City Limits Magazine, May 1981 Issue

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

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LIMITS,MAY 1981 THE NEWS MAGAZINEOF NEW YORK CITY HOUSING AND N'EIGHBORHOODS $1.50

What Future for Rent Regulations?CO-OPS COME TO FLATBUSHHOW THE FUEL BUYING PLANS FARED


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Arson Prevention Conference Targets LegislationSome 150 representatives from nonprofit communitybased organizations in the Northeast attended a two-dayarson prevention conference in Brooklyn's Northsidesection and learned that groups must organize from thegrassroots in order to save housing in older deteriorating neighborhoods.Held April 11 and 12, the special weekend meetingwas the first in a series of three planned by the Bostonbased National Arson Prevention and Action Coalition.The two other conferences will be held in the Midwestand on the West Coast at later dates. The People's Fire-

house hosted this event."It was a very successful occasion for communitygroups because it was the first time so many people gottogether to exchange very valuable information," saidFelice Jergens of the People's Firehouse. "Everyonewent away agreeing on one thing - that the Reagan administration was not going to take any social responsibility for arson crimes against communities. People wholive in the neighborhoods have to organize and take theresponsibility themselves."In the series of nine workshops, participants heard ofalternative strategies for taking deteriorating housing

away from private landlords, ways to challenge insurance companies for refusing coverage in low incomeareas, and methods for securing community funding forresearch and eventual computerization of arson information.A highlight of the conference was a guided tour to thefire-ravaged Charlotte Street section of the South Bronxfollowed by visits to parts of Brooklyn where community groups are embarked on innovative arson preventionprograms.The conference participants were also encouraged tostudy local, state, and federal legislation dealing witharson prevention in an effor t to challenge as a nationalcoalition liberally written laws that are permissible inthe prosecution of arson suits.For more information about NAPAC's future plans,call Ernie Garneau at (617) 482-4477. 0

Fire Commissioner Charles Hynes at arson prevention conference in Northside. Brookly n.

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EDITORIAL LIMITSNeeded: A State Housing Strategy

The newly appointed State Housing Commissioner, Richard Berman, has announced his intentionsto pursue a vigorous housing program for New YorkState and has held many meetings with various private and nonprofit housing sector participants. Wehope this is a sign of better commitment by thestate to begin to address and fulfill the housingneeds of its low and moderate income residents.Heretofore, the state has not taken on the role ofproviding housing. In effect, there has been no statehousing strategy.In the earlier years of the state-sponsored UrbanDevelopment Corporation, housing needs were addressed. But UDC abandoned its mandate whichclearly called for it to produce low and moderate income housing. Instead, it devolved into a conduit fortax shelter schemes for large-scale developers andmoved on to classier enterprises, such as the newConvention Center. This left a large vacuum whichthe state took no responsibility for filling. The statethen took the attitude that, since it could not successfully address the problem, it could presumablybe ignored and would either go away or be solved bysomeone else. The City of New York, recognizingthe overwhelming problem of in rem housing, tooksome initiative and developed a host of programs todirectly address the situation. Although not nearlyenough, it is far more than the state has done.The state has many mechanisms for generatingfunds for the financing and production of housing_ Rehabilitation Mortgage Insurance Corporation(REMIC), State of New York Mortgage Association(SONYMA), Housing Finance Agency (HFA) - toname a few. But what it has lacked in the past is thecommitment and creativity to focus these mechanisms into meaningful programs to produce affordable housing for New York State residents. In ouropinion the state is no less responsible than thefederal government or the City of New York for thehousing needs of its citizens. With rymors of thecreation of a State Housing Block Grant Program

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(which program raises a host of other questions),there is much to be done if the state is to be able totake advantage of the program. We remain skepticalover the workability of such a program at the statelevel based on past performance, but it is clear thatthe task of providing housing must be carried by thestate if the federal government withdraws its commitment. With this recognition, we urge the state toproceed without delay or. the preparations of a setof comprehensive housing programs which canassist municipalities to serve the housing needs oflow and moderate income citizens.New York State lags far behind most other statesin housing and must set a rapid pace to catch up.Get to it, Mr. Commissioner. 0TABLE OF CONTENTS ON BACK COVER

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Oty Limits (lSSN 0199-(330)Editor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tom Robbins~ E d i t o r . . . . . . . . . . . . . . . . . . . . . . . . . Susan BaldwinBusiDess Muaaer . .. .. . . . . . . . .. .. . . . . . . .. Ronnie SpenceDesisn and Layout. . . . . . . . . . .. . . . . . . . . . .. .. Louis FuJaomCopyrighl1981. All rights nserved. No portion or portions 0/t h l f ~ " '" be reprJnted wi!hout lhe express written per-~ l J I t I I e ( J u b l l s h e r s . 11iII. . . . . . . . . . . . ., ...... froID tile Fad for tile Ot)' ofw.w-"... CoYer . . . . . .1tJ Marc .I. .

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NY Rental Housing RegulationsAre Up for Another LookRent regulations, which present an almost bewlldering array of laws, wllI be re-viewed by the state legislature this session and next. Both landlords and tenants arepushing for major overhauls, and the status quo may be hard to find.

by Susan Baldwin

I t has been called the third most controversial issue,ranking only slightly behind abortion and the deathpenalty in the passion and acrimony its mentioning canbestir. Rent regulation, a topic almost studiouslyavoided by most office-seeking politicos, both becauseof the voting strength of its proponents as well as thefinancial clout of its sworn enemies, is back on the political agenda this spring in New York. While no final reckoning is expected to be produced, the shape of futurelegislation could be discernible once some of the smokebegins to clear.Although created by local and state lawmakers, albeitunder headings declaring the laws "emergency" and"special," national and state commissions appointed tostudy rent regulating legislation have abhorred it andpraised it. Last winter, a recommendation by a Reaganadvisory group that every federal nickel be withheldfrom localities that have rent control laws on theirbooks raised the storm anew. Academic studies, depending on which are consulted, endorse or repudiatetheir effectiveness; exonerate or blame them as the causeof numerous social ills.

Opponents have pinned on it the basic guilt for urbandecay and abandonment, as well as citing rent regulation as the single biggest roadblock to the new construction of rental housing and the root cause of lenders' unwillingIiess to make mortgages. Buttressing argumentshave been devised which insist controls lead to tax fraudand racial discrimination.Advocates of strengthening existing tenant protectionlaws have been only slightly less cosmic in justifying theneed for strong legislation: to them, rent regulation represents the thin line between low, moderate and middleincome renters and rapacious, profit-hungry owners.Applied properly, it is said, they could be the salvage ofthe poor and the average wage earner; cast aside, ignored or eliminated, their loss would be the coup-degrace to the tenuous toehold of all those who cannot afford to, or prefer not to, purchase their own housing. .The battleground of the dispute is, by any calculation, already littered with casualties: vacancy levels inNew York City are at a post-war low of one to two percent, and in many areas are zero. Conversions to cooperatives and condomuniums claimed 15,867 formerlyCITY LIMITS May 1981 4

rental apartments in 1980 alone in the city; owner abandonment another 20,000 units. Nor is anything save luxury apartments being created. According to the statehousing department, new rental production hasdropped to virtually nothing.In the resulting apartment squeeze, rents have escalated severely, pricing tenants out of larger and largerareas of the city. Tenant complaints on rent overchargesto just one of the oversight bodies, the Conciliationsand Appeals Board, the arbiter for apartments in therent stabilization system, have increased as well: froman average of 2,500 complaints per year between 1974and 1978, the number jumped to 3,500 in 1979 and shotup again in 1980 to 5,000. And that figure represents only those formally protesting their rents. Tenant advocates estimate the number of tenants currently payingrents above the legal maximum to be far higher.

At the other end of the rent check, the Rent Stabilization Association, a landlord group that achieved a kindof quasi-official status in 1969 when it was charged withregulating its members and funding the Conciliationand Appeals Board, has insisted that without legal relieffrom controls, building abandonment will swell. A recent RSA survey found that three-quarters of the city'slandlords are owners with no more than four buildingswith 60 units or less. Thirty-nine per cent of theseowners, the RSA said, have threatened to abandon atleast one of their buildings over the next five years ifAlbany does not pass legislation more favorable tothem.N Ow, as the state legislature begins a debate on thefuture of two of the four laws which comprise thestate's rent and eviction systems which are up forrenewal, all sides appear to agree that current regulations are a snarled and confusing morass. Both sides,however, are sharpening their arguments and seekingallies to increase or pare back the level of controls offered in the state's laws.With the close of the legislature less than two monthsaway, tenants throughout the state are worried abouttheir rents if current rent protections are not renewed byJune 30. The picture in New York City is particularlybleak. At present, there are approximately 900,000 rent-


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stabilized, 300,000 rent-controlled, and 300,000 decontrolled apartments in New York City, according tofigures provided by the city's Department of HousingPreservation and Development.The greatest potential danger apartment dwellers seeis the expiration of the Emergency Tenant ProtectionAct on June 30. Created in 1974 to protect tenants fromeviction and rent gouging, the ETPA is part of thestate's rent regulatory system with jurisdiction over NewYork City as well as three suburban counties - Nassau,Rockland and Westchester. If this legislation is notrenewed in June, more than one million households willbe decontrolled. But most observers predict that it willbe extended again as it was in 1977. Said AssemblymanJerrold Nadler, Democract of Manhattan, "I thinkthere's no question that ETPA will be extended. The bigquestion is whether it will be accompanied by weakeningor strengthening amendments."

State Rent ControlAlso expiring June 30 are state rent control, whichcovers some 60,000 apartment units in six counties outside New York City (Nassau, Westchester, Albany,Rensselaer, Schenectady, and Erie) and cooperative5

Photos by Robert Wersanconversion legislation for New York City and the threesuburban counties covered by ETPA. New York City'srent control and rent stabilization laws are in effect untilApril, 1982.

"I am sure that ETPA will pass pretty much as it is,but it must be remembered that this is emergency legislation, temporary legislation, and not a solution to thehousing problem," said Edward Wallace, longtime tenant lawyer who is a Democratic Councilman-at-Largefor Manhattan. "Housing is not exactly a commodity.It's people's homes. But the trend by speculators is totreat it more as a commodity. Housing is incidental tothem."Wallace is joined by other pro-tenant legislators whoare concerned that the extension of ETPA may meansacrificing other needed protective legislation, such asthe inclusion of small buildings (under six units) inETPA's jursidiction, a moratorium on vacancy decontrol and illegal rent hikes, and a halt to speculative coop conversion plans.A major piece of tenant-protective legislation first introduced four years ago by Assemblyman John C.Dearie, Democrat of the Bronx, is being revamped for

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this legislative session. Known as the Flynn-Dearie bill,it asks that landlords' requests for rent increases bereviewed on a building-by-building basis, setting a fiveper cent rent increase as a "cap" or maximum. ItsRepublican sponsor is State Senator JohnlFlynn ofYonkers. Designed to strengthen protections for tenantswho are now existing under rent cont rol and rent stabilization, Flynn-Dearie has been called an "administrativenightmare," but its repeated appearance on the legislative calendar has served as a perennial rallying cry and agood organizing tool to build strong tenant coalitions.For the past four years, it has died in the Assembly'SWays and Means Committee. Supporters hope that itwill make its way to the negotiating table this year.

"We have no intention of abandoning the five percent cap. This is crucial. We are sticking by FlynnDearie all the way," said Bertha Hellman, co-chair ofthe Coalition Against Rent Increase Passalongs(CARIP), a citywide tenants coalition and longtime supporter of the bill. "It's a good bill and quite frankly, theworst opposition to it comes from our liberal West SideCITY LIMITS May 1981 6

legislators who are tied into gentrification."Not all critics of the current rent regulations are assevere as Hellman, but most agree that there is a needfor a major overhaul of the legislation.Cut Back

"We are asking government to negotiate housing at atime when people want to cut back on government,"Wallace explained. "What we should do and what government can do is give tenants the power to insist thatlandlords bargain. As it stands now, he continued,"the real estate industry is in the cat bird seat, and p r o ~ fiteering, particularly in coop conversions, is the nameof the game."I n an effort to secure the rental market and protecttenants, AssemblYman Alexander ("Pete") Grannis,Democrat of Manhattan and chairman of the Assembly's Housing Committee, is supporting legislation thatexpands on ETPA and provides for the followingchanges:

The creation of a statewide rent adjustment boardappointed by the governor to establish separate annual


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rent adjustments for ETPA - covered units in NewYork City, Nassau, Westchester, and Rockland Counties. Assumption by the New York State Division ofHousing and Community Renewal (DHCR) of theduties of the Conciliation and Appeals Board, the ninemember board appointed by the mayor, which administers the rent stabilization law under ETPA in New YorkCity. DHCR already administers ETPA in the suburban

counties. Transfer of the Division of Rent Control fromHP D as a separate unit within DHCR, and the establishment of joint rent stabilization and rent control offices on the district level.

Rent registration for all units covered by ETPA andrent stabilization. Enactment of a two-year statute of limitations onover-charges, coupled with rent registration base date,exact rent figures for individual apartments, and rentrolls for entire buildings to be carried out within thenext two years. Institution of treble damages for willful overcharges. Development by DHCR of a workable hardshipformula for landlords to be presented to the 1981-82 session of the legislature.Grannis LegislationI f approved by the legislature, the Grannis legislationwill cause the defunding of the city's Rent StabilizationAssociation (RSA) as the administrative agency of therent stabilization law. Senate Minority Leader ManfredOhrenstein, Democrat of Manhattan, is the Democraticco-sponsor of the bill. State Senator John D. Calandra,Republican-Conservative of the Bronx, is expected to be

the main Reupublican sponsor of the bill.Asked about the possible elimination of RSA, publicrelations officer Morty Matz said, "We're not worried.That process would not do anything to solve the problems. All they're doing is just shifting things around into other bureaucracies. I t does nothing for housing orsevere abandonment ."The RSA plans to lobby against the extension ofETPA and will be focussing its energies on instituting apolicy of vacancy deregulation and fair- or open-marketrents, elimination of three-year leases, and removal ofbuildings of 12 units or less from the rent stabilizationlaw. Others real estate interest groups, headed by Seymour Durst, a prominent real estate magnate who chairsan ad hoc landlord lobbying group, are also invitinglandlords to lobby in Albany for vacancy decontrol.

"Who's going to say, 'Vote for me and I'll increaseyour rentals.' That's just not going to happen, but we doneed vacancy decontrol to keep rental housing," saidDurst, adding, "The housing situation is very desperate,. and I think the only way we will solve it here is by getting some legislation from Washington . . . Otherwise,the non-urban population will be supporting our hous-

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ing." Durst's comments recall the Reagan administration's admonitions against extending Community Development Block Grant monies to cities with rent controllegislation. Durst contends that the legalization of vacancy decontrol, at least for the vacant city apartmentstock, will protect the rental market and, at least for thepresent, make it possible for landlords to provide thishousing.Vacancy Decont'rolETPA was enacted in 1974 because vacancy decontrol had taken over the market place. There were nocontrols on the rents set by landlords for apartments asthey became vacant. Apartment ren.tals were out ofsight, and tenants were bearing the burden because therewas no other choice in a tight housing market.

"I'm sure the same thing is happening now," saidMichael McKee, legislative representative for the NewYork State Tenant and Neighborhood Coalition(NYSTNC). McKee hopes that legislation will be developed to cap spiralling rent levels, while new protectionsare developed to cover occupants of small buildings.But, he added, "I hope the end to this nightmare is insight."NYSTNC has developed a detailed omnibus study billthat deals with the problems of small buildings and vacancy decontrol as well as many other issues, but it isnot scheduled to be introduced during this year's legislative session. This organization has been very active in itslobbying efforts for the basic philosophy behind the bill- namely, that "rental housing should be regulated as apublic utility for the public good in the public interest."C Iling for the creation of serious permanent tenantprotection laws, the NYSTNC document stressedthe important of rejecting "the bankrupt 'market' theoryof rental housing. We reject the popular fiction," thestudy bill declares, "that after four decades of regulation, tenant protection laws are simply temporary measures in response to a short term scarcity during whichthe 'market' fails to function 'normally' . . . Housing isnot a simple consumer commodity such as soap or lipstick; it touches all areas of personal and economiclife."McKee had hoped that the protective measures for residents of buildings with five units or less would be included in the proposed Grannis legislation, and is .stillworking to find strong Republican backing for their inclusion. According to a study made by the United StatesBureau of the Census in 1978, only 31,000 tenants ofsmall buildings (three to five units) were still under rentcontrol, while 4,700 were rent stabilized, and 95,000were paying rents with no ceiling on what can be charged.The Rent Stabilization Association has sought to up thelevel to exempt all buildings with 12 or fewer apartmentsfrom the law. Matz, RSA's spokesman, said that his organization was promoting this exemption primarily tostem further landlord abandonment of this housingstock.



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It remains to be seen if the legislature will pass anysignificant legislation to protect tenants. A number ofadvocates are concerned that certain tenant rights willbe extracted just to maintain the status quo. Some maintain that, if encompassing, permanent legislation is notdrafted; eviction rates could reach a record high - outdistancing the level of the 1970's before ETPA wasenacted, when vacancy decontrol was used effectively to"blockbust" in sections of Brooklyn and Queens.

"People have to address themselves to the possibleelimination of rental housing in New York City," saidChuck DeLaney, a member of the steering committee of


the Lower Manhattan Loft Tenants Association. "Thislegislation is about to expire, and most people don'tknow what it means. But people are like cockroaches.They will live anywhere and they don't complain nomatter how miserable their living quarters are untilthey're out on the street."The real estate industry is creating two classes ofpeople - those who own and those who rent. They

would prefer to sell you a piece, no matter how small,rather than rent you anything. In no time, New Yorkwill be like Europe where they sell you tiny little slices ofreal estate worth nothing, and nobody will be betteroff." 0


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The Laws That Regulate the RentNew York State's rent regulatory system is com-plex,. currently consisting 0/ four separate sys-tems: two state laws which mus t be extended/romtim8 to time by the State Legislature. and two NewYork City laws enacted pursuant to state enablinglegislation. EMERGENCY TENANT PROTECrION Aer.First enacted by the State Legislature in 1974 inr e s ~ to organized pressure by tenants in NewYorlc: City protesting three years of skyrocketing

1 " ; J l _ ~ aad harassment under Vacancy Decontrolby telUmts of post-I947 buildings in the sub

i":,_ .. . around New York City demanding protec~ _ t . DdS is DOW the largest of the four rent systems": ru_ , t lv in effect. It applies only to New York Ci-

toWDS, villages and cities in NaSsau, Rock-lMld'JiDdWestcbester Counties that have voted tothtt system. Currently covers approxif ' < " ~ l _ * l 0 0 ~ units in the three suburban counties. W'bere it is administered by the state Division

of Ilousiq and Community Renewal; and someSGOsOOO apartment units in New York City, whereLeaisJaturc folded its administration into thepreoexistjaa real eswe industry-run rent stabiliza-1ioluystem. In the communities in which ETPA isin etfect, decontrolled apartments in pre-I947buiktinas with six or more units are picked upstabilization after the initial decontrol;BTPA is thus a mechanism designed by the State1:eaiaJature to continue the phase-out of state andcity rent control begun by the 1971 Vacancy De-COJd:rol Law. STATE RENT CONTROL. The EmergencyHoUliDa Rent Control Law, which now coverssome 60,000 apartment units in six counties out-side New York City: Nassau, Westchester, Albany, Rensselaer, Schenectady and Erie. Applies.oaJ.y to pre-I947 buildings where the tenant hasbeen in occupancy since before June 30, 1971 (theeffective date of the state's Vacancy DecontrolLaw). Beina phased out by Vacanct Decontrol; inthose Nassau and Westchester County municipalities which have since 1974 opted into the ETPA.the .decontrolled units in buildings with six ormore units are picked up under rent stabilizationafter the initial decontrol em the four upstatecounties which are not covered by ETPA, the unitsare permanently decontrolled).

At this point. it is necessary to describe the twoNew York City rent laws which do not expire thisyear. They were both enacted and have been per-iodIcRIIy reenacted by the City Council pursuantto 1962 state enabling legislation. This statute wasGIlICkd without a sunset and there/ore does notIuJlIe to be extended/rom time to time by the Leg-- - - - - - - - - - ~ - - - - - - - - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - - -

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Co-ops Come to FlatbushAll the elements are there for co-op conversions in F1atbush: spacious apartments,a bank happy to provide financing, and the beginnings of a market. But ways toavoid resulting displacement are not yet in hand. by Michael Powell and Tom Robbins

Co-op conversion, long associated with the wealthier,trendy neighborhoods of Manhattan, is beginningto define the terms of the housing situation in numerousless likely neighborhoods. Hailed by some as a saviourfor middle income housing, and condemned by othersas a death knell for low income tenants, the sale ofapartments as co-ops is laced with controversy. Whilesome applaud the "upgrading" effects of co-ops upon aneighborhood, and a number of pioneering efforts havebeen made to provide a co-op option for low and moderate income tenants, private conversions frequentlyawaken the twin7headed dragon of displacement andgentrification.Flatbush, the traditional heart of Brooklyn, is one"transitional" neighborhood soon to be confrontedwith the uneasy choices and trade-offs created by con-CITY LIMITS May 1981 10

versions. For many years a largely white, middle classneighborhood, a rapid influx of American blacks andWest Indians in the 1960s and 70s changed the ethnic,racial and economic face of Flatbush. A wide variety offactors, including disinvestment, racism, and fear led toa decline in Flatbush's housing stock and commercialstrips.In 1976, Citibank stepped into what it described as a"deteriorating situation" in Flatbush. The bank would,it said, test the "hypothesis that. .. by positioning itselfas a community bank . . . and concentrating the application of various resources [the bank] could improve itseconomic and market base, enhance its public imageand favorably affect its long-term profitability."Since that time, the bank has received high marksfrom many in the community as a concerned and deeply


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involved partner in neighborhood revitalization, extending its ample resources to enterprises and areas whereother banks have feared to tread. After helping to pioneer stretch (long term) mortgages, and participationloans using low interest federal funds in combinationwith its own, Citibank's Flatbush Pilot Project is presently readying itself to playa large role in assisting thecreation of co-ops in the community. As with earlierprojects, Citibank is working along with the FlatbushDevelopment Corporation, a locally based nonprofithousing group.Neighborhood revitalization, however, is a two-edgedsword. Along with the economic shot in the arm thatnew investment and better-off residents bring, comesrising real estate prices and a new precariousness forlower income residents.A working group on community reinvestment at theInterfaith Center for Corporate Responsibility has beenconsidering jus t that dilemma. The 180 Catholic and 17Protestant congregations which are members of theCenter employ their extensive corporate holdings to introduce stockholders' resolutions on issues rangingfrom disinvestment in South Africa to nuclear powerand plant closings. The resolutions are meant, in thewords of staff member Keith Rolland, to "spark discussion within the corporations, garner concessions, andheighten public awareness."The Center's reinvestment group came to the conclusion some time ago that when neighborhoods are revitalized, existing residents "should be part of the deal.We pushed for reinvestment," said Rolland, "but thepeople shouldn't be pushed out. We see displacement asa real social injustice."

Concern over the possible ramifications of Citibank'sco-op effort led a member congregation, the New YorkProvince of the Society of Jesus, to use its 1,500 sharesof Citicorp, the bank's parent group, as the launchingpad for a stockholders' resolution at the corporation'sApril 21st meeting. Noting that "The conversion ofapartment buildings to cooperatives has caused significant displacement nationally," the resolution asked thatCitibank develop three programs: that the bank makeshort-term loans to qualified community groups; develop along with the city, a program for the rehabilitationof cooperatively owned housing using the sweat equitylabor of the residents to reduce the rehab costs; and,develop a program to offer"co-op loans carrying a lowdown payment and low interest rate.But even well before the April meeting, Citibank'sresponse to the requests in the resolution was a polite"No." Norma Jarbo, director of the bank's FlatbushPilot Project stated, "I feel we are already meeting theterms of the resolution. We refuse, as such, to be lockedinto a paper policy position."As expected, the resolution was resoundly defeated,but not without gaining slightly over three per cent of

the votes - enough to guarantee tha t the resolution canbe reintroduced at the next meeting in the fall. The bankdid, however, agree to join an ad hoc committee madeup of equal representation from churches, the bank,and the community which will study the effects of theconversions. The committee's task will be a tough one,and its ultimate effectiveness, in the face of growingmarket forces, is up for question.Sitting along the southern border of Prospect Park,Flatbush is ideally suited for city dwelling. Twoseparate train lines, and a grid-pattern of buses serve thearea. There are several large shopping strips and manyof the apartments are set along graceful, tree-linedblocks. The building stock, with wide, ornate entrances,hedges, marble lobbies and spacious apartments, wasonce among the finest in New York. Even now, despitethe rising crime rate, and the problems with city servicesendemic to all boroughs, Flatbush provides one of themore pleasant neighborhoods for low and moderate income people in the city. The question that Citibank'sco-op plan raises is whether or not these same peoplewill be able to enjoy the fruits of Flatbush's growingprosperity"416 Ocean Avenue is the planned site for Citibank'sfirst Flatbush co-op. The building recently underwent aconventionally financed rehabilitation. Because the91-unit building rehabilitation was financed by Citibank, it will have a non-eviction plan and the co-oploans will be written by the bank. Four or five otherbuildings are also p r e s ~ n t l y under consideration.Under current state legislation, a co-op offering caninclude an eviction plan for those who do not wish topurchase, or a non-eviction plan which allows non-buying tenants to remain in place as renters. Thirty-five percent of the tenants must agree to purchase apartmentsbefore the owner can evict the non-buyers.Jarbo stressed that Citibank intends to offer onlynon-eviction co-ops, but she cautioned, "We cannotcreate a static world - the neighborhood will eventuallychange. And if the neighborhood wants an eviction coop, we would support them." Or, in the words of JimDunn, Citibank's Public Affairs officer in Flatbush."We can try to change it, but come hell or high water,you're going to have co-oping in Flatbush."

No one, however, is presently pushing to create co-opapartments in Flatbush aside from Citibank. And theavailability of financing from the bank creates a "chicken or egg" situation: should large-scale conversions getunderway in the area - with or without eviction plans- the impetus will clearly have come from Citibank'sefforts.The bank's present decision to finance only non-eviction plan offerings is an apparent turn-around from anearlier bank position that it needed to do both kinds ofco-ops.The final terms of the co-op plan at 416 Ocean Ave-

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nue are still unresolved. The figure of approximately$25,000 has been suggested to tenants as the cost of aone or two bedroom apartment.Under Citibank's stretch mortgage plan for co-ops,tenants in buildings where Citibank provides the majority of the financing are eligible for housing loans of up to$150,000 with a ten per cent down payment. The loanscarry market-level interest rates, plus a fairly high fourand-one-half per cent one time fee. "What tenants arefacing under this plan," remarked Father MichaelDonahue of the New York Province of the Society ofJesus, "i s a combined interest rate of around 21 percent. As long as this remains true, any further talkabout low income co-ops is academic."Norma Jarbo and Jim Dunn basically agree withDonahue on the subject of financing. Cautioning thatgovernment subsidies might make the terms more affordable, Jarbo estimated that "a family making lessthan SIS,OOO or S19,OOO a year would probably encounter large problems with the payment schedule."Richard Marans, director of development for FDC,said "the project is not a low income dea l - 416 OceanAvenue is basically not a low income building. But, thenon-eviction plan makes it fairly non-harmful. We'retalking about providing co-ops for middle income people, civil servants etcetera." According to Marans, theimportance of the role of FDC in the effort is tomonitor and watchdog the developments, assuring thatdisplacement does not occur. Contrasting Flatbush withthe Clinton neighborhood of Manhattan where heworked with another housing group until recently,Marans said, "We haven't seen a lot of upper middle income people coming looking for co-ops - some solidmiddle class folks, yes. But that's a lot better than thecrazy scene in Manhattan, where the market has nolimits, and there are loads of people willing to pay it."According to Jarbo, "We are asking FDC to targetbuildings because we will have a greater chance for success in buildings previously organized. We are not targeting anyone ourselves. We want those people whowant to stay, to stay, and those who want to leave, toleave."Some of the tenants at the 416 Ocean Avenue have already left, said Geraldine Fendall, president of thetenant association. Fendall said that after tenantsreceived a "red herring" - the initial, informal co-opoffering - concern began to mount. She said the association had decided to hire an engineer to do its own studyof the building'S plant, as well as an attorney to represent them. "He (landlord Norman Krischner) is not going to get a soul to vote for the co-op" said Fendall.

However, there,are currently numerous vacant apartments in the building, and Fendall expressed fear thatthe landlord could gather enough votes from outsidewould-be purchasers, who would pay around S35,OOOper apartment, to swing the vote. Fendall also expressedCITY LIMITS May1981 12

dismay that neither the landlord nor Citibank have attempted to meet with tenants personally to explain plansand options. George Danes, an organizer for FDC, whohas met with tenants a number of times, concurred thatthere was substantial opposition from most of the tenants to the co-op plan. And, contrary to Jarbo's assertion, the building wasn't organized by FDC until aftertenants, concerned over the co-ops, sought the group'sassistance.The Flatbush Development Corporation is in the dififcult position of pursuing two paths simultaneously. Onthe one hand it is working to secure the position of lowincome tenants and on another, to encourage outside, middle income interest.Judy Flynn, former executive director of FDC noted,"Flatbush is a neighborhood moving in two directions- we have tried to encourage both routes. Certainly weare concerned with attracting upwardly mobile youngcouples to Flatbush. We need their investment. And, asthe housing market tightens in Manhattan, more andmore people are looking at Flatbush." Flynn insists,however, that this process will,not take place at the expense of low income residents. "We need a mixed neighborhood:' sbe said. "FDC cannot do the middle incomeHWe need a mixed neighborhood. FDCcannot do the middle income co-opswithout doing the low income as well."co-ops without the low income as well." Flynn is convinced that, with careful targeting, large displacementproblems can be avoided.Among the tools FDC will push for tenant protection,Flynn said, are "strong resale restrictions on the co-ops,and the proper enforcement of the maintenance clause."On a Sunday late in April, FDC sponsored its firstapartment house tour for prospective residents. Thetour complements the long-time house tour which FDChas used successfully to attract new middle income families to the many handsome, brick, frame and brownstone homes in the rieighborhood. The apartment housetour was advertised in the Vii/age Voice with the slogan:"End Shoebox Living'" The ad promised a tour of"spacious apartments" with "marble lobbies" in "avibrant tree-lined community."

W hen Citibank first embarked on its Flatbush experiment it outlined a five year plan. for itself.The first couple of years would be devoted to educatingitself about the community, creating strong relationships with residents, groups and businessmen, and getting its stretch mortgages for homeowners of f theground, as well as setting up the participation loans forapartment rehabs. During the following 2 to 3 years, theplan called for beginning co-op conversion financing.So far, the plan has moved along effectively, and according to schedule.


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In order to gauge community receptiveness to conversions, the bank commissioned a survey from the LieberAttitude Research company. The company polled numerous Flatbush residents on their thoughts and plansregarding their neighborhood, and found that 43 percent of renters polled indicated a willingness tobuy theirapartments. But the study included a caveat that thecompany was not able to obtain much low income input: young blacks and West Indians, they reported,were difficult to speak to.

Some of the opinions held by those it did poll werethat: "Anything that can hold down the welfare population will be considered stabilizing," and, that the bank'sactivities should be aimed "at keeping 'them' from tipping out the middle class."In a comment on its own duties, a Citibank reportstated, "The job of Citibank must be to isolate events orconditions most relevant or visible to upper/middle income residents.""Those of us who formulated the stockholders' resolution," said Michael Donahue, "got the distinct impression that Citibank wanted to attract more 'stable'tenants to the community." There exists some question,however, as to how 'stable' is defined by the bank.The option put before Citibank in the resolution, aswell as in programs initiated by FDC, is to take affirmative steps to help finance low income co-ops. Accordingto Judy Flynn, FDC "hopes eventually to become a

developer of low and moderate income co-ops with Citbank providing the equity.""We're working with some low to moderate incomprojects," said Marans. "We want to put together program which will end up in co-ops, not tax shelters."The bank, however, has so far balked at participaing. Norma Jarbo insists that "Citibank cannot subsdize low income co-ops. That is simply not something

bank can do."Michael Donahue agrees with Citibank. "We neveasked Citibank for giveaways. As stockholders thawould not be in our best interests. Rather, we would likto see them develop something analagous to the particpation loan program for low income co-ops."At the stockholders' meeting, that argument appaently fell on deaf ears, but both the church, through thInterchurch Center, and FDC, will be pushing to maksome version of the plans a reality, with Citibank's participation. In the meantime, however, the bank will continue on its agenda, with co-op conversion at the heaof the list."Down the road," said Jarbo, "who knows where thneighborhood is going. This cannot be our concern. Imarket forces come in, they are beyond our control." 0

Michael Powell is a tenant organizer in Brooklyn and afrequent contributor to City Limits.

Number 416 Ocean Avenue, slated to be thejirstCitibankjinanced Co-op in Flatbush. Tenants there are wary ojhigh costs down the road.13 CITY LIMITS May 1981


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IN THE LIFE OF AN ORGANIZERMonday: by Patricia Smith"Now don't you dare give me a run around, younglady, or I 'll go to Mayor Koch . . . . ""Yes ma'am. May I get that number for you?"The caller was a senior citizen demanding answers onhow to get repairs done for her apartment. My offer toCITY LIMITS May 1981 14

give her Koch's number was not meant to be flip. Rath-er, it was a sign of my total frustration, for at that pointI had mentioned several ways to go about getting repairsand none suited this impatient caller. As my patiencewaned, the organizers in my office sensed my despair. I


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to slow the process down so that both tenants and organizer have a chance to think, and to have tenant arguments heard. The lawyers are trained for and accustomed to the pace. I t is a matter of being able to hurryup and wait.In front of the judge, one must compete. We vie forattention. We are tattletales.

"Now be good," the judge seems to be saying, "ifyou would only be good you wouldn't have to be here."Sometimes I think that judges are of another species.As I left housing court today, I heard chants. Thinking that tenants had organized and were protesting theirtreatment, I approached the door. Upon seeing American flags, though, I became suspicious. It is as if theflag has become a tool of the Right. And sure enough, agroup of landlords were demonstrating against thelength of time that it takes to evict a tenant. Life isunfair . . . . "Hello?""Hi, Goldie. Has your door been fixed?""No.""Oh, Goldie . . . . "Thursday:Again, I called ERP. They are still giving the landlordtime to fix Goldie's door. I called the landlord to informhim that I know that his word is worthless. He didn'tcare . . . . In a quest for information that could not be given byphone, I traveled into the bowels of the District Office

of Rent Control today. I t was like entering a time warp.One waits but not in the midst of a bustling office.Everyone moves slowly there as if to echo the lingeringdeath of rent-controlled apartments in this city.I am called from the waiting area and allowed to enterthe inner sanctum. I t is a large room with many unoccupied desks. Yest even the desks at which people were sitting looked unused. There were hardly any papers onthem.The man assisting me lumbers into a smaller room insearch of the information which I request. As I settledin, preparing for a wait lasting at least three years, Inotice that phones are constantly ringing. Realizing howmany times that I have called Rent Control only to waitendlessly for someone to answer, I try to see how manypeople are handling phone calls.

In a corner sits one, tiny woman talking on the phone.She gives the caller information as well as advice. "Justcomplete the form, ma'am," she explains in a paradoxically droning yet cheerful voice. "Don't look for problems where they don't exist." Indeed.Friday:"Hello?""Yeah, This is Goldie's landlord. I won't be able to

CITY LIMITSMay 1981 16

get anyone over to fix that door. Go ahead and have thecity do it." I did some research on a multiple dwelling at theMunicipal Building today for tenants with whom I'll bemeeting, for the first time, next week. The first step is toget the block and lot numbers. With that information, Ican do anything: I can find the owner of record, themortgage holder and the terms of the mortgage, and theowner's tax status. In order to get the block and lotnumbers, I gave the building's address to the manbehind the computer. He punched in the address butwith no results. The man referred to a massive book. Hethen looked up into my eyes and said, "We don't have abuilding with that address. Sorry."Darnmit, I think, I had better call my tenant contactand get the correct building address. Yet when I reachher, she says that I already have the correct information.On no, I think, a phantom building. Next week, atmeeting time, I'll walk into a twilight zone. Yet, the

thought intrigues rather than frightens me for I knowwhat' s outside. 0Patricia Smith is a VISTA tenant organizer working inthe East Flatbush section ofBrooklyn, who, seven mon-ths ago, was a "nice, rather shy college student in theWest." Today, she says, she is "not as nice, and certain-ly less shy."

Association Moves

The Association of Neighborhood HousingDevelopers has moved. I ts new address Is 424West 33rd Street, New York, N.V. 10001.


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Guides for TenantsManaging Money and Keeping Records - For Tenants Who Manage Their Own Buildings. A guide fortenants who are embarking on the awesome task of running their own buildings, this booklet includes a glossary of financial terms as well as sample ledger sheetsfor proper accounting techniques for keeping the rentroll as well as the cash receipt and cash disbursementjournals. It also explains how to deal with monthly bankstatements and checking account reconciliation forms.This excellently produced 83-page manual is available totenant associations' of TIL buildings and other groupsenrolled in the city's alternative management programs.This homesteader's handbook was prepared by theUrban Homesteading Assistance Board and the city'sDepartment of Housing Preservation and Development'sTenant Interim Lease program. Available in .limitedquantity. No bulk orders filled. $6.00 each plus postage.Please write to U-HAB, 1047 Amsterdam Ave., New

York, N.Y., 10025, for this organization's publicationlist, which includes this manual as well as other housingrelated booklets.Tenant Survival Guide - A Self-Help Manual ForTenants Witbout Services. Prepared by the Task Forceon City-Owned Property. A practical common senseguide for tenants running buildings abandoned by landlords, this publication deals with the subjects of organizing tenants in buildings, purchasing fuel oil, hiring private contractors, and making the city's EmergencyRepair Program (ERP) and 7-A Management work fortenants. It also discusses rent strikes, rent collection, .court experiences, lease agreements, and basic financialrecords. Available in limited quantity. Please call thetask force at (212) 966-6998 or write to: Task Force, 40Worth St., Room 1215, New York, N.Y., l00l3, formore details.Another tenant self-help booklet, How To OrganizeYour Building, A Step-by-Step Guide For Tenants, compiled by the city's Neighborhood Stabilization Programunder the Commission on Human Rights, continues tobe available free of charge at 52 Duane St., Sixth Floor,New York, N.Y. 10007. For more information, callRoger Martin, (212) 233-3984, or Joyce Morris, (212)233-3985.The Community Reinvestment Act - A Citizen's Action Guide. This 48-page pamphlet explains what CRAis, the regulations governing it, and ~ a y s communitygroups can use this legislation to obtam mortgage a n ~ home improvement loans as well as loans for small.busInesses and economic and job development. AVaIlablefrom the Center for Community Change, 1000 Wisconsin Ave., N.W., Washington, D.C., 20007. 0

17

Federal Budget:Co-op Bank Reprieve?

The National Consumer Cooperative Bank mayhave been snatched back from the brink of fiscaloblivion into which the Reagan administrationand the Senate Budget Committee had recommended it be consigned. The House Budget Committee moved in early April to fund the bank at$86 million for Fiscal Year 1982. RepresentativeFernan St. Germain, Democrat of Rhode Island,also introduced a bill to reauthorize Title II of thebank, which supplies low interest loans for low income self-help activities, as well as to provide $50million for the bank in 1983 and 1984.Hearings began April 29th in the Senate on budget matters and a Senate subcommittee was scheduled to hear a bill introduced by Senator JakeGam, Republican of Utah, which would revokethe bank 's charter. A national coalition to supportthe bank called "Friends of the Co-op Bank" hasbeen formed to build and coordinate regionalbacking.Several other housing and community development programs were recommended for higherlevels of funding than those included in the administration's budget. The House Budget Committeerecommended funding of 250,000 units of HUDassisted housing. That figure is a return to thelevels sought by the Carter administration and re- .presents a substantial increase over the 175,000proposed by President Reagan, and 150,000 proposed in the Senate.Also in the House, an appropriations subcommittee on HUD and independent agencies voted to.make the low interest Section 312 rehabilitationloans a revolving loan fund, rather than ending italtogether as both the Reagan administration andthe Senate Budget Committee had recommended.This would allow loan repayments to be used tofund new loans by localities and would provideapproximately $30 million in loans this year and$60 million in 1982. .. The Neighborhood Self-Help DevelopmentProgram, which has made grants to c o m ~ u n i t y organizations for project development, failed togain any support in the HOli"se subcoDunittee, thusleaving its chances of being revived as almost nonexistent. 0

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Winter In Review:Bow the FuelBuying Plans FaredThis past winter joint fuel purchasing plans operated on thebiggest scale thus far in New York City, providingsubstantial savings to low income tenants andsmall homeowners. There were problems andsnafus, but three major groups are gearingup for an even bigger season next winter.

18

by Mark LevyThe sweet breath of spring brought sighs of relieffrom tenants, co-op members and homeowners squeezedtight by winter fuel bills. The twin blows of Reagan's oilprice decontrol and a frigid Christmas crushed manybuildings' fuel budgets. This past winter, a number ofambitious fuel buying projects were established. Alltook the cooperative approach to energy purchasing.

Yet, each, reflecting the nature of its sponsor, took adifferent form and, ultimately sought a different goal.The Housing Energy Alliance for Tenants (HEAT) isfollowing a classic co-op format. The Association ofNeighborhood Housing Developers (ANHD) formed afuel consortium to aid its members. The New York Citizens Alliance joined together homeowners and smallbusinesses into its Fuel Buyers Group.HEAT is closely associated with the Energy TaskForce, a pioneer in energy conservation and solar applications in low income neighborhoods in New York.Their aggressive style and innovative brand of technicaladvocacy made ETF a natural base for HEAT. VISTAVolunteers Risa Breckman and Margaret Styx first developed the concept of HEAT in 1978. They envisioneda fuel buying co-op as the groundwork for a neighbor-


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hood based co-operative business that could supply theentire scope of energy materials and service. HEAT'spotential membership was buildings in one of the city'sAlternate Management programs. Its seed money camefrom a variety of government and foundation grants.By the winter of 1980-81, HEAT was ready to roll.Roy Battiste, a street-wise community organizer andenergy consultant came on to direct this first winter'soperation. HEAT received commitments from about 60buildings to represent them and negotiated with a fueloil dealer a favorable price for oil delivery and service.They were able to obtain a lower price than any singlebuilding could because of the volume the 60 buildingsrepresented. HEAT eventually bought over one milliongallons of fuel oil this past winter. A number of dealersbid for HEAT's business. After lengthy negotiations,Burns Brothers, a medium-sized dealer, was selected andHEAT embarked on what was to be a rocky first year.HEAT employed a budget system which spread payments out into year-long equal monthly amounts. Thissystem, familiar to many oil and gas customers, has thedual advantages of avoiding huge winter fuel bills andestablishing an interest-earning balance during the summer months.

In order to join, buildings had to put up a depositequal to an estimated monthly fuel bill. Many buildings,faced with low rent rolls, erratic rent collection and rising maintenance costs couldn't scrape up the deposit.Others had trouble keeping up with their payments anddropped out. However, amongst the core of HEATmembers, the on time payments averaged over 85 percent.The biggest problem HEAT reported was dealing withthe fuel oil companies and dealers. Three months afterthey signed their contract with Burns Brothers, Battisteand HEAT strategists were stunned to learn that BurnsBrothers had been sold. Their #2 fuel oil contracts wereacquired by Petroleum and Heat Power, which in turnsold this contract to Mystic and the #4 and #6 contractswere sold to Original Consumers. Battiste later discovered that not only was Burns Brothers on the block during the HEAT negotiations, but that they used theHEAT contract to enhance its value to potential buyers.According to Battiste and HEAT members, these newdealers placed a low priority on delivery to HEAT members. Original Consumers was Particularly slow in responding to delivery calls and service requests. Battistedescribed some ofthe HEAT service as a "quagmire."Don Yules of Original said that neither he nor anyother executive was aware of the problem but that if deliveries were slow it may have had to do with late payments and small orders. Yet, even he thought that"working together as a co-op was the way to go."HEAT's ability to force the dealers to live up to theircontract was limited to either legal action or negotiations. "Litigation wasn't really a viable option", ex-

plained Battiste, "The oil companies have this fraternity. I f you threaten one of them with litigation, they'll allstick together and we could wind up cutting our ownthroats." Tony Carrasquillo, a HEAT board member,says, "we really learned the ropes about the oil companies this year ."Despite these problems, 35 buildings stuck withHEAT throughout the winter. They were able to averagesavings of 15-20 a gallon, which would translate to$300 for a 1500 gallon delivery. Battiste, OutreachCoordinator Manuel Martinez and HEAT loyalists aregearing up to expand for next year. They've installedcomputer equipment to modernize the billing; they'replanning to offer free energy audits through ETF, areincreasing their education and outreach efforts and areworking with the National Consumer Co-op Bank onmarketing and financial planning. HEAT members aredoggedly optimistic for the future. "We founded HEATas more than a money saving tool."says Battiste but,more importantly as a "force for neighborhood revitalization". HEAT saw the fuel buying projects as the firststep towards offering a comprehensive array of energyservices to community groups and tenant co-ops. RoyBattiste calls HEAT, "A working experiment in participatory technology." Next winter their experiment willtry to work again.

I f HEAT seeks to fulfill a vision, then the Associationof Neighborhood Housing Developers Fuel Consortiumexists to fulfill a need. ANHD represents over 40 member and affiliated community housing groups in NewYork. As part of its technical assistance function,ANHD began developing joint purchasing groups tolower costs for its members. Each of these groups wasdeveloped as a consortium and ANHD offers consortiafor liability, fire and health insurance as well as fuel oil.A consortium differs from a co-operative in that a consortium's members join together for a single purpose,are represented by an agent as a service, and can join orleave as they wish. A co-op's membership has all decision making, planning and policy is in their collectivehands, usually represented by a Board.This was the ANHD Fuel Consortium's second winter. Last year, guided by Technical Assistance DirectorAnne Hartwell, the Consortium started small with 25buildings. Savings averaged 5-13 a gallon. This year'sConsortium, coordinated by Dick Hochwald, a cheerfulgraduate of ANHD's CETA program has about 150buildings participating and purchased close to 2 milliongallons of fuel oil. The Consortium's structure was, inmany ways, similar to HEAT. They requested bids fromdealers and ultimately negotiated contracts with Smilesfor #4 and #6 oil and Heatmaster for #2. Because of thewildly fluctuating oil prices, the price to Consortiummembers was tied to the wholesale price, published dailyin the Journal of Commerce. ANHD, with the help ofoutside grants, supplied most of the overhead costs and

19 CITY LIMITS May 1981


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a bank loan helped the Consortium get rolling. Its members were also on a monthly budget system with accruedinterest being returned to the building. The contractscalled for a maximum wait of 48 hours and Hochwaldpronounced himself pleased with the level of serviceand speed of delivery.

ANHD Executive Director Betty Terrell and Hochwald see the Fuel Consortium as primarily a service toits members and other housing groups. Hochwaldnotes, " I f our buildings suddenly discovered that theyneeded a food co-op, we'd probably set up a food purchasing consortium." But ANHD also has a wider strategy an d long range goals. "The whole idea, besides saving money," said Terrell, "i s to try to generate incometo help support ANHD, which in turn, will help supportits members." Even the meager government and foundation support of recent years is drying up and true selfreliance is a real goal for many community based organizations." Terrell sees the Consortium as the beginningof a chain of economic development and employmentstrategies. ANHD is looking around at other servicesand products widely used by housing groups.The problems that the Consortium did face thiswinter were familiar ones to many in the housing movement: pinched building budgets, inefficient systems andoverworked staff. Next year Hochwald expects to use acomputerized billing system an d expanded quarters toenable the Consortium to double its membership to 300buildings and its volume to 4 million gallons.

Another fuel co-op, The N.Y. Citizens Alliance FuelBuyers' Group, was founded to help the masses of smallhomeowners and businesses equally beseiged by soaringfuel prices. The Citizen's Alliance is an offspring of theNew York Public Interest Group (NYPIRG), one of thescores of state-based organizations around the country.The groups try to combine student enthusiasm withsolid research to spur grassroots action. NYPIRG hasconcentrated on such diverse issues as bank redlining,mass transit, nuclear dangers, truth in testing, energypolicy and consumer protection. The sponsorship of aFuel Buyers Group was a natural response to these concerns.

Sandra Washburn, a long time PIRG staffer, spentmore than a year researching the intricacies of such aventure. The Group negotiated a contract with a smallfuel dealer to deliver fuel and servi


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Tax Abatements to be Reined InA proposal supported by Mayor Koch and the leadership of the City Council that would eliminate luxuryhousing conversion in parts of Central Manhattan wasexpected to pass the full Council late in April."This is no great reform," said Gail Brewer, the housing aide to Manhattan Democratic Councilwoman RuthMessinger. "They may be excluding Riverside Drive,Central Park West, and Fifth Avenue (south of 96thStreet), but Broadway, Columbus, and Amsterdam arewide open for speculation. They are not part of anyabatement plan. There is no provision [in the Mayor 'sproposal] to protect our [Manhattan] neighborhoods onthe West Side, Clinton, and the Lower East Side."Under the mayor's proposed amended J-51Iegislation, other streets between 96th and 42nd Streets wherethese conversions would not be permitted are West End,Park, Madison, York, and East End Avenues.Instituted in 1955 as an incentive to help owners ofcold water tenements to comply with the city's new

building codes, J-51 currently permits those owners whoupgrade apartment buildings or convert non-residentialbuildings or hotels to residential use to receive a 20-yearabatement on all or part of their real estate taxes. In addition, they can receive a 12-year tax exemption on theincrease in the building's value which results from theimprovements.The other legislation proposed by the mayor and approved by the housing committee of the Council is thebill known as the B-to-B or Intro. 951, which wouldreward owners for improving SROs (Single Room Occupancy) by permitting them the same J-51 tax incentiveadvantages presently allowed for Class A residentialconversions . Referred to frequently by critics as "toolittle, too late" or "window dressing," it also is expectedto receive the Council's approval.Calling for a moratorium on all J-51 conversionsbelow 96th Street, Councilwoman Messinger charged,"The mayor has proposed some valuable changes in theJ-51 legislation . . . But no one should be fooled by theseamendments. There is almost no renovation left to bedone in the areas in which abatements are denied, andnone are substantial.

" I t is precisely in those areas of Manhattan wheredevelopment is proceeding apace - the West Side, theVillage, Soho, Yorkville, Clinton, and the Lower EastSide - that the mayor has refused to curtail J-51. Inthese neighborhoods, developers will continue todisplace people and businesses, destroy the remainingSRO housing stock, create luxury apartments andcoops, and benefit from the most generous combinationof tax exemptions and tax abatements that exists anyplace in the United States."Messinger is joined by some 120 community organizations, politicians, and residents as well as the Catholic

Charities and the Archdiocese of New York in her effortto limit these tax benefits for luxury renovations thatresult in displacement of long-time low and moderateincome residents of neighborhoods.Addressing the problem of future displacement,Terence Cardinal Cooke said, "I encourage support fora moratorium on J-51 conversions of SRO facilities, forthe strengthening of tenants rights, relocation requirements and services for those threatened with displacement by conversions and for new initiatives on the partof the state and city governments to assure adequateshelter for all our homeless brothers and sisters."A recent study by the Community Service Society ofNew York City revealed that at least 36,000 city residents are homeless because of the constantly shrinkingaffordable housing stock. D

Travelers Insurance'Urban Focus' Launched

21

A corporate support program aimed at channelingfunds to urban neighborhoods has been announced bythe Travelers Insurance Companies. The insurer'spledge to provide investment capital, insurance availability and technical assistance to neighborhood groupsworking on specific projects was made at the close of athree-day conference in New York City on gaining private sector investment in urban neighborhoods.Dubbed "Travelers Urban Focus", the programcomes after more than a year of negotiations betweenthe firm and community organizations around the country. Leading the community groups in their talks withTravelers was Gale Cincotta, president of National People's Action and head of the National Training and Information Center which co-sponsored the conferencewhere the announcement was made.No fixed dollar amount is attached to the corporateeffort, and Travelers president Edward H . Budd said nodirect grants to neighborhood groups will be made. Instead, Travelers will attempt to work along with groupson individual projects "applying our many corporateresources", said Budd.

Locally, one tangible example of that support is apending loan Travelers will make to a private landlordin the Kingsbridge Heights section of the Bronx. Theloan, of approximately $150,000 for window replacement and boiler repair in a 73-unit building, wasnegotiated by the Northwest Bronx Community andClergy Coalition which last spring won agreement fromTravelers to provide insurance for area buildings. D



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Short Term Notes

Ironing The KinksOutOfCommunity Contracts

A federal grants program for local community groupswhich has suffered in the past two years from what recipients said were unnecessarily stringent reporting requirements, will be streamlined and expedited in thecoming year, a c ~ o r d i n g to the city housing departmentwhich administers the program.The program, known as the Community ConsultantContracts, extends grants ranging from $20,000 to$80,000 of federal Community Development funds toneighborhood housing groups for such services assurveys of local housing stock rehabilitation loanpackaging for building owners. It also supports planning for the creation of new parks and playgrounds onvacant land, as well as tenant organizing and dissemination of information about city housing programs forowners and renters.Last year, 45 local groups received funding under theprogram, but many contract recipients failed to actuallyreceive funds until late spring because of administrativedelays. In those cases, groups were forced to borrowfunds to pay staff or to delay program activities formonths while awaiting completion of all contractdetails.

Manuel Mirabal, Assistant Commissioner for Community Development, has admitted the existence ofproblems, but has insisted much of the delay exists outside the housing department and in the city Comptroller's office. Mirabal expects this year that all contractswill pass the Board of Estimate by June or July, thus allowing contracts and funding to commence September 1.A broader problem reported by the groups receivingthe funds has been characterized as "attitudinal" bysome. The housing department, they say, tends to viewgroups as working for the department, almost in anemployer-employee relationship. A new city descriptionof the program describes it as "complementary to, andsupportive of, HPD's program and goals of preservingand upgrading the housing stock of New York City." 0Toby Sanchez


Rehabilitation CommissionerAppointedAndrew M. Chertoff, former counsel to the Office ofDevelopment at the city's Department of Housing Preservation and Development, is the new assistant commissioner of rehabilitation. He replaces Jeffrey Heintz,who left this post after two years for a position at Citibank.Chertoff, 31, will be in charge of the ParticipationLoan Program, Sweat Equity, and Section 8 ModerateRehabilitation, in addition to the "1-51 Tax Exemptionand Abatement and the Section 421 Tax Incentive programs.Prior to joining HPD, Chertof f was an attorney withthe Manhattan law firm of Stroock, Stroock, andLavan. His salary will be $41,000.Former counsel to the Office of Property Management, Valerie Asciutto has been appointed HPD's general counsel, the position formerly held by Robert Robbin, who now is with the state attorney general's office.o

Cable TV - Programming Your Community Channels:May 22-23, 1981: The National Federation of LocalCable Programmers/Mid-Atlantic & Northeast Regions,the Tri-State Telecommunications Advisory Committee, the Riverside Church and the Channel L Working Group are co-hosting a two-day conference, "CableTV - Programming Your Community Channels" atthe Riverside Church, 490 Riverside Drive at 120thStreet in New York City. For registration information,contact Chuck Sherwood, (212) 964-2960 for write c/oCLWG, 51 Chambers St. , Rm. 532, New York, N.Y.10007.

Tenant Protection MarchA demonstration for increased tenant protection legislation will be held Saturday, June 6, at 12P.M. at the Helmsley Palace Hotel at 45S MadisonAvenue and East 48th Street. Sponsored by theMobilization Against Displacement, the rally willcall for: strengthening enforcement of rent regulation; extension of protections to tenants in small,city-owned and rehabilitated bUildings; abolition

of the Rent Stabilization Association; an end to allrent surcharges and passalongs as well as termination of vacancy decontrol and stronger protectionsfor tenants faced with co-op conversions. Formore information, call: Ray Rodriguez at636-3486 or Felice Jergens at 388-1501. 0


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BroaderState HousingRole Urged

A special committee of the Community Service Society studying the city's overwhelming tax-foreclosed property empire has called on New York State to develop astatewide financial program to fight housing abandonment.Known as the In Rem (tax-foreclosed) Housing TaskForce of CSS's Committee on Housing and UrbanDevelopment, the group, which includes members fromvarious city organizations combatting urban decay, isasking the state's Housing Finance Agency to issuebonds expanding the city's participation and 8A rehabilitation loan programs that have traditionally beencovered by federal Community Development BlockGrant funds. I f adopted as state policy, this proposalwould free up the CDBG monies to underwrite rehabilitation in buildings in low and moderate income neighborhoods that are in serious disrepair, while the state

funds would be used for early intervention in buildingswhich do not require such extensive work.Critics of the two loan programs have argued forsome time that the federal funds concerning them whichshould be earmarked for low and moderate incomeneighborhoods are being used to displace poorer residents and provide rehabilitated housing for non CDeligible elements."Everyone admits that New York City has a housingabandonment problem, but no one ever mentions Rochester and Buffalo. They certainly suffer from thesame dilemma," said Jonathan Erlitz, the fiscal analystat CSS who helped compile the report. "The state

doesn't do much in housing now. It should be made todo more."In addition to advocating the state's involvement infloating bonds, the report makes the following policyrecommendations: early intervention strategies by the city to stem theflow of distressed properties into the in rem pipelines. establishment of a seed money account for community groups to take over in rem housing. timely vesting of properties following the city's oneyear foreclosure proceeding known as Public Law 45. provision of federal and private funds to coverweatherization of in rem buildings, thus reducing operating costs for this housing stock. development of a uniform and expeditious salespolicy and citywide price tag for tax-foreclosed housingfor tenant and community groups. inclusion of economic development and job incentive programs for local residents.Stressing the importance of adhering to a uniformcitywide sales price, the report asserted that this "uni-form policy would dispel residents' fears, help the cityavoid a role as speculator and facilitate economic inte-23

gration of neighborhoods" and "would insure thatneighborhood.: upgrading accrues to long-term residents." It arso suggested tha t options other than sales,such as long-term leases, should be considered for residents in neighborhoods where sales are currently notfeasible.Two years ago the city adopted a sales policy of$250-a-unit for low income cooperatives, but, to date,only five buildings with 82 units have been sold to tenant and community groups. And for some time, criticsof this sales policy have challenged the city's reluctanceto sell housing at this nonprofit rate in sections of Manhattan and Brooklyn where gentrification has caused inflated real estate values and displacement of low incomefamilies. 0

HUDGrant For AtlantaLast month President Reagan made a $1.5 milliongrant to the city of Atlanta to aid in the investigation ofthe abduction and murders of 25 black children and

youths there. The funds were derived from the Department of Housing and Urban Development's InnovativeGrants Program which is a portion of the CommunityDevelopment Block Grant Program.A HUD spokesperson said the justification for makingthe grant from that fund was because many of themurdered children lived in a lower income area wherethe city is undertaking concentrated community development activities. The use of non-traditionalmethods for the investigation may have made it difficultto draw funds from other sources, such as the Department of Justice, the spokesperson said. 0

Brooklyn Development PlanSeven vacant city-owned tenements on 17th Street inthe Windsor Terrace section of Brooklyn will be rehabilitated as low income cooperatives with money from theFederal Section 312 Loan Program.Under the plan, each structure will be converted intoseven units of totally renovated, newly-laid out cooperative apartments, numbering a total of 49.Known as Windsor Terrace Houses, the cooperativewill be run by the Progress of Peoples DevelopmentCorporation, a nonprofit affiliate of Brooklyn DiocesanCatholic Charities. The sponsor is the 17th Street Association, a local voluntary preservation group.Depending on the size and location of the apartment,prices will range from $22,160 to $32,829, and will becovered by the 312 mortgage; average down paymentswill be $5,058, with a low of $4,151 and a high of$6,765. Carrying charges for the co-ops will run from$237.94 to $352.50 per month.Windsor Terrace Houses are scheduled to open earlyin 1982. 0



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LE1lilIERS

Co-op Bonk's MissionTo the Editors:

While the National Consumer Cooperative Bank hasindeed encountered serious difficulties in only its secondyear of existence ("Coop Bank Limps Into New York"March '81), I would like to point out several accomplishments that I believe make the Bank a creditable andimportant new institution serving New York City: In less than one year, the Coop Bank committedand disbursed two loans to low-moderate income housing coops in New York City. One of these groups, the300 West 17th Street Housing Development Fund Corporation, had vainly sought assistance from the NewYork City Department of Housing Preservation andDevelopment jo r over jour years. I challenge CityLimits to find a faster starting, more responsive lendinginstitution. In its one year of lending operations, the CoopBank has committed over $1,700,000 to two major lowincome urban homesteading projects in New York Cityinvolving 9 vacant city-owned properties. The CoopBank is actively reviewing another 5 sweat equity homesteading projects, virtually all of which were referred tothe Coop Bank by HPD's now defunct sweat equityprogram. The Coop Bank is already the funder of lastresort for sweat equity - an item prominently skippedin your article. Of the 16 active or approved loans in New YorkState, New York City claims 13. Of these, 9 are directlysponsored by homesteading groups, community groups,or low-income tenants directly seeking to purchase theirhomes. These 9 projects now involve nearly $9,000,000of the Bank's approximately $11,000,000 activity in thisstate.

[Despite these facts,] your article would have readersbelieve that saving low-income groups is not part of theBank's mission.In addition, the Bank's technical assistance programand below-market rate lending capacity (through theCoop Bank's Title II, Self-Help Fund) are now beingtargeted to the following projects: The Housing and Energy Alliance for Tenants(HEAT), a fuel purchasing cooperative composed of 35low-income, tenant managed or tenant-owned buildingsin New York City. The Coop Bank's assistance to HEATCITY LIMITS May 1981 24

will enable it to double its membership, develop an overall business plan, achieve self-sufficiency, provideenergy audits to member buildings, and spin-off aworker-owned energy conservation contracting company. Feminist Health Works, the only womens' healthclinic in New York City or State exclusively addressingthe nutritional, health and birth-related needs ofwomen, is receiving the Coop Bank's assistance which isexpected to aid the project in locating permanent space,developing a business plan, becoming a cooperative andopening a fully-operational self-sustaining womens'clinic.

The Mutual Aid Project, a non-profit group which,among other activities, supplies fresh food to 30 daycare centers in New York City, and the Coop Bank aredeveloping a plan to open new food cooperative storesin three City neighborhoods where low-income community groups have sufficient tenant-owned or managed buildings to support a full-service food coop.The list of projects goes on . The point is that theopening of the Coop Bank's Regional Office has madeit possible for the Bank to respond directly and immediately to the needs of New York City groups and others inthe State and region.New York City and its very active non-profit groupslobbied hard for the Bank's creation. I believe that theBank's record in its brief period of operation has shownits ability to respond to the needs of many of these samegroups.This is a record deserving of support. We expect to beopen for quite some time, and look forward to workingwith you and all of the groups working to make NewYork City a better place in which to live and work.

Philip St. GeorgesRegional DirectorMid-Atlantic Regional OfficeNational Consumer Cooperative Bank

Outlasting the RedeemersTo the Editors:

On behalf of the Tenants Association I'd like to thankyou for your constant and consistent support during ourbattle against redemption by our old landlord's estate.As you know, the City foreclosed against our oldlandlord, Henry Hof, and the buildings went "inrern"on May 25, 1978, almost three years ago. However, thisAugust the City suddenly "discovered" an applicationto redeem our buildings that had been filed by our oldlandlord two years before. Although there was norecord of any inquiries by the landlord (now deceased)or his attorney after the application was filed, the Cityfelt obligated to send the landlord's attorney a bill for


25/28

all taxes and costs owed to the City, and offer him achance to pay the amount owed by November 3, 1980-and redeem these buildings! November 3, the West 35thStreet "D-Day" arrived and passed with no check tendered by the landlord's attorney. I f the handling of thisredemption began questionably, I am convinced thatyour office and others threw enough sunshine on thematter to end the finagling, if any.The next day, however, through your thorough investigation, we found we had been put into the auctionpipeline. (We've been in the Interim Lease Program sinceNovember.1978!) Ben Bell of HPD-Interim Lease hasinformed me it is "routine", and that "even if you makeit into the brochure, HPD can put a hold on it." Asusual, in the HPD mode, an ounce of prevention is notworth a pound of cure.The redemption battle taught us well - we will notwait to appear in an auction brochure, as did severalLower East Side Interim Lease and Community Management buildings recently. We are handling the auction"Hold" through Community Board #4, hoping to take

care of it locally. However, if the "Hold" on our build-

ings is not forthcoming, we will be asking for your support again.Now with the publication of your City Limits andSoHo News articles we feel we have come full circle,from desperate and underwraps - to organized andknown. And we intend to keep it up. With PeggyKamens, Esq. of CDLAC (Community DevelopmentLegal Assistance Center), we are pressing HPD to locatethe ULURP application we submitted almost 2 yearsago to HPD. No one at HPD seems to know its whereabouts, although several other buildings that submittedtheir applications at the same time as we did havealready been through the whole ULURP process and arepreparing to purchase their buildings. The application isnow old enough to walk. We will be coordinating thiseffort with Ed Fonte of the Task Force on City-OwnedProperty. Our main objective is to locate and determinethe present and future status of the application.

Joe RestucciaWest 35th Tenants AssociationVice President

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25

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CITY LIMITS May1981


26/28

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28/28

INSIDE4 Another Look At Rental Regulations8 Co-ops Come to Flatbush14 AWeek in the Life of an Organizer22 Short Term Notes

23 Study of City-Owned Housing

City Limits Magazine, May 1981 Issue

Documents

Transcript of City Limits Magazine, May 1981 Issue