City Limits Magazine, December 1979 Issue

..
CITY LIMITS
DECEMBER 1979
. . : ... . . . ..... ::::"'; ':::.
. ' ,
. . . ' . ..
. " , ......
. ' .
" ..
-
VOL.4NO.9
. .'
NEW BELIEVERS BUY BITE OF BIG APPLE
by Susan Baldwin
He wheeled himself through the jostling crowd that
overflowed the spacious auditorium and wondered
when he saw the size of the turnout if he stood a chance
of buying the two-story building he has had his eye on in
the neighborhood where he grew up.
William H. Edwards, a disabled Vietnam marine left
the auction November 15 empty handed, out-bid by one
of the 2,500 hopeful buyers who turned the first auction
of city-owned property in more than a year into a bo-
nanza.
By the end of the day, the choicest of the 205 proper-
ties on the auction block had been sold, promising to
bring $2,763,000 to the city's coffers or more than twice
the average amount of $1.3 million for the seven auction
sales held in 1978. New York City was definitely back in
the auction business and back in a big way.
What accounted for the large turnout and the surpris-
ingly high bids? City officials credited much of the
success to a multi-media advertising campaign that
made tax-foreclosed properties sound positively grand
and was aimed at the working middle class that the
Koch administration is systematically courting. More
than $10,000 was spent on newspaper, magazine and
radio advertisements to spread the city's message that
working New Yorkers should take a fresh look at the
"Big Apple" and reinvest in property as a "hedge
against inflation."
The prospective bidders, young and old, were en-
thusiastic, well dressed, and a far cry from the sleazy
speculators that dominated past sales. And, they paid
prices for properties, many of them badly deteriorated,
that were unheard of in past years.
An East Harlem church bought a modest two-story
commercial building for $111,000. The suggested mini-
mum price was $400. A dry goods concern paid $901,000
for a ten-story loft building in Manhattan's West 30's
whose advertised minimum price was $308,000. And a
three-story residential and retail property in Brooklyn
went for $112,500 instead of the suggested $36,000.
By all odds, it was a remarkable job of marketing the
least desirable property the city has.
According to Ron Shafran, director of public infor-
mation for the city's Department of General Services,
the advertising campaign was an effort to involve all city
residents, not just real estate interests, in the auction
process.
"I am egotistical enough to believe that the campaign
was helped a great deal by the few spots we put on
WINS and WCBS during the day, plus the other [news-
paper] ads," said Shafran. "I think this explains why
we got so many people," he added, noting that Mayor
CITY LlMITSlDecember 1979
2
Koch had endorsed the city's auctions as participating in
a "renaissance of New York."
"We are not just selling off houses," Shafran as-
serted. "New Yorkers are also interested in the concept
of buying old fire houses. Also, a mom and pop candy
store presents a very interesting investment. And the
fact that people paid more for properties is not surpris-
ing. They really do see this as a hedge against inflation.
Not one parcel in Manhattan was passed up. This is un-
precedented. "
Following criticism by opponents of the city's auction
policy-particularly as it involves residential properties
-the City Council voted in November, 1978, to declare
a temporary moratorium on public sales. At that time,
the Board of Estimate also agreed only to resume
auctions with the proviso that new stringent regulations
for screening potential bidders would be put in place.
The board voted 10-1 in August to resume the auctions.
Former housing commissioner Nathan Leventhal
admitted last July in a letter to the board that the "exist-
ing public auction policy has not substantially suc-
ceeded" and a 1977 real estate audit by former deputy
mayor John Zuccotti found that four years after an
auction sale, "94 per cent of the properties sold are in
tax arrears, 54 per cent are again eligible for In Rem
proceedings, 44 per cent no longer provide suitable
housing for city residents, and 25 per cent of the pur-
chasers paid no tax at all."
"Frankly speaking, I came here today because of the
ads to bid on a building because there is no way you can
buy good property in New York if it isn't at something
like the auction," said Edwards, who admitted that he
hadn't done "too much homework" before he came to
the sale.
"I don't believe it, that price they're getting,"
Edwards exclaimed, after the bidding took place on the
West 207th Street property in Manhattan that he had
considered. "That was my stomping ground as a
younger guy. I know that turf, but that price was so
high. I was interested in it because it would have been
very easy to put in an elevator." Edwards is confined to
a wheelchair. The minimum upset, or required, price for
the property, a two-story brick building, was $16,000.
The final bidder paid $97,000.
A substantial number of the prospective bidders left
the auction early in the day complaining of the inflated
prices that the sale properties were commanding.
"We came here to monitor the auctions or do what-
ever we can to save our community because many of the
people have lived here 30 or 40 years and want to stay,"
said Emma Thurston of 455 West 141st Street in Man-
continued on page 21
MANAGEMENT SCORECARD
As of December 1, 1979, HPD had a total of 9 600
oc:upied units or one-third of the occupied
umts in. its alternative management program,
accordmg to Asslstant Commissioner Philip S. Georges.
The alternative management programs and the
number of dwelling units (including vacant units) and
buildings are:
Property Ownership Manage-
ment Program (POMP)
Housing Authority Manage-
ment Program (HAMP)
7 A Administrator
Tenant Interim Lease (TIL)
Community Management
Program (CMP)
Management in Partnership
Program (MIPP)
TOTAL
To the Editor:
Dwelling
Units Buildings
883 20
707 36
1940 66
5155 216
2829 136
683 23
12,197 497
I read with interest Joan Brinton's article in the Octo-
ber, 1979, issue of City Limits, entitled "Small Build-
ings? Look Before You Lease." I live in Boerum Hill
near downtown Brooklyn where most of the homes fall
into the "small building" category you describe. We are
facing a real crisis here as the cost of homes skyrocket
and the rents do the same.
Tenants and a number of small homeowners are be-
coming more and more alarmed at the extent of dis-
placement as buildings are sold and/or renovated, and
we see friends and neighbors forced out because of
rising rents and renovations. Also, people who have
owned homes for 10 to 15 years or more and have
children who are looking for their own apartments find
that there are none that they can afford.
A group of us have formed an anti-displacement
committee to figure out ways to fight these problems.
Weare educating ourselves on what tenants rights do
exist and are finding there are precious few for our
neighborhoods.
3
We are now considering what recourse we do have.
W.e .thought that our strategy, in the case of a landlord
rents exorbitantly, would be for our group to
VlSlt hlm/her, find out the reason for the increase and
then a l?wer If this fails, we could picket
the bUlldmg m whlch the landlord often lives or his/her
home, if elsewhere, or job site. We could send press re-
leases to local paper describing our actions and why
we are takmg them. There is a right wing element of
who might harass us in some way, but we
would Just have to deal with them somehow. Their
extreme actions and statements could help our cause.
There is no question that gentrification has advanced
very far here, but those of us not yet displaced want to
put up a fight anyway and to seek out homeowners and
housing groups to unite with.
Sincerely,
Jane Califf
Ted Glick
ANHD FUEL HANDBOOK
A handbook detailing the in's and out's of forming
you own fuel consortium will be available from the
Association of Neighborhood Housing Developers,
beginning January 1.
The booklet will include information about structur-
ing a fuel consortium, billing procedures, and buying
fuel.
The price of the handbook is $2.50, plus 50 cents
mailing charge. 0
_CITY LIMITS'
City Limits is published monthl y except June/ July and August/Sep-
tember by the Association of Neighborhood Housing Developers,
Pratt Institute Center for Community and Environmental Develop-
ment and the Urban Homesteading Assistance Board. Subscription
rates: $20 per year; $6 a year for community-based organizations and
individuals. All correspondence should be addressed to CITY
LIMITS, 115 East 23rd St., New York, N.Y. 10010. (212) 674-7610
Second-class postage paid New York, N. Y. 10001
City Limits (ISSN 0199-0330)
Editor . . .. .. ... .. . . ... . .... . . .. ....... . .. .... . Bernard Cohen
Assistant Editor .. .... .... . ... .. . . ... .... . . . . . ... Susan Baldwin
Design and Layout .. , . .... .. .. . ... .. . . .. ........ . Louis Fulgoni
Business Assistant . .. . . . -....... . .. ... .. ... . . -. : .. : . Carolyn Wells
Copyright 1979. All rights reserved. No portion or portions oj this
journal may be reprinted without the express written permission oj the
publishers.
This issue was funded by a grant from Citibank.
Cover drawing by Gene Tava
CITY LIMITS/December 1979
CITY COUNCIL STUDY OF CON EDISON
GENERATES LITTLE PUBLIC INTEREST
GRAND JURY PROBES VAN ALLEN GROUP
III
-
~
c
..e-
o
..
cO
u
E
.9
o
.c
Q.,
Consolidated Edison's "Big Allis" plant in Astoria, Queens.
by Bernard Cohen
More out of apathy than secrecy, a City Council-
sponsored study of Consolidated Edison and its highest-
in-the-land electric rates is now nearly a year old, with
virtually nothing known by the public about what
progress, if any, has been made. In spite of a potentially
volatile mandate that includes examining the feasibility
of a public takeover of Con Edison, the work of the
nine-member Public Utility Review Board has so far
drawn surprisingly little attention.
On the surface, there is not much to point to, partly
because PURB is still in the information collection
stage, partly because the board's authority and re-
sources are limited and partly because there is no appe-
tite on the board for really investigating the big utility,
4
at least not now. Probably the biggest reason is the lack
of interest by the public and therefore an absence of
pressure on the board to balance the presence of two
utility heavyweights.
The Public Utility Review Board was established by
the Council in November, 1978, and the members
appointed in January under mounting pressure from
consumers outraged by having to pay utility rates that
are more than twice the national average. For residential
customers, the national average rate for electricity was
4.03 cents per kilowatt hour in 1978, according to U.S.
Department of Labor statistics. Residential customers
of Con Edison paid 9.60 cents per kilowatt hour for
electricity in 1978, according to the Public Service
~ j
.J
Commission. Con Edison's rate for the first nine months
of 1979 was 10.36 cents, although that figure was likely
to drop some for the full year since it includes higher
summer rates that go down for the last part of the year.
The board was directed to identify the factors that
contribute to the high rates and to recommend ways to
bring down the price, including the possible takeover of
Con Edison by some type of public entity, such as a
public authority. Many such public systems exist in the
United States, including Los Angeles, Seattle,
Memphis, Jacksonville and 47 municipalities in New
York State.
What has PURB done in the past 12 months? It has
outlined the scope of its study. The board has hired
an engineering firm to look behind Con Edison's costs
-including construction, fuel, purchased power,
operating efficiencies, taxes and legal constraints-and
the role these costs play in driving up rates. It has selec-
ted a law firm, whose clients include environmental
groups battling Con Edison in court, to explore the legal
feasibility of a partial or complete public takeover of the
utility. The work plan also calls for a second engineering
study and a study of the financial benefits of different
options, for which no contractors have been chosen.
In addition, the chairman of PURB, Rev. Morton
Van Allen, has asked Con Edison to answer 11 ques-
tions about management performance, including what
the company has done to increase management produc-
tivity; how many employes use company vehicles; how
much the company spends on travel, hotels, club
memberships and entertainment; how much it spends on
lobbying; what its procedures are for competitive bid-
ding and what informal relationships exist between Con
Edison executives and members of the Public Service
Commission.
The board has had its share of problems, some of
them built into the structure and some for which the
members are responsible. But there is a new factor that
is likely to cloud the study. City Limits has learned that
a grand jury in Manhattan is looking into possible fraud
by the Urban Crisis Task Force, whose director is Van
Allen. Van Allen denied any wrongdoing in an interview
with City Limits and charged that the grand jury investi-
gation was launched in an attempt to intimidate him and
discredit PURB. He said he believed Con Edison was
behind the probe of his organization and vowed not to
resign from the board. (See storY,page 19 ) A City
Council source, confirming knowledge of the grand jury
investigation, said there would be no immediate effort
to remove Van Allen since he has not been accused of a
crime.
PURB has been handicapped by the fact that it has no
fixed budget arid has to negotiate with the Council
leadership for each proposed contract; it has no re-
search, administrative or clerical staff of its own and
only very limited use of help borrowed from other
offices; it is not vested with subpoena power; it depends
5
heavily on from the office of Majority
Leader Thomas CUlte, who was never a friend of the
project. Board members have been unable even to get
nameplates. Plans to print business cards for the board
were reportedly scrapped by Cuite as extravagant.
. In addition, the board has been plagued by absentee-
Ism and low turnout at hearings. Minutes of the
meetings show that board member Amalia Betanzos has
missed more than two-thirds of the meetings. Many
others, including Van Allen, have had stretches of
truancy. On October 9, Van Allen wrote a letter to
another board member, saying, "As you are well aware,
we have been having a severe attendance problem at
both our meetings and public hearings." A move by
another board member to impose attendance require-
ments was droppt:d as unenforceable.
With the exception of one unflattering article about
Van Allen in the Vii/age Voice, PURB has operated for
a year with no publicity.
The board is an odd creature made up of three consum-
er representatives: Rev. Robert W. Emerick of New York
City .POWER (People Outraged with Energy Rates);
Martm C. Seham, a lawyer and counsel to the Owners
Committee on Electric Rates, Inc.; and Van Allen; three
utility representatives: Edward Livingston, Consoli-
dated Edison Corp.; Ira L. Freilicher, Long Island
Lighting Co. ; and William Kirrane Jr., Transport
Workers Union; and three public members: Donald
Moore, New York Chamber of Commerce and Indus-
try; Charles Hughes, District Council 37, American
Federation of State, County and Municipal Employes;
and Amalia V. Betanzos, New York Housing Authority
and Vera Institute of Justice.
Many bring to the board cherished opinions about
why electricity rates are so high, raising the serious
question of how open they are likely to be on issues that
bring ideology into play. How likely it is that a utility
vice president would support a recommendation for a
public takeover of Con Edison? How likely is it that a
public power advocate would support a tax cut for the
utility? A number of personal agendas are also at work.
One board members wants to attack Con Edison
management; another thinks it would be a good idea to
set up a utility court, similar to housing court, to air the
grievances of consumers.
Only one controversial matter has come before the
board so far, and everyone agrees the hard votes are yet
to come. But the outline of alliances is emerging, and
they don't follow the neat utility/ consumer/public divi-
sions set up by the council. The 4 to 3 vote (with 1 ab-
stention and 1 absence) on October 9 to hire the law
firm of Butzel & Kass for the feasibility study of alterna-
tive electric supply options for New York City offers the
best insight so far into how members are likely to line up
on crucial votes. It probably says more about the utility
antagonists than supporters.
Butzel & Kass was chosen over the one other law firm
continued on page 19
AETNA MAKES $15 MILLION PLEDGE
FOR NEIGHBORHOOD REVITALIZATION
Chicago-Aetna Life and Casualty, the nation's
largest diversified financial firm, has earmarked ap-
proximately $15 million to revitalize housing in six
neighborhoods in Chicago, Cleveland, Philadelphia and
New York City. The announcement was made by Aetna
president William Bailey at the conclusion of conference
on harnessing reinvestment for older neighborhoods
without causing massive displacement.
"The bottom line is this," Bailey stated. "Aetna Life
and Casualty hopes to be the catalyst for a whole host of
inner city development projects."
The conference, November 28-30, attended by nearly
two hundred people, grew out of a need to identify more
clearly the displacement process occurring throughout
the country. The National Training and Information
Center, the sponsor, decided to focus the conference
panel and workshop discussions on the availability of
reinvestment funds to be used in neighborhoods while
managing to avoid a population turnover. Speakers and
panelists including government officials, private
investors, academics, elected officials and neighbor-
hood representatives emphasized that displacement is an
unnecessary evil that can be reckoned with.
Negotiations with Aetna over the issue of insurance
availability began in earnest at an October 7, 1978,
meeting between Bailey and leaders of National
People's Action. Aetna Vice President John Martin had
attended NPA's Seventh Annual Conference on June 4
1978,to sign an that Bailey would meet with
community leaders.
As Bailey noted in his address, these meetings led to
Aetna's development of a pilot program of insurance
availability in the Bronx, Brooklyn, Philadelphia,
Cleveland and Chicago. The program has involved a
group of Aetna agents in these cities who are actively
marketing homeowners' insurance and a commitment
by Aetna not to decline to write a homeowners' policy
without an objective and complete review of the prop-
erty. Aetna has also introduced a new product to elimi-
nate the gap between the replacement value and the
market value of inner city homes in Illinois and Ohio.
According to Bailey, after eight and a half months,
Aetna has written 375 new policies in these cities.
"While we are not completely satisfied with the initial
results in all of the cities," Bailey noted, "we are
optimistic that the charge of insurance redlining will no
longer appropriately be applied to Aetna Life and
Casualty. "
Adapted from articles in the current issue of Disclo-
sure, the publication of the National Training and In-
formation Center in Chicago.
6
In dealing with the availability problem, community
leaders utilized Aetna's site visits to draw their attention
to investment opportunities in their neighborhoods.
Last April, Aetna established a Neighborhood Invest-
ment Task Force to explore the investment issue with
the same groups that were involved in the availability
negotiations. They were:
The Northwest Bronx Community and Clergy
Coalition;
The Fifth Avenue Committee of Brooklyn;
Kensington Action Now, Philadelphia;
The St. Clair Superior Coalition, Cleveland;
The Greater Roseland Organization and the
South Austin Realty Association, in Chicago.
Aetna's Neighborhood Task Force led by Charles
Tangeny, director of the Task Force; Sanford Cloud, a
Connecticut State Senator and Aetna's legal counsel for
urban affairs; and Tom McDade of Urban Investment
and Development Corporation (an Aetna's subsidiary),
worked closely with the National Training and Informa-
tion Center to look at these communities. The Task
Force concluded that there were viable investment op-
portunities in each of the neighborhoods. They recom-
mended that Aetna's Corporate Responsibility Invest-
ment Committee commit the necessary financial
support to work with NTIC and the neighborhood
organizations listed above.
Aetna decided that if its investment dollars were to be
utilized effectively over the short and long term, there
was a need to contribute "soft dollars" early on to
develop within neighborhood organizations persons
who are skilled in the areas of planning, construction
and management to oversee the development process.
The result was that Bailey also announced a $225,000
15-month grant to NTIC to provide the dollars neces-
sary to hire development specialists for the neighbor-
hood organizations and to coordinate the project
nationally in the six neighborhoods.
Msgr. Geno Baroni, HUD assistant secretary for the
Office of Neighborhoods, followed Bailey's commit-
ment with an announcement of a $100,000 national
grant to NTIC from the Neighborhood Self Help Devel-
opment Program. This was the first national award
under this program and will enable NTIC to assist the
six neighborhoods in developing their own self-help
proposals as well as to explore future neighborhood
investment opportunities.
Baroni also pledged that technical assistance would be
available from HUD's new Office of Public/Private
Partnerships. This office is specifically designed to serve
the private business community in its efforts to become
more actively involved in urban revitalization programs.
The Northwest Bronx project will involve moderate
rehabilitation of apartment buildings, which will
include basic system rehabilitation such as heating, as
well as cosmetic rehabilitation of public facades and gut
rehab of abandoned buildings. Several buildings are
already under consideration and discussions have been
initiated with Manufacturers Hanover Trust for short-
term financing of the rehab activities with Aetna's role
to be the long-term lender.
The Brooklyn project is focused on a vacant lot. If
the Fifth Avenue Committee can acquire the property
from the city, Aetna will work to arrange construction
financing for a 33 unit mixed-income apartment build-
ing. Aetna would then provide the long term mortgage
financing. FAC is confident that with Aetna's
commitment as leverage it will be hard for the city to
deny their request of site acquisition. Brooklyn leaders
look forward to the ripple effect that such construction
would have on their declining commercial strip.
The three programs in Cleveland, Philadelphia and
the Roseland community of Chicago involve single
family redevelopment. Initially, the rehabilitation of ten
homes in each community is planned.
"We're very excited, said Hank Terjen of the Fifth
Avenue Committee. "We know it's a lot of work ahead
of us. But if we can get something started in the next
eighteeen months, and that day ever comes for a ground
breaking, it will be that one item that brings everyone
together. There will be a rippling effect down the
avenue. It will be like a new heart pumping vitality into
the community."
Said Rich Gallagher of the Northwest Bronx Com-
munity and Clergy Coalition, "I see it as a definite
example. If an outside institution such as Aetna can
come into our neighborhood and perform a project like
this, it should be a signal to the local institutions that
they should get involved."
Gallagher said he was encouraged by the good work-
ing relationship established among HUD, Aetna and
neighborhood groups across the country. "They have
finally realized that we're not just going to go away. We
have shown ourselves to be responsible. We are capable
of doing business with."
In a press conference following the announcement,
Bailey stated: "The total investment opportunity result-
ing from these projects will undoubtedly be $15 million
plus. The plus part of it involves a lot of hard work on
the part of a number of people to bring these projects
from the idea stage into the rehabilitation or, in some
cases, the new construction of dwelling units in these
areas. "
Gale Cincotta, head of National Peoples Action,
pointed out that "No one company, no matter how
large, no matter how great their assets, can single-hand-
edly provide the capital necessary to revitl1-lize our
7
neighborhoods. Other corporations in the insurance and
banking fields must follow the example made today by
Aetna."
At the conference, Nick Carbone, deputy mayor of
Hartford, Conn., said cities must decide that revitaliza-
tion will not take place at the expense of existing resi-
dents. Hartford has made that decision, he said. The
city has adopted a housing policy that aims for not only
racial but economic integration of the entire city, to
increase housing for all income levels, and increase com-
munity control or ownership of housing particularly for
low and middle income levels.
"Government's.major responsibility is to redistribute
the wealth and resources to make sure that low and
middle income people have enough money to pay for
food, clothing and shelter," Carbone said. "The private
sector is not going to do this. "
James Capraro of the Greater Southwest Develop-
ment Corporation, said his organization has managed
to revitalize neighborhood homes and buildings with
style without jacking up the prices or causing displace-
ment. In revitalizing run down apartment buildings, the
developers include every possible security measures, and
try to work out the most efficient method of main-
tenance, but avoid putting in luxury items such as dish-
washers which raise prices.
Besides being a major force for reinvestment in a
community in partnership with government, the private
sector needs to set certain guidelines for itself, according
to Cloud. Aetna, for example, requires developers to
determine how many residents are expected to be dis-
placed; what steps are being taken to set up relocation
programs and where the money will come from; and,
most importantly, what steps are being taken to enable
present residents to remain. "The private sector must be
willing to sacrifice some margin of profit for the public
good," Cloud said. 0
RENT CONTROL SEEN
AS NATIONAL ISSUE
Newark, N.J.-One hundred representatives of more
than 50 tenant organizations from 17 states, including
Texas, California, Washington, Oregon, Illinois,
Florida and Massachusetts, met in November to discuss
the creation of a national rent control movement. It was
called by the National Committee for Rent Controls.
This committee came together last spring on the East
Coast as a result of a position paper by Mark Goldowitz
entitled "Preparing for the Possibility of National Rent
Control. " He maintained that the Carter Administra-
tion is likely to impose mandatory wage and price con-
trols before next year's Presidential election (polls show
a majortiy of people favor controls) and that tenant
organizations should be prepared to have input into the
rent and eviction control aspect.
The meeting Nov. 10-12 resulted in creation of a
National Tenant Information Network and agreement
on a national tenants convention to be held in the
summer of 1980.
To enhance discussions, the subject of rent control
was divided into municipalities that presently have some
form of rent control; municipalities that had rent
control but lost it; municipalities that tried to get rent
control and won; and finally municipalities that tried to
get rent control but lost. This last area proved to be the
most instructive.
Chester Hartman from San Franciscans for Afford-
able Housing explained why Proposition R, a tenant-
initiated rent control bill, was defeated. He cited three
major reasons. The first was the weather. Rain reduced
the turnout to 54 per cent of the voters. Secondly, the
pattern of voting was conservative. Three other
"progressive" ballot issues also lost. The third reason
for the defeat had broad implications. The landlord
interest group in San Francisco mounted a $500,000 to
$600,000 anti-Proposition R campaign. In doing so, it
totally distorted the intent of Proposition R. Landlords
wrote anti-rent control literature designed for specific
communities (i.e., gay, minorities, whites). There was
one goal-namely to confuse the voters about rent
control. The tenants raised $45,000 to $60,000 to fight
back, but clearly that was not enough.
There is a statewide California "Fair Rent" initiative
coming up in the 1980s. If this passes, it would super-
cede local rent controls and mandate automatic in-
creases that would equal the Consumer Price Index.
Stu Gedal from the Somerville Tenants Union re-
ported that once the Massachusetts legislature let the
rent control law expire, Lynn and Somerville lost rent
control. Boston, Brookline and Cambridge tenants were
strong enough to keep local rent control. Gedal main-
tained that since losing rent and eviction controls,
tenant organizing has been extremely limited.
8
He also reminded everyone about one reality of no
rent controls-skyrocketing rents. Once there was no
more rent control, Somerville landlords increased the
rents by as much as $290 per month, he reported.
It was apparent that displacement and condominium
and cooperative conversions are widespread national
issues. Evelyn Onwachi from the Housing Counseling
Services in Washington D.C. discussed how rent control
campaigns there have sought home owner .support for
rent control as a possible solution to the displacement
problem.
Several steps were taken toward achieving the goals of
a National Tenant Information Network (a clearing-
house) and a national tenants convention. First-Shel-
terjorce, a national housing publication, was designated
as the clearinghouse. It will collect and disseminate per-
tinent housing information to tenant organizations.
Secondly, an interim working committee was created
that will do the planning and fund-raising necessary to
organize the tenants convention. This interim commit-
tee has already started the mechanism necessary to hire
staff. In addition, the representatives passed a motion
that enables this interim committee to press for the
inclusion of strong rent and eviction controls in the
event that any program of wage-prices is implemented
before the convention takes place.
The three-day meeting had the endorsement of over
35 tenant organizations. It was hosted by Shelterjorce
and the New Jersey Tenants Organization, and held at
Independence High School in Newark, N.J.
For more information, contact the National Commit-
tee for Rent Controls c/o Shelterjorce, 380 Main Street,
East Orange, N.J. 07018 or call (201) 678-6778. D
Yvette Grant
HUD PROGRAM SETS
MARCH 21 DEADLINE
HUD has set March 21 as the deadline for community
organizations to apply under the $15 million Self-Help
Development Fund for grants for housing, community
and economic development projects to support the
revitalization of low and moderate income neighbor-
hoods.
Applications should be completed well in advance of
that date, however, to provide time for review by the
area clearinghouse agency under the A-95 process.
The program is designed to provide grants of between
$50,000 and $125,000 to support the preparation and
partial implementation of revitalization projects where
earlier stages of preliminary planning can be docu-
mented. It presupposes, according to one HUD offi-
cial's interpretation, that an overall strategy has been
devised, the specific project identified, a budget figured
out and sources of possible financing for implementa-
tion identified.
Applying organizations must be representative of the
neighborhood, accountable to residents with respect to
the project, have a proven record or demonstratable
capacity for the project; be incorporated as a non-profit
organization with a board of directors and have audit-
able financial records.
Eligible projects can cover a wide range of areas.
Besides supporting revitalization of low and moderate
income neighborhoods for the benefit of the existing
residents, projects should also include: a self-help com-
ponent involving the neighborhood residents; leveraging
of private sector resources; coordination of public
sector resources; active, ongoing involvement of neigh-
borhood residents and demonstration that other
funding sources are available.
A highly controversial requirement that HUD offi-
cials take pains to point out is contained in the legisla-
tion and therefore not subject to change by the agency is
the letter of endorsement from the mayor or other chief
official of the local government. At a recent briefing on
the Self-Help program, leaders of community organiza-
tions protested the requirement, saying that many of
them are out of favor with their mayors over policy
differences affecting their neighborhoods.
A HUD official said that while the mayor's endorse-
ment is absolutely necessary, HUD could go to a City
Hall and inquire in the case of a good application
lacking the endorsement.
For further information about the program, contact
the Pratt Center for Community and Environmental
Development, 275 Washington Ave., Brooklyn, N.Y.
11205 or call 636-3486. 0
HPD SUPERS GRADUATE
The first group of superintendents whose skills are
being upgraded in an effort to improve the maintenance
of city-owned buildings graduated in Brooklyn on
November 20 after an eight-week training course.
Of the 50 people who began the program, 37 com-
pleted the first stage and 31 completed the entire course.
The curriculum included instruction on building secur-
ity; janitorial responsibilities; electrical, gas, water and
heating systems; tenant relations; carpentry, plumbing
and electrical maintenance. Completion of either part of
the course entitles the superintendent to a salary
increase, with top scale being $15 per unit per month.
The training program, called Project MATCH (Man-
power and Training for City Housing), was developed
by HPD and the Institute of Public Services Perfor-
mance Inc. A staff member of the institute said it
marked the first time that a training program had been
established to certify building superintendents in com-
pliance with city law.
The next phase of the pilot program is scheduled to
start on Dec. 10 with 50 or more superintendents in
Manhattan. 0
9
MARKUS TO HEAD RGB
Marvin Markus, a vice president of Bear, Stearns &
Co. , has been appointed chairman of the nine-member
Rent Guidelines Board. The Board determines permis-
sible percentages for rent increases for new and renewal
leases for dwelling units covered by the Rent Stabiliza-
tion Law.
From 1974 until 1979, Markus served in various posi-
tions with the Department of Housing Preservation and
Development and most recently was deputy commis-
sioner of policy and government liaison.
Markus, 31, is currently a vice president in the public
finance department of Bear, Stearns & Co., an invest-
ment banking firm.
The Rent Guidelines Board is composed of five repre-
sentatives of the public, including the Chairman; two
representative of owners; and two representative of
tenants.
The Chairman is paid $125 a day, not more than 15
days per year. 0
MCGAUGHEY JOINS CAB
Lawrence H. McGaughey, 36, an attorney and expert
in housing and community development, has been
appointed as a tenant member of the Conciliation and
Appeals Board, effective December 1. His term expires
December 31, 1981.
A partner in the Manhattan law firm of Harris and
McGaughey, he served from 1968 until 1975 as deputy
attorney-in-charge and director of community develop-
ment of Williams burgh Neighborhood Legal Services,
Inc.
The CAB serves as the mediator in solving disputes
between landlords and tenants in rent stabilized
housing. 0
PHN MOVES TO BROADWAY
Peoples Housing Network's School for Organizers
will begin a to-week program in late January. The
course will cover the basics of community organizing,
tenant organizing, bank and insurance redlining, rent
control and other topics of interest to community
activists.
For more information contact Yvette Grant at the
Peoples Housing Network at 533-5650. 0
NEW ADDRESS - Effective January 1, 1980
PEOPLES HOUSING NETWORK
198 Broadway (Room 1100)
New York, New York 10038
$250 BUYS MORE SWEAT THAN EQUITY
IN CITY'S LOW-COST HOUSING SALES
by Susan Baldwin
New York City's commitment to a low-price sales
policy for its unwanted residential properties was the
only thing selling at a discount this month. The city held
up low income neighborhood residents seeking to buy
and renovate their homes, even as it opened up a new
"Big Apple" auction block.
The retreat from the $250-per-apartment sales policy
spread from Clinton and parts of Chelsea to the Lower
East Side and Hamilton Heights as the city tested a pur-
portedly renewed interest in low income Manhattan
neighborhoods by developers, speculators, and pros-
perous family buyers.
Five years ago, according to a housing official who
asked not to be named, the city would have had prob-
lems "giving the property away because nothing was
happening and many more places needed help, but
things are looking up today."
Now the city has a new problem. It wants to squeeze
the top dollar out of its real estate sales in these Com-
munity-Development-eligible neighborhoods, but it
fears the political fallout from displacing large numbers
of low income residents to make a "classical buck."
"It's a Catch-22 what they do and how they change
their minds in mid-stream 50,000 times," said Shirley
Teitelbaum, a resident of the Lower East Side and a
housing lawyer who, along with three other families,
has been attempting for several years to buy an apart-
ment in a vacant, presently uninhabitable four-unit
building at 36 East Second Street.
The 36 East Second Street building is one of three
Manhattan properties in CD-eligible areas that were
promised to prospective owners at the $250 rate, only to
be reconsidered because of a higher market potential.
The other two properties are four-family homes at 83
Second Avenue on the Lower East Side and 317
Convent Avenue in Hamilton Heights. None of the
properties has completed the city's Uniform Land Use
Review Procedure (ULURP), the local approval process
that must be followed in order to sell city-owned land to
tenants. The Convent Avenue building has not even
begun the procedure.
"When we first expressed interest some years ago in
the building, the city was very enthusiastic," Teitel-
baum recalled. "But now they think the property is
worth too much, that the market is reviving, and that,
of course, their favorite people, the developers and
speculators, are now interested."
Earlier this year, the Board of Estimate approved the
$250 sales policy, a vote which low and moderate
income residents thought at the time was binding. But it
has been coming unbound ever since in neighborhoods
like Clinton, Chelsea, and the Upper West Side where
there is pressure from City Hall to sell properties at
much higher market rates.
On the other hand, in some of the less marketable
neighborhoods in Manhattan, Brooklyn, and the
Bronx, the city expects the Board of Estimate at its
December 20 meeting to approve the $250 sales price for
23 properties which are currently in alternative manage-
ment programs.
In all three cases, the tenant families plan to rehabili-
tate the properties under the city's low interest sweat
equity loan program, a loan agreement that will cover
100 per cent of the rehabilitation costs and will be repaid
over 30 years at one per cent interest. Also called the
direct loan or "sweat-contractor-sweat," the program
permits tenants to undertake the demolition and final
finishing touches of the gut rehabilitation, while pro-
fessional contractors are responsible for the major con-
struction work.
"We are committed to the fixed price [$250] and the
sweat equity concept, and we're also committed to
working with neighborhoods, but this question of
whether or not there is a market for the property is
something else we have to face," said assistant housing
commissioner Jeffrey Heintz. "Where there is a market,
we're reluctant to become involved in deep subsidy
programs," such as sweat equity.
Heintz said that he is on record supporting the
tenants' plans in these three buildings, but that "land
values now or five years from here" have to be con-
sidered very carefully because they could become "very
viable" and be seen as a land "giveaway" in future
years.
10
Both Heintz and Alexander Garvin, director of com-
prehensive planning at the City Planning Commission,
have raised the question of the potential value of vacant
buildings.
"If the building is vacant, maybe it should be sold at
the best price-the market price or whatever is higher,"
said Garvin, noting that the decision was really up to the
Department of Housing Preservation and Development.
He also questioned the efficacy of the city's subsidizing
these vacant properties, suggesting that maybe the $250
sales policy should only apply to "inhabited" buildings.
"We were just victims of an incredible turn-around
by the community board in our plans to buy 317
Convent Avenue," said Jeanne Watkins, who grew up
-.
in Hamilton Heights and wants to return there from the
Bronx. She heard about the city's $250 sales policy and
the direct loan program last spring and started process-
ing the necessary papers with HPD immediately for the
Convent Avenue building.
In mid-October, Manhattan Community Board 9,
which has jurisdiction over the property, voted unani-
mously to approve the sale of Watkins and two other
families. Then at the monthly meeting November 15,
the board reversed its decision on the grounds that the
neighbors who opposed the sale were not given enough
information to respond in time for the October meeting.
"I don't know how they can meet and vote one way,
one day, and then reverse themselves," Watkins aruged.
"Is this really legal?"
At a special meeting called December 6 in Borough
President Andrew Stein's Harlem office, representatives
of the Convent Avenue Block Association, the Hamil-
ton Grange, and local clergy presented petitions from
community residents opposed to the sale.
According to Vicki Streitfeld, Stein's housing special-
ist, the residents are worried that the property would sell
for the low $250 a unit "only to be worth $50,000 two
days later." Members of the block association assert
that an adjacent property on Convent A venue sold
recently for $50,000. A meeting to settle the controversy
is set for the end of January.
The two Lower East Side properties are in much more
need of work than 317 Convent Avenue, mainly because
of the years of vandalism and decay as they stood
vacant.
"We thought we had a commitment in 1978 to buy
our building (83 Second Avenue) for $2,500," said Lisa
Knox, a housing activist and court-appointed 7 A ad-
ministrator for another nearby building . . Now both
HPD and the planning commission are sitting on the
application and show no signs of moving on it in the
near future, she added.
"We even have a letter from Mayor Koch when he
was our Congressman supporting this sale to us," Knox
said. "Now they won't sell or they talk about charging
us $25,000 for the building and $30,000 for the land.
This is ridiculously high because so much work is
needed to make the building habitable. The city also
claims that this property is particularly valuable because
it has a large commercial frontage that would bring a
high price at public auction."
Knox also explained that the tenants are reluctant to
come in and do major work, pay for insurance, and
involve themselves in a great deal of expense only to
hear that the building is too valuable for them to keep.
"What they're saying to us by refusing to certify this
sale is that this whole neighborhood is not suitable any-
more for CD money coming in here when they can get
whatever money they want from private developers,"
Knox continued. "I've been living in this neighborhood
for 16 years, and recently we have been fought tooth
11
and nail by developers. What they're saying is that
they're going to Clintonize us."
Knox also said that she appreciated Heintz's commit-
ment to fight for her project but added, "It does no
good for neighborhood good will to let one project
through under the special sales policy and then turn
around and tell others they have to pay the market
rate. "
According to Ralph Ocasio, director of special proj-
ects planning for the planning commission, the sweat
equity programs are expensive and the city is anxious to
put this money into making buildings viable at no loss to
itself or to spend this money in neighborhoods where
the real estate is not viable.
"As a result, this becomes more complicated than
just selling apartments to tenants at $250," Ocasio said.
"It is also location, location, location. And can the city
afford to have a blanket policy of $250 or must it look
at this question of marketability and how it relates to its
best interest?
" It is true," Ocasio went on, "that these Lower East
Side buildings have a long history, and nobody wants to
renege on earlier commitments. Nor does the city want
to start a policy of giving properties away that it would
regret later. It's a very difficult question, and the solu-
tions are not easy."
Buildings enrolled in HPD's alternative management
programs have a firmer grip on the $250 sales price, at
least for now. In addition to the 23 properties on the
Board of Estimate's December calendar, (reports assis-
tant housing commissioner Philip St. Georges,) 45 other
such properties around the city that are completing the
ULURP process are expected to come before the board
for approval of the $250 rate in the next few months.
Of the 13 Manhattan properties on the board's
December calendar, none is located in Clinton or the
Lower East Side. Three are in Manhattan Valley, four in
Hamilton Heights, five in West Harlem, and one in
Washington Heights.
St. Georges is confident that the board will uphold
the $250 policy for these properties, but he questioned
how the board can process "5,000 buildings for public
auction asking almost no questions," while it demands
detailed reports about tenant and community groups in
alternative management that are "monuments of gold."
Community leaders at a recent tenant survival confer-
ence were not as confident of the city's long term
commitment to the sales policy.
"We hear first that they are only changing their
minds in Clinton, Chelsea, and the Upper West Side,
where each is a special case," said Sandy Bayer, director
of the Task Force on City-Owned Property. "But this
doesn't take into consideration the new wave of gentri-
fication. As more people come in from the suburbs and
are willing to spend more money, land values will rise,
and eventually the city will be saying property in Man-
hattan Valley and West Harlem is too valuable to sell at
$250." 0
--
CO-OP BANK AIMS FOR MARCH LOANS
HENRY NOMINATION LIKELY
by Bernard Cohen
Spread out in three locations and still lacking its two
top officials, the National Consumer Cooperative Bank
is nevertheless moving steadily toward a March opening
date and the start of the nation's first large-scale aid
program to cooperative ventures of all kinds.
The 13-member bank board, confirmed by the Senate
on September 21, has divided itself up into five com-
mittees, including a search committee for a president
who may be named by the end of the year. Manuals on
the credit and lending policies of the bank are being
drafted as is the proposed agenda for technical assis-
tance. Proposed regulations are scheduled to be
published in December. A staff of 46 people has been
hired. If all goes according to plans, the bank will open
its doors on March 11 and make its first co-op loan
within two weeks.
The National Consumer Cooperative Bank was estab-
lished by Congress to encourage development of new
and existing cooperatives, which have traditionally been
shunned by the commercial lending world. The bank
will make market rate loans to credit worthy coopera-
tives. In addition, it will provide financing and technical
assistance to low income and beginning co-ops through
the office of Self-Helf Development and Technical
Assistance.
The operating budget of the bank for the fiscal year
beginning Oct. 1, 1979, is $74 million. Of this amount,
$50 million is for bank capital, $17 million is for the
Self-Help Fund and $7 million is for operating expenses,
including technical assistance.
A $3 million technical assistance program that would
include grants of up to $20,000 in seed money is to start
new cooperatives or help existing ones develop innova-
tive projects is envisioned in a draft that is currently
being circulated. Other kinds of technical assistance
would include organizational, legal, financial and
management. In addition, there would be help aimed at
specific types of co-ops such as energy, food, housing
and transportation. An institute would be established to
train co-op managers and boards of directors as part of
a broader education program.
There is little reference in the draft to low income co-
operatives, and there is some concern among coopera-
tive organizations that the technical assistance program
is focusing too heavily on bigger, more established,
higher income cooperatives. A number of leaders in the
co-op movement have also criticized the bank for not
hiring enough people with strong co-op experience. One
leader said, "A lot of people have been sent over by the
White House who need jobs. We are extremely con-
cerned." Said another, "The recruitment process has
12
not been a terribly open one. I have seen no job descrip-
tions so far." Marcy Kaptur, policy director for the
bank.and herself a former White House staffer, pointed
out that none of the 46 people hired to date is perma-
nent and most are expected to be replaced once a Presi-
dent is hired.
Clifford Henry is expected to be nominated by Presi-
dent Carter to head the Office of Self-Help Develop-
ment and Technical Assistance. However, a prolonged
delay in forwarding his name to the Senate for confirm-
ation has led to speculation that the nomination was
being reconsidered. A member of the White House
personnel staff said in early December that the nomina-
tion of Henry would be made very soon.
Henry said in an interview with City Limits that if he
is nominated, he would aim for "a 50/50 balance"
between people with co-op experience and people with
low income development experience.
"One of the major problems is that there are many
people with low income economic development exper-
ience but no co-op experience and the reverse. It will
take a blending of those experiences and skills to make
the office work, " said Henry, a vice president in the
Washington economic consulting firm of Hammer,
Siler, George Associates. One of the problems, he con-
tinued, is that "the co-op movement has not tradition-
DO
DO
ally often involved a sizable group of the minority popu-
lation. There has to be some balance to pull minorities
into the co-op movement." The balance he envisons
would be to give the four top jobs under the director to
people with co-op experience and to make their deputies
people with low income economic development exper-
ience.
Asked why he thought he was named for the job,
Henry said it was most likely because his background
includes economic development, community ~ e v e l o p
ment training and experience in dealing with national
policy issues. One bank insider said it was also
important to have someone "with political savvy,
because we're going to have to go back to the Hill for
more money next year. "
One issue that has stirred some controversy within the
bank is the relationship between the board of directors
and the Office of Self-Help Development. Because the
bank is expected to function under constraints similar to
those of other lending institutions, there was strong
feeling at the time the legislation was being written that
the Office of Self-Help have some measure of indepen-
dence to insure a solid commitment to the development
of low income and new cooperatives. How independent
is unclear, thanks to the ambiguous language of the law.
CLIFFORD HENRY
Clifford Henry, reportedly President Carter's choice
for the director of the Office of Self-Help Development
and Technical Assistance, is an economic development
specialist who has worked to promote opportunities for
minority businessmen.
Henry, 40, is a vice president of Hammer, Siler
George Associates in Washington. Prior to joining the
consulting firm in 1978, Henry served as vice president
for nine years of the National Council for Equal Busi-
ness Opportunity and president for three years of a
council spin-off called National Urban Development
Services Corp. in Washington. There he helped provide
professional assistance in carrying out neighborhood
commerical revitalization and other activities.
From 1966 to 1968, he served on the staff of the U.S.
Conference of Mayors and before that with the Balti-
more Community Relations Commission.
As a civil rights activist, he helped organize boycotts
of products and set up tutorial projects for black
students in New York City, Philadelphia, Washington
and Baltimore in the early 1960s.
A graduate of Morgan State University, Henry has
been an instructor in urban economics at Howard Uni-
versity and Goddard College. 0
13
"It is clear to me from the legislation that the office is
within the bank," said Henry, and that "the board has
the power to review the regulations and operating pro-
cedures of the office and set interest rates for the office.
But it doesn't go beyond this, and that has created some
confusion.' ,
Henry said he thought it inadvisable to try to specify
too much at the beginning, especially before a president
and director were on board, and that there should be
flexibility to work out differences as they arise.
The disagreement reportedly is over whether the
board has "review" authority or "review and approval
authority" over the office. The Justice Department has
been asked for a rulin,:;. "It has led to a certain anoma-
lous situation, but given good will and intelligence, it
will be worked out," said Frances Levenson, a vice
president of New York Bank for Savings and a board
member of the Co-op Bank.
Under the way the bank has been set up, Congress is
authorized to appropriate $300 million for the purchase
of Class A bank stock. As cooperative ownership of the
bank increases through purchase of bank stock by
cooperatives, Presidentially appointed directors will be
replaced by directors elected by cooperative
shareholders. 0
NEW POMP CONTRACT
The Board of Estimate approved one Private Man-
agement Ownership Program (POMP) contract for
$546,774 at its December 6 meeting.
Under POMP, the city contracts with private
management firms to manage some of the better In Rem
properties in neighborhoods where they already have
real estate interests. During the course of the one-year
initial contract, the management company is expected to
develop a modest treatment program that will lead to
the purchase of these buildings at the end of the con-
tract. The POMP participant has the first option to buy
the buildings. This new, $1.5 million alternative
management program offered by HPD is funded with
Community Development monies.
Tecra, with offices at 275 Madison, will manage 215
properties in the West ISO's of Manhattan's Hamilton
Heights. It expects to start its management contract
early in February.
A second management company, Myers, Smith, and
Granday, Inc., located at 2307 Adam Clayton Powell
Boulevard, is expected to receive a contract for up to
$600,000 to manage some 200 properties in central
Harlem. Its referral to the board was delayed because it
is still looking for suitable properties.
The two other POMP participants who were awarded
contracts several months ago are Stepheon Leon
Management Company of the Bronx and Lemle and
Wolff, Inc. in Washington Heights. 0
STUDY FINDS NO HOUSING BENEFIT
FROM TWO-PARTY WELFARE CHECKS
A new study of 40 buildings in the Bronx concludes
that the city's controversial policy of placing welfare
recipients on two-party checks to guarantee the land-
lord's rent has not served its intended purpose of stop-
ping housing deterioration and abandonment.
In fact, according to the study released by City Coun-
cil President Carol Bellamy, the buildings containing
the largest percentage of welfare tenants on two-party
checks tend to have more housing code violations and
higher rates of tax delinquency.
"The most provocative finding of the study is that if
two-party rent checks influence housing stock at all,
they influence it negatively," the 57-page report said.
Unlike normal welfare payments, two-party rent
check require the signatures of both the tenant and the
landlord in order to be cashed. Refusal by the tenant to
sign can result in a direct payment to the landlord,
called a vendor check. This guarantees that the landlord
will receive the monthly rent regardless of whether he or
she is maintaining the building properly and paying
taxes.
The findings of the study are significant because they
contradict the premise of the city's existing two-party
rent check policy and its so-far unsuccessful attempt to
expand the program through a "demonstration" in the
Bronx. In proposing the demonstration more than a
year ago, the Koch Administration argued that guaran-
teeing welfare rents would provide a much needed infu-
sion of cash to help landlords improve maintenance and
14
services in their buildings. It blamed the shoddy condi-
tion and tax delinquency of many buildings in the non-
payment of rents. A recent New York Times editorial
supported that position.
Tenant and welfare rights advocates have long dis-
agreed, calling two-party checks an undeserved windfall
for landlords. "We have been arguing for a long time
that if people would just check out the buildings with
large numbers of two-party checks, they would find
these things-and sure enough, that's what they
found," said Theresa Funicello, director of the Down-
town Welfare Advocacy Center.
In concluding that two-party checks have no benefic-
ial effect on housing, the Bellamy study blames the
city's severe housing problems on much larger economic
forces that cannot be disarmed by a massive issuance of
restricted checks. The study argues that two-party
checks, in fact, deprive welfare tenants of the only lever-
age they have to force needed repairs and says the city
appears to violate federal guidelines in the way it admin-
isters this policy.
At the same time, the study did not rule out two-party
checks but rather listed the conditions under which the
authors felt they should be issued.
According to government figures, the state pays $100
million a year from some 60,000 welfare cases (155,000
individuals) on two-party checks. Close to the legal limit
on the number of welfare tenants with restricted checks,
the city asked the federal government for permission to
Cited as the "most extreme case" was a building
whose owner was identified by the study as Robert Sal-
monsky. In that building, the city pays $63,000 in wel-
fare rent, $18,000 of it in restricted payments. At the
same time, the building shows 196 code violations and
the owner is $62,000 in arrears on his taxes.
The study recommends that welfare tenants be placed
on two-party checks only when the city investigates and
determines that recipients have mismanaged their
benefits. Where serious violations or tax arrears exist,
restricted rent payments should be issued only after the
landlord has removed the hazardous violations, agreed
to a repair schedule for the others and established a
payment schedule for tax arrears. Two-party checks
should also be targeted to relatively sound buildings
rather than those close to abandonment.
While endorsing these recommendations, Funicello
said the study is more concerned about the impact of the
two-party check policy on landlords than on welfare
recipients. "You should not consider guaranteeing
money to the landlord unless you are also guaranteeing
to the recipient the kind of money necessary to provide
for other essential needs," she said.
Thanks to one increase in in the past 10
years, welfare recipients today subsist on a basic grant
of $258 per month for non-shelter costs. That figure
HPD HANDBOOK AVAILABLE
HPD this month released an updated program book-
let entitled "Handbook of Programs and Policies."
The booklet includes organizational charts for each
unit, descriptions of programs, and telephone numbers
and addresses of staff.
The manual was prepared under Executive Director
Bruce Gould and his staff in the office of program and
management analysis.
The cost of the book is $3.50, if picked up at Room
9125, 100 Gold Street, and $5.00, if it is mailed.
For further information, call Jim Story at 566-7856.0
represents a statistically determined minimum standard
of need based on living costs in 1971. Inflation alone has
increased the cost of that minimum standard to $466 per
month in 1979.
"Before you restrict the income of welfare recipients,
you have to take into account what they have to
juggle," Funicello said.
Bellamy's office said a definitive study of the cause
and effect relationship between two-party checks
housing conditions was impossible because of the kind
of data base kept by the city. In addition, the study was
handicapped because welfare administrators reportedly
claimed that two-party check recipients could not be
automatically broken out by computer but had to be
identified manually. The report quoted a Human Re-
sources Administration official as saying that at any
given time 20 per cent of the case records for welfare
recipients 011 restricted checks are missing.
Shortly after HEW denied the city's request to
expand the two-party check program in the Bronx, a
meeting of federal, state and city officials was held to
discuss how the proposal could be redesigned. An aide
to HEW Secretary Patricia Harris is reportedly working
on modifications and is expected to submit them soon to
city and state officials for discussion. 0
SENATE OK'S PASSIVE SOLAR
The Senate has approved a tax credit of up to $2,000
to encourage "passive" solar energy in new homes. The
tax break would be retroactive to April 5, 1979 and last
through 1985.
Tax credits for solar energy systems in new or existing
houses have been available since 1977, but never for
passive systems that use the structure of the house to
collect and distribute the sun's heat rather then relying
on mechanical devises such as pumps.
Related legislation passed earlier by the House
ignored passive solar credit. 0
HOUSING STARTS DOWN IN 1979
The total number of housing starts is expected to be
1.75 million in 1979, down from more than two million
in 1978. Analysts expect only about 1.45 million starts
in 1980. 0
15
Community Management Productivity
by Susan Baldwin
Twenty community management groups and Depart-
ment of Housing Preservation and Development offi-
cials involved in the administration of this six-year-old,
$18 million alternative management program for city-
owned housing are under heavy pressure from City Hall
to develop by March 1, 1980, a set of more professional
and accountable performance standards if the program
is to continue at its current pace.
The call for the new, more stringent requirements
came following a stormy meeting last July 19 of the
Board of Estimate when certain of its members first
balked at refunding the program's new contract, effect-
ive September 1, 1979, to August 31, 1980, for lack of
more detailed measurements of performance.
Some community leaders, who believe that the city
would like to phase out this heavily subsidized manage-
ment program for low and moderate income residents,
are fearful that the requested performance standards
will be used to block the program's renewal next year on
grounds that the program is too expensive and serves
too few buildings.
"The board, and more particularly the comptroller
and the city council president, said they would vote no
or hold over the contract if we did not develop
standards," said Assistant Housing Commissioner
Philip St. Georges this month. "In effect, they were
holding us hostage ... This is why we are calling at least
16 meetings with the groups before March 1 to develop
these standards."
Asked if community management's existence were
endangered, St. Georges answered, "No, absolutely
not, but that's why we need to spell out a series of activ-
ities that everyone has to carry out .. . This makes the
whole program more professional and, ultimately, more
autonomous. "
Approval of the $18 million contract came after
former commissioner Nathan Leventhal sent the board
a last-minute memorandum detailing a timetable for
developing and implementing performance standards.
16
The proposed standards are to be submitted to the
board for its review by March 1. The implementation
period will run through the end of the current contract,
beginning March 1 and ending August 31.
The participating groups, organized formally as the
Coalition of Community Management Groups, have
protested that they have been kept out of the negotiating
process with the board to date. They charge that the
only way workable standards can be developed is for
HPD to submit itself to the evaluation process.
"In reality, this arrangement between the groups and
HPD is supposed to be a partnership, and for it to work
that way HPD has to take at least 50 per cent responsi-
bility for the program," said Galen Kirkland, director
of the program at the West Harlem Community Organi-
zation. "Taking responsibility also means being evalu-
ated. "
According to St. Georges, the board only requested
that a set of performance standards involving the
groups' track records, not HPD's, be submitted by the
March 1 deadline.
Asked about the Coalition's complaint that HPD is
not being evaluated, he said that, although HPD had no
"binding commitment to analyzing itself," the agency is
preparing to contract with the Fund for the City of New
York for a staff evaluation. The Board of Estimate is
expected to review a $140,000 contract proposal with
the Fund for the HPD evaluation at its February 14
meeting.
The Fund, under a $45,000 grant from the Charles
Mott Foundation, is already at work preparing a
quarterly reporting form that the groups will submit to
HPD to measure key elements of their activity.
In his July memo to the board, Leventhal outlined a
schedule of eight program performance standards to be
developed and implemented by March. They include:
"occupancy standards; rent collection and rent arrear-
age standards; vacant apartments; treatment and rent-
up; disposition standards for buildings returned to city
management; qisposition standards for buildings sold to
non-profit groups; revised reporting requirements; and
the community management group employee tasks and
standards. "
At the present time, St. Georges said, the only defined
performance standard is that the monthly rent collec-
tion rate should be about 85 per cent. The collection rate
for September, which he called a "bad month," was
only 73 per cent.
Leventhal's letter to the board also stipulated that as
of September 1, all groups were required to have "50
per cent of their contracted unit total in actual
management within three months" of the start of the
contract and 100 per cent within six months of its
commencement. If groups fail to meet this deadline,
HPD may cancel their contracts.
By and large, the Coalition members find the com-
munity management program to be "basically good but
bureaucratically difficult," in the words of one group
director.
"In order to get anything done we have to deal with
tech [technical] services, and it just takes too long to
process the application and get the assistance from
them," said Sandy Abramson, director of the program
at St. Nicholas Neighborhood Preservation and
Housing Rehabilitation Corporation, a Brooklyn group
that currently manages 40 units of housing in small
frame structures scattered over a two-and-one-half-mile
radius.
Alluding to the program as "paternalistic," Brian
Winston, director of the program at Sunset Park Re-
development Committee, said "I think it's basically a
great program, but we don't have enought flexibility
and control over our budget to make decisions on our
own. For everything over $200, we have to go to HPD
for permission." Sunset Park manages 36 housing units
in Brooklyn and is planning to add a dozen more within
the next few weeks . Its final goal is 150 units.
According to Winston, his rent collection fell off
dramatically from 95 to 67 per cent last month because
the city, not his group, was responsible for hiring a
boiler contractor who took over three weeks to deal with
an emergency.
Created in 1973, the community management
program first received CD funds amounting to $2.8
million in 1976 to manage 870 units of housing. Under
the current $18 million contract, the 20 member groups
manage 2,829 units in 136 buildings. Nine have rehabili-
tation components that permit them to do major repairs
on buildings. Individual contracts range from $300,000
to $2.1 million, and groups manage from 30 to 325 units
of housing. 0
17
PLANNERS NETWORK FORUM
"Cities at Six" , a series of classical and contemporary
films followed by discussion on the historical develop-
ment of cities, is the theme of the fourth annual Net-
work/Forum program.
The Friday sessions will be held monthly through
June-beginning at 6 p.m. and ending at 8 p.m. at the
City University Graduate School, 33 West 42nd Street
(5-6th Avenues), in the third floor studio.
Sponsors of the program are the New York Area
Planners' Network; the Forum on Architecture,
Planning, and Society; and the Center for Human En-
vironments, City University Graduate School.
The 1980 program is as follows:
Jan. 11- Industrial Britain (Grierson, Flaherty, 1933);
Valley Town (Van Dyke, 1940) Speaker: Harry Magdoff
Feb. 15 - The City (Steiner, Van Dyke, 1939); Halstead
Street (Nelson, 1934) Speaker: David Gordon
Mar. 14 - "Zone sociale," Catholic University of
Louvain Speaker: Lucien Kroll (slide talk)
Apr. 18 - Bologna: An Ancient City for a New Society
(1978) Speaker: Bruce Dale
May 22 - Our Cities, Our Right (Bertucelli, 1975)
Speaker: Manuel Castells
June 6 - China: A new film (untitled) (1980) Speakers:
Allane Baerson, Amy Cohen, Jean Mah 0
TWO NEW FILMS
Two short documentaries, one on tenant organizing
on the Lower East Side and the other a glimpse of life in
the South Bronx, have been released.
"EI Corazon de Loisaida" by Marci Reaven and
Bienvenida Matias is the story of how tenants and
neighborhood residents took over three buildings after
they had been abandoned by their landlords.
The tenants discuss how they became organized and
describe the impact of the experience on their lives.
The 30-minute film is available through the Tri-
Continental Film Center at 419 Park Avenue South,
New York, N.Y. It can be purchased for $300 or rented
for $50.
"Simpson Street" by William Sarokin sketches the
residents of the South Bronx, focusing on the Casita
Maria Community Center in the Hunts Point Section.
The 22-minute film is available through Third World
Newsreel, 160 Fifth Avenue. It costs $45 to rent and
$400 to purchase. Third World also offers discounts to
community organizations. 0
FUNDING LAPSE HITS MANY NPC GROUPS
The state Neighborhood Preservation Companies
program has run headlong into the very problem every-
one hoped would not arise. Several dozen of the 114
neighborhood organizations throughout the state that
received first-year grants in the fall of 1978 have begun
running out of these funds before the state Division of
Housing and Community Renewal has been able to pro-
cess second-year applications and get new contracts in
place. Some organizations exhausted NPC funds several
weeks ago. It is generally agreed that the earliest any
group will receive second-year funds is late January.
Eor organizations with large budgets and multiple
programs, a funding gap may be only an inconvenience,
requiring the borrowing of funds from other funding
sources and their eventual replacement once the NPC
funds are in hand. For smaller neighborhood organiza-
tions, however, a funding gap can mean disaster. Some
have no significant core funding other than their NPC
grants. The irony is that the very purpose of the NPC
program is to provide a stable source of administrative
funds for community organizations, freeing them from
worry about how to meet payroll, rent and overhead
expenses and thereby allowing them to concentrate on
rebuilding, preserving or improving their
neighborhoods.
Various means of coping with the gap are being
taken. Better Neighborhoods, Inc. in Schenectady,
whose funds were exhausted in October, reported that
it had borrowed against its emergency repair reserve
fund in order to meet staff payroll. "We'll be in trouble
if a boiler goes out," stated director Richard Kopke,
referring to the buildings managed by BNI. Others ex-
pressed the hope of borrowing from banks once they
receive letters of commitment from DHCR.
A common fear is the loss of valuable staff members
who might be forced to find other jobs if payroll goes
unmet for more than a few weeks.
Not all first-year grantees have exhausted their NPC
funds. Some contracts run for a few more months, and
some whose contracts have expired nevertheless have
some money left over due to last year's delays in receiv-
ing funds from the state. However, every week increases
the nervousness of those whose contracts do not expire
until spring.
Enacted in 1977 and operational since the spring of
1978, the NPC program has been plagued from the start
with administrative problems, including a staff that
knew little about housing or neighborhoods and chronic
misinformation given out to community organizations.
It was inevitable that there would be funding gaps
between contracts. Second-year applications had gone
out late; most organizations were given only a couple of
weeks to complete and return them, and they were even
18
more complex than the year before. No internal system
for evaluating the 114 funded organizations had been
devised.
A new director, Elizabeth Searles, took over in the
middle of this confusion. She told City Limits recently
that it would be several weeks before the program could
be straightened out. She stated that top priority has
been given to expediting the second-year funding pro-
cess, although the agency has selected 30 organizations
for new first-year grants. "I believe we will catch up by
the beginning of the year and will be able to avoid gaps
for groups that come up for second-year review after
that," she stated.
According to Searles, DHCR has decided to re-fund
all 45 of the 114 first-year grantees that have been re-
viewed so far, and most second-year grants have been
increased based on how well the organization has per-
formed. She hopes that most if not all of the 45 will have
signed contracts by the end of the year. However, it will
be four to six weeks before the state Department of
Audit and Control can process the checks once con-
tracts are signed. Searles expressed hope that DHCR
could find ways to speed up this final step.
Assistant Commissioner Lois Kleinerman expressed
regret at the funding gaps, and confidence in Searles's
ability to shape up the program. "She had to start from
scratch," Kleinerman stated. "The gaps were unavoid-
able in the circumstances. We're trying like mad to
make up for it. Liz is very capable and perceptive, and
she is straightforward and honest. She has put together
a logical system for rating groups and took an honest
but supportive look at their performance." 0
Michael McKee
PURB continued
to submit a proposal to study the legal feasibility of a
public takeover of Con Edison. The study includes
looking at how much of the huge syst.em to seek in any
takeover bid; how the worth of the company should be
determined; whether the process should be through con-
demnation of the utility's property or purchase of its
stock; how the takeover should be financed; what legal
entity should operate the utility, and what more modest,
less costly options are available in contrast to a full-scale
takeover. The board is in the process of negotiating for
the $30,000 to $50,000 for the study and has asked for a
waiver of its conflict of interest policy.
A former partner in the law firm and now its counsel
is Peter Berie, who served as commissioner. of the New
York State Department of Environmental Conservation
from 1976 until 1978. The firm's representation of
environmental organization is a hallmark of its
reputation. According to its proposal to PURB, Butzel
& Kass currently represents the Scenic Hudson Preser-
vation Conference, the Hudson River Fishermen's As-
sociation and five Westchester County towns in separate
legal proceedings against Con Edison. The selection of a
law firm with strong ties to Con Edison antagonists,
identifies and gives the first round clearly to a potential
anti-utility alliance on the board.
Voting for Butzel & Kass, were Emerick, Betanzos,
Hughes and Kirrane (a utility member); voting against
the firm were Livingston, Freilicher and Seham (a con-
sumer member); Van Allen abstained. Moore, who
probably would have voted no, was absent and subse-
quently filed a protest with the chairman that the board
meeting has been scheduled on a day when he had said
in advance he could not attend.
Of the two-thirds of the board members who were
by City Limits, hardly any said they expect
PURB to recommend major structural changes in the
way electricity is generated and distributed in New York
City. Part of the reason may be the defeat in November
of a public power proposition on the ballot in West-
chester County. With the failure of that measure, said
one board member, "Con Edison knows that in the final
analysis it's safe for another decade." Said a more util-
ity oriented board member, "There is little desire to
make flaming, radical changes. Con Edison cannot dic-
tate to OPEC on oil prices. Con Edison cannot dictate
to the City of New York on taxes. It is hard to get
excited about something when you know you're not
going to be able to change it."
There seems to be a solid bloc that is opposed, as of
today, at least, to a public takeover of the utility for
reasons ranging from doubt that a public entity could
do the job cheaper and more efficiently to an aversion
to taking workers out of the private market and making
them public employees.
"I'd have to be shown a convincing financial picture,
not just that a public entity could reduce electric rates in
New York City, but could do so without negatively
19
affecting something else," meaning, for example, a tax
loss to the municipality, said a public board member. "I
think the business community would have to have proof
that government can do anything effectively. People are
angry at electric costs, but they're a hell of a lot more
angry at government. "
PURB has scheduled two hearings ip the near future.
A hearing on January 9 will cover the impact of utility
rates on commercial customers. On January 23, the
subject will be the possible takeover of Con Edison. For
further inforrn.ation call, 566-8424. 0
GRAND JURY PROBES
VAN ALLEN GROUP
City Limits has learned that a Manhattan grand jury
is investigating possible misuse of funds by a commun-
ity service organization in the Bronx whose director is
also chairman of the Public Utility Review Board,
which is looking into Consolidated Edison's rates. The
probe is a not-so-subtle warning to go easy on Con Edi-
son, says the director, Rev. Morton Van Allen.
Van Allen told City Limits that he learned of the
grand jury investigation of the Urban Crisis Task Force
in October when the Manhattan district attorney's
office subpoenaed the records of all the major funding
sources of his organization and began questioning
members of the staff. Other sources said investigators
also visited Van Allen's house looking for additional
records.
Van Allen charged that Con Edison is behind the
investigation, saying that it is an attempt to intimidate
him as chairman of PURB and to discredit in advance
the study of why New Yorkers pay the highest utility
rates in the country. One option before the board is to
recommend a public takeover of Con Edison.
Edward Livingston, a vice president of Con Edison
and a member of PURB, said he was unaware of the
grand jury investigation and denied that Con Edison
played any role in it. "It's absolutely untrue and out-
rageous," he said. "We had nothing to do with insti-
gating it."
Van Allen said the grand jury has been impaneled
until just about the time that PURB is supposed to
complete its study of the utility and issue a report. He
said investigators went out Qf their way to tip him off
about the probe, including having him followed for a
week in a bright red car.
A spokesman for prosecutor Robert Morgenthau
would not confirm the grand jury investigation, but said
the Manhattan district attorney's office has authority to
investigate organizations and individuals outside the
borough if they do business in Manhattan.
The Urban Crisis Task Force is a multi-service organ
ization at 1398 Grand Concourse in the Bronx that
provides job referrals, family counseling and works
with youths. It operates on an annual budget of between
$100,000 and $200,000 a year, according to Van Allen.
With funding for his organization now in danger, Van
Allen said, he cannot devote the amount of time he
would otherwise be spending as chairman of the nine-
member PURB. "It's obvious what they're doing," Van
Allen said. "I'm not worried about the case. What I'm
worried about is my credibility." 0
HPD AWARDS $1.5 M TO 45 CITY GROUPS
Forty-five local and citywide community organiza-
tions will receive $1.5 million from HPD to provide
housing services and technical assistance to New York
City neighborhoods.
The program will be funded with Community Devel-
opment monies for eight months, beginning January,
1980, and ending August 31, 1980, the end of the CD
year.
HPD at first intended to fund this innovative
program for $1 million but increased this amount after
Citywide
$ 45,000 Chinatown Planning Council, Inc.
Metropolitan New York Coordinating Council
on Jewish Poverty
45,000
590,000
Bronx
Sebco Development Incorporated $ 20,000
The Seneca Center, Incorporated 30,000
B.R.A.S.H., Incorporated 20,000
Institute of Puerto Rican Urban Studies
Incorporated 20,000
Southwest Bronx Community Coordinating
Council 20,000
TUIP Neighborhood House Inc. 55,000
West Bronx Housing and Neighborhood
Resource Center, Inc. 40,000
Kingsbridge Heights Neighborhood
Improvement Association 25,000
5230,000
Brooklyn
Opportunity Development
Association (ODA) $ 20,000
St. Nicholas Housing and Rehabilitation
Corporation 20,000
Southside United Housing Development
Fund Corporation (Los Sures) 20,000
Pratt Area Community Council 30,000
St. James Cathedral, Incorporated 20,000
Bushwick-Stuyvesant Heights Housing
Rehabilitation Center Inc. 20,000
Ridgewood-Bushwick Senior Citizens
Council Incorporated 20,000
Sunset Park Redevelopment Committee 20,000
Prospect Heights Neighborhood
Corporation 20,000
Prospect-Lefferts Gardens Neighborhood
Association 20,000
Southern Brooklyn Community
Organization 60,000
Astella Development Corporation 37,000
Oceanfront Development Corporation 45,000
Flatbush Development Corporation 80,000
20
receiving applications from more than 125 community
groups.
Funded activities include community groups helping
tenants and landlords package rehabilitation loans;
providing technical services for tenants who wish to buy
their city-owned buildings; organizing tenants who live
in single room occupancy (SRO) hotels in midtown
Manhattan; and setting up housing clinics with trained
negotiators for the Chinese speaking community.
The contract awards are as follows:
Flatbush Tenants Council
Incorporated 60,000
Midwood Kings Highway Development
Corp. 33,000
5525,000
Manhattan
Cooper Square Community Development
Commitee and Businessmen's
Association $ 35,000
Pueblo Nuevo Housing and Development
Association 40,000
United Jewish Council of the
East Side 20,000
Housing Conservation Coordinators 30,000
East Midtown Community Council 40,000
Lenox Hill Neighborhood
Association 25,000
Coalition of Hamilton Heights Tenant
Associations Inc. 20,000
Milbank Frawley Peoples Council Inc. 55,000
143rd Street Community Preservation 20,000
West Harlem Community
Organization 20,000
Hellgate Management Corporation 20,000
HOPE Community 45,000
NERVE, Inc. 20,000
I I 6th Street Block Association 50,000
5440,000
Queens
Hellenic American Neighborhood Action
Committee, Inc. (HANAC) $ 45,000
Greater Ridgewood Restoration
Corporation 30,000
Queens Community Civic Corporation 25,000
The Better Community Civic
Association, Incorporated 25,000
5125,000
Staten Island
Northfield Local Development
Corporation $ 45,000
GRAND TOTAL $1,455,000
A UCT/ON continued
... . .

ll""O
BUy lJf IIIIIIf8]-41.
.<I PIS 'fill., oPp,
/
,q r Cf o/: '01i.,u
r"",Sd, PlJ8ll;'II',s,O/v IV filii '1111.,."
a." NOLf% 114 I1f4l A
,:a; "'''-' be, 1S 'II
O
PfRr
'I( C,/-,.
C' IIIdp Cl'ry ' 7 Po,: E A I , Y Y
Or d 'l'He 8 9:75 ICe PI. "'1 vCr,
thE' hOlliE'S C'E'l)tE'r IIIE' il) t/
C
/jppl. 4.1\1. aZa _ A '01' I
Op'Po PPo
rt
dl)d b OE th E' I) ... . e.. . . V
h r UI) ' us ' E' ... Js "Ito'
eci
9
E' <Ul)itb Jty t 11)E'SSE' Orld It. r,l.,....
0 f. .. S. >' 1" s til - "4. " II.
hattan's Hamilton Heights. "I'm going to stay, but I
can't afford these prices they want for buying, and we
have to know what properties they're auctioning. The
city owns a lot around here, and we would like to keep it
for the neighborhood."
Thurston expressed views that were echoed by other
disgruntled would-be buyers.
A tenant of 119 West 124th Street in Harlem who had
hoped to buy his rented body and fender shop said, "I
just couldn't pay that price they got. They did a gor-
geous piece of camera work for the auction catalogue to
advertise this place. It's just not that great. I wonder if
the guy down the street bought it. $9,000 is just too
much for this."
The Department of Housing Preservation and Devel-
opment has repeatedly reassured community groups of
its intentions to reform the auction policy.
Rita Dattola, HPD's director of sales, said, "We
have done a lot of work on the residential auctions and
are still working out a disclosure policy, but most of the
properties for November were commercial." She does
not expect an influx of residential properties until early
next spring.
Councilman Stanley Michels (D-L, Man.), one of the
proponents of the auction moratorium, expressed sur-
prise that any residential properties were among those
sold at the November auction.
"I know that my [community] board has been very
careful to pull properties from the auction list, but I
don't know about others," he said. "There was nothing
of consequence for my area this time arQund, but I am
worried about what the city will do in the future under
this new auction policy. We must monitor it closely."
21
uh , ....
Following numerous meetings with community
groups who oppose the city's auction policy, HPD has
agreed to screen potential buyers of residential proper-
ties and to develop a timetable for building repairs that
will be enforced as part of the purchase agreement. It is
als.o considering holding regional auctions for specific
neighborhoods on a more frequent basis than the
current bi-monthly citywide schedule. In addition, it is
studying the possibility of accepting sealed bids for the
properties to be auctioned.
"We are not strong advocates of blind, indiscrimate
selling of properties in neighborhoods," said Mike
Dirzulaitis, one of the Division of Real Properties'
auction policy advisors. "But, on the other hand, HPD
cannot do a planned disposition on each piece of city-
owned land. We will have to have auctions. We cannot
hold onto 28,000 parcels of land."
According to real estate deputy commissioner Wil-
liam J . Hirschman, the city is continuing to receive large
numbers of properties through tax foreclosure and must
consider instituting a more frequent auction schedule.
"We have been down to as few as four auctions a
year," he explained, "but I think we should ultimately
head for 12 sales a year to keep up with our properties."
Adventurous buyers can look forward to bidding on
the old Knickerbocker Hotel on Manhattan's West Side
or a West 67-68th Street block front of choice under-
developed land at the January 23 auction. All that is
needed for starters is a minimum of $550,000 for the
hotel or $2.9 million for the land.
Let the buyer beware. 0
MORTGAGE FUNDS
BECOME SCARCE
Money for home mortgages has practically dried up
in New York State, and political pressure is mounting to
raise the interest rate that savings banks can charge on
mortgages from the current 10 ~ per cent to at least 12
per cent. At the same time, others say this will not stim-
ulate the new deposits necessary to make mortgage
loans. And, as happened when the State Legislature
lifted the old 8 V2 per cent ceiling on mortgage interest
rates earlier this year, anti-redlining groups are demand-
ing assurances of more local loans.
Frances Levenson, vice president of the New York
Bank for Savings, told a recent conference on coopera-
tive housing that most savings banks in the state are out
of the mortgage lending business for the forseeable
future because such loans are now unprofitable.
She said depositors are switching to investments with
higher yields and banks have to pay more to attract
dollars than they can earn on the mortgage loans they
make. As a result, she said, the attitude of banks is,
"Don't call me. I'll call you when we are back into the
market."
To improve the lending picture, Levenson called for
raising interest rates on savings accounts and sheltering
a portion of the earned interest in order to attract de-
posits; lifting the current ceiling of 10 ~ per cent on
mortgage interest rates in New York State; removal of
restrictions on the kinds of loans savings banks can
make and more government purchases of mortgages to
free up money for new mortgages.
Governor Carey and the state's legislative leaders
were meeting in early December to try to work out a
plan to pump more money into the banking system.
Major ideas included raising the allowable mortgage
interest rate to 12 or 12 Y2 per cent, the purchase of more
than $500 million in old mortgages by the State of New
York Mortgage Agency to provide banks with a new
money supply for more mortgages; and tougher require-
ments that banks address local borrowing needs. Nego-
tiations on these and other items broke down on
December 6, and it was unclear whether a special session
of the Legislature to address the mortgage problem
would be called.
The New York City Coalition Against Redlining,
representing seven local organizations in Brooklyn and
the Bronx, met with Carey aides to demand that 100 per
cent of new mortgages financed by the sale of
SONYMA bonds be reinvested in New York State and
that half be targeted to low and moderate income neigh-
borhoods. The aides reportedly supported the 100 per
cent commitment but were eyeing a 30 per cent targeting
figure. In addition, CAR asked for the inclusion in the
package of a subsidy to help low and moderate income
homebuyers to offset the higher 12 per cent interest rate.
22
The coalition opposed the proposed provision of a roll-
over mortgage to be negotiated every three to five years
with the possibility of a maximum three per cent rise in
the interest rate over the life of the loan. The governor's
aides hinted that about $180,000 would be included to
finance a new redlining study required by the 1978
Legislature and for continued monitoring and enforce-
ment of the Community Reinvestment Act by the
Banking Department.
Meanwhile, a survey of savings banks by the city's
Department of Finance shows that among the 21 banks
said to have better lending records, only four made
more than 50 per cent of their mortgages in New York
City in 1978. The average ratio of city mortgages to
total mortgages among the 21 banks was about 32 per
cent in 1978.
The study, conducted to determine where the city
should deposit $9 million in court and trust funds,
looked at only two factors: the change in the dollar
amount of New York City mortgages from 1977 to 1978
and the percentage of city mortgages to total mortgages
in 1978. Without additional data on deposits, the dollar
change for out-of-state mortgages or the geographic
percentages for 1977, it is difficult to conclude too much
from the survey.
Four of the 19 savings banks that will not be used for
deposits of the court and trust funds because of their
weak local lending records are Empire, which showed a
$20.5 million drop in city mortgages between 1977 and
1978; United Mutual, down $8.5 million; Queens
County, down $7.2 million; and Greater New York,
down $7.1 million, according to the survey. Other banks
excluded because of their lending records or because
they did not submit the requested figures are Eastern,
Anchor, East New York, Independence, Roosevelt,
American, East River, Emigrant, Greenwich, Sea-
mens, College Point, Jamaica, Long Island, Richmond
Hill and Ridgewood.
The savings banks in the survey with the "better" rein-
vestment records included Richmond County, with 87.5
per cent of its 1978 mortgages in New York City;
Flushing, 73.8 per cent; Green Point, 55.6 per cent;
Dollar, 51.1 per cent; Staten Island, 46 per cent; Lincoln
34.7 per cent; Brooklyn, 34.2 per cent; Northside, 30.2
per cent.
Also eligible are Manhattan, 26 per cent; Hamburg,
25.6 per cent; Dime of Williamsburgh, 25.3 per cent;
New York Bank for Savings, 23.2 per cent; Bowery,
22.8 per cent; Metropolitan, 19.1 per cent; Dry Dock,
18.9 per cent; Harlem; 18.4 per cent; Dime of New
York, 18.2 per cent; Union Dime, 17.1 per cent; Wil-
liamsburgh, 15 per cent; Central 12.7 per cent and
Franklin, 6.8 per cent.
The $9 million for which the city serves as custodian is
small (about $430,000 per eligible bank) compared with
the $90 million to $100 million of its own money the city
deposits in commercial banks for investment. 0
DEATH OF CITY TENANT
AROUSES COMMUNITY
Abraham Weber, 63, of 167 Avenue C on the Lower
East Side, died November 9 in this city-owned building
of causes that neighbors and community housing organ-
izers link to no heat.
The city moved Weber into 167 in late April after a
fire in his old building, also city-owned, at 391 East 10th
Street left that building uninhabitable. 391 East 10th
Street was the sole building of four linked to each other
that had a boiler. As a result, tenants, including Weber,
of the mostly occupied three remaining buildings had
been without heat and hot water since April.
"They listed the cause of death as cardiac arrest,"
said Brent Sharman, a tenant leader at the community
housing organization known as Adopt-a-Building. "But
we know differently. He had no stove; there was a cold
spelI; and he was getting his heat by burning alcohol
over charcoal bricks and hooking up to some propane
tanks. "
After the April fire, Sharman and Hector Rojas, of
the Coalition for Housing Development, another
community housing group, asked the city to seal up 391
East 10th Street so that the boiler would not be vandal-
ized. The city did not respond, and the boiler was
stripped months ago.
A few weeks ago, HPD offered the tenants of the
three adjoining buildings the choice to move into some
other neighborhood apartments. They chose to remain
in their present dwelIings because they felt the new
offerings were worse than their present ones.
Since Weber's death, the city has agreed to repair the
boiler and provide temporary heat for the three build-
ings through a mobil heating unit. But as of December
9, the buildings were stilI without heat. 0
23
RAPID RISE IN COOPERATIVES
Thirty thousand rental units in New York City have
been converted to cooperative housing in the past five
years, and the number of offering plans submitted for
approval has more than tripled since 1977, according to
State Deputy Attorney General Harold Lubell.
LubelI said that 117 offering plans were submitted to
his office in 1977, 270 in 1978 and an estimated 425 by
the end of 1979. Approximately 12,000 rental units will
have been converted to co-ops in 1979, he said.
A major roadblock preventing the conversion of city-
owned housing to state-approved low-income coopera-
tives will soon be pushed aside, according to Assistant
Housing Commissioner Philip SLGeorges. HPD and the
State attorney general's office have been working for
months to devise a method by which state law requiring
disclosure of key information about a prospective co-op
(see November, City Limits) can be satisfied without the
astronomical expense of a standard offering plan.
St. Georges said he expected agreement by early
January on a streamlined offering plan put together by
HPD and that new documents for it should be ready by
late February.
LubelI, and St. Georges were among the participants
at a conference December 1 on cooperative housing
sponsored by Manhattan Borough President Andrew
Stein and Council Member Ruth Messinger. 0
Advertisement
Community organization in Coney Island is seeking
to hire two housing specialists: (1) experienced in
working with government housing programs and some
community organizing background; and (2) exper-
ienced in private sector financing and housing develop-
ment. Knowledge of Spanish desirable. Brooklyn resi-
dent preferred. Salary range-$14,000 to $15,500.
Send resume to:
Alice Paul
AstelIa Development Corporation
2856 West 16th Street
Brooklyn, New York 11224
- - - - - - - - ~ - ------
To: The Editors. CITY LIMITS. Association of Neighborhood Housing Developers, Inc.
115 East 23rd Street. New York. New York 10010
Please enter my subscription for one year (10 Issues) to CITY LIMITS.
o Private businesses. foundations. banks. government agencies and officials, city-
wide groups - $20.00
o Individuals and community-based organizations - $6.00
Enclosed is my check for $ _______ payable to ANHD/CITY LIMITS.
Name: __________________________________________________ ~ - - - - - - - - - - - - - - -

Ad4ress: ________________________________________________________________ __
LITTLE ITALY
City Limits
115 East 23rd Street
New York. N.Y. 10010
IN THIS ISSUE
Auction Sales Resume p. 2
Public Utility Review Board p. 4
Aetna Commits $15 Million p. 6
Further Erosion of $250 Policy p. 10
Consumer Co-op Bank p. 12
Two-Party Welfare Checks p. 14
Community Management p. 16
Second-class postage paid New York. N.Y. 10001
--

City Limits Magazine, December 1979 Issue

Diunggah oleh

Informasi Dokumen

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

City Limits Magazine, December 1979 Issue

Diunggah oleh

Hak Cipta:

Format Tersedia

..

Anda mungkin juga menyukai