PURBmoved the city and state nearer thanever before to closing down theCom-pany's franchise. jThe resolutions must still clear Mr.Cuite's City Council, then steerthrough the goblins in Albany. AndP ASNY has all manner of protest. Butpublic power has never come this far inNew York City: that may be the untoldpolitical story of New York in the KochEra.0Richard Schrader is Director ojEnergyProject oj the New York State WideSenior Action Councii.

CITY L1MITSINovember 1981


20/28

LOBBYIN.GFOR

GOODREPAIRBy Toby Sancbez

Just about every mortgage writtencontains some strong language that re-quires the owner to keep his property ingood condition and repair-or else faceforeclosure. And for years housing organizers have looked longingly at thatclause and tried in vain to get banks touse it. But, thanks to a 55-year-old courtruling the "good repair clause" has beenrarely enforceable.This past spring, however, a bill thatwould change that situation cleared theNew York State Assembly, and althoughit faces stiff opposition in the Senate, itspassage would yield a tough and effective tool for building imd neighborhoodpreservation. Making that happen, according to the bill's supporters, is goingto take a broad-based and persistenteffort.The good repair clause is a written orimplied requirement that the owner of amortgaged property will keep it in goodcondition and repair. I f not, the bank, toprotect its investment, may foreclose,demanding immediate full payment ofthe entire outstanding loan ,and interest.But, in actuality, this power Of foreclosure has rarely been enforced becauseof a 1926 Appellate Court ruling thatlimited foreclosures to those comparatively rare situations wnere the resalevalue of the building had declined somuch that it was approaching theamount of the mortgage.

As Bob Blank, Executive Director ofthe Aatbush Development Corporationexplained it, " I f a building is worth amillion dollars and the mortgage is$300,000, the bank can't foreclosebecause its chances of recouping itsinvestment are not considered to be inCITY LlMITSINoyember 1981

jeopardy. The bank can always foreclosefor nonpayment of the mortgage, butnot for leaking roofs, busted pipes and abroken boiler. We tried several times topersuade the banks tQ foreclose on 'goodrepair,' but it didn't work, as long as themortgage was being paid."

Only a PloyRoger Hayes, a long-time neighborhood activist, recalled that the goodrepair clause had never been more than auseful ploy. "We would use the good

20

repair clause as a threat and this helpedus get to the negotiation stage with anumber of banks. We never got a foreclosure, but we did get the banks to putpressure on the landlords more directly. "To make the good repair clause enforceable as a method to prevent deterioration of multiple dwellings, the NewYork State Assembly this spring passedbill #4141 which would enable the bankto foreclose if the owner fails to correctserious housing code violations threaten-ing the health and safety of the occupants .The bill applies to buildings of


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four units or more and would enable .tenants and community groups to bringthe problems to the attention of thebank. The bank, after certifying that thedangerous violations do in fact exist andallowing the owner a reasonable time inwhich to correct them, could declare theentire balance of the principal andaccrued interest due and payable.In a letter to community groups inMay, before the Assembly's passage ofthe bill, Blank wrote, "With this bill amortgagee [bank's] hand is strengthened ..I f a mortgagee is then reluctant touse this weapon, we would look to publicpressure or the present CRA [Community Reinvestment Act]. I f such reluctanceis widespread, we would have to seekfurther remedies, perhaps through astrengthened CRA.'The good repair bill was sponsored inthe Assembly by Democrat from QueensIvan Lafayette, G. Oliver Koppell,Democrat-Liberal of the Bronx, Alexander Grannis, Democrat from Manhattan and Herman D. Farrell, DemocratLiberal from M a n h ~ t t a n . Lafayetteexplained, "The purpose of the bill is tomake it easier to foreclose and to shiftthe burden of protecting buildings on tothe banks. It's to help the good ownerprotect his building from the effects of

bad building next door or across thestreet."

The sponsors consider the billimportant, but not a panacea for allhousing problems. Harriet Davis, anaide to Assemblyman Koppell cautioned,"This bill is not going to do much forseverely deteriorated areas. I t is good forplaces like Pelham Parkway, but not forTremont Avenue. It will only workwhere a bank thinks its property isattractive to purchase. Banks are verysophisticated now and recognize that onebuildmg can ruin a block. They hold alot of paper in certain areas and they areanxious to prevent spot erosion."Ernest Skinner, Assistant Vice-President at Citibank's Flatbush CommunityDevelopment Pilot Program, agreedwith this assessment. "W e are deflnitelyfor 4141. It makes no sense for us to lendmoney for rehabilitations if we don'thave the assurance that the buildings aregoing to be maintained. We're for thisbill and would work for it, to protect ourown investments."Alan Rothstein, a lobbyist for the Citizens' Union and Michael Lenane, Deputy Director of the Assembly HousingCommittee, both consider the chances ofits passage by the Senate very slim. Rothstein explained, "The Senate has shown

a tendency to be more favorable tlandlord interests than to tenant interests. The price for passage of this biwould probably have to be considerabl'watering down. ' And the banks may nowant this bill because it would pU,t themin the middle of landlord-tenant dis

'putes." Lenane added that the powerfulandlord lobby could be expected toppose the bill. "They might ' say,speculated Lenane, "We'll give you thgood repair clause, if you give up 'waranty of habitability.' That would put uin a real \:lind. How often would thgood repair clause be used? Which is thmore valuable piece of legislation for thmajority of tenants?"

Davis, of Koppell's office, stressethat any chance of success for the bill'survival hinges on creating a broadcoalition; including more than tenanand community groups but religiouorganizations as well. To succeed, shesaid, the bill needed support from area"like Queens that are just starting toworry about deterioration. We need toimpress the conservative members of the, Senate and their staffs that the bill isn't athreat to all owner s." 0

Toby Sanchez works in the TechnicaAssistance unit oj the Assoc. oNeighborhood Housing Developers.

COTYLIMI1S):Manhattan ,Soho Zat -W. Broadway & Canal St.New Morning Books-169 Spring St.N.Y. Marxist School (lSI W. 19 St.)Stand-7th Ave. & W. 14 St.Idle Hour Books-59 Greenwich St.Stand-737th Ave.West 4th St. Books-l48 W. 4th St.StaQd-65 W. 14 St. (Sixtb Ave.)Stand-Bleecker & W. 11 St.WendeU'sBooks-302 W. USt.Vinnr's Variety-2Horatio St.Stand-385 8tb A ~ e . (W . 29 St.)Unity Books-235 W. 23 St.Cbina Books-US Fifth Ave. (19 St.)Revolution Books-16 E. 18 St.Stand-Union Sq . East &15 St.Stand-14 St. &Ave. AStand-417 Third Ave. (E. 29 St.)Stand-E. 34 St. & Lexington Ave.

City Limits is available at these newsstands and bookstores.I f you know of other outlets fo r City Limits, p l e ~ caD 239-9423.

Tobacco Road-Cbristopber & 7tb Ave.Inner World Books-687 Broadway (3rd St.)Stand-E. 23 St. & Park Ave. So.

,Readers Statlonary-Un iv. PI. & E. 9 St.Paradox Books;-128 E. 4th St.Astor Smoke-St. Marks PI. & Third Ave.Eastside Books-34 St. Marks PI.Stand-46 W. 42 St. (5-6 Ave.)Coliseum Books -1771 Broadway (57 St.)Stand-Broadway & W. 62 St.Stand-2422 Broadway (89-90 St.) ,Red Letter Books-Amsterdam Ave. & W. 92,St.Magazine EmporiuD!-Broadway& W. 111 St.Stand-Broadway" LaSalle St.Stand-2795 Broadway (107-108 St.)

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CITY LIMITS/November1981


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A Neighborhood Food Project Sets its Table

L UNCH TIME FOR THE FOOD SERVICE TRAINees is over and the kitchen is being used for a knifesharpening class. Next door, in a large gray dining room,seven black and Hispanic trainees earnestly discuss thenutritional and cost differences between orange juiceconcentrate and powdered lang. In their fourth week oftraining at the school at 330 West 42nd Street in TimesSquare, in twenty more weeks between 35 and 40 peoplepreviously categorized as "hard-core unemployed" shouldbe ready for employment in private industry. Based onstartlingly high rates of placement-95 percent the sponsorssay-for the program's previous three cycles the chancesfor placement look good.Aside from the unusually clean kitchens, the facilitiesappear similar to any food training service center thatmight be organized by industry or a union. But on thedining room blackboards, interspersed with instructions onmenu and food preparation are lessons stressing spelling,math skills and leadership. And, a brief discussion withPeggy Powell, the food project' s director, reveals a trainingprogram with unusual goals: "Much of our time is spenton attitudinal development-analyzing orders, learningCITY lIMITSINovember1981 22

By MICHAEL POWEL

teamwork and building character. Job training is not just astory about skills.". This apparently successful approach is the summation ofthe organizing experience of a novel New York City groupcalled the Mutual Aid Project . Besides sponsoring the foodtraining program, this group that traces its origins to somedomestic anarchiSt strains is also, along with the CaringCommunity, a senior citizens center, planning to open amulti-service center in Manhattan's Greenwich Village.Another program, utilizing technical assistance from theregional office of the National Consumer Co-op Bank, wilcombine the Mutual Aid Project with Los Sures, acommunity housing group in the Williamsburg section ofBrooklyn, to establish a small community-rqn cafeteria andcultural center. Both programs will draw upon the foodservice trainees and will eventually include food-buyingservices as well. Each of these efforts, noted Rick Surpin,the Project's director, will be molded not by the planners,but by the J)a;Iticipants. "The shape that the cafeteria andeven the food program take will, in large part, bedetermined by the users," he says. "These programs mustnot be solely dermed by their relation to us, the Caring


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Community or Los Sures.".. That concept is central to MAP's notion of communityorganizing-and it is also a difference it hopes will distinguish it from other organizing attempts. Stressing that hedoesn't Plean to knock the community h o u s i ~ g move.ment,Surpin differentiates the Project from both direct actionand housing organizing. "Most direct action organizationsare defined by single issue campaigns," said Surpin. "Though these are effective and necessary in the short run,I question whether this work is a long-term answer to theproblems we are facing. " Similarly, while lauding theefforts of local housing and development groups, Surpinobserved that these groups frequently encounter severe .limits on their mobility and work. "Many housing groupsare, by their nature, corporately defined. Governmentalguidelines can serve to limit their responsibility to theneighborhoods," Surpin said.

The Mutual Aid Project, by contrast, eschewsgovernmental funding, concentrating instead on developingleadership and teaching local residents to workcoopenltively outside of governmental structures. Thecreation of political leaders is not a stated objective. Surpinexplained, "We are interested in developing the idea of acitizen within a community. Politics, even at the community board level, is not something that we feel we have todeal with, at least not immediately."Much of these tactics and philosophy are an outgrowthof concepts developed at the Highlander School in WestVirginia. An initial training site for many early civil rightsand union organizers, the Highlander School had a basically anarchist philosophy. "The school started as a placefor the coal miners to meet, eat and talk," Surpincommented. "However, once they defined the issues, theworkers and organizers went out to the action and thencame back and taught what they had learned." In thismanner, organizers functioned as co-workers and staff tothe miners, rather than generals commanding and mobilizing troops. Similarly, songs and poems developed out of .actual experiences and conversations. As Surpin pointedout, "The song 'We Shall Overcome' was nothing morethan a quote culled from one of the many workers at theschool. This is what we mean by developing an indigenousculture based on present day experiences." A direct outgrowth of this philosophy, the Los Sures cafeteria projectwill attempt to wed social and cultural organizing with jobtraining and the provision of nutritional food.

C o n ~ y Island OrganizingThis is not the first time the Mutual Aid Project hasorganized around social and economic issues. The Project

has worked with similar coalitions since its inception in1977. Now located in lower Manhattan, at 17 MurrayStreet: the Project originally worked with senior citizens intheir own communities. Eventually concentrating in ConeyIsland, the Project helped form the Coney Island HealthCenter Inc., and the Concerned Tenants of Coney Island.Both groups had similar structures; and there was little

formal emphasis on political connections, with most of thetime spent on leadership development and needs assessment. After a series of studies and .conversations, thegroups decided to concentrate on transportation andhealth. Thanks to intensive organizing, the groups successfully battled the use of two fare zones, while a new healthcenter is due to open in a few months.However, despite Surpin's insistence that the Mutual AidProject is not interested in local political power and takes aneutral approach to politicians, several Coney Island polsreacted to their organizing with ill-disguised fear. As Surpinexplained, "the notion of an independeIJ,t group lobbyingaround unconventional issues made the politicians nervous.This does not meanwe were interested in political office:"However, as with the Mutual Aid Project's insistence thatthey are not interested in politics, Surpin's statement is.slightly disingenuous; entrenched political structures rarelyview the organizing of previously uninvolved citizensaround volatile issues with equanimity. Surpin, is probablycorrect, however, in stating that "the local politicianswould have done fme if they had treated the people ascitizens rather than serfs." Ironically, due to this opposition, several citizens galvanized by the Mutual Aid Projectare now weighing runs for political office.

Still, the Mutual Aid Project does not claim to beunconditionally non-political. "In a wider sense," admittedSurpin, "groups such as ours, especially in the presentpolitical climate, must deal with progressive issues. Theobvious advantage of an organizer is the ability to reinforcepositive progressive issues and reactions."

Based on that outlook, the Los Sures cafeteria willaggressively encourage the development of local ~ u l t u r e ofresistance; oral histories, plays, music and dance drawingupon local experiences and reactions will welcomed. .And, drawing upon Los Sures strength to shore up theMutual Aid Project's weaknesses, Surpin stated, "We will.especially use the tenant and community contacts that LosSures developed through their .organizing. "The challenge for the Mutual Ai_d Project, Los Sures andother housing groups will be to let the cafeteria andtraining programs develop in such a way that control isexercised by the participants. This is not an easy task in apolitical environment that encourages local groups to takeover and "claim" all programs within their service areas.However, the long term benefit for Los Sures and othercommunities will be great if the cafeterias do become thelocal hothouses for social, cultural and economic development as the sponsors hope. 0

23 CITY LiMITS/November 1981


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Planners Network FoNmA series of Friday evening forums called "Land at Six" willbe presented by the New York Area Planners Network. Theschedule, from November through April is: November 20,Making the Planners Network Work, a report on the national

conference and the launching of local projects; January 22,Land Markets-New York City Real Estate. how urban landbecame capital, with Bob Fitch of the Department of Metropolitan Urban Studies at N.Y.U.; February 19, Land Fil/-Creating New Urban Land, from the water grants to BatteryPark City, with Betsy Blackmar of Yale University and BarryLight, Vice President of the Urban Development Corporationand the Battery Park City Authority; March 19, LandBanking-Government Accumulation oj Urban LandCapital jo r Whom? with Sandy Bayer of the Task Force onCity-Owned Property and Peter Stein of the Trust for PublicLand; April 16, LandojEnterprise-Urban Enterprise Zones-Economic Development or Tax Give Away? with GiniSherry of Pratt Institute.The forums are held at the City University GraduateSchool 33 West 42 Street, in the Third Floor studio. Forumsbegin ~ r o m p t l y at six p.m. Admission is free but contributions are accepted. 0

Movies on NeighborhoodsAs part of a series of fIlms at the Museum of Modern Art,two movies dealing with topics of neighborhood change willbe shown on November 17 at six p.m. "Survival of a SmallCity", by Pablo Frasconi and Nancy Salzer shows theconflicts within an old and industrial neighborhood as itbecomes involved in, and affected by, a process of economic

NEW PUBLICATIONSTENANT FACf BOOK AVAILABLE

A fact book answering flfty basic questions frequently askedby1.enants is available in a new 1981-82 editi09 from the OpenHousing Center. The Center is a non-proflt housing groupworking with VIctims of housing discrimination. Copies of theFact Book can be purchased at the Center at 150 Fifth Ave.,New York City 10010 at $3.00 each. There is an additionacharge of $1 for mailing and handling. Other booklets andmaterials prepared and kept current by the Center are alsoavailable, including "Government Assisted Co-ops and rEntals", "A Temporary Place to Stay," and "The ApartmentRental Book." A complete price list will be sent lipon request.For .more information (212) 989-7346.0Displacement, a 42-page study by Richard LeGates andChester Hartman of the Legal Services Anti-DisplacementProject is available for $2.50 from the National Housing LawProject, 2150 Shattuk Ave., Suite #300, Berkeley, California94704. Attn: Lucy Mandoriao.O

revitalization and architectural preservationThrough the words of the people involved, the fIlm relatesthe issue of historic preservation in Norwalk, Connecticut tothe diverse, larger issues involved-development versus displacement and the problems of preservation. Playing alongwith it is "Neighbors: Conservation in a Changing Community," a fIlm by Richard P. Rogers about neighborhoodrenewal in South Boston. For more information call (212)663-9156.0


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Silkscreen ProjectThe Silkscreen Project, a printing resource center at St. Mark's Church-inthe-Bowery, 2nd Ave. and 10th St. onManhattan's Lower East Side, hasstarted its 1981-82 season of service tocommunity organizations. The Projectoffers a series of workshops that trainmembers of community groups to design and print their own banners, posters, flyers and T-shirts. Intensive, fourhour workshops are being held onweekends at a cost of $20 per session,

or $35 for two. All materials for printing are provided at the workshops.For details on upcoming workshops,call the Silksc.reen Project at982-9005.0

Lerner, VValker, Levy &Cohen1960 BroadwayNew York, New York 10023Attorneys at Law (212) 873-7900Tenant Representation

Here's HowBENECSaves YouEnergyDollarsl

Customized Energy Audits Recommendat ions With Under 3 Year Paybacks G e n e ~ a l Contracting For Retrofit Heat Distribution Balancing Ener

city limits magazine, november 1981 issue

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