City Limits Magazine, March 1982 Issue

8/3/2019 City Limits Magazine, March 1982 Issue

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MARCH 19THE NEWS MAGAZINE OF NEW YORK CITY HOUSING AND NEIGHBORHOODS $1.

The Transit Tax CorporationsWon't Pay

Lefrak's Brooklyn Rehab The Billion Dollar PennYardQuestion


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Battle of he Budget! TISADIMFEBRUARYDAYINWASHINGTON. THEPresident has just returned to the Oval Office after a stateluncheon, and he settles deep into the executive chair, sighingwith immense satisfaction. Within seconds, he nods into a lightafternoon nap.

"Mr. President, sir, are you there?" A voice from beyondthe great oak door jolts the executive from his repose . "Sir?Are you in control?"

"Just a minute Ai ." The executive straightens his chair."Airight Ai, come on in now."The General strides into the room, twitching noticeably, andstands at attention before the President's desk. Under his leftarm there is a clipboard of documents, and slung over his rightshoulder a portable 'Stinger' anti-aircraft missile ."Ai, what's the missile for? I thought you said you made upthat Libyan hit squad thing.""The best defense, in this context, sir, cannot arguably bedenied to be a good offense."" Well, yes, you're right there, Ai. Take a seat.""No thanks Mr. President. I 've come here on a matter of themost immediate urgency. I was just testifying before members

of the legislative component on Capitol Hill, and they're . . .they're . . . " Haig's face reddens and his twitch intensifies."Yes?""They' re talking about failing to fully accept our impendingproposals for the next fiscal year's military budget! " theGeneral blurts.Livid, the President jumps from his chair and stands beforehis troubled colleague. "What's their problem?""I don't know," the General sighs. "All we ' re asking for is$216 billion. For God's sake, that 's only $33 billion more than

this year! They must be crazy!""Well Ai," the President says, "thank God they don't knowhow much we ' re spending on chemical weapons. Next thingyou're going to tell me is that they don't want to let us have theBI bomber, the Trident Missile and the MX missile. Why, ifyou ask me, they're a bargain at $4 .5 billion each.He and the General are startled by a loud crash outside theoffice door. "The Libyans!" the General screams, reaching forthe missile launcher and lunging toward the entrance. "Mr.President, get under the desk! Under the desk!" He grabs thedoor and swings it violently open. He aims the weapon into theouter office."David!" the General lowers the.weapon, looking down at

the bespectacled figure gathering a mass of ledger books fromthe floor."Is it Dave?" the President calls from under the great desk."Yes it's me, sir," the Budget Director calls, picking up thelast ledger book. "I've just come from a Congressional budgethearing and I think we have to talk.""Come in, come in." The President gets up from the flooras his two associates reenter the room."Well, sir, I just can't figure that bunch out. You know

I had to spend a whole morning hearing objections to ourproposal to cut $11.8 billion in Section 8 rent subsidies forthis year and next? And I heard some lip about the plan to cut

$286 million from funds to house poor elderly and hancapped people. I'm even beginning to think they're not goito let us phase out the mass transit operating subsidies ovthe next three years. I'm truly worried, sir," the BudgDirector gazes dispiritedly out the Oval Office windo"There were objections about almost everything-cuts child welfare, nutrition, elementary education, adeducation, educat10n for the handicapped, even sewatreatment! We didn't have these problems last year. It wsmooth sailing! What's gotten into these liberals all ofsudden?"" I don't know Dave," the President responds, nolooking out the window as well.The three leaders sit for a long moment in quiet reflectioThe Budget Director breaks the silence. "We may just hato bargain with them, Mr. President," he says pulling outhick ledger book.

"Maybe," the President meekly says, "we can put bathe $400 million cut in child nutrition since '81, if we reahave to.""Hmmm," the Budget Director says as he looks throuthe ledger book, "We can cover that one by cutting back

the 'Dragon' medium range anti-tank missile. It's down $529 million total ."" I f we really wanted to shut them up," the President sa

"we could forget about next year's $2.2 billion cut in AidFamilies with Dependent Children, even though it would quite a sacrifice.""We could get that by calling General Dynamics acancelling our order for two nuclear attack submarineThey're in the book for $1.7 billion, " the Budget Direcnotes."Now this is getting ridiculous," the General grumbles"I know it seems that way, Ai, but these are tough times

laments the President. "We'll make a few compromises, bif this doesn't satisfy' em, they can forget the whole thing."TIm Ledwith &Jim Mende


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Short Term Notes

TenantBlacklisting

I in th,eComputerAgeBy NADIR SAAFIR

Is computerized screening of apartment seekers-or tenant blacklisting as itis less charitably referred to-on its wayto New York City?

- According to one New York lawmaker, this latest California-launchedscheme will soon arrive in the metropolitan area, and with it a potential threat toevery tenant who takes a landlord tocourt or organizes for increased rentalregulations. To counter that threat,Brooklyn Democratic Congressman .Charles E. Schumer is introducing legislation in Congress, and similar laws arebeing proposed to the state Assembly bytwo other Brooklyn representatives., So far, computerized data for sale on"problem" tenants has been uncoveredin several cities and has been confronted -most widely in those California communities such as Santa Monica wheresubstantial tenant political organizinghas taken place.

Several computer companies such asRentCheck in Denver, U .D. Register andT. R. W. Inc. in southern California areleading the field in this blossomingsun belt industry. T.R.W. Inc. offerslandlords as far away as Detroit,Chicago and New York City a chance toplug into their files. T.R.W.'s largestbranch office is located in Parsippany, INew Jersey.

It has been reported that RentCheck ,has more than one million names in itsdata bank for subscribers in cities fromCITYLIMITSIMARCH ,982

Washington, D.C. to San Diego. Thecompanies which collect theirinformation from court records orprevious landlords say tenants have achance to correct errors in their computers, but legal aid attorneys in California say most tenants aren't aware the\screening exists.

Tenant Protection

What's needed to keep tenants' rightsfrom being abused by the computersystem, says Congressman Schumer, isan expansion of the 1970 Fair CreditReporting Act which offers consumerprotection from credit-rating bureaus.S c h u m ~ r ' s amendment would open thesenew data banks to the public and requirethe services to supply copies of tenants'files to those being screened upondemand. It would also tall on landlordsto show just cause for any rejection of a

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tenant based on the computer data andprohibit apar tment rental denials basedon political activities, rent strikes ortenants rights organizing.

Schumer aides Rachel Gorlin and SyRolnick pointed ou t that the nationwidactivities of the computer companieswhich could track a rental tenant fromBerkeley to Brooklyn points up the neefor a national solution. '"For a companto be outlawed in one state, then to evarestrictions by shifting to another justdefeats the purpose," noted Gorlin.

Just the same, two Democratic,Brooklyn state lawniakers, AssemblymDaniel Feldman and Senator MartyMarkowitz have jointly introduced anact to prohibit computer blacklisting oftenants. The proposed law is still beingreviewed by the state's commit tee onjudiciary.0


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,. ..

Exxon, Can You Spare an Hour?Clifton C. Garvin, ChairmanExxon Corporation1251 Avenue of the AmericasNew York, NY 10020Dear Mr. Garvin,

I want to congratulate Exxon on itsl00th Birthday, and wish it good luck inits second century. Through Exxon's advertising efforts , I have become aware ofyour work.to make America energy independent.I have also become aware that:1) Exxon 's profits have doubled since theoil embargo;2) Exxon 's 1980 earnings grew by morethan 30070 to $5,700,000,000.00 ($5.7billion);3) Exxon's revenues have risen to$116,400,000,000.00 ($116.4 billion), soExxon takes in $12 million every hour ;4) Exxon has spent $11,000,000,000.00($11 billion) on exploration and development in 1981.

In this, your second centSry, Exxon

CONTENTSVolume VB Number 3Computer BlacklistingThe Landlord Wh o Went to JailConverting Clinton HillBrownstone Lottery in HarlemTwo Harlem Co-opsPenn Yards Debate

should use its vast resources to tap theenergy resources right here at home-inour neighborhoods. There is a gusherhere in the Northwest Btonx and wewant Exxon to tap it.Mr. Garvin, we are asking you to lendus an hour of your time-$12 million tobe precise-to tap this gusher, so we canweatherize our homes, improve ourneighborhoods and help our seniorcitizens.Please contact the Northwest BronxCommunity and Clergy Coalition at2656 Decatur Avenue, Bronx 10458.933-3101, to arrange a meeting to discussExxon 's newest exploration project.

Printed on bright yellow paper andaccompanied with an illustration of abirthday cake with gushing oil wells forcandles, several hundred of the abovecentennial greetings were sent fromcitizens of the northwest Bronx to Exxoncorporation. Having refused the Bronxgroup's invitation to attend its annualmeeting, Exxon may have been taken

aback by an onslaught from birthdaywell-wishers. But a slightly bewilderedexecutive did agree to meet with eightcommunity residents to hear theirrequest for Ex xon's assistance last February 8th. The corporate officer agreedto give them an answer within a coupleof weeks. I f hat's a Bronx birthdaycard, what's a Bronx birthdaypresent?D

CORRECIIONIn the article, "Limits on Tenan

Management," which appeared on pag17 of the last issue, new guidelines foentry into the city housing departmentTenant Interim Lease program wererroneously described as including a "percent occupancy rate in habitablapartments." The guidelines actuallrequire eligible buildings to have a 7percent occupancy rate.

( CITYUMIlS)24567

City Limits is published monthly, except JunelJuly andAugust/ September double issues, by tbe Association of Nf8hborbood Housing Developers, Pratt In.stitute Center for Community and Environmental {)evelopment and the UrbanHomesteading ASsistance Board. Articles ili City Limit$ do notnecessariJy refi ect the opinion of the sponsoring organizations.Subscription rates: $25 per year for b u s i n e and governmentofilcials; $9 per year fo r individuals and community-basedorganizations. AU correspondence should be addressed to:

Right Climate for Energy CodeWeatherization LoansCorporateTransit Tax ScamLefrak's Brooklyn RehabReview: PermanentGovernmentPrime Trrne for Cable TV

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CITYLIMl1'S, 424 West 33rd Street. New York, KY. 10001(212) 239-9423,9424Postml#fer send change 0/address to: City Limits, 424 West33rd Slreet. New York, N.Y. I(}()()J.... SeCOOd:.class postage paid New York. N.Y. 10001City Limits (IS$N Ol99..()HO)Editor . . . . . . . . . . . . , ... . . . . . . . . . . . . . . . . . .Tom Robl>ifl$As$istant Editor ' . . . . V \ .. , . Tim LedWith

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Assistant Editor . . . . . . . . . . . . . . . . . . . . . . .. . . . .Susan BaldwinMarketmsDirector . . . . . . . . . . . . . . . . . . . . . . . James MendellDesian and Layout . . . . . . . . . . . . . . . . . . . . .. . . .. Louis FuigonlCopyright 1982. All rights reserved. No portion or portions ojtll/Sjoumalmay be reprinted without the express written per-mission 0/ he publishers,

CITY LIMITS/MARCH198


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The SRO Landlord Who Went to JailBy SHARON MCDONNELL

Imprisoning a landlord for harassingand displacing his tenants is a rare eventin New York City, where the real estatestakes are high, and forcing tenants tomove out to pave the way for dem9litionand luxury construction has all too oftenbecome the name of the game.The owner of a single-room-occupancy hotel on Manhattan's Upper WestSide, however, was recently arrested bydetectives from the District Attorney'soffice squad on criminal charges forwaging a successful campaign of terrorwhich eventually drove all the tenants

from the hotel less than five months afterhe took ownership. Immediately following his arrest on January 22, TonyPostiglione, 38, began serving a 70-dayjail sentence on Rikers Island for repeatedly disobeying two previous ordersfrom New York Civil Court to ceasethreatening and harassing residentsto move from the hotel at 175 West 85thStreet, and to provide adequate heat, hotwater, and maintenance.A grand jury is currently reviewing thecharges of burglary and coercion that theManhattan District Attorney's office ispressing against Postiglione for hisstrong-arm tactics at the SRO hotel andalso at two buildings in Yorkville 'On theUpper East Side where he representedhimself as the new owner.Postiglione, who lives in a posh$250,000 home in Rockaway, N.J., hasbeen the recipient of more than $2million in tax abatements from the Kochadministration.According to the SRO Law Project,funded by the city to protect SRO residents, the tenants lived in fear of theirlives from Postiglione, who threatenedto kill them if they did not move out.Beatings in tenants' rooms or in thelobby by thugs, vandalism of rooms,break-ins-often with no sign of forcibleentry-plugged door locks, and two fires .within a three-week period were alsoreported from the time Postiglionebought the building in August until thelast few tenants left by January.One tenant, John Zapparato, wasthreatened in late October, 1981, byPostiglione and found his locks pluggedon November 2, according to the SROLaw Project. After the locks were repaired, they were broken two days later,and the death threats were reiterated.Across town at 174 and 176 East 85tht; Street, tenants simultaneously wereexperiencing harassment tactics fromPostiglione, who appeared on the sceneand repeatedly informed them, v e r b ~ l y and by letter, that he was the new owner

Crumbling wallsand corrodedplumbing in kitchen at174 East 85th St. 4

and that they must leave within themonth or two. Vandalism, break-infrequent heat and hot water, and existent maintenance and repairs platenants, according to the tenants' ciation.Postiglione, a partner in the YLion Construction Company andowner of numerous buildings in hattan, especially on the East Side, took title to 174 and 176 East 85th Sdespite his claims and claims made bowner-Steve Stribula-that he solbuildings to Postiglione and partners in August, 1981.

Stribula, the president of Zuba Ralso denied responsibility for a toting employee of Postiglione's, FHollen, who began to reside in 17485th Street in September,informing tenants he was not the suas they supposed, since he lived ren-bu t "really a guard . . . to protect[the landlord] investment." Hollenmerly resided at the SRO on WestStreet until he moved to the East siSeptember.

Ongoing InvestigationsCurrently the subject of an onginvestigation conducted by both feauthorities and the District Attoroffice, Hollen is an ex-felon who sefive-and-a-half years in prison stabbing a man to death in 1969 andarrested by federal agents for posse

of two guns in October, 1981,records confirmed.In addition, Jacob Goodman, Plione's attorney, was arrested Februand charged with attempted granceny after, according to the DA's ohe allegedly told Postiglione thcould get him out of jail if Postipaid him $17,000. Goodman released on his own recognizance.

Sharon McDonnell is a freelance who covers New York City commissues.


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A NEW YORK TIMES REAL EState column published early last December described the adjoining northBrooklyn neighborhoods of Fort Greeneand Clinton Hill as an area "richlysteeped in history of a sort to delighthomeowning renovators who like to talkabout the area's early days at cocktailparties." The brownstoners' traveloguewent on to relate the successful efforts ofa few "pioneers" to return the area'sItalianate row houses to their former elegance, and touched on the plans of somedevelopers following more ambitiously inthe footsteps of the cocktail party crowd.One of them, Francis Greenburger; aprincipal partner' in the lIme Equitiesmanagement firm, offered the Times hisown perspective on the neighborhood'snew wave. "The idea of gentrificationnever appealed to me," Greenburger wasquoted, "but the notion of improvementdoes." And to further such improvement, the article explained, Time Equitieswants to turn the Clinton Hill Apartments, a local rental complex containing1,200 apartments, into a cooperativedevelopment. That plan, in turn,prompted the primarily black, middleincome complex's tenants council to askin a recent press release: "Improvementfor whom?"

The heart of this controversy is thesecond largest single cooperative conversion proposal in New York State history,according to the tenants' statement.Under the terms of the plan, which wasfiled with the state Attorney General'soffice last October 21, Clinton Hill unitswould be tagged from $16,000 to about$24,000, depending on apartment \location (some have fantastic views ofthe East River bridges and lower Manhattan skyline) and whether the buyer isa current tenant or an outsider. Monthlymaintenance charges would average over$350. The proposal is a "non-eviction"plan ,under which buyers for only 15percent of a project's units have to befound in order for the conversion toproceed. Under this type of plan, thelegal status of Clinton Hill residents whoremain as renters after the conversiontakes effect would be technicallyunchanged.

CONVERTINGCLINTON HILL

But tenants council members believethe lIme Equities plan is considerablyless innocuous than it seems.Rudy Cain, a 13-year resident andspokesman for the group, wonderedabout the respective provision of servicesfor renters and cooperators after a conversion takes place. The plan, he noted,allows for the purchase and subsequentrental of individual units. "We'll have abunch of little landlords running aroundthis place," Cain lamented. In addition,he voiced concern about the futureposition of "insiders," tenants now inplace, who decide to buy intQ the lImeEquities deal. " It looks good on paper,"Cain observed of the financing-up to80 percent of the purchase price-beingoffered to insiders by Greenburger'sfum. "But the entire balance on the loanis payable on demand in five years."That, he said, would leave middleincome families with the choice of refinancing their loans or giving up theirapartments. Given the possibility ofmonthly maintenance charges rising withinflation, Cain argued, the risk for manybuyers will be great.For his part, Greenburger, who firstmet with tenants the day after the TimeEquities plan was filed, views the plans

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for Clinton Hill apartments as an economic necessity. "Like many large apartment complexes designed for a middleincome tenancy," he stated in a writtenreply to the tenants' press statement,"Clinton Hill is in a difficult economicposition. The combination of legal restrictions on rent and the rapidly escalating cost of operation due to inflationarypressures have given such properties adim future . . . In my experience," Greenburger concluded, "iml'roved housingconditions are not economically feasiblein middle income rental properties."

That conclusion is anathema to manyof the complex's residents, whoseaverage rent presently hovers around$300. Spokesman Cain said the tenantscouncil is "organizing and waiting" forthe Attorney General's decision on theplan, a decision that is not expected untillate this year, according to Greenburger.Meanwhile, the surrounding neighborhood continues to attract investment.And Cain, summing up his own view ofthe alleged improvement this investment-and the proposed lIme Equitiesproposal-will bring to the community,commented simply: "This is a 'redherring.' "OT.L.

CITY LIMITS/MARCH 1982


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The lottery and the preliminary elimination process had been droning on forhours before a live winner materializedin the hall."Here I am. I won," screamed Amelia E. Samuda, a 52-year-old accountantat Baruch College who resides at 111West 135th Street. "Being born inHarlem, it's a joy to have something ofyour own," she said later. "I hope theblack people here in Harlem can get together now and get some homes forthemselves," she added. "After all, theyshould have the first choice for the other400 or 500 houses that are left to get ridof because these are the people who havestayed here in the good times and thebad." The city owns at least 300 morebrownstones, most of which are vacant.

Samuda, who submitted applicationsfor all 12 brownstones, won the right topurchase a building at 65 West 119thStreet in the historic Mt. Morris sectionfor $5,000. Under the terms of thelottery, she will put down one-quarter or$1200 of,the total sales price to purchaseit and will be eligible for a 2O-year lowinterest loan, ranging from three to ninepercent (depending on the family's income) for up to $33,()()()..a-unit to coverrehabilitation costs.Asked if the city plans to implementthis lottery process for disposal of itsother large property holdings, particularly the brownstones, Deputy HousingCommissioner Robert Davis said, "Idori't know whether there will be alottery or auctions .. . We'll have to waitand see what the outcome of this isbefore we sit down with the boards."He did admit that the city would haveserious problems raising the money tocover loans to the 12 brownstones if theywere to exceed the $33,000 cap.Meanwhile, Lois Penny and otherresidents who opposed the lottery arefearful that this process will be extendedto all the boroughs and that any futuresales in Harlem will not be within localresidents' reach. Mayor Koch initiallyopposed the preferential lottery as heclaimed that it was discriminatory tooutsiders who wished to become homeowners in Harlem. 0

Homesteaders Face EvictionIn a sweeping court decision thatappears to effectively exhaust their legaloptions, homesteading residents in three

city-owned Lower East Side buildingshave been denied both recognition aslegal tenants and the right to challengethe city housing agency's performance asa landlord. The New York CountySupreme Court ruling dismissed a legalaction initiated by the buildings'residents against the Department ofHousing Preservation and Developmentlast October. It cleared the way for theoccupants' possible eviction by the citywhen their case returns to a lower courtin March.Justice Edward Greenfield's earlyFebruary decision stated that most of theapproximately 50 occupants of 272, 274and 278 East 7th Street "are squatters."It affirmed the city's right to "consolidate" legal tenants from the buildings toin rem properties in better repair, a mpvethe housing agency attempted last summer, bringing the East 7th Street situation to a h e a ~ i . Greenfield's judgementaccepted HPD's conclusion that no morethatl six such "bona fide" tenantsoccupy any of the property's 72, apartments, and provided for their relocationunder the "fair and reasonable criteria"of the consolidation program. As for the"squatters," Greenfield's ruling mincedno words: "Having illegally moved inafter the consolidation order," it stated,"They cannot de facto gain recognitionin law . . . " HPD Commissioner An-thony Gliedman's "refusal to meet with

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them is proper." The East 7th Streethomesteaders, the decision concluded,"have no right under the law to requestthe relief they seek."That relief, as spelled out in theresidents' 'Article 78' legal proceedingagainst the city, was the repair of hundreds of building code violations thathave accumulated in the buildings sincethey were tax-foreclosed in 1977.According to residents who have been inthe properties since then, they have beensaved from abandonment only throughoccupants' homesteading efforts.As a result of the decisive SupremeCourt ,ruling, which an attorney for theEast 7th Street occupants described as"probably unappealable," the groupfaces virtually certain defeat in CivilCourt, where the city's eviction proceeding against them has been stalledsince last fall. That case is due to comeup again on March 8.As that date approached, the East 7thStreet residents continued an organizingdrive that began in October and has garnered support from community residentsand organizations on the Lower EastSide and around the city. The drive,which has centered on the 7th Street caseand the broader policy issues of consolidation and homesteading it raises, resulted in the formation of the CitywideHousing Coalition late last year. Whatever clout that group has developed willface an acid test in the next few weeks,when the city makes its next move onEast 7th Street.DT.L.

CITYLIMITSIMARCH 1982


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Penn YardsTl:le 62-Acre,Billion Dollar QuestionJUST TO THE WEST OF THE LINcoln Center performing arts complexon the West Side of Manhattan, and justbelow the old San Juan Hill workingclass residential district, lie the littleused, 62-acre Penn-Central railroadfreight yatds. Running 13 blocks alongthe Hudson River waterfront, from 59thSt. to nnd St., the area is the llugestsingle piece of undeveloped larid inManhattan, and potentially one of themost valuable for the future of NewYork City-depending on- which valuesare applied. Local Community Board 117has been asked to make that value judgement as the first step in the UniformLand Use Review Procedure, a Jprocessthat will end with a fmal land use decision by the Board of Estimate thissummer.

At stake is a billion-dollar proposalfrom all Argentina-based consortium toconstruct 4,850 units of luxury housing,along with up- scale commercial development. Most of the units at the site, whichwould be developed by a group calle

new elite of New York's expanding worldfinance capital center versus the protection of blue-collar jobs for the traditional New York City working class,Backward City Planning

Proceeding with consideration of theluxury housing without a prior decisionon the TOFC terminal was described byState Assemblyman Jerrold Nadler as a"textbook example of backwards cityplanning."

Nadler pointed out to Community.Board members that as of now, NewYork City is "virtually cut of f from thenation's rail freight network," and is"the most truck dependent major city inAmerica." He was supported by a representative of New York's garment in-. dustry whose testimony before the NewYork City Council economic. development committee was reported in the N. Y.

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By WILLIAM A. PRICEFirst o j two articles.

Daily News: "If the 60th St. railyardsnot reconstructed, the garment indusand its 600,000 jobs will disappear in, next 10 years." Nadler continued thdespite the outflow of blue collar jobManhattan is still "the third largmanufacturing city in the UniStates.''

Yet the New York City Planning Comission has "certified" the Lincoln Wproposal as ready for consideratwhich set in motion the city's unifoland use review procedure (ULURtime clock. Community Board 117 argthat the certification was premature csidering the failure of the city admintration to make a prior decision on TOFC terminal. But, the City s ~ d , othe clock has started ticking, you mconsider the Lincoln West proposalits merits.This was the situation the comml!-nappointees to the Board confronted.


10/28

Architectural rendering ojproposed billion dollar development jo r the Penn Yards.While all this was going on, two highly development "will help to increase the open space design, impact on an alreadplaced city employees close to the Koch v i a b ~ t y of other neighporhood residen- overloaded subway system, shadoadministration had been co-opted into tial developments and establish this patterns from the projected Lincothe Lincoln West operation. One was portion of the Upper West Side as a West towers-all primarily local issueJames Capalino, former commissioner more stable residential area." The But as the hearings proceeded, it wa

of the Department of General Services presumption of "blight" and the becoming clear that the flamboyanand also-hold your hats at this one- concept of "viability" have, of course, Liticoln West design creating a West Sidformer head of the Community Board become t h ~ code words for rationalizing Sutton Place would affect housing oAssistance Unit, which was set up to gentrification and the displacement of portunities for working class residenprovide liaison between City Hall and working class families. . .not only in the Board's own districthe local community boards. Capalino The "environmental impact" process, which runs from 59th Street to llOwas suddenly appointed president and however, also requires a listing of "miti- Street, but also in Community Boarchief executive officer of B.A. Capital, gating" proposals to counter the adverse #4's district to the South and, in fact, ththe Lincoln West parent company. The factors. Community Board In members, entire West Side. And the option of thother was John Zuccotti, former who live in an area much "renewed" and TOFC t e ~ a l could well protect thchairperson of the City Planning Com- now being rapidly gentrified, are sensi- jobs of workers who come into "thmission (which must also approve the tive to the issue of displacement. ,So the city" from Brooklyn and othedevelopment), whose law firm was re- Board has suggested its own mitigation boroughs.tained to represent Lincoln West in the method: "In order to alleviate the The question was-considering threview process. adverse impact of indirect displacement, unseemly haste of the original certificaAs PaIl of that process, Lincoln West the City must establish a policy under tion of the Lincoln West proposal by thwas required to produce a Draft En- which developers would be required to City Planning Commission, and thvironmental Impact Statement (DEIS) provide for low and moderate income city's foot-dragging on the TOFC termand did so in a volume about the size of residents in affected neighborhoods. As nal which has been in the works fothe Manhattan phone book. Such a applied to Lincoln West, the plan should several years-whether, the fix wastatement must address the questioll of a not be approved without a commitment alFeady in.Odevelopment's adverse environrriental by the City and the developer to protectimpact. Buried in the huge Penn Yards low and moderate income residents . . . Involume is a one-sentence description of the absence of a city-wide policy, CB If!an adverse socio-economic impact: "The recommends that Lincoln West be reincrease in area land values induced by quired to contribute to a fund for thisLincoln West may cause the displace- purpose."ment of existing business and property When the Community Board In's 'owners." However, the statement ex- public hearings on the proposed developplains, the neighboring area is ment started, much of the discussion"blighted" anyway and tbe luxury dealt with questions such as air quality,

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William A. Price is a long-time UppeWest Side resident and a member oCommunity Board #7's housing commitee. Next month the writer will take further look at the Penn Yards effect othe local community and the rest of thcity, and some lessons it may hold foorganizing for low and middle incomhousing in the 1980's.



11/28

The RightClimate for an EnergyCode

N EARLY A DECADE AFfERthe Arab embargo, a half-decadeafter the blackout and after thesubsequent shock treatments of oil andgas decontrol, New York City has at lastdiscovered its own energy crisis; tha t inbuildings allover the city, money isliterally being burned. Three recentstudies, two by city offices and one by acoalition of community and publicinterest organizations called the CitizensEnergy Committee, propose tha t energyconservation investments and the use ofrenewable resources might slow thehermorrhaging of municipal and privatedollars for ever more expensive heating,lighting and cooking.

Residential Energy CodeThe Department of Housing Preservation and Development has developed aproposal for a residential energy code,which would set basic energy efficiencystandards for multiple family buildingswith six or more apartments. In thatproposal, HPD contrasts the distribution

of operating costs for rent stabilizedapartments in 1967 and 1981. Fifteenyears ago, fuel and utilities representedCITYLIMITSIMARCH1982

13.3 percent of those costs while taxes,fees and permits comprised a full 46.1percent. Last year, fuel and utilitiesreached 35.7 percent of all operatingcosts while taxes, fees and permitsshrunk to 26.2 percent. Interestingly,labor had timidly increased from 15.6percent in '67 to 16 percent in '81, whilethe administrative share actually fell,from 8.3 percent to 6 percent. So muchfor the disastrous impact of unions andbureaucracy.The city housing agency suggests thatonly a mandatory retrofit code candiscourage inefficient use of nonrenewable energy sources. Conservationhas surely not occurred spontaneously;landlords, fearful of spending in thebalmiest of economic climates, blanch atinvestments that cannot either be rapidlydepreciated or plowed back into the rentroll as a physical improvement. The rentstabilization system's fuel pass alongmechanism offers landlords only adistant economic incentive; the majori tyof fuel costs are simply added to thetenant 's rent with little regard to leakywindows, clogged boilers or inefficientappliances. The HPD proposal, whichwill go before the City Council thisspring, recommends that all existing

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By RICHARD SCHRAEDER

multi-family housing be required toinstall energy conserving measures wa five year period unless an exemptiogranted.Energy Consumed CityWide

Of course every dollar spent onforeign fuel supports jobs e l s e ~ h e r e adrains the city of capital while consertion creates jobs and circulates revenwithin the area. A s tudy from theMayor's Energy Office, which constra massive data base on all energy consumption patterns in the city accordinto fuel and economic sector, calculatethat in 1979, the cost of energy, excluing jet and marine fuels, was $6.6 bill$4.5 billion of that amount went toenergy producers outside the city. NeYork City households consumed 16percent less energy than the averageAmerican household and 62 percent lelectricity. Yet energy expenditures foNew Yorkers were 33 percent higher,average yearly cost of $965. While 71percent of overall New York consumption was oil-based, the equivalent ofroughly 16 million barrels of oil in theform of waste heat, was discharged belectric power plants located in the cilocal energy system three times more


12/28

dependent than the national average.Yet, no one seems terribly enthusiasticabout alternative energy strategies. Taxdata for 1981 indicates that only .4 percent of the owners of housing stockinstalled energy efficiency measures. Co nEd has given out less than 500 loans infive years to homeowners for conserVation investments under the state HomeInsulation Energy Conservation Act ,about .7 percent of their 750,000 eligiblecustomers. Th e suggested conservationmeasures pu t forward by HP D and theMayor's Energy Office exhibit goodsense bu t not much spleen; the familiarlitany includes caulking and weatherstripping, double-glazed windows, 80percent efficiency in boilers, radiatorvalves, water tank insulation, pilotlessgas stoves, low-flow showerheads andfluorescent lights. These "low-cost andno-cost" measures might producesavings of nearly 25 percent. A sensible ifbelated policy. I f decisions were madeaccording to value and common sense,the path would seem clear for energyself-reliance.

An Energy AgendaThe Citizen's Energy Committee'srecent study of energy options for NewYork City, entitled Energy Agenda,operates with the obvious advantage ofstanding outside of this administration, abenefit in that landlords', utilities' andbankers' feelings can be squashed atleisure, without losing leverage. Thenergy Agenda observes the city, not asa myriad of profitable opportunities or alittering switchboard of potential cashxchanges, but as a delicate web of

uman and institutional relationships.r example, the study discusses the

of locally produced methane inThe City's Response

Task Force has begun theof two idle Staten Islandand Fountainormer will produce enough

to replace 1,250 barrels of oil perhe latter will heat 15,000 homes for

Energy Agenda supports conservation-oriented electric an d gas ratestructures, expansion of solar and windtechnologies and gas-fired cogenerationechnology (which uses heating energy

produced by the generation ofelectricity). Perhaps the mostprovocative segment describes conservation needs in New York's housingstock. Noting that $500 invested inconservat ion goals equals $1500 in a newpower plant, the study bemoans the lackof leadership and education in the upperreaches of city government. Politicsseems l in this light, to be the ultimate

destin'ation of all who would affectpublic policy. A city administrat ion that,would twist arms for the fuel passalong,and build an energy policy around itsgentry is an unlikely leader to an energyefficient future. 0 'Copies of EnergyAgenda at eavailable from the Task Force on GtyOwned Property, 40 Worth Street, NewYork, NY 10007. 691-0480


13/28

ALoan Pool for Energy ConservationF EW BUILDINGS LIVE AS PERIlously close to the financial edge asthe fledgling low income co-ops nowbeing formed in the inner city neighborhoods of New York. These co-op's budgets must stoke the ravenous heatingappetites of older buildings while simultaneously holding rents to affordablelevels . Numerous studies have shownthat substantial fuel savings can berealized by burner and boiler repairs andby window and door replacement. Butgetting from here to there is a difficult,and expensive, proposition.Now, using a combination of grantsand loans from two foundations, theUrban Homesteading Assistance Board,a non-profit group, is preparing to testthe ability of young, low income co-opsto make that transition. Over the nexttwo years, UHAB will assist some 12 to15 buildings, totaling approximately 200apartments, analyze their fuel savingsneeds and originate loans to finance theweatherization work. While the bulk ofthe loan money is expected to come fromprivate banks at market rate interest,what will make the scheme affordable isUHAB's contribution of a second,smaller, interest-free loan, enough toreduce the total cost to an estimated 12percent interest.At that level, UHAB says, the tenants'expenses will match their savings fromreduced fuel consumption and the city'sJ-51 tax abatements which will accruefrom the improvement work.The source of UHAB's funds for theloan write-downs is an "Energy Conservation Endowment Fund" of $200,000supplied by the John A. Hartford Foundation of New York. Invested to yield thehighest rate of return, the interest generated from the fund is expected to reach$42,000. That money will be recycledinto the loans being made by privatebanks for conservation work.In addition, two other pots of loanmoney are being made available toensure the project's success. In order forbuildings to evaluate how much and


what type of weatherization is needed,UHAB will make a no-interest advancefor an energy audit. I f the audit showseffective steps that could be taken andthe building opts to apply for aconservation loan, then the audit loanwill be repaid by the larger one.Also, given the frequent harshness ofNew York City winters, the group willalso make available funds from a ColdWeather Revolving Reserve Fund to helpbuildings with their fuel budgets duringextreme cold.According to Andy Reicher, UHABdirector, federal weatherizationprograms and their attendant incomeregulations and restrictions have been "abad fit" for New York's new low incomeco-ops. "It was clear to us at UHAB itwasn't an answer," he said. " It was justa holding action. What's needed to dealwith weatherization is an industry. Wefigured low income buildings could manage market rate interest loans, once thecosts were offset by fuel savings and thetax abatements. It was also one of thefew places buildings could borrowmoney."We lacked a number of things, especially funds and decent contractors. Butit was easy to see the CETA employmentpossibilities and from there the local businesses that could take off."Taking the outlines of its loanproposal to the Ford Foundation,UHAB was told that its energy savingspredictions was still uncharted territory.Although there had been a good deal ofone-family building experience accumulated, there was not enough testing onolder, multi-family buildings let alonelow income tenant co-ops.Moreover, the loans would be testingthe benavior of the co-ops. Faced withtight budgets, tenants might well chooseto spend on emergencies, not debtservice.Another question raised was couldtenants act in such a way that energysavings could be real. One open windowundoes all the best energy-saving efforts

12

of a double-glazed window installeconsiderable expense.UHAB's response to these questwas that it could work and Ford agto put up $15,000 for the emergency weather fund-as a kind of insuranctbe larger weatherization loan. Interates by that time, however, were at tcurrently high levels, and the ' eapredictions of cost savings equalling expenses no longer held. I t was herethe endowment fund loaned by Hartford Foundation, a philanthrarm of the family that controls Asupermarkets, made the vital differeThe $200,000 loaned to UHAB ainterest provides the 'seed' capitabring down the expensive cost of pricredit. The entire amount mustreturned to the ,foundation at the entwo years.The likely client buildings for theperimental weatherization programemerge from 12 buildings currently benergy audited by the EnergyForce, a nonprofit assistance grunder a contract with the state Diviof Housing and Community RenewIn addition, each building receiviloan subsidy from the UHAB fundbelong to the Housing Energy Allifor Tenants-the HEAT fuel-bucooperative-both to maximize savand to monitor the effectiveness ofsteps taken to reduce fuel consump

With all these precautions and guards, loans leveraged onto loans,banks still be willing to invest in bings that appear to be risky phypropositions, with tenant cooperathat have yet to prove their cohesiven"Some banks have already eJSprtheir interest," said Robert Pierpontis directing the project for UH"We've done everything we can tconservative in our projections figuring," he said. "Down the rolittle, banks can see these loans as utools, and a springboard for odevelopment." 0 T .R.


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N0 ONE LIVES IN MOST OFthe buildings on West 142nd Streetbetween Lenox and Seventh Avenue. Onthe whole, they are tall strong brickapartment buildings discolored by yearsof city smog and little maintenance.Open front doors reveal neglectedhallways and make tenants easy preyeven for amateur burglars. The entrancesto other buildings on this street are sealedwith large concrete blocks. These housesneed a savior, but who can save them?

Harlem Co-ops:The FirstGenerationOne answer to this question is smackin the heart of the block. The residents of139 W. 142nd St. and 109 W. 141 St. areliving witnesses that group ownershipcan work. Both buildings have been cooperatively owned by their residentssince 1925."Housing was short in general," saidMrs. Louis Gaitha, a resident of the W.

141st St. co-op of the early years. "Therewas a change in the neighborhood-Jewish people were moving out, black weremoving in. Many of us knew about thecooperative movement. A. Phillip Randolph (founder of the Brotherhood ofSleeping'Car Porters union) was a leaderthen. He was a s o c i ~ s t and they believedthat people should own things. I met himwhen I was in college at Hunter. He hada pragmatism that taught people manythings. And we wanted decent housing."Gaitha was part of the building's originalco-owner charter. Adam Clayton Powell Sr. of the Abys-In 1925, these co-op pioneers paid sinian Baptist Church, who had been$10,000 down on their 42-unit, $185,000 ~ d v o c a t i n g group o ~ n e r s h i p . building. Most were employed in profes- Many of the people in the buildings'sions like teaching, dentistry, medicine original charters have since moved.and law, but still they; could get no bank Many have died. Still, the buildingsin the ,city to' give them a mortgage. remained cooperatively owned. Though"They didn't lend black people money the buildings are governed by differentback then. You could be a doctor, lawyer self-imposed guidelines, the same spiritor -an Indian chief," said Mrs. Gaitha. -and the same basic day-to-day roatine"There used to be pushcart men on -has kept them together through theEighth Avenue. Those pushcart men years.could go to the bank and get money. We Building officers meet once a monthcouldn't. We fmally got a mortgage and gather with all other residents once. from a bank in Albany." every three months. Once a year, theThe building at 139 W. 142 Street has groups' auditors meet with them to givea similar story. fmandal reports.Looking for housing nearly 60 years After 55 years of cooperative living,ago, ten men began pooling their money these owners still encourage and offerand looking for more people to do the advice to people presently setting out onsame. When they found ten more like this kind of venture. "Be very wellt h e m s ~ l v e s , they were able to buy the six- ' educated in the spidt ,of cooperativeyear-old, 2O-unit apartment building on ness," said Ardin Hinkson, president ofW. 142nd. Some of their motivation 109 W. 142 St. for 20 y ~ s . "Most ofcame from a preacher in the area, Rev. our problems we solved because we were./ 13

By YVEITE MOORE

ever bound by that spirit. I happened be in cOurt a ew weeks ago. When thjudge found out that we had kept thbuilding co-op for so long, he washocked! 'You're still holding on? ' hs ~ d ! We've been through hard timesthree mortgages."While these long-time Harlem co-opare holding on, a new generation of loincome tenant co-ops is being boaround them.Many of these are emerging from thcity's rolls of tax foreclosed buildingwhile others are being taken over frolandlords who long ago gave up othem. Just as Mrs. Gaitha's buildinsome sixty years ago, the new co-omust scramble after affordable loamoney. But there's a wealth of experence close at hand to learn from. 0

.Yvette Moore formerly worked with (hPeople's Voice and is currently writingfreelance CITY LIMITSIMARCH 1982


15/28

Transit Tax Out ofService? (.

Motor's Fifth A venue headquarters: passing through a $50 millionin the state Transit tax.1982 14

By TIM LEDWITHA special real estate tax implementedlast faU and intended to aid the metropolitan area's dying mass transit system

is failing to generate anything close to therevenue its drafters predicted. And amidthe c o n f t i ~ i o n , Mayor Edward Koch hasbeen lobbying the State Legislature inrecent weeks for the levy's repeal andreplacement. The short and unspectacular history of the t r a n s i ~ tax,meanwhile, has spoken volumes abouthow developers in the mid-Manhattanoffice market navigate the muddy watersof corporate responsibility.The tax in question was developed onthe theory that such developers shouldhelp finance the rail and bus system thattransports millions of office workers toand fro daily, making high density officedevelopment possible. To that end, thl..measure, passed in July and enactedOctober 1, cans for a 10 percent chargeon profits from commercial property


16/28

sales of a million dollars or more. Whenthe levy was first imposed, the mostconservative estimates put its potentialannual earnings at $30 million.But in the fITst four months of itsexistence, the transit tax raised a paltry$S million, according to the city FinanceDepartment. Commissioner Philip Michael, who heads that agency, attributedthe lackluster performance largely to theflurry of bigh-fmance sales that immediately preceded the measure's enactment. Besides that surge to avoid thelevy, Michael noted, the slowdown intransfers also results from some impending large transactions being forestalleduntil after the tax has been altered orrepealed.The figures suggest Michael's frankassessment is on target: during lastAugust and .September, when sellerswere scrambling to beat the deadline,more than 130 properties worth a milliondollars-plus changed hands in Manhattan alone, with an aggregate sales pricetopping a billion dollars; while in the 10weeks following the transit measure'senactment, about 70 eligible Manhattanparcels were transferred, selling for atotal of about $650 million.Other 1981 tax records tell the sametale. A one percent city tax on largeproperty transfers, for intance, raised atotal $36 million last year. Fully half thatamount was raised during August andSeptember, while in November, after thetransit surcharge was in place, thetransfer tax accrued a meager $2 million.But these numbers reflect only part ofthe story. Even among million dollarplus transactions that have been completed since October 1, according toCommissioner Michael, few sellers havepaid the transit levy: of 125 such salesclosed city-wide during the tax's fITst 10weeks of existence, 14 paid it. Michaelattributed this shortfall to contracts forthe remaining sales having been signedlast summer or earlier. According to thestatute, that's a legal loophole. Thecommissioner said canceled depositchecks were being used to verify thecontract dates.

The legality of some other fancycorporate footwork around the transittax has been more questionable. In earlyJanuary, for example, the General

Motors Corporation armounced a trans- GM case, the mayor was busy promoaction involving its headquarters at 767 a -new state bill designed to replaceFifth Avenue in Manhattan. Anything transit tax with a more "workabut a straightforward sale, the complex measure. The new proposal, introdGM deal basically granted a financial in both state legislative houses inconcern called Corporate Property February, would replace the cuInvestors an option to buy the 50-story measure with increases in exitower in 1991, in return for $500 million. mortgage taxes, using the additiOaiming the deal didn't constitute a revenue to subsidize the transit syssale, GM neglected to pay the transit Applying to sales of $500,000 or mI the Koch initiative would increasevy.On January 11, Mayor Koch an- existing property transfer tax fromnounced that the city would act against to two percent, and would hikeGM, charging that the company owed current mortgage recording levy fromthe city and the Metropolitan Transpor- to two and a quarter percent. In contation Authority $50 million, under to earlier mayoral proposals, _ he lterms of the transit tax. According to the one would tax each property's e

New York TImes, the mayor said: "We sales price, not its "net consideratare going to take the position, and that (the sales price minus existing liens omeans we will sue, to collect the tax property, such as mortgages and inwhere we believe there is a technical ance). Even so, the Straphangers Cavoidance to subvert the clear tenor of paign, a mass transit research andthe law. Then a court will have to decide vocacy group, characterized the billwhether or not they have found a way poor substitute. "It may be a step inlegally to avoid, or whether in effect they right direction," a Straphangers spoare simply engaging in a fiction." SUp- man said, "but the tax rate justporters of the tax were delighted by the low to capture the kind of revenuearmouncement, but they were incredu- transit system needs."lous as well, since Koch's representatives On February 23, the mayor's prowere already lobbying for the transit was voted out of the Senate Taxmeasure's repeal in Albany. and Investigations Committee, whIn hindsight, nearly two months after headed by Manhattan Republicanthe mayor's headline-generating an- Goodman. Albany observers belnouncement, that skepticism looks well- the bill would probably pass in thefounded. According to Hadley Gold, an Senate, where it will enjoy substaassistant to the city's Corporation Republican support. In the DemocCounsel, "there is no lawsuit pending." controlled Assembly, however, theHe explained in February that the city posal remained in committee at Fhad still not established the basis for any ary's end, and observers said thelegal action against GM. Gold added would not be likely to pass in that hthat he had met with representatives from the corporation whom he described Meanwhile, MTA and governmenas "cooperative," on February 10. The flcials floated the idea of a transitpurpose of that meeting, he said, was to increase later this year. The crumgather more detailed information on the Franklin Avenue shuttle, serving Brterms of the deal in question. "There is lyn's Crown Heights communityno case until you make sure you have the opened after undergoing stopproper documentation to back it up," repairs but still faced an unceGold responded when asked about the future. The MTA aggressively purmayor's seemingly decisive statement of "Operation Slug," a public relaa month before. "Until we can analyze extravaganza that includes fIDingthat information and assess whether publicizing the names of subway rthere is a liability for this transaction, we caught entering the system illegally. can't say whether there defIDitely is or is morning after morning, millions ofnot a suit." Yorkers ventured into the bowels oWhile his legal department pursued transit system, hoping for no newthis ostensibly uninspired course 'on the - prises on the way to work. 0

15 CITY LIMITS/MARC H 19


17/28

....HowLefrakCouldn't KeepTenants 'In Place'

By MICHAEL POWELL

A FTER OVER A YEAR OF COMMUNITY DEBATE,fmancing problems and intensive meetings with tenants,the New York City Department of Housing, Preservation andDevelopment and developer Ted Hilles are preparing toinitiate the rehabilitation of 118-126 Sterling Place. Sittingnear F1atbush Avenue, on the outside border of Park Slope,in Brooklyn, 118-126 Sterling Place is a group of fourbuildings containing forty-eight apartments. The buildings

I are the target of a federal Section 8 Moderate Rehabilitationloan. The terms of the loan guarantee the present low incometenants a fifteen-year federal rent subsidy; tenants will pay nomore than 30 percent of their income towards rent. 'Fortunately, the rehabilitation process has left the tenantsas pleased as the city and the developer. The Sterling Placebuildings are almost fully occupied and most of the tenants

will fit the federal income guidelines. Basic building servicesare being provided. As one tenant, Angel Gonzalez, explained, "S o.far, everything has gone according to plan. Ourrapport with management is good and the repairs have keptcoming." Cathy Meyerson, Director of HPD's ModerateRehabilitation Program, and staff member Jack Green madeseveral visits to the building and the developer has maintained

CITY LlMITSIMARCH 1982 18

a high degree of visibility. For his trouble, the developeHilles will be rewarded with guaranteed market-rate rents o$480 for a family of four and a variety of tax benefits for hiinvestors will accrue from the rehabilitation.Unfortunately, the almost model rehabilitation process aSterling Place is not necessarily repeated elsewhereMonitoring rehabilitations and providing for tenant inpuinto a process that, by defInition, is supposed to allow thetenants to remain "in-place" has proved much more difficulon other sites.

In addition to these problems, the Section 8 ModeratRehabilitation Program is under attack at the federal levelAs one of the nation's last in-place rehabilitation programsthe program is vulnerable to charges of profligacy in the samway a lone lightning rod attracts electricity. Low incomhousing is not a popular item in an age of trickle-doweconomics. I f budget director David Stockman and PresidenReagan are successful, all federal rehabilitation funds will beterminated by the end of 1983. Housing vouchers andmigratory tenants will replace the goal of providing new andrehabilitated housing.


18/28

Program's Rockier SideLocated well into Brooklyn, far from Park Slope, arehabilitation project on East Flatbush's Nostrand Avenueillustrates the rockier side -of the moderate rehabilitationprogram. On Nostrand Avenue, the process has resulted indisplacement and poor living conditions and raised questionsabout the tenants role during the rehabilitation.From the beginning, many of the tenants at2047-2054-2064 Nostrand Avenue were skeptical about therehabilitation. The buildings were basically sound with rentshigh enough to generate an acceptable cash flow. Recalls onetenant, "I don't know why the man needed the loan money.All we needed were basic services."The "man" is Samuel Lefrak, one of the largest realtors inthe city and the owner of almost one hundred properties inBrooklyn and Queens. Lefrak is presently building theresidential property section of Battery Park City, while at thesame time selling of f as co-ops the property bearing his namein Queens, Lefrak City.The three, large gray buildings lining Nostrand Avenue

contain 190 apartments, none of them previously in disastrous shape. As is common with most Lefrak properties, thetenancy of the three buildings is generally at a moderateincome level, with a smattering of elderly and publicassistance recipients. As the Section 8 program has an incomecap of $21,500 for a (amily of four, many of the tenants knewthey would not qualify for the post-rehabilitation subsidies.According to Evette Wright, a tenant leader, "Lefraksimply used the loan as an excuse for not carrying out repairsand getting rid of troublesome tenants." A small, energeticwoman, Evette Wright is speaking from experience; deteriorating conditions forced her out after several years of battlingLefrak in court. She comments, " It just got ridiculous.Service was non-existent. . . Lefrak decided he could get paidfor not providing services."The present situation is grim. In 2054 Nostrand Avenue, ahole resembling a toothless grin lines the wall where a bank ofmailboxes used to sit; the boxes were literally torn out of thewall. Graffitti cover the walls and unlocked entrance doorsand nonfunctioning intercoms make captives of the elderlytenants in this high crime area. Placed in the buildings due totenant demands, three security guards now provide amodicum of security to the three half-empty buildings.Though Cathy Meyerson insists that "We [HPD] alwayspushed Lefrak to keep the basic services coming," fewtenants are receiving repairs.Meyerson struck upon one of the program's weaknesseswhen she explained, "Lefrak had his program together he'sjust been caught by the fmancing." And, as Stanley rufer,Lefrak's rehabilitation consultant explained, "The biggestreason for the delay was that HU D sat on our request forinsurance for six months." At the same time, Rifer andLefrak were requesting that the federal government grantpost-rehabilitation rents that would approximate 131 percent

of the prevailing fair market rent in the area.T h r o ~ g h a fairly arcane process, the federal Housing andUrban Development agency and HPD allow developers tocharge post-rehabilitation rents equaling 120 percent of the

prevailing fair market rent, though, in some cases, percentage can go as high as 144 percent.

Repain and VacanciesWhile these fmancial dealings were of obvious interesthe developer, tenant concerns at the Nostrand Avebuildings appeared to take a bac)c seat during this period.Cathy Meyerson states, "In-place rehab is difficult. Y

don't want to invest mega-bucks before the rehabilitatwhen you'll just have to replace it after you receive yfunding."Unfortunately for the Nostrand Avenue tenants, a fmonths stretched into a year and a program designedminimalize displacement and provide for in-place work resulted in extensive displacement, and, undoubtedly, higconstruction costs. All this with a landlord whom, in words of HPD, has a "solid management record."Stanley Rifer defends management's actions, stating, "Wmade an attempt to repair apartments. The buildings wfifty years old and needed the work. Besides, the tenancy wnever stable. Many of them refused to fill out the Sectioapplications and others moved of their own free will. Dplacement is definitely not what is taking place. There walways 30 vacancies, even before Lefrak decided not to rout any more apartments." Lefrak stopped renting apartmeover a year ago, in a process referred to as warehousing.As with other parts of the program, the problemsvacancies is a two-edged sword; though HPD discouracuts in services while buildings await rehabilitation, theyencourage developers to hold vacancies. "Warehousinaccording to Cathy Meyerson, "is a smart idea given the nto move tenants between apartments while you are replacpiping or other systems."Though it may serve development purposes, a graduaemptying building can have a traumatic effect on tenanBuildings take on a ghostly appearance, and, as EveWright stated, "Without careful regulation, the fewer ofthere are, the easier it is for the landlord to justify withdraing services." In addition, with only 90 tenants presenspread throughout 190 apartments, security becaproblematic.Meyerson agrees with Rifer that the buildings "had a laturn-over rate to begin with," though she acknowledges t"a lot of tenants were- going to be over-income and woffered a chance to relocate."

However, for many long-time residents of East Flatbuthe prospect of a move to a completely different neighbhood was not enticing. In a neat wipe of the hands, fedeguidelines do not include over-income tenants in their dplacement statistics; over-income tenants are supposed toable to carry the vastly increased rents. Meyerson is herscritical of the program's guidelines. "I wish we could skthe rents, so that those without subsidies could remain," ssaid. "W e are trying to create solid, low-income housiunits, not displacement. Of course, the bottom line without the loan, would the landlord have another option?

17 CITY LIMITSIMARCH 198


19/28

Conversations with ~ t s and community leaders in East'Flatbush suggest that there may well have been other options.They raised questions possibly applicable to other projects aswell; if the Nostrand Avenue buildings clearly contained substantial numbers of over-income tenants, why were thebuilc!ings targeted for a Section 8 Moderate rehabilitation? Inthis &se the rent increases and subsidies acted as a sieve,rather than a safety net. As Robert Rose, director of tJieJunction College Development Corporation, a groupmonitoring the rehabilitation, said, "A large number ofpeople were over-income . . . here was a strong sentiment inthe community that Lefrak let the buildings go because theywere not profitable enough, and that the program should nothave been applied to the buildings."Stanley Rifer explained that "We intend to substantially redo the Nostrand Avenue apartments. Post-rehab we expect tohave 144 apartments instead of 190. Previously, the buildingscontained 70 studios, which is far too many and led toovercrowding." Rifer maintains that larger apartments and"the type of tenant" these apartments attract "is farpreferable" to the present l ~ o u t .

After much pressure from Junction College, the localNeighborhood Stabilization office and, recently, HPD,Lefrak's organization agreed to consolidate the tenants in thetwo worst buildings. Tenants were offered moving costs, theright to inspect their new apartments before moving in, and afree moving gift, such as a color TV or new appliances.However, several tenants refused to move and the deal fellthrough.The question of tenant rights during a rehabilitation is notan easy one to resolve. Even fairly successful efforts, such asthe rehabilitation being carried out at 52-58 Argyle Road inthe Flatbush section of Brooklyn have created problems.Brenda Riley, president of the Argyle Road tenant association is now "basically very satisfied" with the nearly com-

pleted rehabilitation. However, during the early period owork, Riley, a six year resident of the building, recalle"when we had to relocate the landlord wanted us to acceanything until the building was completed. We were nogetting heat or basic services . . . a lot of the tenants wanted leave but I begged them to stay."Richard Marans, Director of Development for thFlatbush Development Corporation, a community grouslated to manage the post-rehabbed buildings, agrees therwere some problems with the buildings but views these a"endemic to a basically sound program. Tenant-in-placwork is inherently difficult. There is a tremendous pressuron the landlord, and when they fall behind, catch-up workfrequently done at the tenant's expense." Developers havabout 12 months to complete construction. Besides beincostly, over-runs can jeopardize the subsidies and makproper tenant consultation impossible.In this vein, ironically, even several tenants at the NostranAvenue buildings defend the program in general terms. Saione tenant, "The program isn't working for us but thatbecause it was aimed at the wrong buildings and withouenough pressure on Lefrak. I have a lot of friends that wistheir landlord would apply for this program."With over 2,300 units waiting to be allocated, the Section Moderate Rehabilitation program still has an impact to makon neighborhoods. Indeed, Meyerson expresses the hope thafuture projects will be "more innovative and attract widecommunity participation." However, until HPD provides thdirection necessary to prevent undue displacement aneducates both tenants and the community as to the developerresponsibilities, moderate rehabilitation may continue on hit-or-miss basis.D

Michael Powell is a tenant organizer in Brooklyn.


20/28

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,A 4O-page publication, "Stimulating Cooperative Ecoomic Development in Low Income Communities: An Ovview" has just been published by the ConferenceAlternative State and Local Policies. The booklet consists oseries ofarticles on the Reagan Administration's impact onop development, the s p e c i ~ r o l e of women in co-op develoment, and specific suggestions for cooperative economdevelopment.To o r d e ~ , send $4.95 10 percent for postage to: Coference Publications, 2000 Florida Avenue, NW, Room 4Washington, DC 20009.0

CITYLIMITS/MARCH 198


21/28

Inside the Permanent Govemment IBy TOBY SANCHEZPhotos by LAURIE PEEK

Jack Newfield and Paul Du Brul's ThePermanent Government is essential reading for an understanding of how NewYork or probably any other city works.Non-New Yorkers may get lost in someof the details, but they will easilyrecognize in their own cities the samepattern that the book documents aboutNew York: that a permanent governmentof banking, real estate and politics runsthe city year in and year out, regardlessof who is elected mayor, governor orpresident.The cast of characters changes overtime, as do their internal alliances, bu tthe focus of their attention remains land: 'who owns it, invests in it, builds on it,what they build and how much tax theycan manage to avoid paying. Thefeasibility and profitability of dealsdepends on the cost of money, the costOf construction and the rate of taxes.Since these translate into interest chargesand write downs, zoning laws, buildingcodes, tax abatements, contracts and allthe other items that go to make upprofitable investment, it means thatbanking, real estate and politics go hand. in hand. Each needs the other two inorder to prosper.Newfield and Du Brul sum up thewhole process in a few sentences, wellworth quoting:

The current investment in lap.d andbuildings in New York is . . . morethan $100 billion . . . . This means thatthe.most powerful realtors andAmerica's largest banks are perpetually trying to figure ou t ways toincrease their profits on investmentsin New York real estate: . . . Theprimary way they can accomplish thisgoal, next to their unstinting attemptsto rape the Internal Revenue Code, isto manipulate the politics of NewYork city and state . . . .An amazing number of individualscan become involved in any buildingproject in New "X'ork City: the seller ofthe site, the builder of the project,architects, dO,zens of separate con-CITYLIMITSlMARCH 1982

Governor Hugh Carey andHarry Helmsleystruction trades, title-search insurancebrokers, contractors, property insurance brokers, truckers, building inspectors, bankers-and almost all ofthem will be accompanied by legionsof lawyers, accountants and tax experts . . . . . In tum each of thesegroups has its own lobbyists, stringpullers and political godfathersoperating at City Hall and the StateCapitol, and each is a source ofcampaign contributions, favors, andpolitical foot-soldiers for 'sympathetic' politicians.

I f his were the only point of the book,neither David Rockefeller nor MeadeEsposito,nor William Shea, to name justa few of the members of the permanentgovernment described on te9 full pagesof the book, would find anything in itwith which to quarrel. The authorsbelieve, however, and attempt to prove,tharthe "Golden Triangle of politics,real estate and banking" is bringingabout the ruin of New York by the pursuit of their own narrow interests.

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Althotigh the permanent governmentclaims to be working for the public goodby c r e ~ t i n g projects that will trickledown wealth to the rest of us, Newfieldand Du Brul try to show that the factsare otherwise. The benefits that mayonce have trickled down in slow but, steady drips to a wide circle now amounto a great flow of money to a very selectfew beneficiaries. Very little goes tothose not white and IlOt rich.

What the permanent government de-fines as ''New York" includes only thoselike themselves and tlle minions whocater to their needs. Exactly how the

.' p e r I l \ ~ n e n t government has been bringing about the doWIlfall of NewYork is detailed in story after story,starting with the 1975 Budget orBankers' Crisis, the moment when thebanks decided to dump New York City'sbonds and notes. The book describes thebanks ' redlining of most of New York'slow and moderate income neighborhoods and h o ~ they defeated legislativeattempts to counteract it.

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Realtor Harry HelmsleyThey also explain the history andoperations of Con Edison, the develop-

ment of Battery Park City and Westway,organized crime and the selection ofjudges, and the background of manyother events in recent New York history.In each of these tales it is the members ofthe permanent government who benefitand the ordinary New Yorker who loses.Newfield and Du Brul have an extraor-dinary range of knowledg! and an envi-able ability to make complex financialmanipulations interesting and exciting.

Must the permanent government goon serving its interests at the expense ofeveryone else? The authors say no.Although they open up their last chapterwith the statement that the inaugurationof Reagan comes at the bleakest hour forNew York City and the entire Northeastsection of the United States, they calionordinary citizens to organize to changethe system. "Reform-change for thebetter-comes only when movements ofcommon people rally around an idea andcreate new leaders from the bottom up."

But for organizing issues they offer avery disappointing list of reforms. Eachreform is worthwhile, but it is not likelythat the permanent government wouldbe threatened even if all of them came topass. The authors exhort us to tackle thetransporta tion issue (by electing theMTA, trading in Westway and salvagingthe railroads), take on the real estateinterests (by saving rent controls,regulating cooperative conversions,passing commercial rent controls,making the Urban Development Corpor-ation build affordable housing for the

poor and middle class, taking the profitout of arson, investing municipalpension funds in rebuilding New Yorkand abolishing unjustified real estate taxexemptions).

Further, city employees should berequired to live within the 5 boroughs,the City's debt payments should bestretched out and state and citygovernment should fight crime seriously.After 262 pages of examples of theincredible and far flung power of thegolden triangle, the list is something of aletdown.These items would indeed improve thelives of ordinary New Yorkers, but theywould do nothing about some of themore important determinants of thequality of New York life: the disappear-ance of jobs for the unskilled or moder-ately skilled with limited ability in writtenEnglish; the federal tax system, whichencourages overseas investment andmakes the poor pay relatively more thanthe rich; the transfer of our incomes andour income taxes to the states rich in oiland gas and for investment in defense in-dutries.Most importantly, the authors forgotto include the permanent war economywhich creates both inflation andunemployment. Even if Harry Helrnsleyconverted the Palace Hotel into an SROfor homeless people and the rest of thepermanent government gave up greed,shortsightedness and racism in favor ofbuilding affordable housing for low andmoderate income people, little in NewYork would really change.

The last chapter, in other words,reveals the limitations of the book.Everything does not begin and end inNew York-there are bigger forces ou tthere. To save New York as a place ofeconomically and racially diverse neigh-borhoods, affordable for all kinds offamilies, will take far more than rentcontrol, an elected MTA, and a lesspolitical system for selecting CriminalCourt judges.

Despite the weakness of the reformssuggested, The Permanent Governmentremains essential reading for under-standing the daily workings of the city. Itoffers a way of looking at events, plus

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AttorneyRoy Cohnthe names and interconnections nevefound in daily newspapers. It certainteaches one to be skeptical of each netrickle down scheme offered (the LowManhattan Expressways, Linear CitiBattery Park Cities, Westways, etc.).The Permanent Government documethe truth of Russell Baker 's recentremark, "There is no free lunch excefor those who don't need it." 0Toby Sanchez works at the Associatio fNeighborhood Housing Developeand edits the HANHD Weekly Reade

Banker David Rockefeller

CITY LIMITS/MARCH 1


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( LE'i"IERS )-_.v"".cLead Decision

To the Editor,This January, a new bill strengthening New York City'sability to prevent lead poisoning was signed into law. Underthe old law, the city had to wait until a child was poisoned to

order housing corrections. The result was that in 1981 over1,000 children, approximately 80 percent of them Black andHispanic, were poisoned by lead in New York City. The newbill will make peeling paint in older apartment buildings aserious housing code violation. While this is an importantstep forward, several obstacles to preventing lead poisoningremain.First, the Departments of Housing Preservation andDevelopment (HPD) and Health have a poor track record inenforcing previously existing laws. In 1980, HPD'sEmergency Repair Program failed to remove the lead hazardin one third of those apartments in which a lead poisonedchild lived. Many children were forced to return fromhospital treatment to the very same conditions that madethem sick. The new law will have an impact only if HPDinspectors enforce it. Organized pressure from tenant groupswill help ensure enforcement and landlord compliance.Second, only one of every six children at risk of leadpoisoning in New York City is actually tested for the disease.Many hospitals, clinics and private doctors fail to testchildren aged one to six annually as recommended by medicalauthorities.Mayor Koch's proposal to consolidate (i.e. close) HealthDepartment child health stations in hospitals threatens tofurther reduce the availability of the free screening test forlead poisoning.Finally, several of President Reagan's budget cuts promiseto hamper the fight against lead poisoning. His 22 percent cutin funds for the lead poisoning control program means somecities will eliminate lead control services. Cuts in housingassistance means that more people will be forced out ofdecent housing into the deteriorating conditions that causelead poisoning; also less funds will be available for repairprograms. If implemented, Reagan's proposal to allow morelead into gasoline would reverse the decade's improvementsin air pollution due to lead. Children exposed to high levels oflead in the air are at greater risk of lead paint poisoning.Recent evidence indicates that even small amounts of leadin a child's body can retard emotional and learningdevelopment. Higher levels can have multipleeffects-including death. Lead poisoning is a social disease;CITYLIMITSIMARCH 1982 22

its prevention requires social action. Continued pressure fromthe health field and the community will be necessary both toinsure enforcement of the new law and stop housingdeterioration.Respectfully,

Jose AlfaroSally KohnNick FreudenbergWashington Heights HealthAction Project

The Threat of Rental LotteriesTo the Editor:

A few points about your article, "Rental by Lottery,"(January 1982).It is important to emphasize that the context of the struggleto give a priority to long-time neighborhood residents in the

rental of government-assisted new or rehabilitated housing isthe belief that the health and vitality of New York Citydepends on the planned stabilization and revitalization of itsneighborhoods. The tireless efforts of non-profit communitygroups and local activists in housing and communitydevelopment have produced remarkable progress towardsachieving this stabilization and revitalization. The profoundlyanti-neighborhood bias of new federal and city "lot tery"policies threatens to undermine and eliminate these achievements, as well as the role of communities in bringing them


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abou t. Equally important, the citywide lottery policiesthreaten to eliminate the small amount of control that poorand minority communities have fought to achieve over thepitifully inadequate amount of decent, affordable housingthat their community groups are creating in theirneighborhoods.

Second, racial discrimination in government-assisted housing has not been caused, and will not be cured, by the use ofcitywide lotteries for tenan t selection. Federal and city claimsthat the lotteries will be used to fight discrimination representthe mos t cycnical kind of smokescreen designed to deflectattention.from the failures of government to vigorouslyenforce existing antidiscrimination laws, thereby contributingto that very discrimination in housing that they now claim to. be fighting.

Third , the new lottery policies have the wonderfulcollateral effect of deflecting public attention away fromcurrent federal and city efforts to drastically cut back orcompletely eliminate the already meager and insufficient lowincome housing r ehab and production programs, and instead,pitting groups of housing-star.ved people against each other tofight for the few remaining units. This strategy of creating"horizontal hostility" among needy groups will work only ifwe fail to see where our mutua l interests lie.

Fourth, both the federal and city governments seem to besimultaneously developing the most insidious forms ofdouble standards. With respect to HUD, ANHD's researchindicates that New York City appears to be the only place inthe country where arbit rary restrictions on the percentage of

MASTER'S DEGREE IN URBAN AFFAIRSwith concentration inNEIGHBORHOOD DEVELOPMENTA 36 credit 'graduate program that can becompleted full-time in one year or part-time.Courses include: Urban Development Workshop Community-Based Management Structure of the Urban Community FieldWorkPresent tuition for 15 credit semester $750plus fee for NYS residents. Financial aid. Grad

uates don't necessarily get rich, but many areplugged into vital community work such asneighborhood and economic development specialists, 'District Managers, community rela-tions and citizen participation organizers. 'For Information contact Hans B.C. Spiegel,Director, Graduate Program In Urban Affairs,Hunter College, CUNY, 790 Madison Avenue,New Yort, N.Y. 10021. 570-5594.

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neighborhood preferences are being i m ~ under theHregulations that actually allow for these preferences. Theof citywide lotteries for tenant selection has, not surprisinbeen restricted to projects developed by non-profitcommuni ty groups. For-profi t private developers applyinfor the same city-administered low interest loans continuebe permitted to choose tenants for their projects withoutusing citywide lotteries. Neither the federal nOT city madeeffort to explain or justify these convenient lapses from eand even treatment.For all of these reasons, in early January, ANHD hostebreakfast for members of the New York City congressiondelegation and representatives of over two dozencommunitie$ and community groups. The unity and strenon this issue expressed at that meeting was truly remarkabAlthough subsequent meetings-and efforts to meet-wicity and federal housing o f f i c i ~ have as yet produced noconcrete results, ANHD and its allies will cont inue to prefor a rescission of the destructive lottery policies. What isstake here is nothing less than the question of whether government will be held responsive and accountable to the peit supposedly represents, and whether the people who aremost affected by government decisions will be permitted legitimate role in shaping the future of their neighborhooand their cityBonnie BrowerExecutive DirectorAssociation of Neighborhood Housing Developers

~ S O C I A ~ 1 ~ ~ ~ 309 FIFTH AVENUENEW YORK, N.Y. 10016IS YOUR INSURANCETOO EXPENSIVE ANDTOUGH TO GET?

For a modest fee we will evaluatyour insurance program to see iyou are getting the most for youdollars."Specializing in lYon-Profit andCommun ity Organizat ions"

Contact: Paul SourifmanVice President(212) 684-4770CITY LIMITS/MARCH 1


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cable TV: Prime Time for.Communities? ByPATRICIASWANNT HE CITY'S BOARD OF ESTIMATEIS CURRENTLYnegotiating cable television contracts for the 'outer bor-oughs' of New York City, one of the most lucrative marketsin what will be one of the most lucrative industries in the coming decades. Th e long and complicated process of negotiatingcable franchises for Brooklyn, the Bronx, Queens and StatenIsland is expected to culminate this April when the Boa rd isscheduled to award contracts. Between now and then, crucialquestions about community access to the burgeoning cablemedium will have to be answered.

The process started when 19 applications (nine for Queens,six for Staten Island, three for Brooklyn, and one for theBronx) from 13 companies were submitted in response to thecity's request for proposals to wire those four boroughs.Seven applications were recommended for acceptance by theCable Working Group which was created by the Board ofEstimate to review applications and develop guidelines. Thegroup is composed of representatives of the mayor, the fiveborough presidents, the city council president, the c o ~ p t r o l -ler and a non-voting representative of the Bureau ofFranchise.

The lineup of the group's recommended applicants isCITY LIMITS/MARCH 1982 24

impressive. The Warner Amex Company is generally considered to be the winner so far in the New York City cables w e e p s t ~ k e s , since it was recommended fo r all three franchises it sought. Warner Amex is the result of a mergerbetween American Express and Warner Communications,whose holdings include Atari, Warner Brothers Films,Warner Brothers Records and Tapes, and Warner BrothersPublications.

' Impressive corporate credentials are held by other recommended applicants as well. Amer ican Television andCommunications is a subsidiary of Tnne, Inc., whichpublishes Time, Life, Fortune, People, Money and SportsIllustrated, and owns Home Box Office, the cable movieservice. Teleprompter, which now serves upper Manhattan, isa subsidiary of Westinghouse and owner of five other cablesystems in the metropolitan area. However, Teleprompter isreportedly dissatisfied with the CWG's recommendations andis rumored to have withdrawn its application. Other recommended applicants include Cox Cable, a subsidiary of 'General E I ~ c t r i c , and Inner Unity of Queens, whose parentcompany, Inner City Broadcasting, owns seven radio stationsacross the country, including WLIB-AM and WBLS-FM inNew York.


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A S ~ D E F R O M E N T E R T A I N M E N T , WHAT DO THEh l g ~ - p o w e r e d cable T.V. companies have to offer? Jobs,

!or one thing. In New York City, where the communicationsmdustry represents one of the few growing sectors of thecity's job base, the job-creating protential of every phase ofc a b l e . f r a n c ? i s ~ g from construction to program production isespecIally slgruficant. Video communications in particular is agrowth industry that will generate thousands of jobs in theyears ahead.

Some of the proposed cable franchise contracts includeprovisions for community studios to be located in the neighborhoods. These facilities and their support services couldhelp to revitalize economically depressed neighborhoodse s ~ i a l l y if skills training and job opportunities are targ;tedto neighborhood residents.

Another crucial issue is media access. Neighborhood activists should understand that cable T. V. is unlike othermedia forms in the sense that cable wire becomes a more orless permanent part of the physical infrastructure of acommunity. The rights and restrictions of ownership and'consumership' that are attached to this infrastructure oughtto provide for some community input. Anyone who isconcerned that poor and working class community residentshave some control over their neighborhoods should beequally concerned that they have some control over the mediathat serves them. Yet

Documents

City Limits Magazine, March 1982 Issue