(

CITY LIMITS
COMMUNITY HOUSING NEWS
JUNE/JULY 1979 VOL. 4 NO.5
GARDENS, PARKS SUPPLANT
VACANT LOTS IN THE BRONX
Tires which have been converted into planters line Barretto Street Park.
by Penny Wolfson
The people of the South Bronx, armed with shovels
and shrubs, are well on their way to converting a patch-
work of barren lots into their own urban version of the
National Park System.
A 75-foot by IOO-foot plot on Barretto Street, rescued
by the neighborhood from an asphalt future, is already
taking shape. It has a vegetable garden planted by
schoolchildren, a sculpture made from telephone poles,
a dogwood tree and a park bench. Outside the fence
surrounding the unfinished park is a sign that reads,
"Adopt-a-Lot/ Adoptar Pedazo de Tierra. Barretto St.
Block Association. With Help from the Bronx Frontier
Development Corporation."
The sign only begins to tell the story. The lot on Bar-
retto Street, which at one time was destined to 00- paved
over for a parking lot, is being transformed into a rec-
reational and park space with help from everyone from
the U.S. Interior Department to the Hunts Point Indus-
try and Commerce Association.
Barretto Street Park is one of fifteen vacant sites in
the southeast Bronx now being developed as gardens,
playgrounds and parks by a coalition of neighborhood
groups called the South Bronx Open Space Task Force.
More than $1 million in federal and state land and water
continued on page 2 I
OWNERS PLAY 'POMP' AND CIRCUMSTANCE,
GET $1.5M CD FUNDS FOR IN REM UNITS
by Susan Baldwin
A new and controversial $1.5 million program that
permits private management companies to use federal
funds to operate and maintain the city's better tax-fore-
closed housing stock will go into effect early in August.
Originally scheduled to begin in June, the program,
known as the Private Ownership Management Program
(POMP), invites private firms to manage In Rem prop-
erties in neighborhoods where they already have real
estate interests and to develop a modest treatment
program that will lead to the purchase of these buildings
in a year's time. The management firm has the first
option to buy the properties.
POMP critics charge that the program reserves the
best buildings for the private sector and does not involve
community groups in the selection of the management
firms.
In its contract with the private management firm, the
city's Department of Housing Preservation and Develop-
ment allocates Community Development funds to cover
the maintenance and repair of the buildings. It also
underwrites a ten per cent management fee. In addition,
the company uses the rent rolls to cover expenses. The
funds do not cover major rehabilitation costs. Rather,
they cover repairs ranging from $2,000 to $3,000 per
unit.
HPD also pays the management firm to do a detailed
survey of each building proposed for the POMP pro-
gram. This fee is paid even if HPD rejects this building
for the program.
"We are viewing this program as a one year experi-
ment," said Assistant Commissioner Philip St. Georges,
head of HPD's Division of Alternative Management
(DAMP). "We are talking to and screening firms all the
time, and we are hoping to choose at least two more for
this program this year." Each management firm will
handle between 300 and 500 units of housing.
The Board of Estimate approved the first POMP
contract May 24 when it awarded $548,326 to the Steph-
en _ Leon Management Co. of the Bronx. The Leon
firm will manage 492 units. Two other firms under HPD
consideration are the Viva Management Co. in East
Harlem and Lemle and Wolff, Inc. in Manhattan's
Washington Heights.
The management phase of the program was originally
scheduled to last two years. According to St. Georges,
the one-year deadline was imposed because HPD is
anxious to assess its "experiment" as soon as possible.
Noting that there has been a "fair amount of criticism
of the program," the assistant commissioner asserted,
"What we are supposed to be doing with all the alterna-
tive programs is trying every approach to manage these
2
properties and not have the city as the only manager.
We have to find out what works and what doesn't .. .
That's why we have implemented a broad variety of
programs. "
"I have no immediate problems with the concept of
POMP," said Lorraine Holtz, district manager of
Community Board 5 in the Bronx, an area where three
of the first nine POMP buildings to be managed by
Leon are located. "But, what does concern me is the
quality of the management company. The company
should have a very good reputation for management,
and if HPD is picking companies that have been oper-
ating in the neighborhoods, the companies are known to
the people. The community should be considered first."
According to Holtz, computer records of a number of
buildings managed by Leon "showed a good deal of C
(major) violations."
"These violations should never have been there if
there had been competent management of these prop-
erties," she argued. "It is these details that the city
should investigate before this program is implemented
and the best buildings are sold off to these private
management firms. We do not want to turn these build-
ings back to the worst slumlords. Some call the city the
worst, but I think the private sector can easily be the
worst. History has proven that."
Jerome Waxenberg, vice president of the Leon
management company, confirmed that his firm had
managed properties with major violations that had also
gone In Rem, asserting "if our clients had been willing
to take $10,000, $15,000, or $20,000 to fix up the prop-
erty, this would not have happened ... Many of them
(owners) are retired and expect to get an annuity from
the buildings ... not a tremendous liability on top. But
right now we have no In Rem buildings."
Jerry Mooney, an organizer with the Northwest
Bronx Community and Clergy Coalition and an advo-
cate of the Tenant Interim Lease program (TIL),
attacked POMP on another level.
"Maybe I wouldn't have a problem with POMP if the
city turned the worst buildings over to private manage-
ment," he said. "But that is not the case here. The Koch
Administration is giving them the best buildings-build
ings that could manage themselves. They (POMP) are
also getting the rent rolls and fees and monthly CD pay-
ments. This is unfair, particularly when you look at the
interim lease program where the tenants have to scream
and fight to get any money from the city for repairs."
The 150 buildings in the interim lease program receive
about $347 per apartment each year under the pro-
gram's $1 million budget. Unlike POMP, the manage-
continued on page 17
..
EDITORIAL LIMITS
What w ~ as locally based housing and Community
Development groups do, how we do it and how much is
determined not only by the capability of our own organi-
zation but also by policy and administrative decisions
made by others in other cities. We have all learned that
pressure on City Hall is a necessity whether the admini-
stration courts us or confronts us. What we have not
learned is how to effectively participate in national coali-
tions, legislative action, and administrative rule making.
Whether we like it or not that is where the rules of the
game are written and the resources allocated. If we learn
how to play that part of the game it will be easier for us to
be on the offensive at home . Such issues as anti-redlining
measures, targeting of Community Development Block
Grant funds to low income neighborhoods , and the Co-op
Bank bill were won, in part , because neighborhoods tem-
porarily united.
However , other issues were lost. Money for the livable
cities was cut out entirely, the Co-op bank was under-
funded , as was the Self-Help Development Fund. We
cannot afford these kinds of setbacks. We cannot afford
not to participate in the development , evolution, and ad-
ministration of domestic programs .
We would like to underline the word domestic and
point out that the word urban was purposely not used .
The 1980 U.S. Census in all probability will result in a
decrease in urban representation. If we are to survive the
conservative drift of our SOCiety and map out a progres-
sive domestic agenda for the 1980's, we will have to
forge meaningful coalitions with low and moderate in-
come people whether they reside in large or small cities,
counties, suburbs, or rural areas.
Neighborhood organizations have a responsibility to
themselves and to their constituencies to participate in
these coalitions and networks. The upcoming presidential
election, the development of party platforms, the
emergence of a third party-the Citizens Party-provide
use with opportunities to shape future domestic pro-
grams . Efforts are already underway by the Progressive
Alliance, the National Association of Neighborhoods,
ACORN, National Peoples Action, and others. We
should join their effort now. 0
Progressive Alliance, 1625 L St. , N.W. , Washington ,
D.C. 20036; Tel : 202-452-4800.
National Peoples Action, 1123 West Washington St.,
Chicago, Ill. 60607; Tel : 312-243-3035.
Association of Community Organizations for
Reform Now (ACORN), 523 West 15th St. , Little
Rock, Ark. 72202.
National Association of Neighborhoods, 1612 20th
St. , N.W., Washington , D.C. 20009; Tel: 202-332-
7766.
____________ Notice to our Readers:
City Limits is jOintly sponsored by the Associa-
tion of Neighborhood Housing Developers, Pratt
Institute Center for Community and Environ-
mental Development and the Urban Homestead-
ing Assistance Board.
Shared sponsorship of City Limits is intended to
strengthen the housing movement; meet the need
for a reliable source of timely and useful informa-
tion, broaden the publication' s base of support,
combine resources of the sponsor organizations
and avoid duplication of similar efforts; build an
effective working partnership among the sponsors
and enhance the editorial quality of City Limits.
We are gratified by the positive response City
Limits has received from community organizations,
funding sources and others who are dedicated to
making neighborhood preservation and revitaliza-
tion a major national , state and local priority.
_CITY LIMITS.
City Limits is published mont hl y except June/ J uly and August/ Sep-
tember by the Associati on of Neighborhood Housing Developers,
Pratt Insti tute Center for Communi ty a nd Environmental Develop-
ment a nd the Urban Homesteadi ng Assistance Board. Subscription
rates: $20 per year; $6 a year for communit y- based organi zations and
individuals. All correspondence should be addressed to CITY
LIMITS, 11 5 East 23rd St. , New York, N. Y. 10010. (212) 674-761 0
Appli cat ion to mail at second-class postage rates is pending at New
York, New York 10001.
Edi tor ... . .... . ......... .. ... . .... . . . . . ....... Berna rd Cohen
\ ssistant Editor ... . .... .... ... . ...... . .. ... . . . . Susan Baldwin
Design a nd Layout ......................... . .. . . . . Loui s Ful goni
Business Assistant. ................. . ... . . . ... . .. . Carolyn Wells
Copy right 1979. All rights reserved. No portion or portions oj this
j ournal may be reprinted without the express written permission oj the
publishers.
This issue was funded by New York Community Trust.
DELAYS, REGULATIONS HAMPER
EFFECTIVENESS OF SA LOANS
by Bernard Cohen
Theodore Angelis's six small buildings in the Sunset
Park section of Brooklyn were already not in the best
condition when he applied to the city for a $175,000
low-interest loan in Apri, 1978. He planned to install
new boilers, replace pipes, upgrade the electrical system
and put on new storm windows.
Although housing records continue to list the two-
story buildings as being in the loan pipeline and "moving
toward closing," in fact the structures have fallen into
such ruin that they now require far more work than the
$5,000 per unit limit allowed by the loan.
The buildings were destroyed by the over-long pro-
cessing time that has plagued the Article 8A loan
program since its first loan in November, 1976. The
loans are administered by the Department of Housing
Preservation and Development.
"It was a total disaster," said Ida May Staiano of the
Sunset Park Redevelopment Committee, who tried to
help Angelis obtain the loan. "I cannot account for a
year's time wasted. I've been down to HPD eternally.
Each time it was, 'You're missing this, you're missing
that.' It was a constant thing. I think they work one
page at a time.
"The buildings were not in great shape to begin with.
HPD told us it would take six to eight weeks to process
the loan. Going by what they said, he stopped making
repairs in anticipation of the loan. Now, more than a
year later, the buildings are a total wreck-they need a
total gut rehab."
Although some loan applicants had much faster
service, a recent report by the city's Office of Manage-
ment and Budget said, "Overall average processing time
per loan has not been reduced. It takes approximately
10 months to process each loan, due to a lack of owner
expertise, lack of staff and cumbersome requirements.
Three months of backlogged applications await assign-
ment."
Although 8A loans have enabled some 120 owners to
make major repairs in buildings they might otherwise
have abandoned, the four-year-old program has also
left a trail of disappointed loan applicants who simply
gave up in frustration over the time-consuming
paperwork, regulations they could not satisfy and the
feeling that some administrators of the program were
indifferent to their needs .
"There's a point where you just give up," said Mrs.
Roman Occasio, who applied in December, 1977, for an
8A loan for her two buildings on upper Park Avenue in
Manhattan. HPD rejected the application in August,
4
1978, saying she had not submitted contractor bids. Her
own records show bid documents were obtained from
three contractors between August and October, 1977.
"I was so disgusted that I dropped it" after receiving
HPD's notice. "I did a lot for those buildings," putting
in more than $3,000 of her own money into fixing the
boiler, repairipg the roof and upgrading apartments. "I
can't afford to do any more."
Low Income
The 8A program provides loans of up to $5,000 per
unit at 3 per cent interest. The loans, which are re-
stricted to buildings occupied by low income tenants, go
for eliminating code violations; replacing antiquated
buildings systems such as heating, plumbing and elec-
trical; repairing roofs, windows and walls and installing
buzzer systems. Owners must show inability to obtain
conventional private financing by producing bank
rejection letters. They are eligible for tax abatement as a
way of keeping to a minimum rent increases to pay for
the improvements. Rents may not exceed $80 per room.
The city has set aside $8.15 million in Community
Development funds for the first four years of the
program. Some $2 million remained uncommitted as of
June I, but housing officials said they expect to have it
committed by the end of August. Another $5 million
has been set aside for CD Year V, beginning September
1.
Interviews with more than a dozen successful and un-
successful 8A loan applicants, administrators of the
program and other city and federal government aides
turned up the following points about the program:
Although loans are supposed to be restricted to
buildings with low income families, it is impossible to
say if that is happening. The city measures benefit by
I
Hector Lozano in an apartment he is renovating without a city loan.
the economic and racial makeup of the census tract of
the 8A building, not the actual tenants. In addition, the
city's records of where the loans are going appear to be
inaccurate. A computer printout used as the basis for
identifying who is benefitting from the CD programs
shows 16 8A loans in the Bushwick section of Brooklyn.
In fact, no loans have been made there.
HPD does not have an adequate number of loan
coordinators. It began the program with three and is
now up to seven, each with a caseload of about 25
applications. Fifteen coordinators would be preferable,
according to loan officials. In addition, the level of
training varies greatly among coordinators.
Rules prohibit 8A loans for buildings on which
taxes are owed. In many cases, this disqualifies owners
who assumed the back taxes at the time they purchased
the building from being able to improve it. As a result,
lower income landlords denied loans have difficulty
holding onto longtime tenants, and vacant apartments
become very difficult to fill as the buildings continue to
deteriorate.
The program is supposed to keep costs down and
encourage participation by minority and small con-
tractors, but certain procedures work against those
goals. The delays of up to one year in loan processing
result in higher prices that some borrowers said had to
come out of their own pockets. Moreover, while the
loan is made in installments, the payments occur after
portions of the work are completed. This creates severe
start-up problems for owners and contractors who lack
sufficient. capital or do not have a sizeable line of credit.
Owner Expertise
Satisfaction with the loan program seems to be
related to the expertise of the owner applicant and how
experienced he is in dealing with the city. Acknowl-
edging that "I'm not typical" of 8A borrowers, Nor-
wood Campbell said that he was very satisfied with the
loan he received for two of his buildings, totaling 110
units, at 770 and 780 Garden Street in the Bronx. He
said it took HPD five or six months to approve his
application and that the loan administrators had been
very responsive. "It has to be judged in the context of
working with bureaucracy. I knew what they wanted.
To the extend that owners know how to satisfy the
requirements, they will be successful."
Other borrowers were not so happy, although they all
ended up with loans. "What I found out is there is too
much waste of time, too many people," said the owner
of two Queens buildings."you go from one office to
another. I just about gave up last year because of the red
tape business. 8A called me themselves and told me to
come around and talk it over."
The owner of a building in upper Manhattan put it
this way. "I think they fell asleep on it (the application).
I have more important places to spend my time than
waiting for the city to approve one of these loans."
Owners commonly said they made 15 to 25 trips to the
loan office at HPD before approval was granted.
Henry Warshavsky, director of the 8A loan program,
acknowledged the discouraging delays associated with
the program, but said the major holdup was due to lack
of owner expertise. He cited failure to obtain the
required cost estimates in particular. "If we get an
owner who knows what it's about, in some cases we can
process a loan in four months."
Warshavsky said HPD is trying to speed up the pro-
cessing by assigning the less experienced coordinators to
the early steps of the application, then turning it over to
a veteran.
Tax Arrears
One of the most frustrating obstacles to low income
landlords who want to borrow is the prohibition on tax
arrears. When Hector Losano bought his 26-unit apart-
ment building at 2172 Amsterdam Avenue in Manhattan
for $9,000 in June, 1977, he inherited $17,000 in back
taxes from the former owner. His total tax bjte. comes
to $2,100 per quarter, which he has been paying. In
September, 1978, a fire ravaged two of his apartments
and caused less serious damage in three others. When he
tried to have his building re-assessed, he was told it
could be done only during the annual assessment period
in February or March and that if he began to renovate
the damaged apartments immediately, the assessment
would actually be increased, with no consideration for
the period the building was burned.
5
Losano, who is the (7 A) administrator of a neigh-
boring building, decided to apply for a $50,000 loan to
repair the damaged apartments, renovate all the bath-
rooms, replace windows, waterproof the roof and fix
the brickwork. According to him and Louise Halady,
who helped him apply for the loan while she was
working at the Urban Homesteading Assistance Board,
an HPD loan official advised that the back tax rule
would be waived since the arrears had been incurred by
the former owner, and Losano was paying them off.
. Losano filled out the forms, obtained the required
estimates and bank rejection letters and took the com-
plete package down to HPD. This time he met with
another official and a different decision. No back taxes
allowed. "I really got discouraged when they told me I
.must pay $17,000 and recommended that I go to a
neighborhood bank and get a $17,000 loan. I was never
notified officially. I just said, 'If you think I'm not
going to get a loan don't waste any more time. ' "
Losano is now slowly trying to fix up the apartments
out of the rent roll.
Asked why HPD would bar someone like Losano
from getting an 8A loan, Warshavsky said that unless all
back taxes were paid, he could not receive the tax abate-
ment which is necessary to offset part of the rent in-
crease that would otherwise be levied on the tenants. In
addition," He must have bought the building at a low
cost" with such high tax arrears so there is no necessity
continued on page 19
DIVIDED STATE RENT COMMISSION
GRAPPLES WITH HOUSING ISSUES
The Temporary State Commission on Rental Housing was created in 1977 for the purpose of making a study
of rental housing and recommending changes in the rent control laws to the Legislature and the Governor.
Establishment of the Commission was the political price demanded by the Republican-controlled Senate in
1977 in return for renewing the Emergency Tenant Protection Act and upstate suburban rent controls until June
30,1981.
The Commission is a ten-member body. Four of the commissioners have a history of affiliation with tenant
organizations (Michael Patrick Doyle, Jeffry Gallet, Joseph Klein and Michael McKee); four represent the real
estate industry (Robert Fougner, Abraham "Bunny" Lindenbaum, Burton Resnick, Edward Sulzberger). Two
"swing" members are chairman Jacob Ward and Henry Cohen.
The commission was originally due to render its report by November 15, 1978, but the deadline has been
extended twice by the Legislature and Governor. Its report is now due by August 15, and it goes out of existence
on September 30.
by Michael McKee
During recent weeks the Temporary State Commis-
sion on Rental Housing has been engaged in some heavy
voting on the future of New York State's tenant pro-
tection laws. After more than a year of torpor, the
commissioners are finally punching each other silly,
trying to get the six votes necessary to pass a motion for
inclusion in the commission's report.
Since April 10, enough six-vote motions have been
adopted to constitute a "package" in two areas: con-
versions of rental housing to cooperatives or condomin-
iums, and rental assistance to low-income retired and
disabled tenants.
In addition, it is clear that the 'commission intends to
recommend elimination of many existing tenant rights
and drastically weaken rent control laws. This despite
the fact that the mandate of the commission to make a
comprehensive study of rental housing throughout the
state has never been carried out.
Among the recommendations already adopted are: an
accelerated phase-out of New York City rent control,
transferring the fewer than 400,000 units remaining
, under this law to the growing rent stabilization system;
establishment of a full-time, staffed statewide rent
guidelines board to set annual rent increases; allowing
any municipality in the state to opt into the new system;
and establishment of a permanent "oversight commis-
sion" to evaluate periodically the need for rent controls.
A tenant-sponsored motion to repeal the scandal-
plagued New York City Rent Stabilization Association,
the "voluntary" owner organization created by the 1969
stabilization law, failed to pass when Cohen abstained;
Ward voted with the four tenant members.
The coop-condo recommendations are a mixed bag of
30 motions adopted at three lengthy meetings amidst
tortured maneuvering by all three sides. The overall
thrust is to "encourage" conversions, while "pro-
tecting" tenants who can't buy their apartments. There
is no internal consistency to the package and anyone
6
knowledgeable about conversions will surely conclude
that it was put together by ten fools.
The elderly and handicapped package is, by contrast,
a well-balanced and even well-designed revamping of
the present "senior citizen rent increase exemption/ tax
abatement" program, allying the fiscal needs of local
governments with protection to low-income tenants who
are over 62 years of age or disabled or handicapped.
State law has for several years allowed municipalities
to exempt low-income senior citizens under rent
controls from paying rent increases if they pay more
than one-third of income for rent, or if the increase
would push their rent over one-third. The landlord re-
ceives a credit against his real estate taxes equivalent to
the increase; the municipality loses the tax revenue.
The commission calls for the state to reimburse the
local taxing authority for 50 per cent of the lost reve-
nues. This will be an unpopular recommendation be-
cause the Legislature and Governor will be loathe to
appropriate funds for this or any other new program.
But they will have difficulty ignoring the unanimous
vote of the commission, with tenants and landlords
agreeing that it is unrealistic for local governments to
continue to bear the program's full cost.
At present the City of New York loses some $26 mil-
lion annually through these abatements, and the cost of
the program grows each year. Several municipalities in
the surburban counties of Westchester and Nassau have
opted into the program, but many more cannot afford
to do so. Partial state reimbursement would encourage
more localities to opt in, thus bringing protections to
more retired persons.
The package also calls for a two-tiered reduction of
the rent-to-income ratio: to 25 per cent of income under
$4,000 per year, and to 30 per cent if the tenant's
income is between $4,000 and $6,500. The commission
further voted to recommend that the tenant's rent be
reduced to the appropriate rent-to-income ratio. At
present the tenant's rent is merely frozen when entering
the program, even if far in excess of one-third of
income.
Another recommendation is a periodic review by the
Legislature of the $6,500 income eligibility level in the
light of inflation. A means test, or assets test, before
tenants could qualify was beaten off, but the landlords
pushed through a $400 per month rent cap, above which
the tenant will not be eligible. Commission chairman
Ward and dean Henry Cohen provided the two swing
votes.
A majority also voted to extend the program to the
low-income disabled and handicapped, who at present
have no protection against rent increases. Only Cohen
and landlord Burton Resnick voted against this motion.
The relatively rational and cohesive recommendations
in this area are due largely to excellent research by Ted
Weinstein and Paula Ryan of the commission staff (in
contrast to other areas which have been researched not
at all) and to the fact that aid to the elderly and handi-
capped is less controversial than other matters under
debate; after all, it doesn't cost landlords anything.
More than 75 tenants, includin$ many retired persons, picketed the
New School for Social Research on June 12 to protest the anti-tenant
positions taken by Center for New York City Affairs Dean Henry
Cohen, a "swing" member of the Temporary State Commission on
Rental Housing.
During the summer, the commission will generally
meet weekly, struggling to complete voting on rent
controls. I believe that readers of City Limits would find
monitoring these meetings, which by law are open to the
public, to be a fascinating and revelatory experience.
Meetings are held on the 60th floor of 2 World Trade
Center; call the commission at 212/ 488-4502 for the
schedule. See you there. 0
Michael McKee, coordinator of the statewide Peoples
Housing Network, is a member of the Temporary State
Commission on Rental Housing.
7
RENT HIKES UPSET TENANTS
Amid stormy reactions from some 100 tenants attend-
ing its June 27 session, the New York City Rent Guide-
lines Board voted to raise rents as much as 20 per cent in
the city's 850,000,rent-stabilized apartments.
Under the new regulations, effective July 1, lease
renewals will be 8.5 per cent for one year, 12 per cent for
two years, and 15 per cent for three years. In addition,
the board approved a five per cent increase for a new te-
nant who moves into a vacant rent-stabilized apartment.
This tenant must also sign a vacancy lease.
If a tenant is paying $300 a month in rent now, his
new rent under the three-year renewal rate will be $345.
Commenting on the RGB's decision, Jane Benedict,
head of the Metropolitan Council on Housing, said,
"They did precisely what they wanted to do. The
meeting was a joke. The anger of the people is so justi-
fied ... The average person and the poor will have to
bear the burden ... The hysteria is over the fuel costs,
but why don't they make the landlords show what they
pay?"
According to Benedict, the steering committee of the
Coalition Against Rent Increase Passalongs (CARIP)
plans to bring a law suit against the RGB.
In a related manner, Mayor Edward I. Koch has
asked the City Council to raise rents up to five per cent
in the city's 350,000 to 400,000 rent-controlled apart-
ments to cover the rising cost of fuel. Rent control
tenants already pay an annual 7.5 per cent increase in
their rents under the Maximum Base Rent (MBR) for-
mula.
Membership on the RGB consists of nine mayoral ap-
pointees, with two representatives each for tenants and
owners. Since its inception in 1969, the RGB had not set
such high increases as were mandated June 27. In 1969,
increases ranged from 10 to 15 per cent for renewals,
while a ten per cent increase on vacant apartments was
permissible.
On April 10, the RGB met and adopted a special
"add on" order for increased fuel costs, occuring since
1978. This surcharge, retroactive to March
1, 1979, permitted rent increases of 7, 8.5, and 9 per
cent for one, two and three-year leases signed in
1978-79.
. In the only pro-tenant action June 27, the RGB voted
against allowing landlords to charge additional rent
where the owner pays for the electricity. In the past,
owners were permitted to charge between .05 and 4 per
cent for electricity. 0
FUEL PURCHASE PLAN
Nineteen neighborhood groups and eight tenant
associations in New York City communities have joined
together to buy fue,l cooperatively for about 170 low and
moderate income buildings.
The fuel consortium, which will be administered by
the Association of Neighborhood Housing Developers,
Inc., will purchase over five million gallons of oil in the
first year alone.
Two years ago, ANHD conducted a feasibility study
of community groups' purchasing f).lel in large quan-
tities and determined that the consumption rate did not
warrant an independent fuel cooperative. An updated
research project performed by VISTA workers this year
proved the opposite. Increased community and tenant
management of buildings and the overall dramatic
increase in fuel costs have made the concept of a
consortium a cost-saving reality.
The Federation of Protestant Welfare Agencies, Inc.
will negotiate with fuel delivery companies within the
next few weeks to establish a basic price formula for the
plan member organizations. [In this bidding proce-
dure, the per-barrel Exxon price, which is published
weekly in the Journal of Commerce is translated into a
per-gallon price (42 gallons in a barrel), and a margin
above that per-gallon base price is agreed to. However
much the base price varies, the margin-.0053 per gal-
lon, for example-will remain the same.]
Through group purchasing, the fuel plan hopes to
save between 10 and 15 cents per gallon. It cannot
predict what oil prices will be this year as they may rise
to anywhere from 80 to 90 cents per gallon. On a sample
building last year's prices (average 71 cents), a saving
of 15 cents per gallon would result in a monthly rental
saving of $11.75 on an apartment that rents for $190.
Under the guidelines of the consortium, buildings
may be added over the fall and winter months, but those
buildings joining in mid-winter will not receive the same
price advantage as the original members.
The balance for all buildings will be deposited in a
"ready assets fund" which will yield about nine per cent
in interest-enough to cover ANHD's administrative
costs and possibly, at a later date, provide surplus funds
for rebates to members.
Boiler and burner service will be guaranteed to each
building as the plan will not do business with companies
that do not provide service. Contracts for service, how-
ever, will be made on an individual basis between the
community group or tenant association and the fuel
company.
Each building will be billed on an "even monthly
usage" basis means that if it consumes 24,000
gallons of oil annually, it will receive bills each month of
2,000 even though its actual usage in June, for example,
may be 1,000 and in January, 4,000.
8
ANHD will send estimated fuel delivery bills at thE
"beginning of each month. If ANHD overestimates
dollar amounts to cover costs over the contract period,
it will refund the full amount of the surplus in April and
May, 1980, in the form of lower fuel bills.
Buildings managed by tenants associations or neigh-
borhood groups will be eligible for membership in the
consortium as long as they serve primarily low income
tenants, and are a non-profit organization. There is no
application fee.
A group or building may withdraw from the consor-
tium by giving written notice, and the total amount in the
fund balance after payments have been made for all
fuel delivered will be refunded.
In a year' s time, ANHD plans to add two more joint
purchasing plans-liability and fire insurance-to its
fuel purchasing consortium. 0 Anne Hartwell
CALIFANO FAVORING
WELFARE PROJECT
Health, Education and Welfare Secretary Joseph
Califano is likely to approve, probably in July, Mayor
Koch's request to allow the city to place thousands of
welfare tenants in the West Bronx on an automatic rent
payment system, City Limits has learned.
Califano would have to waive two laws in order for
the city to expand its existing policy of selectively issuing
welfare checks that can be used only to pay rent (two-
party checks) or paying the rent to the landlord directly.
If Califano approves the "demonstration" project-
and HEW sources say he will-it will be over the oppo-
sition of many welfare rights groups, tenants organiza-
tions elected officials and social welfare agencies. They
it will provide a windfall to landlords, will not
lead to better housing and will illegally deprive welfare
recipients of their rights.
The Downtown Welfare Advocate Center has also
argued that the demonstration should be rejected on the
grounds that the city currently violates the law in the
way it defines "mismanagement" of benefits as justifi-
cation for issuing two-party checks to some welfare
families.
There are 355,000 families and single persons who
receive welfare benefits in New York City, 250,000
under Aid to Families with Dependent Children and
105,000 under Home Relief. Restricted checks are now
issued to 40,000 families and individuals under AFDC
and 10,500 under HR, according to city figures.
In 1977, the New York State Legislature eliminated
from the Home Relief program the last remnants of
recipient control over welfare benefits. AFDC, how-
ever, is governed by federal law, which puts two legal
obstacles in the way of expansion of the restricted check
system. First, recipient control of how AFDC benefits
are spent may be restricted only if the agency finds mis-
management of funds affecting the welfare of the chil-
dren in the family. (This is the law the city currently
violates, according to DWAC, by issuing a two-party
check whenever a landlord, including the city, claims
that rent has not been paid without even checking with
the tenant). Second, there is a 20 per cent ceiling on the
number of AFDC recipient s whose control over benefits
may be restricted . New York City is very close to the
limit now.
These are the two laws that Califano would be
waiving in approving the demonstration to be run in
Bronx Community districts 5 and 7. AFDC recipients in
those areas whose landlords enrolled in the project
would be issued two-party checks for rent if their land-
lord said they had paid rent late for whatever reason
during any of the previous six months; if the city said
the recipients had not returned a form which would be
sent to them explaining the project or if they "volun-
tarily" agreed to participate.
Opponents of the demonstration contend that guar-
anteeing rent payment by welfare tenants removes the
only real incentive landlords have to provide services-
the knowledge that rent can be withheld if they do not.
The New York City chapter of the National Associa-
tion of Social Workers issued a position statement in
May, declaring that welfare families are concentrated in
the worst neighborhoods with the poorest housing, that
$500 million in public funds spent annually for shelter
allowances only perpetuates those conditions and that
expansion of the two-party checks system would be a
"non-solution" that "would not alter this situation."
Also on Califano's desk is a request from the state of
Michigan to institute a restricted payment system for the
entire city of Detroit. 0
SHARE THE WEALTH
Private developers of Section 8 housing projects will
be required to share part of their tax shelter proceeds
with locally-based community organizations in the
future, according to a new city policy.
For now, the policy is limited to Section 8 contracts in
ten neighborhoods specially designated as Neighbor-
hood Strategy Areas.
With 5,000 Section 8 units set aside for NSA's, the
share of the tax shelter proceeds earned by community
organizations is expected to total several million dollars.
In the past, developers backed by investors built the
housing and reaped the lucrative financial benefits. (See
Cily Limits, May, 1979)
In announcing the policy, HPD said locally-based
groups will be designated by Community Boards. All
agreements between developers and the boards,
including how the community'S share of funds will be
spent, will require approval by HPD, according to
Steven Grathwohl in the agency's community develop-
ment office.
9
The city has been accepting Section 8 applications
from sponsors of rehabilitation or new construction
projects in the ten NSA's. They are Kingsbridge/ Bed-
ford Park in the Bronx; Sunset Park, Bedford Stuy-
vesant, North Flatbush and Crown Heights in Brooklyn;
Hamilton Heights, Washington Heights, Manhattan
Valley and Harlem Gateway in Manhattan and Far
Rockaway in Queens.
The policy of linking developers with community
organizations could be expanded to all Section 8
projects approved by the city if it is considered success-
ful in the NSA's, according to HPD officials. 0
DAVIS-BACON ESCAPES
The House of Representatives, by a vote of 244 to
155, has rejected a renewed attempt to exempt neighbor-
hood self-help housing projects from the Davis-Bacon
act.
Enacted 44 years ago, Davis-Bacon requires construc-
tion workers on federally supported projects to be paid
"prevailing" wages. The law was designed to protect
union scale wages by preventing a builder from import-
ing lower-paid workers from outside the area.
Compliance with Davis-Bacon standards has posed a
serious problem for community organizations
sponsoring sweat equity or other rehabilitation projects
in low income neighborhoods because of the high labor
cost. The law has created a conflict betwen legitimate
housing production goals and legitimate employment
goals.
The law has been waived for projects using federal
312 loan funds but not for those with Community De-
velopment Block Grant funds. The requirements apply
to buildings with eight or more units.
The House upheld the banking committee in rejecting
the exemption, which was proposed by Rep. George
Hansen, R-Idaho, as an amendment to the fiscal 1980
housing authorization bill. Last year, a similar proposal
was beaten by only 29 votes, 217 to 188. 0
JULY 19- BOARD OF ESTI MA TE
MEETING
On July 19, the Koch Administration will present its
sales policy to the Board of Estimate. Without protec-
tion for tenants, the sale of city-owned buildings to the
private, profit-making sector will lead to displacement
and further deterioration of this housing. It is important
for everyone in New York City concerned with housing
to attend this meeting and testify.
For further information, call Sandy Bayer or Marilyn
Phelan at 566-0719 or 566-0709. 0
STATE CUTS INSURANCE RATES
AS GROUPS FIGHT REDLINING
by Marion Swan
The sky high cost of insuring properties in many areas
of New York State that are being redlined by private
companies will drop dramatically as a result of a new
bill approved by the State Legislature.
The bill is a compromise that vastly reduces the rates
for properties forced into an insurance pool called Fair
Access to Insurance Requirements, or the FAIR Plan.
However, it does not go far enough to bring the state
into compliance with federal law that ties eligibility for
riot reinsurance to lower FAIR Plan rates.
Meanwhile, efforts by neighborhood and tenant rep-
resentatives to require insurance companies to disclose
the number, type and location of policies they approve
and refuse-information similar to what banks have to
report-have fallen on deaf ears at the State Insurance
Department.
A meeting in Albany on May 17 between 35 repre-
sentatives from neighborhoods across the state and
State Insurance Commissioner Albert Lewis ended
abruptly after a mere 30 minutes. Lewis became visibly
upset when he discovered that he wasn't able to control
the meeting. When confronted by a demand for public
disclosure, Lewis said, "The fact that you need dis-
closure is not something I have to respond to." Insisting
that he would not be cross-examined, Lewis said, "If
you had information, would you do anything with it?"
As the meeting continued to heat up, Lewis began to
walk out, cursing the delegation as his path was blocked
momentarily. Following the stormy session, members of
the group met with Michael DelGuidice, a top aide to
Governor Carey, to demand Lewis's resignation and
press further for public disclosure.
In a subsequent letter to DelGuidice, Timothy
O'Hanlon, project coordinator with South Brooklyn
A.I.D., wrote that, "A serious prerequisite to serious
discussions is disclosure by these companies of the loca-
tion of their policies."
The FAIR Plan was created because of the blanket
denial of fire and homeowners insurance in many lower
income neighborhoods. FAIR Plan rates, however, are
up to five times higher than those paid in the private
market. The highest prices, therefore, are paid by those
who can least afford it. The withholding of insurance on
a basis of general location and the setting of rates that
make the cost of insurance prohibitive are among a
number of recognized causes of neighborhood decline.
Federal law requires states to reduce FAIR Plan rates
equal to the level charged for private insurance or suffer
the loss of riot reinsurance under which the federal
government shares with private insurers the risks posed
by urban disorders.
10
New York State lost its eligibility for the riot rein-
surance in March by not complying with the law. That
will remain unchanged by the new state legislation,
which sets the following FAI R Plan rates: one-to-four
family owner occupied buildings-20 per cent above
regular market rates; one-to-four-family non owner
occupied and five-to-eight family buildings-30 per cent
above market rates; more than eight-family
buildings-40 per cent above market rates.
A similar scale applies to commercial property with
small "mom and pop" stores paying no more than 20
per cent above market levels and 30 per cent higher for
other businesses.
The bill, which must be signed into law by Governor
Carey, makes it illegal to di scontinue or deny insurance
based solely on the location of the policy. It provides for
fines of up to $5,000.
Pressure by the New York State Tenant and Neigh-
borhood Coalition and other groups helped break the
stalemate between the Assembly and the Senate to pro-
duce the compromise legislation.
[The Illinois Department of Insurance slapped two
unusually large fines totalling $104,000 in June on two
insurance companies in Chicago that were found to
have denied homeowners policies solely because of
where the housing was located.
The state fined W.W. Vincent & Co. $50,000 for
using zip code lists to refuse insurance policies and fined
the Insurance Co. of Illinois $54,000 for the same viola-
tion plus filing incorrect information.
Allegations of insurance redlining were brought
against the two companies by the Metropolitan Area
Housing Alliance of Chicago.]
The F AI R Plan earned $11 million in profits last year.
An aide to Assemblyman Vincent Nicolosi, D-Queens,
chairman of the Insurance Committee, said the reduc-
tion in the rates is expected to create a $14 million
deficit, all of which should be made up by a state insur-
ance reserve fund. Additional deficits would be covered
by premium increases of up to one per cent (50 cents per
year) for the average customer.
The Assembly earlier approved a bill that would have
cut FAIR Plan rates to market levels. The Senate
refused to go along.
Community organizations in the Midwest and North-
east have been negotiating directly with insurance com-
panies concerning policies suitable to urban areas, loca-
tion of brokers, local advertising, reinstatement of
cancelled clients and reinvestment in rehabilitation
projects. For example:
Representatives of 22 insurance companies met
..
t
with hundreds of neighborhood representative in Chica-
go to discuss programs for meeting the insurance needs
of urban areas. Allstate Insurance Co. has met with the
Metropolitan Area Housing Alliance of Chicago, the
Buckeye Woodland Community Congress of Cleveland,
the Northside Redlining Task Force of Minneapolis and
other community groups in Detroit, St. Louis and
Kansas City.
Buffalo-Sixty representatives of the Grant-Forest
Concerned Residents and the Waterfront Lakeview
United Neighborhoods met with representatives of
Travelers Insurance Company. Travelers agreed to con-
sider naming organization-recommended agents
presently located on the West Side to represent the
company. Travelers also agreed to improved review pro-
cedures that include written notification within 10
business days of the reasons for denying an application.
Negotiations will continue over the summer .
Rochester-The Insurance Redlining Action Group
(I RAP) has been meeting with Allstate. The regional
office has asked the home office for data on losses,
premiums, number of refusals and cancellations by
census tract for the purposes of public disclosure. The
company also agreed to establish a new basic home-
owners policy, recontact all those whose policies were
cancelled or not renewed once the new policy is
approved, consider local newspaper advertising and
study the feasibility of placing offices in Rochester,
Utica and Syracuse .
Brooklyn-South Brooklyn A.I.D., after receiving
disclosure information for Brooklyn from Aetna, All-
state and Hartford, has been negotiating points of af-
firmative plans for meeting local insurance needs . With
Hartford, A.I.D. is discussing a plan for reinstating
thousands of policies cancelled in 1978, rehiring dozens
of fired brokers and an affirmative marketing program .
Bronx-The Northwest Bronx Community &
Clergy Coalition has recently reached agreement with
Aetna on an affirmative insurance program. Aetna has
agreed to hire new brokers, advertise locally and have
all applications processed by brokers inspected by the
head office in New York City.
However, the likelihood of a statewide insurance
policy disclosure remains uncertain at best. The current
position of the superintendent of insurance is that the
matter of insurance redlining can be left to his office to
solve.
Article 3, Subsection 26 of the New York State Insur-
ance Law gives the superintendent the power to deter-
mine the form and content of required annual reports
from insurance companies. Article 3 Subsection 27 gives
the superintendent the power to call for special reports.
This means that Lewis can order disclosure now. 0
Marion Swan is western New York State coordinator
for Peoples Housing Network.
11
STEIN AIDE JOINS HPD
Ronald Marino, former executive assistant and hous-
ing specialist in Borough President Andrew Stein's of-
fice, is the new deputy commissioner of policy and
government relations at HPD.
He replaces Marvin Markus, who resigned after five-
and-one-half years of service at HPD, to join the Wall
Street firm of Baer, Stearns and Co. as a municipal
bonds underwriter.
An urban affairs expert and planner who has had
considerable dealings with New York City community
groups through Stein's office, Marino began work at
HPD June 18.
Commenting on his new position, Marino said, "I ex-
pect to become quite involved in developing policy ...
Some of the areas that I will be confronting in depth are
the J -51 revisions, public auctions for In Rems, the fuel
passalong, and rent restructuring within In Rem hous-
ing." He also said that he would like to see "more
teeth" in eode enforcement.
HPD is still interviewing candidates for director of
the community management program, the position
formerly held by Sandra Moore. 0
Hundreds oj Lower East Side residents recently celebrated a ground
breaking jor the rehabilitation oj 250 units in 14 abandoned buildings
on 10th and lIth Streets between Avenues Band C. The development
cost will be $48,000 per unit and tenants will receive 100 per cent Sec-
tion 8 subsidy. Co-sponsors oj the project are the Coalition jor Hous-
ing Development, Inc., a local community housing group, and the
Center jor Housing Partnerships in the City oj New York. The project
has been in the planning stage jor more than seven years.
QUESTIONS REMAIN AS CO-OP BANK
MOVES TOWARD EARLY 1980 START
by Michael Freedberg
The Co-op Bank is moving steadily through Congress
toward making its first loan. When operational, the
bank will provide major financial and technical assis-
tance to all kinds of consumer cooperatives, including
housing co-ops.
As City Limits went to press, funding for FY 79
seemed likely-giving the bank operating funds as early
as mid-August, although it will probably be early next
year before the bank actually begins to provide loans.
Soon to be announced are the nominations by Presi-
dent Carter of the 13 members of the board of directors
(see separate list) and the important director of the
Office of Self-Help Development and Technical Assis-
tance. The nominees must be approved by the Senate
after which they must find a location for the bank,
appoint executive officers, hire staff, promulgate rules
and regulations and establish lending and technical
assistance procedures.
Appropriations
On June 6, the House voted to appropriate $12.5
million for the bank's FY 79 operations. This includes
$8 million for the general market rate loan fund, $3
million for the low interest loans and technical assis-
tance from the Self-Help Development Office and $1.5
million for bank administration.
This compares quite favorably with the Administra-
tion's original request. The House also approved a $74
million appropriation for FY 80, as against $88.8 mil-
lion requested. The House action was encouraging to
bank lobbyists, considering the budget-cutting, anti-
inflation mood of Congress. They expect the Senate to
go along with the House figures. Additional monies-
around $300 million-are authorized by the bank legis-
lation for the next five years.
Low Income Benefits
The Bank's success thus far in Congress is due to the
active support given the legislation by an unusually wide
coalition of community, cooperative, church, consumer
and labor groups. Housing and neighborhood groups in
need of additional funding for co-op housing and
community-based economic development stand to
benefit from the bank. There is a specific provision in
the legislation requiring the bank to make its "best
efforts" to provide at least 35 per cent of its resources
for low income cooperatives. The Self-Help Develop-
ment Fund must target all its funds to low income and
new cooperatives. In addition, initial indications are
that the proposed board nominees will be responsive to
low income, neighborhood needs.
Despite the potential benefits, community groups
should be aware that real statutory and structural prob-
12
lems have emerged in terms of the bank's ability to meet
low income needs. Among them are:
Severe limitations on the bank's capacity to provide
start-up venture and equity financing.
Extremely limited funds for technical assistance.
High interest rates under the bank's general (and
primary) loan fund.
Pressure on the bank to make "safe" loans to exist-
ing cooperatives because of the need to go back to
Congress for additional appropriations.
A conservative bias which may develop as the bank
tries to sell bonds on the private bond market.
In addition, proposed rules and regulations for the
bank, which have been drafted by a federal interagency
task force, appear to be too restrictive for neighborhood
groups. The task force's credit requirements would be
prohibitive for many low income communities, while its
narrow interpretation of the Self-Help Development
Fund could reduce the bank's effectiveness in meeting
low income credit needs. The task force has also not
developed a plan for local bank branches, with the
result that the bank may adopt a highly centralized
organizational structure.
Not Binding
Luckily, the task force's proposed regulations are not
binding on the bank. The new board will draft its own.
To do this, it will probably hold public hearings in the
fall, providing neighborhood and community groups a
real opportunity to influence the bank's role in support-
ing non-profit housing and neighborhood projects.
There are still many unanswered questions about the
bank. What incentives will there be for rehabilitation
over new construction? What balance will be struck
between the need for existing home improvements as
against new co-op housing? Will there be limits on the
role of developers, speculative and non-profit, and will
community groups be encouraged to play an active role?
Should the bank place special emphasis on housing
programs designed to involve co-opers in the planning,
and construction of their housing? Will the bank
develop anti-displacement guidelines? Will loans cover
so-called indirect costs including fire insurance, energy
conservation, management fees, legal services and
refinancing?
If the bank's enormous potential is to be realized,
neighborhood groups should be monitoring the bank's
regulations, participating in public hearings and
beginning to develop cooperative plans as an important
part of their community development effort.
For further information, contact the Co-op Bank
Monitoring and Assistance Project, 1901 Que St. NW,
Washington D.C. 20009 or call (202) 234-9382; for
current information on the appropriations, contact
Congresswatch, 133 C Street, SE, Washington D.C. or
call (202) 546-4996. 0
Michael Freedberg is on the staff of the Conference
on Alternative State and Local Policies in Washington.
City Limits has learned that the following people were
on President Carter's final list of nominees for the
board of the Co-op Bank:
Public
Joseph Hansknecht, Director of Public Affairs, League
Life Insurance Co., Board Member, Southern Cooper-
ative Development Fund
Derek Shearer, Public Interest Economist, member of
Co-opportunity in Santa Monica, California
Father A. J. McKnight, President, Southern Cooper-
ative Development Fund
Frances Levenson, Director of Urban Housing, New
York Bank for Savings, New York City
Juan Patlan, Founder and Executive Director of Mexi-
can-American Unity Council, San Antonio, Texas
Ron Gryzwinski, President, South Shore Bank, Chicago
Government
Lawrence Connell, Administrator, National Credit
Union Administration
Msgr. Geno Baroni, Assistant Secretary for Neighbor-
hoods, Voluntary Associations and Consumer Pro-
tection, HUD
Sam Brown, Director, ACTION
Roger C. Altman, Assistant Secretary, Department of
the Treasury
Dr. Patricia Burr, Assistant Administrator for Manage-
ment Assistance, Small Business Administration
Graciela Olivarez, Community Services Administration
Carol Tucker Former, U.S. Department of Agriculture ~
Advertisement
Neighborhood, The Journal For City Preservation,
is a publication of the New York Urban Coalition that
focuses on the importance of strong neighborhoods
for the preservation and revitalization of cities. To
achieve this end, Neighborhood educates, informs,
and advocates policies which advance the interests
of neighborhoods. Each issue profiles a particular
New York City neighborhood, examining that neigh-
borhood in depth through its social and civic organ-
izations, its vital statistics, pertinent government
programs, and other relevant information. As a
regular feature, Neighborhood also includes an
interview with a seminal thinker in urban/environ-
mental affairs. Subscriptions: $8 for four issues
from Neighborhood, New York Urban Coalition,
1270 Avenue of the Americas, N.Y.C. 10020.
13
NEW PUBLICATIONS
How to Get Your Day (Or Night) in Small Claims Court.
Available from New York Public Interest Research
Group (NYPIRG) Publications, 5 Beekman St., Room
1,000, New York, New York 10038 or call 212-349-6460;
50 cents each; lower rates available for bulk purchases.
The 27-page booklet lists the locations of the small
claims courts and explains when and how to file a claim,
how to prepare for a hearing, what the hearing pro-
cedures are and how to collect a judgment.
Residents' Satisfaction in HUD-Assisted Housing: De-
sign and Management Factors. By Guido Francescato,
Sue Weidermann, James R. Anderson and Richard
Chenoweth of the University of Illinois Housing Re-
search and Development Program. Available from
Policy Development and Research, HUD, Washington
D.C. 20410 or call 202-755-5544. It is also for sale at the
U.S. Goverment Printing Office. This study has con-
cluded that tenants in government-subsidized housing
are happier without the integration of different social,
economic and cultural groups, and recommends against
this policy of integration.
The Redline Continues: The Community Reinvestment
Act Statements: The Reality Behind The Rhetoric. A
report from the New York City Coalition Against Red-
lining, March, 1979. Available from the People's
Housing Network, c/o Roger Hayes, 115 East 23rd St.,
New York, New York 10010; 50 cents each. This report
details the complete disregard local banks have dis-
played for the New York consumer and the law against
redlining.
Thinking Small: Transportation's Role in Neighbor-
hood Revitalization. Published by the U.S. Department
of Transportation, Urban Mass Transportation Admin-
istration. Available from NTIS, 5282 Port Royal Road,
Springfield, Virginia 22151; the cost is $8.00 each. This
report, prepared by the Conservation Foundation, dis-
cusses small-scale transportation solutions as a means
of revitalizing urban neighborhoods. It reports on
citi?en involvement in planning for improved trans-
portation, and cites examples in several cities where
citizens have been involved in successful planning.
A Survey of Residents' Perceptions of Neighborhood
Services in the Southeast Bronx and Central Harlem.
Conducted by Louis Harris and Associates for the Com-
munity Service Society of New York, May, 1979. Avail-
able through CSS, 105 East 22nd St., New York, New
York 10010 or call Vera Avery at 212-254-8900, ext.
336. The study interviewed 1,000 residents in Central
Harlem and the Mott Haven area of the Southeast
Bronx and found that a majority of the people believed
that the quality of life and most city services had
deteriorated in their neighborhoods in the past few
years. Most residents also expressed feelings of aliena-
tion from government and government officials. The
poorer the resident, the greater was his alienation. 0
BOWERY SHELTER UNDER SIEGE-
GENTRIFICATION AT THE GATES
Men lounge around on the street in front ot the Shelter waiting for the supper hour to begin.
by Susan Baldwin
"I think the only humane thing to do would be to
close this place down. It's overcrowded and there is no
delivery of services. Our children cannot grow in this
neighborhood because of it."
Richard Boodman, a longtime Lower East Side
resident who deals in residential and commercial real
estate in the vicinity of the Shelter Care Center for Men
on Third Street between Second and Third Avenues,
offered this projection for the future of this Bowery
refuge for homeless men which, since its founding in
1949, has been the only city facility to deal with the
basic needs of one of New York City's most neglected
populations.
"This Shelter is a program of last resort, and for
every man we serve here, there are at least ten others like
him out there who are not being served," said Calvin
Reid, as he showed a visitor around the premises on a
recent tour. Reid is the embattled administrator of the
city's only shelter for homeless men. "We are always
hearing about depopulating, decentralizing, or closing
this facility down," he added. "Our cachement area is
the entire city of New York and that includes the five
14
boroughs. "
Reid's domain is a rambling, red brick former YMCA
that could be mistaken for a school, complete with a
playground, sometime parking lot, next to it.
It is supper time and shabby men wait in a cavernous
lobby, filled with the blast of disco from loud speakers,
to be called to the Dickensian mess hall below in the
building's basement. This night they would eat tuna fish
casserole and beet salad and then be turned out to the
street with a hotel voucher for the night.
Outside the neighborhood residents appear not to
notice the ritual. A man is giving his dog a bath in an
open fire hydrant. A young woman sweeps a play-
ground across the street in anticipation of a summer
youth program. As often, appearances can be deceiving,
for the Shelter and its clients are much on the residents'
minds.
For years, this Lower East Side neighborhood has
been coping with the Shelter's clients who once were
primarily harmless, elderly alcoholics and are now a
growing band of younger violent and psychotic men.
Recent neighborhood statistics list this new population
at between 55 and 65 per cent.
"We know that the neighborhood feels threatened,
but anytime you talk about any alternative plan to the
Shelter, you're talking about money," Reid explained,
noting that the funding is hard to come by and proposed
plans to relocate "mini-shelters" in the other boroughs
are almost impossible.
According to his figures, the annual Shelter budget is
about $2.5 million. The average cost per day to
maintain each client is $12.
At present, the Shelter serves three meals each day to
between 1,100 and 1,500 men. The annual regular pop-
ulation receiving services ranges from 8,000 to 10,000
cl ients.
In order to be accepted at the Shelter, a newcomer
must establish that he is homeless and destitute. He is
asked his name, birthdate, and social security number.
He must be X-rayed for tuberculosis and, if he seeks
housing, he can receive a hotel voucher for the maxi-
mum of 30 days. The Shelter issues about 950 hotel chits
per night.
The Shelter is not a residential facility. As a result, the
men who come there for meals spend a great deal of
time on the street outside during the day and into the
evening. And if the local lodgings or "flop houses" are
filled or off-bounds to them, as many as several hun-
dred men have been known to spend a cold winter night
sleeping on the floor and in chairs in the Shelter's "big
room," a major holding area for the facility's clients.
According to Reid, there are only five hotels in the
area that the Shelter still uses for the men because most
of the others have been sold for other use.
"There is a very frenzied real estate market on the
Bowery," he explained. "The result is that we have a
housing crisis and so does the neighborhood." In the
past, he added, the Shelter had an overnight capacity of
580 beds.
The most recent neighborhood proposal to improve
conditions at the Shelter recommends that the popula-
tion be decreased to 400 men and that mini-shelters be
set up in the other four boroughs to handle the rest of
the clients. Proponents of this plan maintain that it will
discourage the influx of recently released mental pa-
tients into the Lower East Side.
"We have been meeting on a regular basis with Sena-
tor (Manfred) Ohrenstein and have pushed our ultima-
tum-that there be one facility in each borough," said
Sister Elizabeth Kelehan, chairwoman of the Coalition
on the Men's Shelter. "By the end of the year, we hope
to have a facility in one more borough and to have set
up a firm policy to locate each patient released from
area mental hospitals into halfway houses in the same
zip code area."
State Senator Ohrenstein (D-Man.), at the behest of
some community residents, recently was instrumental in
holding up $300,000 in state funds to underwrite a
special crisis intervention and stabilization team to
15
screen the psychotic patients.
"These residents believe that this psychotic screening
service will serve as a magnet to attract more clients to
the Shelter, but I don't think that is the case. Most
people don't want to be screened," said Sarah Connell,
deputy regional director of the State Department of
Mental Hygiene. "I think the only solution to moving
these people out is funding this team."
Connell also said that the state facilities do not release
patients directly to the Shelter but that it is possible the
patients end up there because they are familiar with the
neighborhood.
Susan Leelike, chairwoman of the rehabilitation com-
mittee of Community Board 3, maintains that the city
has no choice but to decentralize the Shelter.
"The city's administrative code states that we have
the responsiblity to feed and provide shelter for the
homeless, but it never said that you had to do it in one
place," she asserted ,emphasizing that the present, anti-
quated facility is being used beyond capacity.
"It used to be that the presence of the Shelter de-
creased the value of real estate around here," she said.
"Now with all the renovation and speculation in gen-
eral, the real estate value is going up in spite of the
Shelter. And those of us who have stuck it out to save
our affordable housing are now being threatened by
being bought out."
Leelike fears the intrusion of large real estate interests
in the neighborhood, while Anne Pollon, a social
worker who lives in a loft on Fourth Street, believes that
institutions such as New York University or Cooper
Union have their eyes on the neighborhood.
"NYU has said repeatedly that it needs to expand in
order to survive," said Pollon. "But we do not want
them east of the Bowery."
Pollon is proposing a plan to thin out and identify the
Shelter patients, while making essential capital repairs
to make the facility habitable.
"I do not want to close down the Shelter. I just want
to fix it up, and I think we must do this right away if we
do -not want chaos in this neighborhood."
Pollon has also recommended that the Shelter begin
to notify state mental hospitals, all social agencies, and
churches of its plans to reduce the population.
"If we fix up the Shelter and reduce the number of
men, while excluding those with histories of violence,
we have a chance to save our neighborhood and keep
the speculators out."
The current city budget has allocated $200,000 in
Community Development funds to fix up the Men's
Shelter.
"I think this is a ridiculous waste of $200,000," said
Carlos Perez, chairman of the Cooper Square Com-
munity Development Committee. "This place doesn't
need to be fixed up with paint. This money could be
much better used to buy some place away from the city
for the men to live." Perez has proposed that the Shelter
continued on page 19
EQUAL EMPLOYMENT: WHO CARES?
by Bernard Cohen
Not enough is really known about whether New York
City discriminates in hiring,according to interviews with
city and federal officials. Its system of collecting em-
ployment data is regarded as antiquated and inefficient.
Responsibility for monitoring compliance with equal
opportunity laws is scattered among many government
agencies. And there is a belief among at least some
officials that the whole issue of fair hiring has not been
taken seriously enough.
Federal equal employment opportunity (EEO) law
prohibits discrimination in employment on grounds of
race, color, national origin, religion or sex.
Every year, the city must submit to the federal Equal
Employment Opportunity Commission a report on the
number of employees it has, broken down by so-called
"protected" category (female, black, etc.) and salary
range. In addition, the U.S. Department of Housing
and Urban Development monitors the city's EEO per-
formance for agencies and projects that use Community
Development funds .
How reliable New York's data are appears to be a
question in the minds of knowledgeable officials. Inde-
pendent research conducted by City Limits discovered
that the official figures for the number of employes in
the city's housing agency in 1975 and 1976 are off by
nearly 700 per cent. What is more alarming is that the
figures have never been corrected, although the error
was detected in 1977.
"One would think that the City of New York would
have the most sophisticated system for compiling this
information," said an official of the Department of
Personnel, which collects and computerizes employment
data for all the city agencies. "In fact, it is so manually
put together and half of it is wrong."
Two years ago, HUD determined that the city's
record of hiring and promoting blacks, Hispanics and
other minority employes was inadequate. HUD ordered
the city to rectify the imbalance, including the establish-
ment of "indicators" for each agency. No indicators
have ever been established, and HUD officials say they
are still waiting for the city to supply accurate employ-
ment information.
"We asked the city to develop a system we could rely
on at the end of 1977, beginning of 1978," said Frank
Torres, who is in charge of equal opportunity monitor-
ing at HUD. "Thelcity said it would try to develop a
system. They gave us a draft later in the year, but all it
did was describe the system. There were no results. We
asked them to modify it to show results. The final docu-
ment never came back. A few days ago we asked them
for it again, by coincidence."
In Washington, the EEOC said the city is late in sub-
mitting its 1978 report.
16
The complexity of the problem and the stubbornness
of bureaucracy can be seen in the example of what
happened in 1975 and 1976 with the housing agency,
then called the Housing Development Administration
(HDA) . The employment figures for those years are
grossly inaccurate, showing 657 housing workers in
1975 when in fact there were 4,394. Naturally, the
figures for di stribution of jobs among the protected
subcategories are meaningless since they are based on
the wrong total.
Why? Laila Long, assistant housing commissioner in
charge of equal opportunity blamed the problem on a
computer snafu-apparently only one section of HDA
was counted two years in a row-plus general confusion
among different city agencies over EEO authority and a
two-year tug of war between HDA and Personnel
Department for employment data compiled by the
housing agency.
In late 1974, Mayor Beame issued Executive Order 14
requiring each city agency to designate an EEO Officer
and prepare an EEO plan. In 1975, Long said, HDA
conducted a survey of its employes and sent the raw
data to the Personnel Department, without keeping a
copy. "They were to computerize the information and
send back the survey. With the change in administra-
tion, there was confusion about whether they were to
send the survey back to us or we were to just update
their records. We did not get the documents back for
two years."
Long said she pointed out the discrepancy in the
employment figures in a letter to the Personnel Depart-
ment in February, 1977, apparently to no avail. The
figures have never been corrected. As recently as May,
1979, the city published the wrong data in the Grantee
Performance Report, which Long's office contributed
to and the city submitted to HUD in compliance with
Community Development Block Grant regulations.
Long said she did not know the report's figures were
still wrong because her office is responsible for a dif-
ferent section of the document.
She said that after she learned of the problem in 1977,
the housing agency repeated the survey so that figures
submitted directly to HUD for 1975 were accurate. She
was not sure about 1976.
Criticism of the system tends to be blunted somewhat
by a tolerance based on recognition of special difficult-
ies faced by the city due to its size and the internal up-
heaval brought on by the years of fiscal crisis. Just
monitoring the city is a mammoth undertaking. "When
you talk City of New York-where one section of HPD
(Housing Preservation and Development, the current
name) has more people than HUD's Area office-
you're expecting a lot," said Torres.
However, a source in the Office of Mangement of
Budget who is familiar with housing and community
development said weak enforcement by HUD was also
to blame. "One of the major problems is that HUD has
no credibility whatsoever," he said. "We do what we
see is in our own best interest. We know damn well that
pushed against the wall, HUD will fall over. It's a con-
ditioned response."
The following is an analysis by City Limits of employ-
ment patterns at HPD based on a comparison of 1979
figures with accurate 1975 data supplied by the agency.
HPD lost 1,300 jobs or 30 per cent of its staff between
1975 and February, 1979. A comparison of the distri-
bution of jobs during that four-year period shows that
women went from 40 per cent to 43 per cent of the
agency, up 3 points; blacks went from 25 per cent to 35
per cent, up 10 points; Hispanics went from 7 per cent
to 8 per cent, up I point.
In the categories ($IO,OOO-a-year and
above) women went from 14 per cent to 24 per cent, up
10 points; blacks went from 13 per cent to 21 per cent,
up 8 points; Hispanics went from 3 per cent to 4 per
cent, up 1 point.
POMP continued
ment fee is six per cent, and no CD funds are available
on a guaranteed basis to underwrite needed repairs. For
the most part, the TIL buildings must pay for repairs
out of the rent roll.
Early in May, the Task Force on City-Owned Prop-
erty, a 60-member coalition of community and tenant
groups and public officials, sent HPD a document that
was highly critical of POMP.
"The Task Force questions the fiscal sanity of taking
scarce funds and applying them toward a management
fee to the same private firms that originally wrote off
these buildings," the report charged. It also asserted the
POMP "lacks safeguards to insure the proper expendi-
ture of city funds and to protect tenants living in those
buildings.' ,
Deputy Commissioner of Property Management
Charles V. Raymond answered the charges in a letter
dated June 1 in which he stressed that POMP is "only
one of several alternative management programs with
which we are experimenting.
"POMP is one of the least expensive alternative
management programs, largely because the firms we
have chosen to work with are well-established with
organizations that can accommodate our buildings with
only small staff increases, which are covered by the
management fee." HPD does not pay for additional
staff hired by the management firm to run POMP.
The task force and other critics are fearful that ten-
ants-many of whom are on fixed incomes-will be
driven out of the POMP buildings by higher, restruc-
17
For 1979, it is only in the lower salary echelons of
$6,000 to $9,999 that female employes outnumber male
employes (774 to 223) and blacks outnumber whites (525
to 288) in 1979. Hispanics number 175 and Orientals
number 9.
Among other findings of the analysis, all 1979 figures:
HPD has 111 employes who earn more than
$25,000-a-year. Of these, 83 per cent are male, 90 per
cent are white, 8 per cent are black, 1 per cent are
Oriental and 1 per cent Hispanic.
HPD has 510 employes who earn between $16,000
and $24,999. Of these, 80 per cent are male, 78 per cent
are white, 17 per cent are black, 3 per cent are Oriental
and 2 per cent Hispanic.
HPD has 688 employes who earn between $13,000
and $15,999. Of these, 81 per cent are male, 74 per cent
are white, 21 per cent are black, 4 per cent are Hispanic
and 1 per cent Oriental.
HPD has 774 employes who earn $10,000 to
$12,999. Of these, 60 per cent are male, 46 per cent are
white, 41 per cent are black, 10 per cent are Hispanic
and 3 per cent are Oriental. 0
tured rents.
According to St. Georges and Reed Orenstein, direc-
tor of POMP, the rents will not be raised until all the
necessary repairs are made.
St. Georges also said that HPD was in the process of
negotiating with the Housing Authority to reserve at
least 1,000 units of existing Section 8 subsidy money to
supplement increased, restructured rents in hardship
cases after the buildings are sold under POMP and the
other alternative management programs.
POMP will be monitored on a month-to-month basis,
and all tenant complaints will be given serious consider-
ation, Orenstein said. In addition, if a management firm
fails to live up to HPD's POMP criteria, its contract will
be cancelled immediately.
"We must take all the programs very seriously, if we
are to solve the city's housing dilemma. That is why we
are working hard to develop an overall procedure for
dealing with our properties," St. Georges concluded.
In the meantime, others wonder if POMP belongs in
the alternative management program, as it does not
involve tenant input in solving the In Rem housing
management crisis.
"They call it an experiment, and if it fails they can
excuse it for that reason," said Marilyn Phelan of the
task force. "On the other hand, if it proves to be effi-
cient, they can play it off against the other tenant and
community-oriented programs and say, 'Let's push this
one (POMP) because it costs a lot less .. It may jeopar-
dize the other programs." 0
ALTERNATIVE CD BUDGET UNVEILED
by Brian Sullivan
As a result of a day long conference attended by over
400 people, a citywide organization of community
groups and technical assistance organizations has
unveiled an alternative Community Development
budget to that proposed by the City of New York for
CD Year 5. The group known as the New York City
Housing and Community Development Coalition, pre-
sented its findings to representative of the City Council
and Board of Estimate.
Each year since 1974 the City of New York has pre-
pared a budget representing its plans for housing, public
services and facilitites and economic development
activities to be undertaken as part of HUQ's Com-
munity Development program. Each year, the CD
Coalition has held city-wide conferences, workshops
and seminars. The Coalition tries to get maximum input
from residents of low and moderate income neighbor-
hoods, who, according to federal law, are supposed to
be the primary beneficiaries of CD funded activities.
Increasingly, the Coalition has become the only effec-
tive voice for an equitable community development
policy in New York City.
Mayors Beame and Koch ma.de persistent attempts to
direct CD benefits to the politically more important
"transition" neighborhoods (largely white, moderate to
middle income neighborhoods threatened by racial or
ethnic changes in their population), or to divert CD
funds to bail out Capital or Expense budget programs.
Althoug .. both of these tactics are clearly in violation of
the spirit as well as the letter of the CD Act, it is only
with the constant threat of legal action and appeals to
Washington that the Coalition has forced HUD to en-
force its own regulations.
The Coalition's efforts have, over the years, been
successful in focusing public attention on the vital issues
involved in community development, so much so that
an estimated $100 million dollars has been redirected
into low and moderate income neighborhoods and
direct benefit programs.
Although the amount of money available this year is
higher than any previous year ($257.8 million) the
competing demands on these fund continue to grow at a
staggering rate:
Housing funds requested by HPD exceeded $100
million.
In Rem (city-owned) properties were variously pro-
jected to need $100 million to $128 million.
Neighborhood Strategy Areas had been tentatively
designated for $50 million to $60 million.
Model Cities Administration had been drastically
reconstructed but its programs still represented at least
$30 to 35 million.
Economic Development had become the
18
Mayor's top priority citywide and could easily absorb
$15 to $20 million in CD funds.
Clearly, these items exceeded the total available with-
out even considering the huge administrative budget
that the city takes off the top for its own staff.
This was the context in which the Fifth Annual CD
Conference was convened. Once again the representa-
tives of low-income neighborhoods gathered to discuss
the CD budget with city officials. Nathan Leventhal,
commissioner of HPD, and Alex Garvin, Director of
Comprehensive Planning at the City Planning Commis-
sion, told those gathered that there was virtually no
money available for addressing new neighborhood
priorities. It was all to be spent on carrying on the on-
going CD programs and meeting other urgent needs. As
the day progressed, however, it became clear that the
budget projections cited above were far from fixed.
In Rem properties are actually budgeted for only
$78 million ($16 million of which goes to Community
Management, an ongoing HPD program) and $13.6
million for repairs to more than 32,000 apartments-
about $450 per unit.
NSA projects add up to only $25 million for the ten
neighborhoods targeted.
All services (including former Model Cities pro-
grams) added up to $45 million.
This leaves over $100 million dollars which should be
available for neighborhood priorities like housing, jobs
and improvements to local community facilities like
parks.
Instead, the city's budget proposed:
Another $15 million for the Participation Loan
Program which just doesn't work and which certainly
(with the banks' interest rates increasing every quarter)
is not getting any better at providing affordable rents to
low-income tenants.
Over $22 million for Code Enforcement, most of
which is a direct transfer from other funding sources to
fund Housing Court and HPD staff who used to be paid
out of city and state monies.
Almost $16 million in nonsensical economic
development programs to give loans to real estate pack-
agers, put in more street lighting in the garment center,
and improve industrial security. None of these seems to
guarantee any new jobs for low and moderate income
New Yorkers .
Over $43 million to pay for administrative and
support staff on the city payroll. ($1.5 million goes
toward preparing the CD application-draft copies of
which were over ten days late in getting to the public.)
In response to this the Coalition drew up a counter-
budget for CD 5 which reflects the priorities of the low
income neighborhoods rather than the priorities of the
bureaucrats who control the purse strings. The counter-
budget calls for:
Cutting the Participation Loan program to $7.5
million. Increasing the Sweat Equity program by $4.5
million. Expanding the SHIP program to more neigh-
borhoods and making available grants as well as loans
to low and moderate income homeowners.
Each CD Economic Development proposal should
be reviewed to see that it in fact can produce more jobs
and contributes to the long term development of the
city's neighborhoods as its economic base. Over $4
million in the city's economic development package
should be scrapped or funded from other sources.
The allocation of $2 million to develop CD projects
that can employ CET A staff in neighborhood improve-
ment projects, e.g., housing rehab.
About $2.3 million to be used to develop plans for
the next twenty-three Neighborhood Strategy Areas so
8A Loan continued
to give him a special break.
The uncertainty over whether the program is going to
benefit those for whom it is intended pertains to other
CD-funded programs as well. "The reporting forms are
not useful. They don't assist one to do an analysis of the
programs," said a housing specialist at the City Plan-
ning Commission. "The forms have never kept up with
changes in the programs. Because of that they are a very
poor tool for trying to get out information."
A source at the area office of the U.S. Housing and
Urban Development Department echoed his words.
"Right now the city does not have the information
gathering system that enables it to pull together data at
tlie program level. We assume if its in a low and mod-
erate income census tract, that it is benefitting low and
moderate income persons unless there are substantial
facts and data to the contrary."
Asked how 16 Bushwick loans were erroneously
included in the computer printout for the SA program,
an HPD spokeswoman said the agency had switched the
applications into a different loan program without
changing the records immediately. In fact, the loans
were transferred in late November or early December.
The records were not submitted to the City Planning
Commission to be converted into census tracts and
computerized until the last few days of March, four
months later.
As a result, it remains difficult to say whether the SA
loan program satisfies the mandate that CD funds be
spent principally for the benefit of low and moderate
income persons. 0
19
that they won't be rushed through a mock planning
process as the first ten were. Funds should also qe made
available to structure the current ten NSA plans to ef-
fectively address the true needs and not
the city's convenience .
An increase of over $25 million to go directly into
deferred maintenance and repair of In Rem buildings
and to expand the Community Management Program.
The net result of the Coalition's counterbudget is to
turn the city's CD 5 budget on its head-to look at the
CD program not as a way to save the city money in
Capital and Expense Budget lines, but to respond to the
priorities of the low income neighborhoods. Coalition
Counterbudget is available from the Pratt Center. Call
636-34S6 for a 0
Brian Sullivan is a senior planner with the Pratt
Institute Center for Community and Environmental
Development.
Men's Shelter continued
be relocated in a non-residential area in a closed-down
hospital or school. His sentiments are shared by others
who claim that the Shelter's clientele hurts neighbor-
hood business.
Meanwhile, Robert Trobe, an associate administrator
in the Human Resources Administration's adult services
program, and Councilwoman Miriam Friedlander (O-
Man.) defend the expenditure, stressing that the re-
pairs are necessary if basic amenities are to be provided.
"Talk of closing down the Shelter and not fixing up
the toilets and crumbling walls ranges from self-center-
edness to vigilantism," Friedlander charged. "We must
do something to cope with this terribly serious ' com-
munity problem. But there is an increase in crime in
many communities. Ours is not the only one where
people are killed, mugged, and raped. There is a con-
centration of violence in all low income neighborhoods,
and we cannot blame all our problems here on the men
in the Shelter. "
As controversy swirls around it, the sluggish rhythms
of the Shelter continue unchanged from day to day. One
recent Sunday, a local street watcher contemplating the
scene idly suggested that the place be bombed, while
across the street the ragged knots of men shuffled
toward their evening meal.
As City Limits went to press, city and state officials
were working on a decentralized plan calling for
separate shelters in all five boroughs with a client
capacity of 150 to 175 men each. Under this plan, the
present Shelter would be stabilized at 400 to 500 men.
The estimated cost of this plan is $11.5 million. 0
ASK $12 MIIJLION FOR CREDIT UNIONS
by Selwyn Eiber
Legislation to provide $12 million in seed money for
federally chartered community development credit
unions has been introduced in Congress. The Com-
munity Services Administratiotl (CSA), working jointly
with the National Credit Union Administration
(NCUA), could provide applicants with a maximum
loan of $200,000 in start-up capital according to Wilmer
Theard of NCUA in Washington, O.C., who is a co-
ordinator of this proposed capitalization program.
"This program is in response to President Carter's
urban policy proposal made in March, 1978 which calls
for related agencies to cooperate towards a single
effort," says Theard. If the $12 million budget is
approved by Congress, CSA would be in charge of the
funding while NCUA, a federal regulatory agency,
would oversee the chartering of Community Oevelop-
ment Credit Unions (COCU's) as well as providing
technical assistance.
Existing federally chartered neighborhood credit
unions could also apply for an official designation as a
COCU and they would then be eligible for continuation
funding. Eligibility of state chartered credit unions is
less certain. Credit Unions are borrowing resources for
residents of low-income neighborhoods who have diffi-
culty acquiring high interest loans from private sources.
Also, COCU's reinvest funds back into the neighbor-
hood, which stimulates community development
activities.
A main feature of this proposed capitalization
program, according to Theard, would be the elimina-
tion of the 25,000 population restriction which now
stands as a stipulation for receiving a federal charter. By
abolishing the population restriction, COCU's would
have a much broader base from which to draw capital
and thus stand a greater chance for survival.
The maximum $200,000 loan would be a substantial
increase over what COCU's in the past have used as seed
money, although an accurate, figure on what is necessary
for start-up capital is difficult to determine, according
to AI Alayon who is president of the National Feder-
ation of COCU's. Alayon estimated that between $1.5
million and $2 million in assets is needed for a COCU to
stand on its own.
"The impact of this proposed $12 million program,"
says AIayon, "is minimal if you're only talking about 60
credit unions throughout the country receiving funds,
but we will be able to measure how successful a COCU
can be with proper seed capital and management. The
real promise is if we can get the Credit Union National
Association turned on because then you have people
with know-how and money who can help."
In order for a group to start a COCU, the specific
community the group wishes to serve must be desig-
20
nated as a special impact area or an area involved in re-
vitalization. This designation could come from any
federal or state agency.
Jim Clark, executive director of the National Feder-
ation of COCU's, wants to ensure that the proposed
program not only provides groups with seed capital but
also with technical assistance "and substantial training.
He feels that "without the back-up management you are
creating disaster and this is why so many credit unions
in the past have failed. People just weren't trained."
Officially designated COCU's that receive CSA funds
must realize, Clark added, that the money is in fact seed
capital and should not be looked upon as a government
subsidy. "If the capitalization program is perceived as a
government give-a-way the COCU's will go down the
drain. "
The $12 million proposed budget did receive a setback
in early June when the House Approporiations Com-
mittee did not include funds for COCU's. The Com-
mittee stated in its report that "this proposed new
program is of lower priority than many others." How-
ever, money could be obtained for COCU's when the
budget process reaches the House floor or when the
Senate Appropriations Committee meets in July.
The most recent listings received by Clark from
NCUA indicate that there are 398 COCU's presently
operating nationally.
One of the newest groups to acquire a federal charter
is the North Brooklyn Federal Credit Union (NBFCU)
which received offic.ial word from NCUA's regional
office in Boston on March 8th. Each account in the
credit union is insured to a maximum $40,000 by
NCUA.
Some of the services offered by NBFCU, which are
available to all residents of the Williamsburg-Green-
point community, are savings accounts with dividends
as high as 7!Tfo a year, loans (presently limited to $5(0) at
a rate of I % a month on the unpaid balance, money
orders from Chase Manhattan Bank at 20 each, and
free Citibank traveler's checks. NBFCU also offers a
life insurance plan.
NBFCU started out with substantially less than
$200,000 in seed funding. In October,1978, it received
$9,400 from the Institute of Human Oevelopment, an
arm of the Catholic Charities.
NBFCU now lists over $60,000 in assets.
For further information and assistance contact Jim
Clark at the National Federation of COCU's, 16 Court
Street, Brooklyn, N.Y. 11201, (212) 522-5904.
Selwyn Eiber is a VISTA volunteer with the Associa-
tion/or Neighborhood Development in East Harlem.
Open Space continued
Landscape architect Harr), Dodson and two BarrellO Street youths .
construction funds are being used in the I8-month
demonstration project, marking the first time these
funds have been made directly available to an urban
community group. New York City is contributing
$149,300 in Community Development Block Grant
monies, and the mandatory matching requirement from
the communit y is in the form of "sweat equity" labor.
The Task Force, which includes 25 citywide and local
organizations, is just one effort of a much larger South
Bronx revitali zation plan that was sparked by President
Carter's visit to the area in October, 1977. That plan,
which was to include housing, economic development,
human services and open space development, was
supposed to be the product of a "partnership" between
government and the people of the South Bronx. In fact,
open space development is the only sphere in which
meaningful partnership was ever established.
The Task Force was assembled last year largely
through the efforts of Tom Fox, an energetic ecologist
from the Institute for Self-Reliance in Washington.
Fox, who had been working as a consultant to the Bronx
Frontier Development Corp. and to the Department of
the Interior, had also been a greening activist in New
York and was acquainted with many Washington
bureaucrats through his work at the Institute.
"People on the streets and people in Washington
were all asking me, what can we do in the South Bronx,"
Fox said. "So I got together the best people I knew, and
that was the South Bronx Open Space Task Force. "
Federal , state and city agencies were all in on the
planning from the start. Presidential Assistant Jack
Watson's office, the regional office of the Heritage
Conservation and Recreation Service (which administers
the land and water conservation program), the New
York State and City parks departments and Mayor
Koch's South Bronx Redevelopment Office were all
instrumental, Fox says, in pushing through the project.
Yet, despite the grandness of the scheme, the task
force is community-based. Three of the principal South
21
Bronx groups-People's Development Corp., Com-
munity Involvement Program and Bronx Frontier
Development Corp.-are acting as coordinators for the
individual sites, each of which is sponsored by a neigh-
borhood group. These organizations have extensive ex-
perience and excellent track records .
The 15 sites chosen for development were selected by
these coordinating groups. While the funding is coming
from the top, the community groups have kept a firm
hold on what actually goes on at the sites, and the neigh-
borhood residents not only have a major part in the
planning: there's is the final say.
Initial plans are developed at meetings between the
larger coordinating organizations and the neighborhood
groups. Landscape architects draw up a map and resi-
dents push miniature pieces of trees, walkways, benches
etc. around until the settle on what they want the site to
look like. The architects prepare a sketch based on their
instructions and return to the neighborhood for adjust-
ment and final approval.
Take the Barretto Street Park, for example. The lot
where it now stands was originally a flourishing garden,
owned and planted by an Italian family on the block.
About three years ago, the Singer Oil Co. purchased it,
uprooted the plants, and leveled the land.
The owners' idea was to turn it into a parking lot, but
the people on Barretto Street opposed it. The owner
struggled for a few years, trying to get a permit to build
the parking lot, but with help from the community
board, Barretto Street residents finally beat him, and
convinced him to let them plant a garden there. They
were assisted by the Cornell University Extension for
two years, until they ran out of funding. Then they
asked for assistance from Bronx Frontier.
When the Open Space Task Force was formed, Bronx
Frontier decided that Barretto Street should be one of
the sites chosen for participation in the project. Land-
scape architect Harry Dodson, an intern from the Har-
vard Graduate School of Design and Landscape Archi-
tecture, has assisted residents in planning the site. The
park will include a stage and tent for entertainment, a
barbeque pit and picnic tables, and a fountain, all made
from found objects, such as telephone poles, 50-gallon
drums, and tractor tires . Juniper and dogwood trees will
surround the park. The garden will supply a crop of
pumpkins, corn, carrots, peppers and collard greens for
the people on Barretto Street.
Barretto Street residents are also in the process of
acquiring the land for their park from the owner. They
are being assisted in the negotiations by the Trust for
Public Land, a national conservation organization that
is serving as a consultant to the Open Space Task Force.
TPL provides technical assistance to rural and urban
groups interested in forming land trusts, locally-based,
non-profit corporations that enable groups of people to
own land in common.
TPL often helps groups acquire land by convincing
the landowner to donate his property. Because of the
tax benefits resulting from such a charitable contribu-
tion, it is usually in the landowner's interest to do this,
particularly in an area like the South Bronx, where the
assessed value of property is often higher than the fair
market value.
The formation of a land trust is one way community
people can control their own land, something that may
become increasingly important ih the South Bronx,
according to Tom Fox.
"We've got a wonderful opportunity in the South
Bronx," Fox says. "It's vacant. There's a real challenge
there for redevelopment. How do you empower people
who live there to redevelop it? We need a certain
amount of protection for open space; it's going to be
very valuable from a housing perspective soon."
While TPL consultants don't see open space as a
number one priority in the South Bronx, they do believe
that forming and operating land trusts can be a good
focal point for community energy.
"We see it as pretty important in terms of community
identity," says Bob Kornfeld, a TPL urban consultant.
"And once a group has a plot of land they're respon-
sible for, you sort of think they'll see other things-like
economic development and housing-in the same
light. "
There is hope among Open Space Task Force
PLANTALOT GROWS
Plant-A-Lot is a city program that provides free soil,
plants, trees and shrubs to community groups that want
to turn vacant lots into gardens, parks and play areas.
It costs about $3,500 in materials to beautify a small
lot, according to the Council on the Environment of
New York City, a privately funded citizens organization
that runs the program. The amount includes the cost of
soil, plants, a wrought iron fence, paving, benches,
litter containers and other amenities.
Under the program, soil preparation, planting and
maintenance are done by community residents . To be
eligible, a neighborhood group must locate a site and
complete arrangements to lease it. It must have a mini-
mum of12 to 15 volunteers who are committed to the
construction and maintenance of the project.
Another city program, "Operation Green Thumb,"
enables groups to lease for $1-a-year many of the
approximately 15,000 city-owned vacant lots.
The Council says there is a waiting list for Plant-A-
Lot. However, groups can partake in other Council
services, including on-site advice, "how-to" resources
instructions, design sessions, landscaping plans, Grow
Truck (which delivers garden tools, books and services),
soil tests and a library of related literature.
For an application or information, write the Council
at 51 Chambers Street, Room 228, New York, N.Y.
10007 or call 566-0990. 0
22
members that the work they are doing in open space will
be catalytic in all aspects of South Bronx redevelop-
ment. Still , there is a tendency among the members to
keep their role in perspective.
"I see us being a force," says Jack Flanagan, chair-
man of the task force. "But I don't see it as being sig-
nificant. Sure we'd like to think we'll be catalysts, but
our initial thrust right now is getting these parks done."
There is also a strong feeling that open space develop-
ment alone will never be the answer to South Bronx
redevelopment.
"It's proceeding faster than the other things right
now," says Peter Stein, Northeast urban regional
manager of TPL. "But that's not good. We would like
to see the other components catch up, so it's not piece-
meal, so that we have a comprehensive plan. "
In the framework of open space, the task force does
see itself serving a larger role. Flanagan says the group
wants to serve as a model for open space groups, and
hopes its unique combination of community and
government involvement will be duplicated not only in
the South Bronx but all over the country. 0
Penny Wolfson is a freelance writer who has worked
on open space development and other issues with the
Manhattan Valley Development Corporation, a
community-based organization.
The Bronx Museum of the Arts will sponsor an exhi-
bition on "the history, devastation and potential resur-
rection of the South Bronx" from October through
December.
The Museum will also produce a l00-page catalogue
and sponsor a symposium on the South Bronx to be held
during the first three weeks of the show. Symposium
speakers will include residents of the South Bronx, rep-
resentatives of local and national government agencies,
sociologists, planners and architects.
The historical portrait will begin with the first settle-
ments in the South Bronx, about 1675. Original maps,
lithographs, paintings and old photographs will be pre-
sented.
The exhibit will document those sections of the South
Bronx where, from about 1960 to 1979, the worst physi-
cal and social disintegration has occurred.
The efforts of individuals, community groups and
government agencies to re-claim vacant land and rebuild
existing neighborhoods will be presented.
The Bronx Museum of the Arts is at 851 Grand Con-
course. For further information contact Robert Jensen
at 681-6000. 0
National and State Legislative Roundup ,
Congress
HUD Housing Assistance Programs: Public Housing
and Section 8.
House: Completed action providing for $1.286 bil-
lion in contract authority; 300,000 to 312,000 units
depending on the final mix of new construction/ sub-
stantial rehabilitation and existing units. This compares
with 517,000 units in 1976,388,000 in 1977,363,000 in
1978, and 326,000 in 1979.
Senate: Action likely after July 9. Sen. William
Proxmire, D-Wis., holds key positions on the author-
izing and appropriation committees, may push for a
reduction (possibly to 225,000 units) and perhaps an
increase in the rent-to-income ratio to 30 per cent.
HUD Self-Help Development Fund to provide grants
ana other assistance to neighborhood organizations to
prepare and implement housing, economic and
community development, conservat ion and revitaliza-
tion projects in low and moderate income neighbor-
hoods.
House: Approved $5 million for FY 79 and $10
million for FY 1980. The 1979 amount is half of the
Admini st ration's request.
Senate: Appropriations subcommittee approved $5
million for FY 79.
Livable Cities Program provides grants and other
assistance to support projects connecting urban design,
cultural affairs and other art initiatives with neighbor-
hood revitalization.
No funding for 1979 or 1980.
New York State Legislature
Retaliatory Eviction, Approved
Prohibits landlord retaliation against tenants who
report code violations or participate in tenant organiza-
tions; evictions or rent increases are barred for such
reasons. Primarily designed to protect tenants in upstate
New York and smaller buildings downstate not covered
by rent control laws, the bill has been the major priority
for the past two years of the New York State Tenant and
Neighborhood Coalition. Numerous homeowner
groups also supported the legislation as an effective tool
against absentee slumlords.
Senior Citizef} Protection, Aproved
Allows New York City tenants 62 years of age or
over with annual incomes of $30,000 or less to remain as
"non-purchasing" tenants when their buildings are con-
verted from rentals to cooperatives or condominiums.
(A similar bill was enacted last year for Nassau, West-
chester and Rockland Counties.) The bill also incor-
porated procedural reforms in the conversion process
which will significantly aid non-elderly tenants facing
conversions.
In Rem Evictions, Not Approved
Would have deprived tenants in city-owned build-
ings of certain rights ensured to all other tenants. It
would have nullified any leases in existence when the
city takes over the property; would exempt the city from
having to show reliable business records, as landlords
must, in order to determine rent owed and grounds for
eviction; would allow anyone who was "authorized in
writing" to bring an eviction against tenants in city-
owned, HUD run or state-run housing. In New York
City, eviction agents would not be required to be
licensed.
Urban Development Action Area Program, Ap-
proved
Provides new authority for cities of 100,000 popu-
lation or more to negotiate the sales of tax-foreclosed
properties to private owners and to offer them a tax
exemption as an added incentive for development.
Areas will be designated by the governing body (Board
of Estimate) or planning commission. Approval of
projects must conform to the procedures required for all
land-use designations. The name of potential sponsors
must be published in at least one general circulation
newspaper 10 days prior to actual sale. A tax exemption
of up to 20 years for new construction or rehabilitation
co-sting at least lOOper cent of the assessed value of the
structure is authorized. Anyone who had lost property
through tax default in the previous two years is
ineligible. 0
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:
Address:
23
Is hoarding of CITY LIMITS a problem in your community group? If so, we are
pleased to announce that we are offering a special rate of $20 for 5 one-year sub-
scriptions at a savings of $10. This is a small price to pay to avoid unnecessary con-
flict over who gets to see CITY LIMITS and assure its availability to all members of
the organization. Simply indicate five subscriptions on the form and include the
names for addition to 'our mailing list.
City Limits
115 East 23rd Street
New York, N.Y. 10010
IN THIS ISSUE
Open Space Task Force
Private Ownership Management Program (POMP)
Article 8A Loans
Temporary State Commission on Rental Housing
Insurance Redlining
Co-op Bank
Men's Shelter
Equal Employment Opportunity
Alternative CD Budget
Application to mail at second-class postage rates is pending at
New York. New York 10001.