City Limits Magazine, October 1992 Issue

8/3/2019 City Limits Magazine, October 1992 Issue

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O c to be r 1 99 2 N e w y ort 's C o mm u nity A ffa irs News Magaz ine $ 2 .

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S A K H I F O R S O U T H A S IA N W O M E NE N E R G Y W A R S D N E W H O U S IN G A N D V A C A N C Y S T A T S

Low Incom e Hous ingD row ning in Deb t


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Ci ty L im i tsVolume XVII Number 8

City Limits is published te n times per year,monthly except bi-monthly issues in June/July an d August/September, by the City LimitsCommunity Information Service, Inc., a nonprofit organization devoted to disseminatinginformation concerning neighborhoodrevitalization.SponsorsAssociation for Neighborhood an dHousing Development, In c .New York Urban CoalitionPratt Institute Center for Community andEnvironmental DevelopmentUrban Homesteading Assistance BoardBoard of Directors"Eddie Bautista , NYLPIICharter RightsProjectBeverly Cheuvront,Former City LimitsEditorMary Martinez, Montefiore HospitalRebecca Reich , Turf CompaniesAndrew Reicher, UHABTom Robbins , JournalistJay Small, ANHDWalter Stafford, New York UniversityDoug Turetsky, Former City Limits EditorPete Williams , Center for Law an d

Social Justice"Affiliations for identification only.

Subscription rates are: for individuals andcommunity groups, $20/0ne Year, $30/TwoYears; for businesses , foundations , banks ,government agencies an d libraries , $35/0neYear, $5 0/Two Years.Low income, unemployed,$10/0ne Year.City Limits welcomes comments an d articlecontributions. Please include a stamped , selfaddressed envelope for return manuscripts .Material in City Limits does .not necessarilyreflect the opinion of he sponsoring organizations. Send correspondence to: City Limits,40 Prince St ., New York, NY 10012. Postmaster:Send address changes to CityLimits ,40 PrinceSt. , NYC 1001z'.

Second class postage paidNew York, NY 10001City Limits (ISSN 0199-0330)(212) 925-9820FAX (212) 966-3407Editor: Lisa GlazerSenior Editor: Andrew WhiteContributing Editors: Mary Keefe, Errol Louis,Peter Marcuse , Margaret MittelbachProduction: Chip CliffeAdvertising Representative: Faith Wiggins,(212) 226-4119.Office Assistant: Seymour GreenInterns: Beth Greenfield, Donna Les'liePhotographers: Isa Brito, Andrew Lichtenstein ,F.M . KearneyCopyright 1992. All Rights Reserved . Noportion or portions of this journal may bereprinted without the express permission ofthe publishers.City Limits is indexed in the Alternative PressIndex and the Avery Index to ArchitecturalPeriodicals and is available on microfilm fromUniversity Microfilms International,An n Arbor,MI48106.

2/0CTOBER 1992/CITY UMITS

The Privatization Gremlin

Like a gremlin that looks cute bu t turns into a monster, privatizationis changing the way New York City works-often for the worse.In a city with an often ineffectual bureaucracy and a tight budget,the idea of "downsizing" government has obvious appeal, and maysometimes be necessary.But when budget officials an d Wall Street bondholders push the cityinto swift privatization schemes, who looks out for .the long-term stabili tyof the city, its neighborhoods and its residents?Without close oversight, privatizat ion can become the Frankenstein ofurban policy-making.Consider water and sewer taxes, the slimy beast attacking low incomehousing. Seven years ago the New York City Water Board was created totake rate-setting out of the hands of elected city officials. We're paying theprice today, with a regressive new taxation system that hits hardest inpoor, densely populated communities.The city has spent more than half a billion dollars repairing an d thenselling city-owned buildings to nonprofit neighborhood groups and

tenants. But a study by City Limits shows that water an d sewer taxes havepu t one out of four of these buildings on the verge of fiscal collapse, andthey may return to city ownership.Describing this outcome as counterproductive is' to err on the side ofpoliteness. Disastrous-even stupid-is probably more accurate.Privatization isn't always an evil creature. The housing department'sCommunity Management Program uses nonprofit neighborhood groupsto renovate, manage and sometimes purchase city-owned buildings.With extensive cooperation between the community group an d thetenants, this process can yield amazing results. But this program is beingphased out, an d the first program to replace i t ignores two decades ofhard-earned lessons in favor of a quick-fix approach promoted by costcutters. It allows for-profit contractors to oversee renovation and tenantselection, an d leaves community groups to clean up afterwards.These choices only make sense within the short-term framework of acity government whose vision is blurred by budget constraints and adesire for re-election. They make no sense whatsoever for the long-termhealth of a city that desperately needs more stable, affordable housing.Tame the beast! 0

Cover illustration by Eric Drooker.


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SPECIAL REPORTIntroductionCrisis an d change in low income housing. 9Drowning in DebtOne in four formerly city-owned buildings faces fiscalcrisis-mostly because of unpaid water an d sewertaxes. 10The End of An EraThe Community Management Program is on the wayout. What lessons can be appliea to the future? 13FEATURESElectric ShockIs the New York Power Authority robbing the city ofcheap power? 22A Capital PrimerBudget bumblers take heart-a citizen's guide to thecapital budget. 26DEPARTMENTSEditorialThe Privatization Gremlin ....................................... 2BriefsLabor Protest ............. ...............................................4Parkhill Problems .... ...................................... .......... 47-A or Bust ............................................................... 5

Housing Cuts ............................................................ 5ProfileThe Sakhi Sisterhood ........ ...................................... 6Vital StatisticsOvercrowded Masses .............................................20ReviewBlack in Brooklyn .................................................. 30Letters ........................................................................ 31Job Ads .................... ......................... .......................... 35

Sakhi/Page 6

Special Report/Page 9

Electric/Page 22

CITY UMITS/OCTOBER 1992/3


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LABOR PROTESTMore than 1 500 peoplemarched to Foley Square inAugust to demand that workersfrom the nearby Chinatowncommunity receive equal access

to j o ~ s on a construction site fora federal courthouse and officebuilding.'W e found that out of 169workers at the courthouseproject, only one was Chinese,"says Peter Lin, an organizerwith the Chinese ConstructionAssociation. "At the officebuilding, there were over 100workers and none of them wasChinese."Chinatown labor organizations, business and communityleaders are accusing the federalgovernment o f complicity in theexclusion of Chinese workersfrom jobs at the site.The issue is not simplywhether or not Asians, AfricanAmericans and Latinos arebeing employed. By all accounts, they are . BPT Properties,the courthouse developer,claims that its workforce is 52percent women and racial andethnic minorities.But members of the newlyformed Campaign for EconomicJustice say the workforce atFoley Square should includecommunity residents. They'vegathered 8,000 signatures for apetition calling for 60 percent ofthe construction jobs for pe:opleof color, with 30 percent ofthose going to Chinatownworkers, as well as input fromcommunity leaders in decisionmaking.Federal officials say this isn'tnecessary. "The different minority groups are looking for setasides for each group. Federallaw doesn't allow for that,"explains Harold Busch from theOffice of Federal ContractCompliance. "And there ar e noresidency laws to provide forhiring from the communitieshousing the projects."Virgo Lee of the Mayor'sOffice on Asian-AmericanAffoirs adds, ''With the highunemployment in the construction industry, the building tradesunions can meet minority hiringgools from within their ownranks, even though their ownminority composition is low.There's no incentive for them to4/0CTOBER 1992/CITY UMITS

bring in workers from thecommunity."But this doesn' t mollifyChinatown leaders. "Thequestion is not what is legal, butWhat is fair," says Stanley Mark,an attorney from the AsianAmerican legal Defense Fundwho is coordinating the economic justice campaign. "In thiscase, the law is inadequate andcan't provide for a fair share ofjobs fOr our community."The Campaign for EconomicJustice includes members ofother fair-hiring groups, including Harlem Fightback and theChinese Staff and WorkersAssociation.Although irs far from complete, the Foley Square projectalready has a considerablehistory of controversy. Federallegislation in 1989 allowed theconstruction job to go aheadwithout passing through NewYork City's Unirorm Land UseReview Procedure, whichincludes community residents indecision-making. Because ofthis, Chinatown leaders protested that they lost an importantopportunity to have input in theproject.More r e c e n ~ y , AfricanAmerican activists and politicians became involved in thesite after they discovered thatone of the buildings was beingconstructed on top of an 1 8thcentury African-American burialground. Changes ar e nowunderway to ensure that theburial ground is saved. 0 BarbFadden

PARKHILL PROBLEMSHaving fallen into a dangerous state of disrepair duringyears of neglect, the federallysubsidized Parkhill Apartmentscomplex on Staten Island finallyhas a new owner. But necessaryrepairs are still on hold until thefederal Department of Housingand Urban Development (HUD)approves the sale of the six-building, 800-apartment project.Residents of the complex have

been c o m ~ a i n i n g for yearsabout lea plumbing, drawindows, roken fences, f a ~ n g plaster, and abondoned

CrumbIng Wall: Activist Joan Wheeler points to problems at theParkhill housing complex on Staten Island.apartments that ar e strewn withrubble and infested with Reas.On July 27,without any noticeto tenants, ga s lines were shutoff throughout the complexbecause of extensive leaks. Tomake matters worse, the meterrooms were so full of debris andinsects that gas companypersonnel refused to enter untilmanagement did a two-dayclean up. Gas wasn't restoreduntil August 1 2.

"I've rought since 1980 tostraighten these buildings out,"says Joan Wheeler, a tenantleader. "It's been very discouraging." But she is hopeful thatthe new owners--and arearganized tenant association--{;an pull the placetogether. "At least we have aworking relationship" withmanagement, she adds, whichwasn't the case in the past.David Buchwalter, chief ofthe loan Management Branchat the federal Department ofHousing and Urban Development (HUD) office in New YorkCity, says that the previousmanagement company, HigenAssociates, handled things"inadequately." He adds thatthe new owner, UnithreeInvestment Corp., will soonsubmit a plan detailing e x a c ~ y how it plans to repair problemsidentified by HUD inspectors.But his agency has not yetapproved a ''Transfer ofPhysical Assets" between the oldowners and Unithree, whichmeans no new federal money

will go to the complex forseveral months.In the meantime, tenants aremeeting with Unithree'spresident, Arlington H. Fuller.Since taking control of theproperty in May, the corporation has painted and repairedsome walls, replaced mailboxes,mowed lawns and removedabondoned cars. Tenant leadersnote that the elevators are morereliable now and that bosicmaintenance work is underway.Fuller says Unithree has invested$500,000 in the property. Buthe says he needs $2.5 million ingovernment money to do majorrepairs on the roaf, windowsand elevators, and predicts hewon't have the cash for at leasta year.Wheeler worries that ifproblems aren't fixed soon,some tenants-many of them onpublic assistance and fixedincomes-may have to bemoved before repairs can bedone. Fuller disa9rees.For now, Parkhill tenants ar elooking across the street atanother Unithree property, St.George plaza. They are a limewary of what they see. Thecorporation has managed St.George for a full year longerthan Parkhill, Wheeler says,and "it's been slow over there,too." This month, tenants of thetwo developments plan to electa united tenant associationleadership to work with thelandlord and HUD. 0 BrianHanson-H .... ng


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7A OR BUSTAn important legal dispute isset to decide whether or not

j'udges may use an anti-slumlordaw to seize control of cityowned apartment buildings.The case is a bottle of willsbetween the city's Departmentof Housing Preservation andDevelopment (HPD), which isstruggling to manage 3,200occupied buildings, and somehousing court judges, whodescribe HPD as an incompetentmanager.The case centers aroundthree South Bronx buildings onCreston Avenue and Elsmereplace that were the subject ofhousing court suits long beforethe city took control of the

properties. In 1989 and 1990,when the buildings were privatelyowned, judges found thelandlords liable for dangerousneglect. Housing court placedthe buildings in the care ofDennis Henriques, a courtappainted manage r known as a"7-A administrator".By tenants' accounts,Henriques completely turned thebuildings around. He instollednew boilers, locks and doors,renovated the more dilapidatedunits, and, most strikingly,cleared the buildings ot crackdealers by coordinating theefforts of city authorities, tenantorganizations and his ownsuperintendents.But in the summer of 1990,the city took possession of thebuildings beCause the ownershad defaulted on taxes. Asdictated by city tax laws,Henriques was dismissed andHPD prepared to manage theproperties.Many tenants were fearfulabout having the city as theirlandlord. "As soon as the citytakes over a building, the drugscome in," soys tenant association president Ann CarolynNunez.Refusing to accept citymanagement, the tenantscontinued paying rent toHenriques. And about twomonths after the city acquiredtheir buildings, they sued tohave him reinstated as 7-Aadministrator.Housing court Judge HowardT ussel not only reappointedHenriques, he also ordered

Prot8st Tenants from the Queensbridge housing projectsprotested recently at Federal Plaza, demanding permiSSion for Nationof Islam members to guard their apartments.

Henriques to c o o ~ r a t e with thecity to get the buildings into theTenant Interim Lease Program(TIL), which would enable thetenants to purchase their apartments as a low-income cooperative and manage the buildings themselves. The city isappealing both rulings.An HPD spakesperson insiststhat the tenants ar e not interested in self-management, andtherefore do not qualify for TIl.But Henriques and his lawyer,Michael Doyle, soy the city ismisrepresenting the tenants'wishes.If the case goes to appeal,the lawyer representing the city,Janet Zalean, soys she expectsto argue that the city was notgiven a foir chance to managethe properties. The 7-A statutecan be invoked if dangerousconditions in a building persistfor five days; but in the past'judges have generally used theaw only in cases of persistent

neglect.Only two city-owned buildings, both in Manhattan, haveever been assigned 7-A administrators. The city appealedthese cases, but both weresettled out of court.An HPD spokespersonacknowledges that the department needs all the help it canget in managing its buildings,but Zalean soys this case is amatter of principle: HPD mustbe given a fair chance to run itsown buildings.

The tenants aren't concernedwith such legal niceties. SaysNunez: ''The city takes over, Ileave." 0 Matt Siege.

HOUSING CUTSAdvocates for the homeless

ar e decrying the city's decisionto reduce the number of NewYork City Housing Authority(NYCHA) ap


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By Sasha Nyary

The Sakhi SisterhoodA group of South Asian women provides counselingand support for victims of domestic violence.

Kitty Chachra was in an Indiangrocery store two years agowhen she happened to noticean article in a copy of IndiaAbroad, one of the city's many newspapers for the South Asian community. "I t was just a coincidence," shesays, as she doesn't usually read Indian papers. "Itjust caught my eye."The article happened tobe about Sakhi for SouthAsian Women, a grassrootsadvocacy group forwomenin the Indian, Bangladeshi,Nepali, Pakistani and SriLankan communities inNew York. Intrigued,Chachra started attendingmeetings. Today she volunteers 20 to 25 hours aweek for the group."With the passion that Ipu t into it, it is like anotherjob," Chachra says. "Butit's very important to methat women in our community have a voice withinthat community."Focus onDomestic Violence

from the Asian Women's Center, theVictims Services Agency andManavi,a similar group in New Jersey. Thefounding members, most of themyoung professionals, including alawyer, a computer scientist an d afilm editor, planned to spendan entire

stand on street corners in JacksonHeights an d Flushing in Queens,Coney Island Avenue in BrooklynandLittle India in Manhattan, handingout fliers written in English, Hindi,Urdu, Gujarati an d Punjabi."It's amazing how Sakhi came at atime when the need was so great,"says Madhulika Khandelwal, ahistorian at the Queens College AsianAmerican Center. "Suddenly, rapidly,it grew into prominence."The tri-state area contains thecountry's largest concentration ofSouth Asians, with a little more than100,000 living in New YorkCity, accord ing to the 1990census. South Asiansstarted coming to this country in large numbers whenthe immigration laws

loosened in 1965, so theimmigrant population isrelatively young. F irst generation Indian-Americans,for instance, are in theirmid-20s now and Khandelwal says this often leadsto "an underlying insecurity" about cultural identity."In the last 25 years therehas been an increased effortto maintainwhat people seeas Indian tradition," sheadds. "There is a very conscious struggle to maintaintraditions in food, dress andmarriage. Marriage is themost important institutionthrough which tradition iscarried out.""A voice within th ecommunity" says a lo tabout the purpose of thenonprofit organization thatwas formed in 1989. Themembers of Sakhi- thename means "womanfriend" in Hindi and otherSouth Asian languagesfocus on the issue ofdomestic yiolence withinthe South Asian community. CommunIty Voices: Anannya Bhattacharjee (left) and Kitty Chachra fromSakhi.

"Completely Isolated"With a cultural emphasis on marriage, dealingwith an abusive husbandz can be especially difficultfor South Asian women.8 And this difficulty is comQ poundedby the vulnerabil(! ) ity and fears of newcomersin a strange country. "Think"Our aim was to createan agenda for women in the fast growing South Asian community in theUnited States," says AnannyaBhattacharjee, Sakhi's only paidstaffer. "We didn't want to become anacademic group that simply talksabout things. We knew that domesticviolence was a problem, an d wewanted a South Asian women's.organization. The two came together."Sakhi was created with support

a/OCTOBER 1992/CITY UMITS

supuner educating themselves aboutthe issues. But to their surprise, thecalls came before they were even open.The quick response says somethingabout the power of word of mouth inthe South Asian community. Sakhidoes not advertise, an d they are notlisted in the phone book. Mentiongets out through community newspapers an d Indianradio and televisionprograms. And Sakhi members also

of a woman who, some guycomes here, goes back, marries awoman in an arranged marriage, andbrings the woman here," explainsRadhika Balakrishnan of the FordFoundation, who has counseled SouthAsian women. "She's all alone, completely isolated."But that's not all. Many SouthAsianwomen, including those being abusedby their husbands, are here on theirhusband's green cards. In the past


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couple of years, however, immigration laws have become more flexibleand it is easier for battered women toremain eligible for permanent residency status.Providing free and confidentiallegal advice in delicate situations likethis is just a part of what Sakhi does.The organization also has a core ofwomen who volunteer as case workers, guiding South Asian womenthrough New York's overwhelmingmaze of safe houses, shelters,apartments and social services.One of the women who calls onSakhi for help is Mira (not her realname), an Asian Indian woman raisedoutside New York City. Years aftershe left her husband, who beat herregularly-even when she waspregnant-she read about Sakhi anddecided to seek support."Women who've been throughthese kinds of situations deal withthem for years and years and years,"Mira says, noting that Sakhi offeredher contacts for emotional counselingas well, as advice about practicalmatters like job-seeking. Perhaps justas importantly, she adds, "Theyopened me up to a community ofpeople you feel like you have something in common with."Educating the Community

Besides the one paid staffmember,Sakhi is ru n by about 30 South Asianwomen, all volunteers. The organization's annual budget this year isjust$85,000, funded in part with grantsfrom organizations like the Ms.Foundation and the New YorkFoundation. The group plans to hire asecond employee this fall.But Sakhi's goals go further.Members of the group want to extendtheir outreachbeyondhelping womenleave abusive situations; they want toeducate their community aboutviolence against women so that it willtake responsibility for that violence."We want no t only to preventviolence against women, but tochallenge the system that allows thatallows this to continue," saysGeetanjali Misra, a board member ofSakhi. "Any violence," she emphasizes. "We are trying to cause therippling effect." 0Sakhi for South Asian Women can bereached at 212-866-6591.Sasha Nyary is a reporter at LIFEmagazine.

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--------------I1489,,"di4-);i'-------------Crisis and Change

In Low-Income HousingAter more than two decades of struggle and success, community-based groups inNew York City's poor neighborhoods are at a crossroads.These groups are doing the undoable: turning crack dens into low incomehousing , transforming junk-strewn lots into community gardens, developingeducation, job training and youth programs. Even more importantly, they 're a keyresource for involvement an d action by disenfranchised community residents.Side by side with the incredible gains of the past 20 years are harsh economic truths:poverty is increasing an d one out of every four households spends more than half its income

on rent , according to da ta from the ne w Housing and Vacancy Survey. Overcrowding inapartments has increased 144 percent since 1978.

This situation has the potential to overwhelm and undermine attempts at change. Butit's far from the only threat to the survival, growth and relevance of community-basedorganizations.A study by City Limits shows that right this minute one out of four communitycontrolled apartment buildings is on the verge of fiscal collapse, mostly because of newwater and sewer tax increases imposed by the city. Abandoned by landlords, then neglectedby the city, most of these buildings are now owned by neighborhoods groups and tenants.They 're a precious source oflow income housing and it's plain craziness to allow regressivecity-created tax hikes to force them back into city ownership.

Another element threatening community-based groups is more insidious. A brandnew housing program known as Neighborhood Ownership Works has been touted as thenewest way to help communitygroups improve their neighborhoods. Unfortunately, there'sa huge gap between rhetoric and reality; so far, the program relegates community groups tolittle more than a standard landlord role. It seems like the final step in a long, slowinstitutionalization process that has sapped the last drop of activism from many of theseorganizations. I f he city isn't careful, it could turn the local groups into the very creaturesthey were created to oppose: local slumlords.Times of crisis are also times of opportunity. It's no t too late for the city and communitygroups to return to a participatory process that ensures stable, community-controlled lowincome housing that remains affordable. In the long ru n , the entire city benefits.

CITY UMITSIOCTOBER 1992 /9


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"It's just a mess," says CarolLamberg of the Settlement HousingFund, which owns and manages severallow-income buildings. "We usedto figure about $150 a unit per year[for water taxes]. Now there's a rangeof $300 to $1,200 pe r year. It'scraziness." And Bill Frey of the Enterprise Foundation, another source offinancing for low income buildings,says the water bills for some of hisprojects have turned out to be 500percent higher than budgeted.Ripple EffectExperts across the city say the crisis could well have a ripple effectthroughout low income housing. "Private, public and nonprofit groups arestarting to come together an d [they're1realizing that this is going to be amajor nightmare," says Kathleen Parisiof Neighborhood Housing Services, anational nonprofit that provides financing for small homeowners.She says that building owners fromBedford-Stuyvesant, Harlem and theLower East Side who come to hergroup for help can't cope. "I workwith these clients daily," she says."They're barely making it now. I fyoudouble their costs it puts them rightunder.""We are quite concerned about theimpact of these price hikes on the

affordable housing stock," adds JohnMcCarthy, an executive vice president at the Community PreservationCorporation, a nonprofit lenderbacked by many of the city's largestbanks. "Our main concern is, will rentcover operating expenses? The dramatic increase in water an d sewertaxes has made that question harder

c..

"The city isburying its ownaffordable

housing."

to answer." McCarthy explains thatthis growing uncertainty is discouraging lending institutions from making loans for low-income housing.The buildings in the City Limitsstudy all participated in programsadministered by HPD during the1980s. In the cooperatives, the citypartially renovated the properties andorganized tenants into associations,

which went on to buy the buildingsout of city ownership for a nominaprice. I f a shareholder moves out, heor she cannot profit from the sale oftheir stake in the property; insteadshares are transferred to a new tenant.Maintenance fees in the buildings aresupposed to remain very low-justenough to cover costs-so that thehomes remain permanent!y affordableto people in the lowest income brackets.Apartment buildings owned bycommunity organizations and, insome cases, private landlords that participated in the city's alternative management programs, were also purchased for a minimal fee and are designed to remain as permanently affordable housing.But in many cases the budgetsworked out by the city housing department at the time the buildingswere sold have proven inadequateTenants bought a 24-unit Brooklynbuilding in December, 1985, and budgeted $5,750 for annual water andsewer taxes based on a city estimate.But in 1991, the water bill came to$12,308.Watching Things GoAn oasis of affordable, tenantowned housing stands at 1187 ClayAvenue in the Morrisania section of

The biggest problem iswater and sewer debt Low-income co-ops' costs risefaster than inflation

Two-thirds of the average building's debt of$16,858 is water and sewer taxes.

Source: NYC Dept. of Rnance

UHAB's co-op index shows the cost of running alow-income co-op increased faster than inflation,primarily because of ncreases in taxes and waterand sewer charges.Source: UrlJan Homesteading Ass/stance Board. US Bureau of Labor StatistiCS



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---------------I1Qi9h"di4);il.r-------------

Miledis Arias (farthest left) and her neighbors in their low income cooperative at 658 Grand Street in Williamsburg.

The End of an EraAfter 19 years, a city program promoting community-based management of lowincome housing is being killed. What lessons can be carried to the future?BY ERIKA MALLIN AND LISA GLAZERLike the dusky pink-tin ted glasses she wears, OliviaJones' newly-renovated apartment in th eBrownsville section of Brooklyn is decorated insoft, pastel colors and filled with overstuffedcouches and starched curtains. Smoothing onehand over the newly-painted wall of her kitchen, she says,"In this building, we try to make a difference. You can seethe hallways are quiet and if we hear something we stickour heads out."Jones is obviously pleased with the results of the city'sCommunity Management Program (CMP), which fundedthe total renovation of her 23-unit limestone building bya local community group, the Oceanhill BrownsvilleTenants Association. After watching her building milkedfor profit an d abandoned by a landlord, then neglected bythe city, she says that the communitygroup's involvementhelps her feel "a little closer to what goes on."But not quite close enough. After lauding the overallimprovements in her building, Jones says the Oceanhill

Brownsville Tenants Association is slow to make routinerepairs and sometimes withholds important informationfrom the tenants. In he r opinion, many tenants havebecome too dependent on the community organizationlike a child leaning on its mother-which she feels is onereason the tenants turned down the opportunity to buyand manage the building on their own."That's all true," responds Abdur Rahman Farrahkan,the executive director from the Oceanhill BrownsvilleTenants Association. "The communication does need tobe better, bu t it's no t always the fault of OceanhillBrownsville. Sometimes we call a meeting and only two orthree people come. Also, there are many times whentenants want to be an equal partner in what we do, but wehave the legal responsibility and sometimes we makearbitrary and capricious decisions. It's nota perfect world."

Rabble-Rousers to LandlordsThe ambivalent feelings expressed by Jones andFarrahkan are repeated by many housing advocates andtenants familiar with the 19-year-old Community Man-CITY UMITS/OCfOBER 1992/13


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agement Program, which is now being phased out by thecity's housing department. The ambivalence is largelybecause CMP, more than any other city effort, has changedneighborhood groups from local rabble-rousers intoconstruction supervisors, developers, property managersand even landlords. It's an evolution that's led to verymixed results.Community leaders and residents alike agree that theprogram has achieved what many considered impossible:turning around some of the most decrepit, drug-infestedbuildings in the city and forming strong tenant associationsthat have sometimes gone on to purchase an d managetheir own buildings.But there are also serious criticisms, including instancesof bad management, slow repairs that are sometimespoorly done, and the disillusionment and tension that canemerge when tenants decide not to buy their building andthe community group becomes the owner, with thepotential of either being a benevolent landlord-or a localslumlord.But now the city has decided to phase out the CommunityManagement Program in favor of the new NeighborhoodOwnership Works (NOW) initiative. While CMP reliesprimarily on nonprofit neighborhood groups, the firstNOW program will use for-profit contractors to restorebuildings and then sell the property to community-basednonprofit groups (see Sidebar, page 18).Why is the city cutting off funding for CMP after 1994and establishing anew program? "We'rejust trying to findways to treat morebuildings, to get morebuildings out of thesystem," says JoanWallstein, an assis

tant commissioner atthe housing department. "Right nowgroups in CMP arerenovating tw o tothree buildings a year.Even i f we coulddouble that to sixbuildings a year, wewould not be able toproduce as much aswe need."

to find a way to reclaim tumble-down buildings that hadbeen abandoned by their landlords-and the CommunityManagement Program was born. Relying on the growingstrength an d commitment of nonprofit neighborhoodgroups, CMP has expanded enormously in the past twodecades, from an early annual budget of about $6 millionto a peak of $36 million in fiscal year 1992. From the SouthBronx to Harlem to Central Brooklyn to Lower Manhattan,there are about 30 groups taking part in the program thisyear.In theory, the Community Management Program isrelatively straightforward. The city provides funding forthe renovation ofrun-down, abandoned buildings, a community group oversees the renovation, an d once the building is done the tenants are meant to become the owners,assuming responsibi lity for taxes an d maintenance. If hetenants don't become the owners, then the communitygroup takes over from the city and becomes the landlord.In reality, this process has proven complicated, timeconsuming and costly. The city has spent more than $321million on the program and sold just 228 buildings with4,286 apartments-132 buildings were bought by thetenants and 96 were purchased by community groups.Another 131 buildings are still in the process of beingrenovated.The "hard" construction costs for the CMP program areestimated as $35,000 to $55,000 pe r unit, but when "soft"costs such as tenant organizing are added, the per unit costcan climb to between$60,000 an d $75,000per unit. This compares poorly with theTenant Interim Leaseprogram, which reliessolely on tenants tooversee rehab in their

buildings, and thePrivate OwnershipManagement program, which broughtin for-profit contractors to renovate andeventually purchasebuildings. Construction costs in thoseprograms are estiG mated as betweenca $20,000 and $30,000,according to cityofficials.So far, many housing advocates are expressing dismay that

the Community Management Program isbeing replaced. To_-:-=-____ ---'''----"--'ca Despite these bleak

Mixed Feelinp: Olivia Jones questions whether her neighbors have become too statistics, CMP sup-dependent on the Oceanhill Brownsville Tenants Association.their minds, the new program ignores some of the keylessons learned from CMP: the harsh fiscal realities ofdoing business as a city contractor and landlord in seriouslytroubled buildings, and the tenant organizing groundwork that's necessary throughout the rehabilitation processto create community-controlled, low income housing thatwithstands the test of time.Reclaiming Abandoned BuildingsBack in the early 1970s, housing department officialsnegotiated with fledgling communitygroups in poor areas14jOCTOBER 1992jCITY UMITS

porters say it's impos-sible to judge theprogram by the bottom line and misleading to compare itto other programs because CMP ends up with some of thecity's most physically and socially run-down buildings."CMP buildings were in the toughest neighborhoods,needed the most repairs, an d usually ha d some pivotalplace in the community," says Harold DeRienzo, thedirector of the Consumer-Farmer Foundation, whichsupports low income housing.Because many of the CMP buildings a re in such terribleshape, they require almost complete rehabilitation andsometimes the tenants have to remain in the building,


15/36

swapping apartments in aprocess known ascheckerboarding. This requires intense diplomacyand close cooperation andtrust between the community group, the contractorsand the tenants, which alsoexplains some of the costs intime and money."In one of our buildingswe had to rehab half thebuilding because the apartments were being used asshooting galleries and theother halfof he tenants werescared to walk out," saysMark Alexander from HopeCommunity, Inc. in EastHarlem. He says the renovation process was slow andexpensive-but ultimatelyworthwhile. Clearing out theshooting gallery and fixingup the building was a catalyst for larger changes. "Wecleaned that block up," hesays.

brings out the documentsin Spanish and Englishexplaining the ownershipprocess. "They hold meetings, give us papers, theytreat us right," she says. Andher personal stake in herbuilding has changed her attitude, she says. "When youwere renting, if things gotmessed up in the buildingyou knew you could moveout. But now that it's ourproperty we have to take careof it."The staff at St. NicholasNPC also gives the programstrong support. "Communitymanagement really helpedto re-fabricate neighborhoods," says Virginia VerEcke, who until recentlyserved as the group's directo r of housing. In th eWilliamsburg neighborhoodwhere St. Nick's operates,CMP has helped restore almost all of the run-downbuildings in the area. VerEcke says that CMP has alsohelped build St. Nick's intoa strong, professional organization with a large staffthat's most!y from the neigh

_ ..... -O' ........o....::.:l""""".... borhood, including some

Nonetheless, there aremany instances where theCommunity ManagementProgram's major investmentof capital has led to less thanlaudable results. "I reallyhave mixed views about theCommunity ManagementProgram," says BernardAlston, the project directorfor the Union of City TenOn tile SInet: Tenants of buildings run by West Harlem Group who come from CMP build-Assistance recently held a protest to highlight complaints about the ings.communitymanagement organization. A number of housing ad-

ants. "There are a few groups that act like a responsiblelandlord, bu t it's a mixed bag." How does he grade thecommunity groups in general on their landlording skills?Barely passing-a C minus.Ripple Effects-Positive and NegativeWhen the Community Management Program workswell, the benefits have a ripple effect from individualtenants to their apartments, the block and the entireneighborhood. But when the program backfires, the rippleeffect is equally powerful-and negative.

One building in Williamsburg is an example of how theprogram can work. The first thing a visitor notices about658 Grand Street, a small w a l k - ~ p on a bustlingWilliamsburg thoroughfare, is the spiffy new renovationjob: the bright white tiles and fresh paint in the hallwaysand the shiny new fixtures. But tenants who live in thebuilding say the transformation that's taken place theregoes far beyond physical details."You care more about the building now because it'syours," explains Demetrius Renne, 21. The building wasrecently purchased by the tenants after it was renovated bythe St. Nicholas Neighborhood Preservation Corporation.The tenants give St. Nick's high marks for makingspeedy repairs and informing them about their rights.Miledis Arias, who has lived in the building for 22 years,

vocates across the city echothis support of the Community Management Program."From our experience it's been a good program," says JohnReilly, the director of the Fordham-Bedford Housing Corporation in the Bronx. "The neighborhoods have seenbuildings that they'd given up on turned around." AndAna Bonano, the director of housing management at theLos Sures housing group in Brooklyn, adds, "I love theprogram. When I started working here with the program in1984, we had so many buildings in bad ,condition. WithCMP, we've fixed all these buildings. Now the tenants allown and manage the buildings."Tenants Rush to Air GrievancesBut these glowing references aren't universal, and no tevery CMP building ends up being owned by the tenants.Four tenements that stretch from 220-226 West 116thStreet were among the very first buildings in the programand a ceremony commemorating their $2.5 million rehabin 1980 was attended by then-Mayor Edward Koch andwritten up in The New York Times. Today the front doorsswing wide open, graffiti is festooned in the hallways andtenants rush to speak to a reporter about their grievanceswith the West Harlem Community Organization, whichhas owned and managed the building for a decade."West Harlem, they don't do shit," curses one man onhis way to the group's office, which is on the same block,

CITY UMITS/OCTOBER 1992115


16/36

to complain about a broken boiler. Sinclair Montoute,who lives in 222 West 116th Street, adds, "When they firststarted, it was okay. But problems developed becauseeverything was buddy-buddy. There was a lot ofmismanagement."Others refuse to lay all the blame on the West HarlemCommunity Organization. "West Harlem does a good job.The problem is the tenants," says Missie Moye, who livesin an immaculate apartment on the fourth floor of 220West 116th Street. Moye and a few of her neighbors paid$250 to own their apartment, bu t there weren't enoughtenants regularly taking part in a tenant association toform a low income cooperative so they had to get theirmoney back."I started here April 1st and when I saw those buildingsI was horrified," notes Ruth Brown, a long-time WestHarlem Community Organization board member who isnow working part-time for the group. She explains theearly renovation money was a "mere pittance" that didn'tcover essential expenses like new wiring. "The city says[the money they give you for repairs] will be sufficient, bu t10 years down the line we live with the problems." (In theearly days of CMP, the city provided about $15,000 perapartment for renovations. Today that allocation has increased to about $38,000 per unit.)Brown adds that West Harlem's director, MargaretMcNeill, recently died and that during her lengthy illness,she"didn't have the right people around her." She deniesallegations of fiscal mismanagement,

partment standards an d fixing the sewage pipe was not theresponsibility of her group.Yearly Threat of ExtinctionDespite some of the ambivalence about CMP that currently exists, there was an enormous amount of excitement and hopefulness in its early days. Photographs andarticles from early issues of City Limits show tenantsstanding proudly in the homes they helred renovate anddescribe boisterous protests at City Hal , where placardswere waved and voices raised to save the program from ayearly threat of extinction.Started in 1973 as a piloteffort, CMP is widely acknowledged as the brainchild of Robert Schur, a city housingofficial who went on to establish a coalition of communitygroups, the Association for Neighborhood an d HousingDevelopment-and City Limits magazine."The whole thrust of CMP at the beginning, whencommunity groups fought for it, was that this was going tobe this real partnership" between tenants, the communitygroup and the neighborhood, recalls Jay Small, the current director of the Association for Neighborhood andHousing Development. In the early days , he says, theprogram had a clear mission: "I hate the word, but it wasabout empowering the residents of the neighborhood,about having people engage in some sort of self-determining process, to be stakeholders in their neighborhood."But behind these idealistic dreams were the pragmaticneeds of city government. The pilotprogram that Schur started was exxplaining that "the building started tofall apart, people stopped paying rent,we wound up owing vendors, oil wasn'tbeing delivered, we're owing thousandsof dollars in taxes. At least we've managed to stay alive. A lot of organiza

tions have fallen by the wayside." Infact, several of West Harlem's properties are on the verge of fiscal collapse.The city has begun in rem proceedingsagainst at least three of the buildingsone owes more than $70,000 in unpaid

"Ten years downthe line we Iive

with the

panded in 1978, when New York wasin the throes of a severe recession an dnew laws had accelerated the city'stakeover of tax-delinquent buildings,leading to an unwanted windfall ofproperties. And the city also had asurplus of unspent federal Community Development Block Grant funds.problems. " "It was a case of use it or lose it,"recalls Philip St. Georges, whom thehousing department recruited fromthe Urban Homesteading AssistanceBoard to quickly set up the Division ofAlternative Management Programs,taxes.More problems are evident 30 blocksnorth, where another communitygroup, West Harlem Group Assistance (WHGA), runs anumber ofcommunitymanagement buildings. "They don'twant us to be successful, because they want to keep thebuildings to themselves," says Ethel Branch, a resident of424 West 146th Street.Branch complains that the group sends ou t unwar

ranted eviction notices an d took a year to fix an odorspewing sewage pipe in their building. She says she'safraid to move out of her apartment to allow renovation."With West Harlem's track record, if you move out, that'sit," she says. She an d her neighbors recently held a rallyto highlight 20 complaints about the group, ranging fromshabby bookkeeping to a failure to organize a tenantassociation-a practice mandated by CMP.Shelly Callendar, the director of West Harlem GroupAssistance, responds that she has signed an agreementwith the tenants promising that they will be able to returnto their apartments. She disputes the other complaints,explaining that the building has always had a tenantassociationand that WHGA meets with them each month.She adds that WHGA's bookkeeping meets housing de-18/0CTOBER 1992/CITY UMITS

which aimed to sell city-owned buildings to tenants,community groups or private owners. "We didn't knowwhat was the best way to do this, so we said let's tryeverything," he recalls. "I t was a real challenge."Besides CMP, St. Georges also helped set up the TenantInterim Lease Program and other efforts, but problemswith the pace an d quality of the renovation within CMPstarted early on. In a letter to City Limits in 1980, St.Georges wrote: "Last year an $18 million CommunityManagement Program actually spent only $9 million of itsavailable funds .... Most of the unspent funding was forrehabilitation projects the groups could not get underway." Even harsher, he added, "After eight years of existence and over $30 million of federal funding, the Community Management Program has not resulted in the sale ofa single building to date."But a research paper written by a coalition of neighborhood groups participating in CMP presents another side ofthe story. Although the buildings were not completed forsale, members of the Community Management Coalitionargued that their work transformed 3,044 apartments


17/36

from shabby shells tolivable homes.The coalitionmembers also notedintangible rewards:

of the Urban Homesteading AssistancBoard, which assisttenants learning toown an d manage theibuildings, says that ithe city was reallserious about tenanownership, tenantwould be the majodecision-makers inthe Community Management Programwith the ability to firecommunity groupserving as theimanager.

"Another by-productof th e program issomething which cannot be purchased elsewhere: a cadre ofdedicated community persons workingclose by the buildingsthat they manage andproviding trainingan d consciousnessraising to the tenants.This enables tenantsto develop from forgotten, disadvantagedpersons into proudhomeowners."After 1980, the citypressured commu

Shattered Hopes: Three tenements on West 116th Street were among the first buildingsin the Community Management Program. Today the doors swing open and graffitifestoon the walls.

"The most positivrole for communitgroups is for them toserve as a resourcfor tenants and noas landlords," he

nity groups to complete rehabilitation an d sell the property; i f tenants didn't choose to purchase a building thecommunity group became the owner. By 1983, a total of 63buildings had been sold.The most important recent change in the CommunityManagement Program involved switching the paymentmethod to a fee-for-service system where communitygroups get paid after work is done. This was meant toensure speedier renovation, repairs and sales, and somesay this was long overdue."There were plenty of carrots to munch on, but nostick," says Alexander from Hope Community, Inc. "Therewas no incentive or penalty for leaving a building in theprogram for six or eight years and a lot of buildings stayedin the program a long, long time."Lost PartnershipOthers counter that the ne w structure undermines thebasic principal of forging a partnership between the community group and the tenants. In its earlier incarnation,the program ha d flexible funding that made it easier topay for "soft costs" such as administrative staffand tenantorganizers. "We don't even call them organizers anymore," says Barbara Schliff, the housing director of he LosSures group in Brooklyn, referring to field staff once calledtenant organizers, then tenant liaisons and then managers.

Susan Saegert, a professor of environmental psychology at the City University of New York, and the author of"From Abandonment to Hope: Community-Householdsin Harlem," says he r research shows that in successfultenant-owned buildings, the importance of extensivetenant organizing cannot be underestimated. "Tenantshave to learn a lot to be technically and socially preparedfor ownership ," she says. "I f hey don't learn it during therenovation period, it's difficult to learn. After that, theystart to feel they've bought into something that someoneelse controls." She adds, "My impression of the Community Management Program is that the rewards and punishments the city used did not really support a tenant cooperative form of development."Others echo he r opinion. Andrew Reicher, the director

says. "The tenantcontrolled buildings tend to provide better housing andthe tenants feel more satisfied with their housing becausethey control it."But others question whether it's realistic to assume thaall buildings can become tenant-owned. "Let's tell thetruth," says Farrahkan from the Oceanhill BrownsvillTenants Association. " Every [building] is not prepared tobe a co-op the same way not everyone is prepared to benuclear physicist.""What we found in larger buildings is that co-ops aretougher," adds Getz Obstfeld, the former director of theBanana Kelly Community Improvement Association inthe South Bronx. "Every group has differences in terms otheir philosophy and experience. Some said we believe inthe co-op model bu t it isn't working out. Others had theopposite experience. At Banana Kelly we've found it to bea mixed bag."Obstfeld says that because of this, he and many othehousing advocates are exploring the Mutual HousingAssociation model, which allows community groups an dtenants to jointly ow n clusters of buildings. "We're tryingto blend the best ofboth approaches," he says. "Everyone'still struggling with the questions. They're not going to goaway."Future Lessons

For the future, advocates say, three lessons from CMPare clear: the need for adequate resources to fully rehabilitate buildings, the importance of competent communitymanagers, an d the necessity of support from the city fotenant organizing an d education.The final lesson may be the most important-and themost difficult to apply in a city where funding that doesn'quickly lead to tangible achievements has always been inshort supply. In a rather startling acknowledgement, stGeorges says, "One of our real failings was not addressingthe long-term aspects of these buildings, how you havestability in the buildings and the neighborhoods ovetime. It's one of the problems of working in HPD andgovernment in general. You're thinking about todaytomorrow and the next election." 0CITY UMITS/OCTOBER 1992/1


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Advocates Blast New ProgramThe regulations for a new planto sell city-owned apartmentbuildings to communitybased nonprofit groups arebeing finalized and Mayor DavidDinkins' avowedbeneficiaries-thecommunity groups-are not veryhappy about the results.

In a nod to entrepreneurship andthe private construction andmanagement industries, the firstprogram within the NeighborhoodOwnership Works (NOW) initiativerelies heavily on the for-profit sectorin the early stages of the program.F or-profit contractorsand construction managers will have primaryresponsibili ty for overseeing renovations and choosing new tenantsfor empty apartments. Only thenwill nonprofit community groupsbe brought in to buy and managethe buildings.Undermining EmpowermentTenant leaders and housing advocates say the new program ignores many of the key lessonslearned from the past two decadesofcommunity-based housing work.They say the NOW regulations don'tgive tenants a significant voice inrenovation, management or ownership, and relegate the community groups to a standard landlordrole, undermining their larger mission of local empowerment."The NOW program takes theworst aspects of he various housingprograms and puts them into one,"says Jay Small, the executivedirector of the Association forNeighborhood Housing and Development (ANHD), a coalition ofabout 30 community-based housinggroups."When you don't involve peoplein the process, you have a situationwhere people say, 'It's no t myproblem, " explains Bernard Alstonfrom the Union of City Tenants."Thensmall problems end up beingbig problems. Tenants are veryconcerned about security, but whenthey're not involved in thebuilding's process then they loseinterest and outsiders can ge tinvolved in the buildings," which

18/OCTOBER 1992/CITY UMITS

often leads to drug-dealing activity.Alston and many other advocatesargue that the city should reassess itsplans for the future of city-ownedbuildings. Most of these buildings arein extremely poor shape bu t theyprovide the housing of last resort forfamilies with no other alternative; themedian income of tenants in cityowned buildings is less than $7,000,according to the 1987 Housing andVacancy Report. In the past five years,more than 12,000 homeless familieshave moved into city-owned buildings, which the city acquired whenlandlords failed to pay taxes.The purpose of he new initiative isprivatization-selling off city-ownedbuildings. The draft regulations spellout a process where for-profit contractors would oversee the renovationof run-down, occupied buildings andchoose tenants for apartments thathavebeen vacant. Once this process iscomplete, the city would sell thebuilding to a community-based organization in the neighborhood. I f herearen't qualified nonprofits, the citycould then sell the building to forprofit developer.The city plans to spend more than$300 million in the next four years torenovate and sell off9,300 city-ownedapartments. This comes to about$32,000 per unit.

Lack ofExperienced GroupsHousing department officials saythe new program is necessary becausethe city can no longer afford to manage tens of housands of apartmentsand there aren't enough experiencedcommunity-based housing groups tooversee management and renovationof buildings being sold."If you have the same groupsinvolved in every aspect of everybuilding, you just can't deal with theneed," says Joan Wallstein, an assistantcommissioner at the Department ofHousing Preservation and Development. She adds, "The key thing thatpeople have to remember is there arethousands of buildings. It's not fair tosay a building has to sit and waitseveral years before a local communitygroup can get around to renovatingit."

Wallstein adds that one aim ofthe new program is expanding theuniverse of community groupstaking over city property. "Somegroups only have the ability to domanagement-ifwe can widen thesphere of groups that can manageand own city property then wewon't overburden the groups wehave now."Involved-Up To A PointThe assistant commissioner hasno qualms about including forprofit contractors in renovationwork. "Some of the very best management and construction management firms come from the privatesector," she says.And she argues that the NOWregulations include adequate provisions for the input of tenants andcommunity groups. "We do intendto have both groups involved-upto a point," she says. "But I don'tthink you have to have everybodyin lockstep through the process tohave a good product that lasts."Many tenant leaders and housingadvocates beg to differ. They saythat i f tenants and the communitygroup don't form a partnership inthe early days of renovation, it's.very easy for a hostile landlordtenant relationship to develop, and .for the building to eventually deteriorate. "It's a scenario for disaster.Groups will become slumlords,"says Joe Center, the director of theEcumenical Center for CommunityDevelopment in Harlem.Besides questioning the processleading up to the sale of buildings,housing advocates are also raisingserious questions about how buildings will be able to provide affordable housing for very low incometenants-and also be economicallyviable in the long run without operating subsidies. Others say the program is deficient because it doesn'tcreate paths for buildings to eventually be owned by the tenants or acollective land trust known as aMutual Housing Association, inwhich both tenants and community groups share the responsibilities of ownership. 0 Lisa Glazer


19/36

,

CITY LIMITS____ __am........... ..

C i ~ v L i m i ~ s _ l lm l lO__----C iq L i m i ~ s

Starting SmallFighting Incineration from the School,

and PubUc Houaing Pro)ects of Fort Greene, Brooklyn

Winner of the

~ . I D I I I ~ I I _ __ __

C i ~ V L i m i ~ s BURIED ALIVE:

New York's GarbageQuagmire

1992 New York City Audubon Society Media Awardfor Distinguished Service to the Environmental Cause

CITY LIMITS covers the urban environment like no other New York magazine becausein this town the environment is more than parks, birds and trees. It is illegal garbagedumping, lead paint poisoning, overburdened emergency rooms and crack vials in thestreet. We uncover the hazards, and we spotlight grassroots groups turning their neigh,borhoods around. We've won six journalism awards for our reporting. Isn't i t time yousubscribed?

, - - - - - - - - - - - - - - - - - - - - - - - - - - - - ,YES! Start my subscription to CITY LIMITS.o $20/one year (10 issues)o $30/two yearsBusiness/Govemment/Librarieso $35/one year 0 $50/two years o Payment enclosed. Add one issueto my subscription-free!Name______________________________________________Address ___________________________________________City State Zip _ _L____________________________

CITY LIMITS, 40 Prince Street, New York, NY 10012ern UMITS/OCTOBER 199211


20/36

Overcrowded Masses causes of the city's chronic homelesscrisis. There are currently one millionNew Yorkers on welfare, and welfareonly provides a housing allowance of$286 for a family of three.ew data offer a grim picture of a worseninghousing crisis. Meanwhile, the medianrent of NewYork's occupied apartments rose substantially in the 1980s and early 1990s,from $265 in 1981 to $509 in 1991. Ininflation-adjusted 1991 dollars, that'san increase of about 20 percent, andcomes at a time when the earnings ofthe average renting household increased only 10 percent.Hgh rents, low wages, an d nocheap place to live: it's possibly the most dependable NewYork story. And by at least onemeasure, it's more common now thanever. According to the federal Bureauof the Census' still-unpublished 1991Housing an d Vacancy Survey, one infour tenant households in the cityspends more than half its income onrent. Ten years ago, the figure wascloser to one in five.That's only one of the stunningpieces of information found in thecomprehensive, triennial survey ofmore than 18,000 city apartments andhouses. Much of the data confirmsestimates and anecdotalreports aboutthe state of housing in New York during a year of recession, declining property values, and increasing immigrat ion-and marked, as ever, by achronic shortage of affordable housing.The data show a ballistic increasein the number of New York households crammed into overcrowdedapartments. According to the survey,crowding has become far worse thanit's been in more than two decades.The number of "severely crowded"households city-wide shot up 69 per-

cent in four years an d 144 percentsince 1978. The figures represent theyears when foreign immigration toNew York soared an d the human density of compact neighborhoods likeWashington Heights, Chinatown,Crown Heights and Flushing becamesteadily more apparent.The survey's data on vacancies hasalready caused a stir among deregulation advocates. For the first time sincethe mid 1960s, the overall vacancyrate for the city topped 3.5 percent.Rent regulation remains in force solong as the vacancy rate stays belowfive percent.But the overall vacancy rate is misleading. The vacancy rate for apartments with rents less than $500 isonly 1.9 percent, and the number ofaffordable rentals has continued todiminish. The number ofvacant apartments available for less than $300 amonth has dropped off drastically, by66 percent since 1984. Meanwhile thenumber of vacant luxury units costing$1,000 a month or more has skyrocketed 210 fercent since 1987-in parta result 0 unsold, high-cost cooperative apartments shifting into the rentalmarket. This data helps explain the

The survey provides fuel to counterthe claims of deregulation advocateswho argue that rent control unfairlybenefits wealthy tenants. In fact, theaverage occupant ofa rent controlledapartment is very poor: their medianannual household income is just$12,075 an d has failed to keep pacewith inflation in the last decade. Still,rent controlled housing is becomingless of a factor as the number of controlled apartments declines rapidly.Rent stabilizedapartments becameless affordable during the last decade,when the median rent of occupied,rent-stabilized apartments increasedfrom $288 in 1981 to $522 in 1991.That's an increase 13 percent greaterthan the rate of inflation.Three separate reports based on the1991 survey are scheduled for releaseduring the next year or two. But all ofthe reports have been delayed by tieups at the census bureau. 0 AndrewWhite

Affordable housing is disappearing fast...Low rent vacancies decline...

15,000 -r------------------,12,0009,0006,0003,000

o1984 1987 1991

Vacant units available for rent at less than$300/month

20jOCTOBER 1992jCITY UMITS

I"'1:;I:'S0-J!Ez

. .high rent vacancies increase15,000. , . . . - - - - - - - - - - - - - - - - - ,

12,000-+-----------------,,19 , 0 00 - + - - - - - - - - - - - - - ,6,000-+----------:3,000 -+---- - -=

o1984 1987 1991

Vacant units available for rent a t more than$ l ,OOO/month


21/36

...and rent control ison the wane.~ . ~ - r - - - - - - - - - r - - - - - - - - - r - - - - - - - - ~ I 2 5 0 . ~

! 2 0 0 . ~ 1 1 5 0 ~ 'S.I l 0 0 . ~

5 0 . ~

o1981 1984 1987 1991

Chart shows the rapid decline in the total numberof rent controlled apartments in New York City.The median annual household income of rentcontrolled tenants is on ly $12,075.

11I..

111I8 O . ~ 7 0 . ~ 6 0 . ~ 5 0 . ~ 4 0 . ~ 3 O . ~ 2 0 . ~ 1 0 . ~

01975

Meanwhile, severecrowding soars.

1978 1981 1984 1987

Crowding in New York apartments is far worsethan it's been in two decades, and rising fast.Chart shows the number of rental apartmentswith more than 1.5 pe rsons per room.

Median rents and stabilized rents are on the rise-even after they're adjusted for inflation.$600 . . . . . , . . . . .---------------,

400

1970 1978 1984 1991

Median rent adjusted for inflation, 1991 dollars.

$ 6 0 0 ~ - - - - - - - - - - - - - - - - - - - - - - ~

$522

400

Median stabilized rent adjusted for inflation,1991 dollars.

Source: Bureau o f the Census. 1991 Housing and Vacancy Survey for New York City

199



22/36


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the FDR plant. developed energyefficient motors.Then the city couldbuy the cheap hydro-power that isfreed up. He models his proposal ona West Coast program, where Californian utility customers cover thecost of efficiencyprojects in Mono tana, then buy theleft-over, cheaperMontana power.Energy effilr ciency is central tog he argument forredirecting hydropower downstate.

In 1989, NewYorkCityatlorneysseized upon thiswording to launchlitigation aimed atsending some ofthe hydro-powerflowing south,bringingsuitunderthe Niagara Development Act beforethe Federal EnergyRegulatory Commission, and underthe Power Authorit y Act in statecourt. The city argued that by withholding its least expensive powerfrom downstateconsumers, NYPAfails to live up toits own founding

flowing U.-.-n: The Robert Moses Niagara Power Plant generates some 0/ the cheapestpower in the country-and almost all a/it stays in upstate New York. Already, ConEdison, along withmany other utili-mandate-and NYP A's contracts with the upstate utilitiesan d industries are therefore illegal. "There's absolutely noway you can conceivably square what the power authorityis doing with what the law says," argues King.NYPA lawyers, however, found a way to do just that.They argued that the law onlysays the authority in generalmust act in the interests of the state as a whole, but eachcontract needn't be pu t to that standard. Thus far, thecourts have agreed. The case was dismissed by a federalappellate court, and the Supreme Court refused to hear itin 1990. With federal remedies exhausted, the city isconcentrating its efforts at the state level. In 1990, thecity's case was dismissed by state Supreme Court JudgeHarold Baer, who agreed with NYPA lawyers that thewording of the Power Authority Act was vague. In July1992, the city filed an appeal with the New York StateSupreme Court Appellate Division.But many energy experts an d even city officials whosupport the suit say it has little chance of success. "Thejudicial standard is arbitrary," says Chris Ward, assistantcommissioner of energy policy for the city. "The judgesays, 'I'm not an energy economist. NYPA's a state agency,so let them deal with it. "Political DecisionWard and others say the fight must instead be decidedpolitically, in Albany. That will take some creative workon the part of the city, says Ashok Gupta, energy pointman with the Natural Resources Defense Council. "It's bigpolitics in the governor's office and the legislature, and thecity doesn't have much leverage there ," he says. "Peopledon't always listen no matter how much you're right onthe facts. It will take more than that."Komanoff argues that the city should stop relying on thelawsuits an d focus instead on a productive proposal to pu tbefore the regulators and legislators. He points out thatmetropolitan New Yorkers could save money by subsidizing the installation of non-electric heat in homes upstate,helping offices put in new high-tech lighting and coolingsystems, and paying for factories to switch over to newly-

ties around thecountry, is marketing an d profiting from the sale of energyefficient technology. State regulators allow some privately-owned utilities to increase rates to cover the cost ofsubsidies for installing efficient technology in homes an dbusinesses, plus a profit margin. Energy saved throughefficiency becomes a new resource, an d the utilities thusavoid having to build new power generating plants.But, critics argue, so long as upstate consumers haveready access to very cheap power, they have little reasonto adopt energy efficiency. That means the state isn't usingpower as efficiently as it should and may have to find otherresources for power generation, according to Gupta.But efficiency proposals for upstate have met with astubborn state administration and an often unresponsivepower authority. NYPA is controlled by five trusteeschosen by Governor Mario Cuomo-only one of themfrom New York City-and approved by the Republicancontrolled state Senate. "NYPA is not accountable toanybody but the governor," says Warren Leibold, formerhead of the New York State Environmental PlanningLobby. Gupta agrees. "It basically comes down to a political decision on the part of Governor Cuomo," he says.Cuomo an d his men at the power authority decidedseveral years ago not to redirect any of the cheap hydropower downstate, and have held firm ever since. "It wasa tradition for over 30 years that that power had goneupstate," explains NYP A spokesman Stephen Shoenholz."It was determined that the economic devastation thatwould have been wrought on upstate would have vastlyoutweighed any benefits downstate." Asked if the decision had been reassessed now that energy efficient technology has become much cheaper, Shoenholz will onlysay that the decision "was very carefully considered"when it was made.Electric HeatersMeanwhile, in northwestern New York State, wherethe winters are cold and the snow gets deep, many homesare heated with extremely inefficient electric heatersbecause power is so cheap. And the two aluminum smelt-



24/36

ing plants in Massena, New York, which consume morethan one-third of the power generated at the two upstatehydro plants, are among the oldest aluminum smelters inthe country. They use about 15 to 20 percent more powerthan their newer counterparts elsewhere, says DavidMoison of Resource Strategies Inc., a consulting firm thatworks with industrial metal manufacturers.The metal smelting industry is among the most energyintensive on earth-as well as the most polluting. The St.Lawrence region has already been severely contaminatedby the numerous aluminum and chemical plants fueled bycheap hydro on both the New York and Canadian sides ofthe river. In 1988, Greenpeace commandos hung a giantbanner reading "ST. LAWRENCE POLLUTERS" from aReynolds Aluminum plant overlooking the river.But the plants employ about 1,000 upstate residents,and few officials are eager to drive the aluminum companies out. In fact, as i t is, the smelters are so old that thealuminum companies have little reason to invest in upgrading their technology. "You have to figure your plantwill last long enough to recoup the investment," says

Moison.The downstate litigants insist thatthey are not challenging upstate

housing projects and government offices, and it's no tnearlyas cheapas the hydro-electricity generated upstate.A small amount of upstate hydro-power is available toNYCPUS only as "interruptible"power. That is, the agencysends it downstate only when there is a surplus upstate.This is the cheaper, bu t comparatively minimal rowerthat goes to the 5,000 area manufacturers, most 0 themrelatively small operations. Margaret King calls this a"pittance. "Some critics say the city should be subsidizing thesmall manufacturers first, and the big companies later. "Itis fundamentally wrong that the biggest subsidy goes tothe biggest blusterer-like Shearson Lehman blusteringabout moving out of he city," says Komanoff. "A Grummanor a Shearson can get the attention and therefore get thesubsidy." Others say the hydro-power should all go toward cutting the city's energy bill across the board.James Bay Redux?Still, the question of where the power goes is moot untilthere's some change of heart in Albany. That happened

once before this year, in a related case.The struggle over New York State'spower grid made headlines in Marchindustry's access to cheap power. "Thecity has never opposed the industrialallocations of hydro-power to meet jobneeds," says Ward. "But to sell it togeneral consumers is wasteful. Residential customers in the NiagaraMohawk service area use three timesas much power and pay a third of whatpeople pay in New York City. Theydon't even bother to put in storm windows. General rate payers should beweaned off of his subsidy. It should goto economic development."

"It isfundamentallywrong that thebiggest subsidy

goes to the biggestblusterer-like

when Cuomo announced that NYP Ahad pulled out of a deal to purchase1,000 megawatts of power for $12 billion from the Canadian utility HydroQuebec. Much of the Quebec hydropower had been slated for the metropolitan area, and NYP A officials hadlong argued that the power purchasewas the bestway to supply the region'spower needs without building new,expensive, polluting power plants inthe state.Cuomo cited economic reasons forthe change in plans. But he was underheavy pressure from environmentalists who oppose the state's complicityin the construction of Hydro-Quebec'sJames Bay II dam comflex, whichPreferred Beneficiaries ShearsonWhat constitutes "economic development," however, is in the eye of thepolicy maker. Lehman."The city an d its co-litigants,Westchester, Nassau and Suffolk counties, want most of the NYPA power notfor Con Edison or retail consumers, bu t to provide cut-rateelectricity for their preferred beneficiaries of "economicdevelopment" , mostly big area employers. According toWard, this is the best way for the city to get the most "bangfor its buck."

Ward is co-director of the New York City Public Utilities Service (NYCPUS), which provides NYPA power atdiscount rates for local employers like the Chase Manhattan Bank, Morgan Guaranty Trust, ABC and NBC, theHunts Point Meat Market, ilie New York Post, and-whenit's available-to over 5,000 mostly small manufacturers.The counties which have joined the case have similaragencies, such as the Nassau County Public Utility Agencyand the Suffolk C O ~ ~ b Electrical Agency. Other firms,such as the giant M attan investment firm ShearsonLehman and the Long Island defense contractor GrummanAerospace, receive NYP A power under separate discountdeals they have worked out independently with Albany.Most of the cut-rate "economic development" power isthe same nuclear power the city buys for the subways,24/0CTOBER 1992/CITY UMITS

would flood vast areas 0 tundra andsub-arctic forest along with the homeland of many Native Americans. Op-ponents of the Quebec contract convinced the publicand the governor-that the deal was not only too expensive, but unnecessarymainlybecause ofrapid advances inenergy efficient technology.But, experts say, the Hydro-Quebec contract couldalways be renegotiated i f he state doesn't pursue energyefficiency quickly enough and finds itself in need of newenergy supplies. They say that as long as upstate consumers have exc lusive access to NYPA's cheap hydro-power,the utilities and factories there have little reason to pursueenergy efficiency, and the state's power won't be used aseffectively as it should be-giving the governor an excuseto go back to Hydro-Quebec.During the 1980s, NYPA built massive power linesconnecting New York City with the ~ t . Lawrence regionostensibly to carry James Bay II power downstate. Insteadof carrying power from James Bay II, there's a chance thesepower lines could be used for a very different purpose:sharing cleaner, cheaper hydro-power between upstateand New York City. 0


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THE CITY L IM ITSRESOURCES CLEARINGHOUSE

"ENVIRONMENT AND HEALTH"City Limits is expanding the scope of the clearinghouse-as well as pamphlets, handbooks and guides, we're also listingreports and publications.Because of the volume of infonnation available, we'll bepublishing listings by topic: Housing and Development,Environment and Health, Economic Development andCommunity Banking, and Community Organizing.To list your resource with the clearinghouse, call 925-9820.

"Hazardous Neighbors? Living Next Door to Industry in Greenpointand Williamsburg" and "Right to Breathe, Right to Know: IndustrialAir Pollution in Greenpoint and Williamsburg." Reports on toxicpollution and air pollution. Community Environmental Health Center.Free for residents of Greenpoint and Williamsburg. $15 for others."Harlem Environmental Action." Brochure on how to advocate onenvironmental issues in Harlem. West Harlem Environmental Action.Free."Longwood Letter." A quarterly newsletter focusing on toxic wasteand other issues in Hunt' s Point and Longwood in the Bronx. Sent outto members of the Longwood Historic District Community Association. Membership is $10.''1breshold.'' Annual newsletter on home improvement, quality of lifeand environmental issues. Neighborhood Housing Services of EastFlatbush. Free."City Cyclist" and "Auto Free Press." Bi-monthly magazine andnewsletter. Sent to members ofTransportation Alternatives. Membership is $20."The Environmental Cost of Electricity." Volume of studies aboutenvironmental damage of generating electricity. Pace University Center for Environmental Legal Studies. $38.50."The Newspoint." Quarterly newsletter on planning, development,land use and community issues in Hunters Point, Queens. HuntersPoint Community Development Corporation. Free."Household Conservation Tips," a short English-Spanish guide toconserving water in the home. Department of Environmental Protection. Free."Dripnet." Nine-minute videotape on water waste in and around thehome. Department of Environmental Protection. Free for two-weekloan. $10 for purchase."To Plant a Tree: A Citizens Guide to Urban Reforestation." Brochure.New York State Releaf. Send stamped, sel f enclosed envelope. Free."Environmental Tips for Your Office." Environmental Action Coalition. $3."Recycling Action Guide." A how-to guide on office paper recycling.Environmental Action Coalition. $5."Recycled Paper Sources." Fact sheet on where small vendors can buysmall amounts of recycled paper. Environmental Action Coalition. $1 .

"Be a Water Watcher: A Resource Guide for Water Conservation."NYC Department of Environmental Protection. Free."Cycle," a quarterly about local environmental issues that is sent tomembers of the Environmental Action Coalition. Membership is $20."Smart Moves." Quarterly newsletter about transportation innovations underway by the city's transportation office. Department ofTransportation. Free."Uptown Eco Blues: Environmental Woes in Harlem." Special 24-page report from the summer of 1991 . The City Sun. $3."Spring and Summer Guide." Lists programs on environmental science, urban gardening, workshops on lead poisoning. Magnolia TreeEarth Center of Bedford-Stuyvesant. Free."Lightwheels News." Bi-annual newsletter concerning solar, electricand hand-powered vehicles. Lightwheels, Inc. Free.''Tackling Toxics in Everyday Products." Directory of organizationswith infonnation on toxics. INFORM. $19.95."Amicus Journal," a quarterly magazine covering national and international environmental issues. Natural Resources Defense Council.$10."Worldwatch Magazine," bi-monthly publication dealing with environmental issues. Worldwatch Institute. $15."Alternatives to the Automobile: Transporting Livable Cities." Reportby the Worldwatch Institute. $5."Lower East Side Ecology Newsletter. " Newsletter that comes withmembership to Outstanding Renewal Enterprises, a recycling group.Membership is $25."Pregnancy Rights." Pamphlet covers health care and patient rights.Medgar Evers Center for Law and Social Justice . Send self-addressedenvelope with stamp. Free.

TO ORDERPlease include check(s} or money order(s} payable to thepublisher of the resource or resources you request. Remember,if you are ordering multiple publications, you will probablyhave to write a numberofchecks.Checks should not be madeout to City Limits.Please circle the reports and guidesyou want and send this formto City Limits, 40 Prince Street, New York,NY , 10012.Allow3-4weeks for delivery.Name _______________________________________Address _____________________________________City, state, zip _______________________________Telephone ___________________________________

The Resources Clearinghouse is supported by the Joyce M e r t z ~ G i l m o r e Foundation.CITY UMITS/OCTOBER 199212&


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A Capital PrimerEverything you ever wanted to know about the city's

capital budget ..and how to change it.BY TOM KAMBER

l\T w Yorkers are known for their strong, oftenloudly expressed opinions on every topicunder the sun. Go to any gathering an d youcan find them holding forth confidently onthe bullpen woes of the Yankees, the peaceprospects in Sri Lanka, or the mating habits of he milodonsloth. But there is one topic that is guaranteed to drawblank stares from even the most opinionated: the capitalbudget.What is the capital budget? It's the document thatoutlines how the mayor intends to spend the money thecity borrows on Wall Street by selling bonds. This moneycan only be spent on large-scale projects that develop thecity's infrastructure. During the last decade, the numberand cost of these projects has grown, and grown, an dgrown. Since 1980, capital spending commitments havemore than tripled, surging from $1.2 billion to $4.5 billionannually, and 10-year projections have climbed from $35billion to $67 billion.Because of he huge amounts ofmoney involved, capitalspending is very controversial, with strong supporters an dvehement opponents engaging in a debate that is beingechoed at every level of government. It boils down to this:should the government borrowbillions of dollars to supportprojects that are meant to spur economic growth? Or willborrowing drag the government-and the taxpayers-intoa swamp of unnecessary and unwieldy debt?In New York, some capital budget watchers are worriedthat overspendingand short-sighted priorities are pushingthe city toward a debt crisis. But other prominent leaderssay significant capital spending is necessary for the city to26/0CTOBER 1992/CITY UMRS

keep up basic maintenance and move forward withimportant public works projects.So far, much ofthe debate has been confined to a smallbu t passionate coterie of policy wonks, intellectuals andpoliticians. While this is understandable given th ecomplexity of the issues, it is also unfortunate, since thecapital budget has a profound impact on all New Yorkcommunities. What follows is a primer on the capitalspending debate an d an introduction to the capital budgetprocess.Al'ewBintsWresting any meaning from the jumble oftechnocraticterms, financing arrangements an d revenue projectionsthat frame the debate on the capital budget is a dauntingtask-especially if , like me, you decisively failed highschoolmath. A few hints, however, can help those withoutfinance degrees no t only understand the capital budget,bu t begin to take an active role in its shaping.Unlike the federal government, cities cannot borrow tomeet day-to-day operating costs-they have to balancetheir budgets, making revenues equal expenses. All citiesare required by law to pay short-term operating costs outof the expense budget, which is about $30 billion for NewYork this year and is funded mostly by taxes an d federalan d state aid. The capital budget , where borrowing isallowed, is used only for projects that are expected to beuseful for at least five years an d have a price tag of at least$15,000, like bridge an d highway construction, or incinerators, or construction subsidies for ne w low-incomehousing.To fund projects in the capital budget, the city sellsbonds that will be paid back-with interest-over a period


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of five to 20 years. There is a certain logic to this practicesince those that actually benefit from a project-tomorrow'staxpayers-end up paying for it. Unfortunately, they alsoendup paying more, since interest rates and underwritingfees (paid to the investment banks that sell the city'sbonds) ad d on a sizeable cost. Also, tomorrow's votershave no control over the capital priorities of today'spolicy-makers.Bow Big is Too Big?All this adds up to a double responsibility: the government needs to invest enough to ensure a future of soundbridges, adequate schools and effective environmentalprotection, but the government has to be very careful notto overestimate the capacity of future taxpayers to payback the debt.Some observers say New York City'S capital budget ison the right track. Manhattan Borough President RuthMessinger, for instance, supports maintaining a substantial capital program, arguing that capital expendituresrepresent an important tool for reinvigorating our stalledeconomy. As an example, she cites President JimmyCarter's extensive federal spending inthe cities as the precursor to urbaneconomic growth in the 1980s, an d

"Anything that can be delayed should be delayed," hecounsels.Many others agree that the spending should be curtailed. They argue that the current spending plan wasbased on rosy 1980s projections of economic expansionan expansion that could have boosted tax revenues an dmade debt payments affordable. But the projections wereunfounded, an d critics say that by 1998 the city will bespending 201ercent of its tax revenues on interest payments relate to the capital debt.StraDge AnteDeeLeading the pack among those who want maximumdownsizing in the capital budget have been the mayor'sOffice of Management and the Budget (OMB) and the probusiness Citizens Budget Commission (CBC).This year, OMB tried to scale back capital spending by30 percent, but, after an uproar within city agencies andthe City Council, settled for a cut of about 10 percent."We're just trying to take a fairly conservative view ingeneral," explains Amy Laskey, head of OMB's CapitalPlanningUnit. "It's hard to know when things are going toturn around or to what extent." DeanMead from CBC, whose organizationcalled for a 20 percent reduction in thesubsequent cuts as the preamble to thecurrentdecline. "Right now, we shouldbe looking for ways not to cut thecapital budget," she says.Former Mayor Edward Koch alsosupports an aggressive capital spending program. "You can get a lot ofthings done at much cheaper interestrates because of the recession," Kochargues. "It's too great a bargain to passup."

Theeapita!budget hastripled from$1.2 billion to$4.8 billion

capital plan in a 1990 report, describeseven the newly trimmed plan as "enormous" an d says that the amount ofNew Yorkers' personal income neededto pay debt service by the year 2000 is"a staggering figure."Many left-wing commentators, in astrange conjuncture of ideologies fastbecoming characteristic of the 1990s,have taken a view of capital spendingthat equals the caution of the conservatives. Some leftists complain thatthe financing arrangements for sellingbonds result in huge profits for invest-

Messinger's argument recalls theactivist fiscal technique promoted byfollowers of the liberal British economist John Maynard Keynes since theanDually.

1930s. "Keynesians" advocate bor-rowing, to jump-start a sluggisheconomy by stimulating business with government money.Because the spending is intended to counter the extremesof the economic cycle, it is called counter-cyclical spending.The root question remains whether the city's capitalspending can generate enough long-lasting economicactivity to make the city's economy expand st

Documents

City Limits Magazine, October 1992 Issue