CITY LIMITS

COMMUNITY HOUSING NEWS

JUNE I JULY 1978 VOL. 3 NO.5
UPHILL BATTLE TO BRAKE
THE SLIDE OF 590 P ARKSIDE
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MABEL KELLY. "It's just patch-up 590."
by Bernard Cohen
Mabel Kelly, 59, covers her white lamps hades with
plastic to protect them from the soot that blows so thick
into her apartment that she sometimes thinks her
building is on fire. Downstairs, the mustard colored-
wall of her son James's kitchen looks two-toned from
the neat line marking the upper limits of where he has
cleaned off the grime.
Approximately one third of the 40 units in the city-
owned building at 590 Parkside Ave. in Brooklyn are
occupied. In March it had 57 outstanding housing code
violations. A fire last November left a 50-square-foot
hole in the roof that gobbled snow all winter and went
unrepaired until May when James Kelly and two other
tenants fixed it themselves.
There was no heat or hot water for weeks during the
cold season and a recent visitor to the four-story brick
building saw a notice that said the boiler was "tempor-
arily" out of service again. Plaster falls from apartment
ceilings and broken windows seem to stay broken. The
intercom has not worked in years.
"It's just patch-up 590," says Mrs. Kelly, shaking her
head and laughing.
Is this another New York City building down the
drain? Not to the tenants and others who are familiar
with 590 Parkside. It is certainly no paradise, but to
them it is a prime building to be saved. Why?
"It's a beautiful building," Rev. John Powis, who
has known the building for years, said, referring to its
structural soundness and potential. "And it' s in a
section where there is no such thing as a vacant house or
building. "
All the other buildings on the block, which straddles
Crown Heights and Flatbush, are occupied and properly
maintained. Across the street from 590 is an elementary
school. One block away there are some beautiful private
homes and the subway; two blocks away are busy
commercial streets.
Since neighborhood deterioration often begins with
one bad building, rescuing 590 would contain the blight
and stabilize the block, Powis and others argue. Letting
the building continue to slide could doom the area as the
infection spreads.
"It is an absolute disgrace for the Department of Real
Estate (which has managed the building for two years)
and HPD (Department of Housing Preservation and
Development) that for so many years it has seen an
almost perfect building on a perfect block and not done
anything," Powis said.
Mrs. Kelly and other tenants at 590 say they have
fared no better under two years of city management
than they did during the last years when the building
was privately owned. Many of the units are in terrible
shape, they say, and some tenants have moved without
permission into more livable apartments in the building.
A number of residents are putting their rent into a bank
account from which they intend to finish paying for the
fuel they bought themselves last winter. Some tenants
are paying rent to DRE and others pay no rent at all.
Nevertheless, the tenants successfully pressured the
city to remove their building from the auction block last
February. They feared that it would be bought by a
"slumlord" who would milk the building for rents while
skimping on maintenance and service.
The last private owner of the building, J&B Realty,
was forced to give up the property after the city success-
fully sued him for failure to maintain the premises,
according to Powis.
At the end of March, the local Prospect Lefferts
Gardens Neighborhood Association assigned an
energetic organizer, Ronald Lewis, to the building.
Earlier, the tenants had applied for admission to the
community management program in which HPD con-
tracts with community-based organizations to manage
city-owned property. That application was supported by
Rose Brown, director of HPD's Preservation Office in
Crown Heights.
Lewis said that one of his first tasks was to report to
the tenants the disappointing news that HPD had rejec-
2
James Kelly pointing to where there was a gaping hole in his roof all
winter. He and two other tenants repaired it themselves.
ted their building because the city estimated that reha-
bilitation would cost $8,OOO-a-unit or $3,OOO-a-unit
more than the maximum allowed under the program.
To complicate matters, while Powis, PLGNA and
others were trying to get HPD to waive the regulation
HPD auditors suddenly began questioning some book:
keeping practices of the Crown Heights Management
~ o r ? , the only logical community management organ-
IzatIOn for 590. There were a number of questions, but
the probe into $446.50 in rent monies not properly
accounted for threw CHMC's community management
contract into limbo for two months. Finally, on June
22, HPD auditors cleared the organization, apparently
assuring continuation of the management contract.
Michael Nobles, executive director of CHMC,
charged that the city had overreacted because of past
fiscal problems in the community management program
and had not given him the chance to address the
bookkeeping questions before threatening his contract.
"There were some legitimate questions," Nobles
said, "but the way HPD addressed them was not." He
said HPD should be more sensitive to the likelihood that
innocent problems are bound to show up at the
community level where expertise is not always readily
a.vailable. "I think they are more interested in trying to
fmd someone stealing and pull out all the stops and say,
'We found this,'" Nobles said. "It seems that the
Playing ball in the entrance to S90 Parkside Ave.
(HPD) staff is not as concerned with the program as
they are with playing cops."
Nobles said Crown Heights would like to take over
management of 590 Parkside but that it depends on
whether HPD will admit the building into the program.
Bob Moncrief, who heads the community manage-
ment program at HPD, said he will recommend that the
rehabilitation spending limits be waived for 590. He said
HPD will take another look at the building to see if the
work can be scaled down closer to $7,000 to $7,500 per
unit. Charles Raymond, HPD deputy commissioner for
property management, has instructed his staff to pre-
pare a list of all the buildings deemed suitable for
waivers.
Turnover at 590 remains rapid as a result of the
conditions. Many people apparently do not realize how
3
grim things are until after they move in. Frances Holmes
arrived last April rather than get assigned to a welfare
hotel. She says she is still waiting for a refrigerator that
works.
Few if any tenants have lived in the building as long as
Mrs. Kelly, who came in about 1966. "This building
was well kept then," she said. "The super was very
nice." James Kelly, who is 30, said, "The tenants were
beautiful. They looked out for each other. There was no
trouble at all."
Mrs. Kelly and a number of other tenants interviewed
all agreed that the residents of 590 would resume paying
their rent once services were restored to the building.
Then, said James Kelly, 590 will be "a city within a city.
It will be like a castle. It is very important to come home
to something. " 0
SIMPLE TENANT MANAGEMENT PLAN
DEVISED FOR CITY-OWNED PARCELS
by Susan Baldwin
One month after the city acquired the first group of
some 25,000 buildings expected to be taken in tax fore-
closure this year, community housing groups have won
an agreement to test a simple management plan that
gives major responsibility to the tenants.
"A few months ago, I don't think anyone who has
been working on this In Rem problem would have
thought that we would be getting so much coopera-
tion, " said Adina Johnson, Manhattan borough
director of Operation Open City and a member of the In
Rem Task Force, a coalition of community housing
activists and elected officials.
The city expects to be ready to sign interim manage-
ment agreements with some tenant and community
groups by mid-July, according to Charles Raymond,
deputy commissioner for property management in the
Department of Housing Preservation and Development
(HPD). HPD, which takes over responsibility for city-
owned multiple dwellings from the Department of
General Services (GSD) on September I, is working with
GSD during the transition period.
"We have to develop a mechanism . .. to halt
the potential In Rems . .. We have to go to the
banks to get loans to keep this 'redlining' from
happening . .. "
The streamlined, simplified interim agreements are to
be based on models prepared by Lawrence McGaughey,
a Brooklyn lawyer, on commission from the Fund for
the City of New York; and by the In Rem Task Force,
which has already identified 26 buildings on Manhat-
tan's Upper West Side, Harlem, East Harlem, and
Brooklyn for the proposed interim agreement program.
"I am very hopeful about the interim lease agree-
ments," said Raymond. He denied that pressure from
community groups hastened his involvement in the In
Rem plans.
"My door is open," Raymond asserted. "About 30
different groups have started to meet with me and I
think that's great. .. I am absolutely 100 per cent
convinced we can't do anything without community
people. I think this is the only way this particular [In
Rem] situation can be solved. "
The GSD assistant commissioner for the Division of
Real Property (DRP), Perry Soskin, supported Ray-
mond's view.
"We are working on the interim lease format right
now, and plan to sign off with the groups," he ex-
4
plained. "We also will allow [Article] 7A administrators
to continue who are affiliated with community law
services. "
Soskin and Raymond have submitted a draft interim
lease agreement to City Corporation Counsel Alan
Schwartz, who is expected to rule on it by early July.
Although details of the agreement are not yet public, it
is likely that qualified tenant or community groups
would manage the buildings with much the same
authority as that exercised by Article 7 A administrators.
Such groups would have power to rent apartments,
collect rents, and, under a waiver from the Corporation
Counsel, institute dispossess proceedings for non-pay-
ment of rent. They would disburse funds from rental
income to maIntain the buildings, purchase fuel and
utility service, and make repairs according to a schedule
negotiated with the tenants and the city. The groups
would account to the city for income and expenses,
probably in more detail and with greater frequency than
is required of Article 7 A administrators by the Housing
Court.
While acknowledging the need for the interim tenant
management, Soskin worried about the future. "We
have to develop a mechanism . . . to halt the potential In
Rems ... We have to go to the banks to get loans to keep
this 'redlining' from happening," he added.
Soskin reported that a special task force of high-level
city officials is going to work to keep more buildings
from going into tax foreclosure. Led by Deputy Mayor
Lee Oberst, the group includes GSD Commissioner
Peter Smith, Finance Commissioner Harry Tishelman,
and Deupty Mayor Herman Badillo.
Other observers agreed that the In Rem properties
must be seen as a long-term problem.
Douglas White, who recently left HPD's division of
evaluation and compliance to become District Manager
of Manhattan's Community Board 9, said, "The major
problem that is being avoided is ownership of these
parcels ... People have to realize that the city has taken
a holiday in that it is willing to deal with management
but not with ownership."
White predicted that the tenants who ultimately
"inherit" the buildings from the city in some form of
sale will be unable to meet the property taxes without
"massive rethinking of the tax structure and how it
relates to this problem."
Contemplating interim management, Adina Johnson
was also thinking about restructuring-in this case, of
rents. She warned that many tenants, particularly senior
citizens, will not be able to pay the rents that result, for
j
)
example, from community-management-type rehabili-
tation.
"The tenants really should do the rent restructuring,"
J o h n ~ o n asserted. The city has agreed, she reported, to
permit a tenant managing agent to request a rent
restructure.
HThe major problem that is being avoided is
ownership of these parcels . .. People have to
realize that the city has taken a holiday in tha.t
it is willing to deal with management but not
with ownership. "
Asked to explain financial plans for tenant manage-
ment of the In Rem buildings, Soskin said, "Most of the
tenants have not asked for money to manage the build-
ings ... Most of them seem to prefer getting control of
the buildings 'as is,' with the idea of deciding later on
about future plans."
Johnson said that Soskin's main concern in negoti-
ating with tenant groups over interim agreements 'has
been to insure their compliance with three requirements:
1) ~ h a t they maintain liability insurance for the prop-
erties; 2) that they attend a management course at
HPD's division of evaluation and compliance; and 3)
that they maintain proper books, records, charts, and
accounts.
Meanwhile, Soskin revealed that 50 In Rem buildings
around the city, selected for their strategic importance
to the blocks where they are located, will receive a
$2,5OO-per-unit rehabilitation immediately under GSD
supervision. Some $9 million is being reserved to beef
up managerial staff.
Soskin predicted that GSD would continue to provide
service to many of the In Rem buildings even after the
September 1 transfer to HPD.
Johnson anticipated regular meetings throughout the
summer between the In Rem Task Force and Raymond
and Soskin.
"We hope that if some regularity of meetings is
achieved, there is a possibility of having a smooth
transfer of the buildings," she said. "One advantage of
talking now is that we can try to be very relaxed, calm,
and cooperative," she added.
Time is what is also needed to understand the city's
intended "treatment" programs for the buildings,
Johnson continued. "Some may be prime candidates
for community management or direct sales, and I guess
it has to be admitted that some may only find their way
into the seal-up and demolition programs. We're hoping
that this will be the exception rather than the rule."
"Right now there is no massive attempt to bring in
the bulldozer," Soskin said. "We would like to see as
many of the buildings as possible enter into the HPD
programs, specifically direct sales and community
management.
"Obviously, if we're talking about a 20-unit building
5
that only has two people living in it," Soskin went on,
"we're going to ask the people to move out, because we
cannot justify spending the money to repair a large
number of vacant apartments." He stressed that Mayor
Koch and HPD were also committed to this policy.
"What the city has to understand," Johnson coun-
tered, "is that it is not taking over abandoned buildings.
There are people living in these structures who have
experienced all the horrors that go along with living in
conditions where the landlord has taken everything he
can get and then has gotten out.
"The city needs to distinguish between abandoned
and tenant-run buildings. We hope Mr. Soskin under-
stands this," Johnson said. "Let's see whether he trusts
us enough."
Efforts are being made to insure that tenant groups
will have the know-how to keep the buildings alive. The
In Rem Task Force is putting together a tenant manual
detailing city programs available to groups for saving
their buildings.
Legal self-help and technical assistance must also be
forthcoming, according to Johnson. "The time has
come to prepare groups to run their own buildings so
that they can come to the city with some strength in
discussing their problems," she said.
If the interim management agreements proposed to
GSD and HPD for the In Rem buildings work out, the
volume of buildings able to enter the direct sales
program may vastly increase, along lines first proposed
by attorney McGaughey last March.
He recommended to newly appointed HPD Commis-
sioner Nathan Leventhal that direct sales should strive
for simplicity and volume. At that time, both Leventhal
and William Smith, direct sales program director,
opposed the idea of loosening. administrative controls,
although admitting that the program lacked the volume
to make it effective.
For the 35 documents the program currently requires,
McGaughey would have substituted just three: 1) a
registration form listing tenants' names and apartment
numbers, and the telephone numbers of the tenants'
association's officers, employes, and agents; 2) a peti-
tion showing membership in the tenant association and
support for tenant"as is "management signed by at least
60 per cent of the tenants in occupancy; and 3) liability
insurance coverage for both the city and the tenant
association of at least $100,000 each person, $300,000
each occurrence.
Concerning the apparent breakthrough in interim
management negotiations, McGaughey welcomed the
development but cautioned, "This program contains no
promise to sell the buildings to the tenants." He hoped
the city would come up with a policy for "outtake" of
the In Rem properties within six months.
McGaughey praised the "team" assembled by
Deputy Commissioner Raymond in the office of prop-
continued on page 13
THE PEOPLE'S FIREHOUSE:
HOW TO SAY NO AND PREVAIL
by Fred Ringler and Ron Webster
On June 17 at 10 a.m. fire sirens pierced the air in the
Northside section of Brooklyn, signalling the joyous
reopening of Engine Co. 212 and the end of one of the
most significant community struggles in recent years.
The battle to restore adequate fire protection in
Northside ended almost as swiftly as it began 2Y2 years
ago when Engine Co. 212 was closed, a victim of the
large scale cutbacks imposed by the city at the height of
its fiscal crisis.
During the ensuing years, aroused community resi-
dents banded together, moved into the firehouse,
refused to let the Fire Department retrieve its engine,
negotiated endlessly with the city and ultimately pre-
vailed. The victory siren heralded more than just the
reopening of a fire company. It marked the education of
a community that started out knowing next to nothing
about fire protection but was determined to resist what
the residents saw as a dire threat to their existence. The
outgrowth of this struggle is a permanent organization,
the People's Firehouse, committed to the ongoing train-
ing of residents of this and other communities in the
Fred Ringler and Ron Webster are director and assistant
director, respectively, of the People's Firehouse.
6
protection of their homes from fire.
The battle began in July, 1975, when the New York
City Fire Department closed 26 fire companies. These
companies were reopened after two days, with the city
mysteriously finding the funds to reactivate them.
Engine Co. 212 was one of these companies. No com-
mitment was given to the Northside community that it
would remain open. In November, 1975, the city
announced the closing of eight fire companies, ours
among them. Engine Co. 212 has been serving North-
side, a mixed industrial-residential working class neigh-
borhood, for 114 years. Some 60 per cent of its housing
stock is wood frame attached dwellings with common
walls and cocklofts, meaning a blaze in one building
would spread rapidly to adjoining structures. Industries
(including petroleum and chemical) and residences co-
exist randomly throughout the community.
Community residents realized that the elimination of
212 would mean the end of adequate fire service in
Northside.
Upon finding out that the city was going to close
Engine Co. 212, residents organized to develop a
strategy to deal with the situation. On Nov. 21, 1975,
(
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500 angry people met at the quarters of the company
and blocked the fire engine and firemen inside the fire-
house in an attempt to put pressure on the city to keep
the company open. The building and the men were held
hostage for one day at which time our elected officials
convinced the group to leave the premises with an agree-
ment from the city that the firehouse would be left
intact for five days. This would give residents an oppor-
tunity to institute legal proceedings to stop the closing.
Five days later the city got two judges to lift the tem-
porary restraining order and on Thanksgiving night,
Nov. 27, at 11 p.m. the city attempted to remove the
engine from its quarters. Once again the city dealt in
bad faith!
Residents were alerted when some unknown soul rang
the air raid siren on the roof of Engine Co. 212 as a
signal. Five hundred outraged Northside citizens assem-
bled back at the quarters and again blocked the engine.
It then held the truck and the firehouse hostage for 16
months. This was the People's Firehouse battle.
During the period of occupation, residents and organ-
izers ran the quarters of 212 as a "People's Firehouse,"
responding to fires, collecting data, doing research on
Fire Department decisions, monitoring fire hydrants
and ERS Voice Contact Fire Alarm boxes and running
the facility as a community service center. All of this
was done to convince the city that it had made a mistake
in closing the company. Community residents commit-
ted themselves to sleeping and living in the firehouse to
guard the engine from being taken by the city.
Finally on March 17, 1977, the community agreed to
an offer made by the NYFD to reopen the quarters of
Engine Co. 212 as a Utility Unit, composed of an
engine, full complement of men and a foam unit. This
Utility Unit was to respond to only 34 first-due boxes in
7
Northside as its major responsibility. Community resi-
dents reluctantly accepted the proposal but saw it as the
beginning of the full restoration of 212.
As we began to monitor the operation of Utility Unit
1, it became clear that it was not serving the needs of the
community, was not responding to fires and sat idle
while fires raged throughout the community. It was now
time to begin the fight once again. Pressure was put on
the Fire Department and the Mayor's office for the full
restoration of 212. Finally on June 17, 1978, the
demand was met and Engine Co. 212 was once again in
service protecting the Northside community. The battle
was finally won.
At the victory celebration, men, women and children
cried with joy as they were called up on stage to greet the
crowd. Mayor Koch and other elected officials were on
hand along with about 1,000 community residents. The
subject on everyone's mind was where do we go from
here? What should the People's Firehouse do next? The
answer seemed simple. We're going to continue mon-
itoring our fire service, make sure that the city imposes
no more cuts in our community and involve ourselves in
housing and the revitalization of the Northside
community.
The People's Firehouse has a paid staff of seven
persons plus some 100 volunteers. We are planning fire
prevention seminars, including how to monitor fire
hydrants; we are printing fliers in four languages on
how to use voice contact alarm boxes; we are continuing
to evaluate fire protection in the neighborhood; we are
working with the National Association of Neighbor-
hoods on a national fire prevention task force.
For more information or assistance in setting up or
organizing a fire service monitoring project call 384-
9344. 0
BREWING DISPU'IE WITH HUD MAY
COST,CITY EXTRA SECTION 8
by Susan Baldwin
Hopes for major housing rehabilitation through a
new five-year federal subsidy program may prove
worthless to most of the 12 city neighborhoods included
in a recent city application to HUD, as the city and
federal governments spar over responsibility for the first
year's allocation of funds.
The city has submitted to the New York area office of
HUD applications to rehabilitate 6,500 housing units
with a Section 8 "substantial rehabilitation" subsidy to
be set aside under the Neighborhood Strategy Area
(NSA) program.
This program, which calls for 20,000 rehabilitated
units nationwide in its first year allotment, was an-
nounced last Janaury. The city's requests would be
added to the 2,600-unit Section 8 allotment already
allocated this year under the Community Development
(CD) block grant.
NSA, according to HUD, is intended to give local
governments "a central role in deciding upon the alloca-
tion of housing subsidies" in a "concentrated, coordi-
nated plan of neighborhood revitalization and housing
rehabilitation. "
With applications due to be forwarded by HUD's
New York office to Washington at the beginning of
August, Ralph Lapadula, HUD's area director of
housing production, complained that the city has failed
to inform its constituents of the program's limitations.
"As far as I'm concerned, they should not have sub-
mitted 12 applications," Lapadula said. Instead of
"culling the field" to find the one or two major neigh-
borhoods that best fit the contours of the NSA
program and most need its help, Lapadula charged, the
city decided to tum over to HUD a batch of applications
that could not be approved.
"The city is forcing HUD into confrontation with the
neighborhoods," Lapadula said. "In the meantime, the
money may run out. "
Lapadula pointed out that New York normally should
expect to receive five per cent of the national housing
subsidy allotment. This would mean that, under NSA,
the city would receive only 1,000 units altogether, not
the 6,500 applied for. Some 150 cities have proposed
50,000 units for designation to the 20,000-unit program,
he said.
The city has a much different view of the situation.
Nathan Leventhal, commissioner of the Department of
Housing Preservation and Development (HPD),
explained in announcing the city's 12 choices May 31,
"Although the NSA program has only 20,000 units
allocated nationally, we have applied for a sizable
portion of the nationwide funding for New York City
8
because we strongly believe that immediate action in the
target areas now will serve to lessen the need for greater
federal subsidy in the future."
HPD included the following neighborhoods in its
NSA applications: Bronx-Kingsbridge/Bedford Park,
The South Bronx Plan Area; Manhattan-Washington
Heights, Manhattan Valley, Hamilton Heights, Gate-
way to Harlem Area; Brooklyn-Crown Heights, Flat-
bush, Sunset Park, Bedford Stuyvesant, East New
York; Queens-Far Rockaway.
It is the applications' inclusion of 1,000 units in the
so-called "South Bronx Plan" area, at the direction of
the federal government, that particularly vexes both city
officials and neighborhood representatives.
Vicki Streitfeld, housing liaison for Manhattan
Borough President Andrew Stein,asked,"Theyhave the
South Bronx in the [NSA] plan? They have to be
kidding. As I understand it, they were supposed to pick
neigborhoods that are not devastated."
Streitfeld's surprise reflects the city's resentment that
the federal government forced the city to channel the
rehabilitation element of their much -heralded
joint plans for the South Bronx through the NSA
program, in a nullification of its apparent commitment
to process the entire South Bronx redevelopment plan
on a separate track, and with funds not otherwise avail-
able to the city.
Meyer Fender, a Brooklyn representative of the City
Planning Department to Community Board 5, analyzed
the city-federal conflict this way.
"The South Bronx doesn't meet the [NSA] criteria,"
Fender asserted. "The city thought it [South Bronx]
would get a special pool [of funds]. But there aren't
enough crumbs to go around," Fender observed.
The city also contests Lapadula's assessment of New
York's share of the national housing subsidy allotment.
Philip Johnson, of HPD's division of community
development, said, "New York usually gets about ten
per cent."
Explaining why his office recommended 12 neighbor-
hoods and a much larger share (than ten per cen:) of the
NSA program, Johnson said, "There are five boroughs
in the city and there are five borough presidents. It has
to be a plan that reflects the needs of the boroughs.
"We're not interested in going into the most devas-
tated areas," Johnson asserted. Under the five-year
term for NSA program achievement, Johnson said,
"We want to see a beginning and an end."
Statements of this kind support the inference, from
Mayor Koch's announcement of the applications in
May, that the City has unwillingly attached the South
continued on page 13
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TECHNICAL ASSISTANCE
by Anne Hartwell
HEALTH INSURANCE
Employees (and their families) of ANHD member
organizations and CETA VI Groups are eligible for our
new health plan, which includes life insurance, hospi-
talization, Major Medical and dental coverage.
So far, 14 organizations have enrolled 185 people.
The rates are $36.74-a-month for the employee or
$85.70-a-month for the entire family.
We have found that among the 14 particIpating
groups, their existing fringe benefits budgets have
covered the cost of their own employees' insurance.
More than half of the participating groups were also
able to pick up the family insurance costs. For those
employees with families who had to contribute to the
plan, their paycheck deductions ranged from 12 cents to
$5.50 a week.
Here is what the medical plan includes.
Life insurance - $10,000 term.
Accidental Death and Dismemberment - $10,000.
Basic Hospitalization - Blue Cross - semi-private
room (includes four days of maternity hospital care).
Major Medical - private duty nurses; extended
hospital confinement; doctor's office visit (other than
regular checkup); surgeon's fees; specialists; x-rays and
lab fees; wheelchairs, crutches, etc.; prescription drugs
and medicines; chiropractors; outpatient psychiatric
care (50 per cent of fee, no maximum per year, $20,000
lifetime maximum).
Dental - basic care including fillings, extractions,
cleaning; fluoride and restoration and root canal,
crowns, inlays and prosthodontics.
For the Major Medical, there is a $100 deductible per
year per individual. In the case of a family, there is a
second $100 deductible for a second claim. For three
claims or more there is no additional deductible.
Major Medical will cover 80 per cent of the first
$2,000 in bills and 100 per cent thereafter.
The dental program has a $25 deductible per person
(lifetime) for basic care; it sets forth a schedule of
payment limits that includes $8 for a regular office visit;
$12.50 for a single x-ray; $120 for single root canal
therapy; $114.25 for a plastic crown.
The life insurance, accident insurance and Major
Medical are provided by the Prudential Insurance Co.
of America. The hospitalization is covered by Blue
Cross.
This comprehensive health plan was put together
after comparing coverage and benefits of about six
insurance carriers and analyzing what the participating
groups could afford.
One of the advantages of the plan is that it allows
patients to select their own doctors.
SEMINAR
ANHD will be sponsoring a series of seminars on
neighborhood planning. Eight sessions are tentatively
scheduled between July and September. The topics will
include an introduction to goals and strategies and types
of building control; an explanation of available housing
and loan programs, including seal-up, community man-
agement, participation loans, 7A and 19A, receivership,
direct sales, private loans.
Also, HUD's Section 8 program; building manage-
ment, including budget projections, rents, bookkeeping,
maintenance and tenant meetings; sources of building
data-ownership, building violations, allowable rents,
tax and other liens and assessed violations.
For information about the seminars contact me at
674-7610. 0
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MEET SOME AMHD STAFF
Barbara Pacheco
Barbara Pacheco, who has a history of community
involvement that spans 13 years, sees her job
function as acting as a liaison between ANHD and
the Ceta VI groups.
"Essentially what I do is help monitor the
spending of ANHD's money," she explained,
noting that another part of her job involves alert-
ing groups as to what the Department of Employ-
ment may be looking for in their performance of
contract agreements.
Visits to the eleven groups and one worksite in
the Bronx entail supervising plans and schedules
for tenant organizing and training, pre-selection of
buildings for city housing programs as well as
looking into possibilities for open space develop-
ment and urban gardens.
The field coordinators visit the groups on a
weekly basis and file monthly and quarterly writ-
ten reports on the development of the programs.
"Tha paper work is unbelievable," Pacheco
asserted. "Each individual in the program has
seven or eight pieces of paper in his/her personnel
file."
Noting that the groups suffer from years of
maintaining very poor lines of communication
with each other and the rest of the city, Pacheco
added, "I find that one of the hardest parts of my
job is to make recommendations about updating
the programs that the groups originally developed
when the Ceta VI proposal was first written. Every-
thing has changed. There are more city-owned
buildings and lots, and as a result, there is a lot of
program modification. The housing stock has
changed so radically in the three months we have
been working."
Warning that one of the main problems with
being a field coordinator is being viewed as a "spy
or social worker form downtown," she said, "I
really like my job and I believe I am dOing a lot of
10
good. I am particularly excited by the groups'
most recent plans to get involved with as much as
240 to 600 units of rehabilitated housing."
Prior to working as administrative manager for
the core staff at ANHD, Pacheco did counseling
and assistance work with teenage runaways and
served as a tenant organizer in Manhattan Valley.
She holds a bachelor's degree from City College
in the social sciences and a master's degree in
family and community life from Columbia Teach-
ers' College. She and her four-and-a-half year-old
daughter, Cybele, live in Manhattan Valley.
Speaking about her future in community in-
volvement, Pacheco concluded," I am very
interested in women's rights and services, partic-
ularly in low income areas where they are virtually
non-existent. I am working with a group of 15
neighborhood women right now developing a
proposal for a women's storefront in Manhattan
Valley. D
Jose Garcia
Jose Garcia, a former program director in a
social service agency in Monmouth County, N.J.,
sees his job as field coordinator as primarily one
of developing "good relations and trust" with the
community groups.
Although he and Pacheco alternate visits to the
groups on a weekly basis, Garcia has found that
he has been spending more time in the Northwest
Bronx where his duties involve visiting worksites
where tenant groups are making building repairs.
"Right now things are going pretty smoothly at
all the sites," he said, "but I am not looking
forward to all the difficult paper work" that will fall
due in the next few weeks.
A graduate of Puerto Rican University (in Puerto
Rico) with a degree in accounting, Garcia is
married and lives in the Bronx with his wife,
Carmen, and three children, Richard, 7, and three-
year-old twins, Eric and Erica.
Prior to serving as program director in Mon-
mouth County, Garcia was an accountant for six
years in a private company. 0
COMPUTER PAYROLL PLAN SET
FOR COMMUNITY MANAGEMENT
by Bernard Cohen
Bookkeeping for the community management pro-
gram should be greatly simplified soon when a new
computerized payroll system takes over from the old
practice of writing checks manually.
The computerized payroll, scheduled to begin in early
July, is designed to spare the 14 neighborhood organi-
zations in the community management program from
the complex and time consuming process of computing
hours, figuring taxes and writing checks.
Under the new system, the groups will provide
Chemical Bank with the names of their employes and
the number of hours worked. Chemical will compute
the taxes, deduct them from earnings and issue checks.
The bank will pay the taxes and also issue income tax
statements for each employee.
"The system looks like a beautiful system," said
George Maldonado, controller of Los Sures in Brook-
lyn, one of the neighborhood-based organizatipns in the
program.
Under the community management program, the city
contracts with community housing organizations to
manage city-owned buildings. Some 300 people are
employed by the groups and the number is expected to
grow quickly with the addition of a rehabilitation com-
ponent to the management contract.
The transition to automatic payroll has been in the
planning for a year, during which time City Comptroller
Harrison Goldin released an audit that severely criticized
the Department of Housing Preservation and Develop-
ment for lax fiscal monitoring of the community
management program.
"Goldin was right. He came down very hard," said
Steven Fredericks, HPD assistant commissioner for
fiscal affairs. Fredericks calls himself a strong believer
in the program. "I had to give my word that this would
never happen again."
Rudy Jennings, chief auditor of the community man-
agement program for HPD, said that while many
groups did an excellent job of handling payroll, others
had difficulty in figuring the taxes accurately and
making the proper deductions so that the taxes could be
paid. As a result, he said, it was frequently difficult to
reconcile balances and four of the 14 groups owed a
total of $24,000 in back taxes and penalties covering a
three to four-month period.
In rebuttal, .the community organizations charge that
HPD historically has neither provided the necessary
accounting training assistance nor issued clear, con-
sistent fiscal guidelines for the groups. "The only way
we ever find out about a problem is after we've done it
11
and it's wrong," s a i ~ one organization representative
recently. It was only within the past year that a fiscal
training manual was even available, another added.
Fredericks said he has been making an effort to meet
with the community organizations and work more
closely with them to improve performance and contract
compliance.
Aside from easing the accounting burden, Fredericks
said, the biggest advantage of the Chemical computer is
the security of a guaranteed weekly or bi-weekly pay-
roll. "In the past there were problems with funding for
payroll," he said, referring to delays by the city in
depositing quarterly checks. "That worry is gone."
The reason for the new security, Fredericks explained,
is that city money to back the payroll will be drawn
automatically into Chemical's community management
account from a central pool of funds used by the city for
many of its bills.
Each payday, the community organization will go to
its local Chemical Bank branch and pick up the payroll.
The checks can be cashed at any Chemical branch as
well as at the employee's own bank. Community organ-
izations can put their non-community management
employees on the computer as long as the groups
deposit their own funds into the payroll account.
"The groups are getting a lot of service and it's not
going to cost you anything," Fredericks said.
William Barr, vice president of Chemical Bank, said
the bank does 1,800 payrolls and that the community
management program is its first public municipal
client.
Advantages for the bank, according to a number of
sources, include use of the funds between the time they
are deposited and the time the checks clear (HPD has
made its first monthly deposit of $233,(00), an extra
"compensating balance" the city pays to cover bank
expenses and the possibility of attracting new depositors
among the community management employees.
Fredericks declined to discuss how HPD intends to
monitor payroll other than to say, "We will verify in
some way the existence of employees, their rates of pay
and that they are receiving their checks."
The Oceanhill-Brownsville Tenants Association has
been using a computerized payroll for some of its other
employees, and Roy Henry, OHB's controller, says it
has worked well. "Before, we were always harassed and
hurrying with the payroll," he said. The new system
will afford more time to train bookkeepers to do a
better job of handling their other fiscal duties, he added. 0
CONSUMER COOPERATIVE BANK
by Bernard Cohen
Creation of a new bank that would provide major
financial and technical assistance to all kinds of
consumer cooperatives, including housing co-ops, is
undergoing final consideration by Congress.
"This is one of the most important bills that Congress
will consider in the next 10 years" from the standpoint
of developing community-based enterprises, according
to Shanti Fry, former manager of the Cambridge, Mass.
food co-op and now with the federal agency, ACTION.
"It is unlikely that another bill will go through with this
amount of funding," Fry said.
If approved, the National Consumer Cooperative
Bank would stimulate creation and growth of housing,
consumer goods, health, energy, food, credit and other
kinds of cooperatives that have experienced serious
difficulty in the past obtaining conventional financing.
In addition to the bank, which would provide loans to
"credit-worthy" cooperatives at U.S. Treasury interest
rates, the legislation would create a separate "Self Help
Development Fund" administered by ACTION to lend
money at below-market interest rates to low income
cooperatives and would set up a program of technical
assistance.
The U.S. Senate is expected to debate the legislation
in mid-July. Opponents have agreed to limit debate on
the bill and proposed amendments and avoid a repeat of
the filibuster that recently blocked efforts to revise the
labor law. The Co-op Bank bill passed the House of
Representatives last year by a single vote.
While there are many kinds of cooperatives, all share
certain characteristics. Consumers of the product or
service provided by the association are also the owners
so that benefits go to the participating members.
Advantages can include lower prices, rebates, lower
rents, plus nonmonetary benefits such as better service
and better understanding of the process.
Unlike commercial business, cooperatives directly
relate ownership with consumption.
Patterned after the Cooperative Farm Credit System,
which has helped rural and farm co-ops for 60 years, the
bank would start with $300 million to $500 million
invested in preferred stock by the U.S. government.
Initially, the chairman and board of directors would be
appointed by the President.
A portion of each loan would be in the form of shares
so that borrowers become investors in the bank. As
loans are repaid, co-op capital will replace government
capital. As co-ops increase their investments in the
bank, they will elect increasing numbers of directors.
Advocates of the legislation say it is not clear how
many loans will be targeted to low income cooperatives.
The Senate bill instructs the bank's board to use its
"best efforts" to target bank loans to low income
groups.
In addition, there is some disagreement over the defi-
nition of a low income cooperative. Some groups such
as the Cooperative League of the U.S.A. favor member-
ship by at least "a majority" of low income families as
the definition so as not to encourage segregation of low
income Americans in co-ops. Others, fearing that loans
intended for low income groups will be diverted to more
middle income areas, are pushing for a higher minimum
of 80 per cent.
Ernie Eden, executive director of the National Asso-
ciation of Housing Cooperatives, acknowledged the
uncertainty of the targeting but said, "Our Association
has a lot of low income members. We're pushing for
equal access to everybody."
The legislation would limit spending on housing to 30
per cent of the loans, although some groups are asking
that rehabilitation-as opposed to new construction-
be excluded from that limit.
Eden said a wide variety of housing and related
activities would be eligible for loans or loan guarantees
including purchase "f a building, rehabilitation and
installation of solar energy, insulation and other energy
saving measures. ~
In the House-passed version (HR 2777) housing co-
ops would have to seek HUD financing before qualify-
ing for a bank loan.
Fry said opposition to the legislation has come from
those who generally oppose federal spending and from
small-business groups who argue that the bank would
give cooperatives an unfair economic advantage.
Supporters point to the existence of the Small Busi-
ness Administration, which has made more than $20
billion in loans since 1953, and argue that consumer
cooperatives have a right to the same kinds of financial
and technical assistance as the small-businessman.
The biggest threat to the Co-op Bank package is an
old Ford Administration amendment that would substi-
tute a $20 million pilot study that would include a
miniature loan program. "Any time the Congress wants
to kill something, they decide to do a study," said one
opponent of the amendment.
At a conference June 8, the New York Committee for
the Co-op bank was organized. Co-chairpersons are
Chuck Laven and Charyl Edmonds of the Urban Home-
steading Assistance Board.
Sen. Jacob Javits has expressed his support for the
bank. Sen Daniel Moynihan has not announced his
position, although staff aides say he is leaning away
from the bank bill and toward the pilot study amend-
ment. 0
12
.....
Twelve buildings in the South Bronx and Lower East Side will be rehabilitated in the next 16 months by the
low mcome residents of those neighborhoods under a "demonstration" sweat equity program using federal 312 loans. Title transfer and loan
commitment were signed June 22 at City Hall. Left to right: Roberto Nazario and Vernon Perkins of Interfaith Adopt-a-Building on
the Lower East Side and Deputy Mayor Ronay Menschel. Similar signing occurred for People's Development Corp. which will rehab the
buildings in the South Bronx.
Interim Leases continued
erty management at HPD. "Their heads are in the right
place-they have a good attitude and approach, and I
think we're going to have a good program," he pre-
dicted.
McGaughey hoped that community groups would
join with the tenant organizations to seek interim
management contracts from the city.
Referring to the management contract, he said,
"Although there is no substantial overhead money,
there is a management fee which would cover a couple
of people working part-time.
"This is a good way for groups to get their foot in the
door," McGaughey added, pointing out that more com-
prehensive contracts might follow, entailing greater
responsibility and opportunity for improving communi-
ties. 0
Section 8 continued
Bronx units "at the request of the federal government."
On the other hand, criticism of the city for the way it
packaged the NSA applications is not hard to find
outside the confines of HUD's area office.
Martin Warmbrand, of the East New York Develop-
ment Corporation, serving an area designated by the
city for NSA inclusion, said, "As far as I know, they
arbitrarily selected them [the areas} ... That's the way
they operate. They get precious little input from the
neighborhoods. "
Warmbrand faulted the city for not working through
the community boards in preparing the NSA applica-
tions. He complained that the NSA program in East
New York covered too little ground to have major
impact.
13
Tbe influx of In Rem Buildings to city ownersbip bas
brougbt witb it job opportunjties as real estate managers
to qualified tenants and community workers, according
to Joan A. Williams, director of Community Action
Center No.7 in Brooklyn and a member of tbe In Rem
TaskForce.
Witb more such jobs available tban applicants
waiting on the Civil Service list, Williams says, the city's
Department of General Services (GSD) bas agreed to
consider hiring as managers, at $11,000 per year, appli-
cants with either a bachelor of arts degree or three to
four years' managerial experience in real estate.
Williams urges those interested to submit resumes
directly to: Mr. Perry Soskin, Assistant Commissioner,
Department of General Services, 2 Lafayette Street,
New York, N.Y. 10007; or to: Mr. Sandy Bayer, In Rem
Task Force, c/o Councilwoman Ruth Messinger, 250
Broadway, New York, N.Y. 10007.
Another neighborhood included in the city's NSA
application provided an equally skeptical community
group representative.
Ennis Francis, of Harlem-East Harlem Model Cities
said, "What they're doing here is passing the buck . .
New York City has the responsibility to designate
[priority} areas," Francis declared, "and shouldn't be
allowed to shirk that responsibility. .. If they're not
prepared to designate the areas, let them get out of the
business," she concluded.
Whoever finally takes the blame for the city-federal
quarrel, the city's neighborhoods seem likely to have
learned another painful lesson in raised expectations
and frustrated hopes. 0
UDAG
NOTES FROM WASHINGTON
BROWN AMENDMENT
HUD's new $400 million Urban Development
Action Grants (UDAG) program is supposed to
"achieve a reasonable balance" among projects
designed to restore needy neighborhoods, gen-
erate industry and renew commercial employment
centers.
Last April, HUD announced the first round of
UDAG grants totaling $150 million. Two-thirds of
the money went for central business district revi-
talization efforts. The National Commission on
Neighborhoods estimated that only six projects
t.otaling $5 million, went to neighborhoods.
Responding to criticism over first round
spending, HUD Assistant Secretary Robert Embry
promised that subsequent grants would be
heavily weighted toward neighborhood projects.
Joseph McNeely, director of HUD's Office of
Neignborhood Development, reaffirmed that
pledge in a recent mailing and said HUD is looking
for proposed projects that will be carried out in
neighborhoods, owned in whole or in part by com-
munity based development corporations or devel-
oped with the substantial participation of such
groups.
McNeely's letter suggested that community
organizations work with their city governments to
develop UDAG proposals, encourage their cities
to develop projects that can be carried out by local
organizations or initiate their own projects.
For further information, contact City Limits or
the UDAG Task Force, Room 7238, HUD, Washing-
ton, D.C. 20410. Telephone (202) 755-6195; or your
HUD area office.
_CITY LIMITS.
published monthly by the Association of Neighborhood Housing
Developers, Inc., 11S East 23rd Street, New York, New York 10010
(212) 674-7610
Editor .... .. .... . ......... ... . . ...... . .. . . . .... Bernard Cohen
Assistant Editor .................... . .. . ...... ... Susan Baldwin
Design and Layout .... . .. . ................... ... .. Louis Fulgoni
Production ... ......... ... . . .............. . .. Marianne Czernin
Copyright 1978. All rights reserved. No portion or portions of this News-
leller may be reprinted without the express wrillen permission of the
Association of Neighborhood Housing Developers. Inc.
The House of Representatives has passed legislation
that includes an amendment that would weaken greatly
the Community Development Block Grant program's
emphasis on low and moderate income people.
The amendment, which was introduced by Rep.
Garry Brown of Michigan, would eliminate the existing
authority of the Secretary of HUD to apply a "benefits
test" to CDBG applications.
The test is whether low and moderate income people
are the "principal beneficiaries" of the proposed CDBG
application-the transcending purpose of the 1974
Housing and Community Development Act.
The law currently allows the HUD Secretary to dis-
approve applications that do not comply with Title I of
the Act by either. principally benefitting persons of low
and moderate income, preventing and eliminating slums
and blight or meeting other urgent community develop-
mentneeds.
While the new CDBG regulations interpret this clause
to provide a three-fold test, the regulations also stress
that the principal beneficiaries of the overall program
must be low and moderate income people.
Brown's amendment would forbid the Secretary to
"disapprove an application due to the fact that such
application addresses anyone of the primary purpose
... to a greater orlesser degree than any other." '-./
Critics of the amendment say it would undermine the
concept of targeting CD funds to the areas where they
are needed the most. They add that the likely place to
remove the amendment will be when it goes into con-
ference between the House and the Senate.
Those wishing to register an opinion should write to:
Sen. William Proxmire, 5241 New Senate Office Build-
ing, Washington, D.C. 20510 or Sen. Edward Brooke,
437 Russell Senate Office Bldg., Washington, D.C.
20510.
HUDOFFICE
HUD's Office of Policy Development and Re-
search is opening an office in New York City, the
only regional PD&R office in the country.
Sybil Phillips, director of community
conservation research, will head a staff of about
seven.
"Since New York City has the largest reservoir
of building capable of some form of cooperative
ownerShip, we felt it should be a laboratory to tes
different forms of tenure," Phillips explained.
The office wi II be at 26 Federal Plaza.
CITY LIMITS
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250,000. In this city of large numbers, that's a large number. The City of New York is
fast becoming the number one landlord - some say slumlord - in town, with more than
250,000 tenants in the 20,000 buildings it will take over this year for non-payment of taxes.
Of course you've noticed. But what are we to do?
You will get some answers to that and many other questions from City Limits, the
monthly journal of the neighborhood housing movement, because City Limits has been
covering the onrushing problem of building abandonment and foreclosure and the people
trying to deal with it since our first issue in February, 1976.
Until recently, New York's housing crisis was but one of many. By the time another
long cold winter looms, however, housing may be at the top of everyone's agenda, yours,
ours, and City Hall's. We think now is the time you need to know what the neighborhood
housing groups, the tenant groups, and the government bureaucrats are doing - or not doing
- to shape and carry out a coherent urban housing policy. City Limits will tell you now.
City Limits will put you in touch with people, places, problems, and programs affecting
housing that the daily newspapers rarely-and barely-touch. What have you heard, for
instance, about the In Rem Task Force? Direct Sales Coalition? Community Management?
Participation Loans? Fuel cooperatives? Energy alternatives? All these were the subjects of
recent (and ongoing) City Limits stories.
If you agree that we're telling the housing story that needs to be told for you and for the
city's neighborhoods, take out your checkbook today and take another look at City Limits,
beginning with the current issue. To subscribe, tear off and return the coupon below.
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Please enter my subscription for one year (10 issues) to CITY LIMITS.
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IN THIS ISSUE
590 Parkside Ave.
In Rem Interim Leases
People's Firehouse
SectionS
Co-op Bank
Computerized Payrolls
'A'N '1IJOA MeN leeJIS 1883 SU
'OUt 6u!SOOH
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