City Limits Magazine, November 1979 Issue

CITY LIMITS
NOVEMBER 1979 VOL. 4 NO.8

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1980 Census: The Vanishing City?
THE CHALLENGE OF COUNTING PEOPLE
by Bernard Cohen with Katie Hanner
On April I, 1980, every known household in the
United States will be asked to fill out a census form, a
one-hour task with a ten-year impact.
The population count and additional data collected
by the U.S. Census Bureau will become the basis for
dividing up billions of dollars in federal and state aid,
adjusting the balance of political representation in
Congress and state legislatures and developing long-
range social policies.
An accurate count in 1980 will have major impor-
tance for every block of every town across the country,
but it is likely to be most critical in older urban areas
where past censuses show the chances of a substantial
undercount are much higher and the need for many of
the programs shaped by the census is much greater.
"I Count. I Answered the Census," is the Census
Bureau's proud motto for 1980. But ten years ago, at
least 5.3 million people, or 2.5 per cent of the general
population, could not have made that claim because
they were missed by the census. Officially, the under-
count for blacks was 7.7 per cent, including nearly 10
per cent of black men, and 14 per cent for Hispanics.
Others with knowledge of minority population counts
insist these figures are too low.
The 1970 undercount is blamed in part on flawed
methods of collecting information, especially in the
inner cities, and in part on a built-in resistance among a
sizable segment of the population to identifying them-
selves to the government. The Census Bureau says it
recognizes and intends to correct past problems with
data collection. That should improve the count.
Whether the bureau will also be able to win cooperation
from millions of undocumented aliens and others whose
attitudes range from apathy and fear to hostility is a
question no one can answer for sure. Those who have
contact with this population group say they doubt it
unless stronger protections against potential misuse of
the census information is enacted.
"The almost universal reaction of the undocumented
aliens in the Diocese of Brooklyn at the present time to
the 1980 census is that they will not cooperate with the
census count," Monsignor Anthony Bevilacqua,
director of the Catholic Migration and Refugee Office
of the Diocese, told a Congressional hearing in New
York City on October 22.
Thomas Sung, an attorney who practices immigration
law in Chinatown, agreed, adding, "The problem is not
only with the undocumented aliens. It is also with the
legal aliens and citizens who don't want tn participate"
out of fear .
CITY LIMITS I November 1979
2
The most immediate impact of the census will be jobs.
The Census Bureau will be hiring approximately 15,000
people in New York City alone to assist with the count.
The higher-level jobs are being filled now under what is
being called a "political referral system." The bulk of
the jobs-enumerators paid about $4 per hour to visit
households that do not return the census questionnaire
by mail-will be filled next February.
Programs
Population count is at least part of the basis of an
estimated $50 billion in federal and state grant-in-aid
funds through more than 1 00 programs, including food
stamps, adult education, bilingual education, child
welfare, Community Development , employment and
training, legal services, public assistance and aid for
senior citizens.
According to the government, New York City's
population reached a peak of 7.9 million in 1950 and
remained at this level until 1970. The Census Bureau
says the population dropped by 550,000 between 1970
and 1977. In fact, many people believe the actual census
of the city, boosted by a large influx of undocumented
aliens, has probably remained about the same.
continued on page 20
EIMICKE NAMED
TO DEPUTY POST
William J. Eimicke, deputy commissioner for admin-
istration for only a month at HPD, has been named
deputy commissioner of property management, effec-
tive immediately.
He replaces Charles V. Raymond,who is leaving the
agency to join an international network of hair styling
concerns.
Asked to comment on his new position, Eimicke said,
"When I came here a month ago to my present job, I
would have preferred to be in the property management
position, but it was filled then. What can I tell you? I'm
as surprised as anyone else that it became open."
The new deputy commissioner plans to make consoli-
dation one of his priorities in dealing with the city's
3,600 occupied buildings which now have 26,000 units
under property management and 8,000 in the alternative
management programs.
"I would like to see an increased occupancy in our
resource buildings," he continued. "Right now our
buildings are only 60 per cent occupied. If we were to
reduce our inventory by one-third, we would have one-
third more money to spend on the better buildings. This
would result in our providing better services and more
people paying their rent."
Eimicke also stressed the importance of increasing the
number of units in the alternative management
programs and closing down buildings that are struc-
turally unsound and currently represent throwing
"money down the drain." With the CD V and tax
money he estimated that the city has $100 million to run
its buildings and provide decent housing. The new CD
budget, he pointed out, puts an emphasis on consoli-
dation by earmarking $4 million for its
A former professor of urban affairs and quantitatIve
methods, Eimicke received his B.A., M.A., and Ph.D.
degrees in public administration from Syracuse
University. From 1975 to 1978 he served as fiscal
director of the New York State Senate, and from 1978
until October, he was assistant director in the city's
office of management and budget where he specialized
in housing. Prior to serving in the state Senate, he was
director of the New York Commission on State and
Local Finances. He did post doctoral work at the
University of California at Santa Barbara and also
studied at Manchester University in England.
A native of Brooklyn, Eimicke, a bachelor, lives on
the Upper West Side of Manhattan. 0
3
To the Editor:
Congratulations on an excellent issue! Your front
page story on the NYC fuel oil situation is certainly
timely. We couldn't agree more on the urgency of the
energy problem in our neighborhoods. The article gave
a clear picture of the problem and the inadequacy of
proposed solutions.
Of course, we also were happy to see your story on
our solar mechanic, Joan Altman. It's a great article.
We really appreciate your consistently good coverage of
Energy Task Force projects.
Again, our congratulations on a superior issue. Best
wishes for the heating season.
Sunniest regards,
Mary Christianson
Larry Levan
Margaret Morgan, for the entire ETF staff
_CITY LIMITS.
City Limits is published monthly except June/ July and August/Sep-
tember by the Association of Neighborhood Housing Developers,
Pratt Insti tute Center for Community and Environmental ))evelop-
ment and the Urban Homesteading Assistance Board. Subscription
rates: $20 per year; $6 a year for community-based organizations and
individuals. All correspondence should be addressed to CITY
LIMITS, liS East 23rd St., New York. N.Y. 10010. (212) 674-7610
Second-class postage paid New York, N.Y. 10001
City Limits (ISSN 0199-(330)
Editor .... . .... .... . .. . .... ...... . . . .. . ........ Bernard Cohen
Assistant Editor ..... . ... .. ........... ... ........ Susan Baldwin
Design and Layout ... .... ...... ........ .. ... ... . . Louis Fulgoni
Business Assistant. .. . . . . ... .. . ...... . . ... .. . . . ... Carolyn Wells
Copyright 1979. All rights reserved. No portion or portions of this
journal may be reprinted without the express written permission of the
publishers.
Cover drawing by Marie Thurman
This issue was funded by Morgan Guaranty Trust Co.
and the Eastman Fund
CITY LOSES MILLIONS IN 312 LOANS;
HOMEOWNERS' DREAMS GO UNFILLED
by Susan Baldwin
It sounds like a homeowner's dream come true. All
you have to do is run down to Borough Hall, spend
half an hour between errands filling out forms, and
end up with a government-backed, low-interest loan
that will cover all the low-cost but necessary home
repairs that you, the homeowner, cannot get covered
by a bank loan.
Unfortunately, this federal rehabilitation program,
known as Section 312 of the Housing Act of 1964, has
not answered many New York City homeowners'
dreams.
Under the terms of the 312 loan program, a low or
moderate income homeowner of buildings with up to
seven units can receive a loan of up to $27,000 for each
dwelling unit at three per cent interest with 20 years to
repay this amount. In order to secure the maximum low-
interest loan, the owner is only required to invest ten per
cent per dwelling unit during the processing and con-
struction period, which should be completed in less than
a year's time.
So far in the New York area, the 15-year-old 312
program has been advertised in 22 neighborhoods desig-
nated as Community Development (or low and moder-
ate income) -eligible areas determined by the 1970
census tracts.
An investigation by City Limits shows that New York
City has closed only three 312 loans, all in Staten Island,
in the past year; that it had to give back millions of
dollars to Washington because of its inability to spend
the money and that the fast moving South Bronx Devel-
opment. office, which was created to revitalize the South
Bronx, has asked HUD to bypass the city housing
bureaucracy and fund it directly under the 312 loan
program.
For the CD year ending September 30, New York City
was originally granted $10 million and was finally
reduced to $7.1 million to run the 312 loan program,
according to HUD's Washington office. The city is
recorded as spending only $1.5 million, mostly for
administration, during the fiscal year 1979. The total
national budget for this period, according to Washing-
ton officials, was $200 million.
What happened in New York? Many things. And the
final result is that program money of up to $3 million,
unspent by the end of September, has been "recap-
tured" or sent back to Washington and will be reallo-
cated to other cities that have spent their 312 allocation
and are in need of more money.
"We really didn't lose the money we didn't spend,"
said housing official Jeffrey Heintz, who estimates that
CITY LIMITS I November 1979 4
at least $2.3 million from New York City's budget was
returned to Washington. "Our problem is that we only
started to push this program last October. We hired 16
new people who had to be trained, and the initial
response to this 312 program was less than immediate.
We also had no existing pipeline before we started."
As of October 1, 1979, only three 312 loans-all in
Staten Island-have been closed in New York City. On
the national level, the program has been used success-
fully by a number of cities since 1964.
"I think it's a terrific program, and I don't know why
more people don't take advantage of it," said Maureen
O'Hare, of 11 Kirby Court, one of the three Staten
Island families that has taken advantage of this loan
program. The O'Hares recently closed a $9,950, 20-year
loan that included installation of aluminum siding, a
new front foundation wall, and insulation of their three-
bedroom house in Staten Island' s New Brighton section.
According to O'Hare, whose loan payments are $55
per month, application for the loan was easy.
"We saw it [the 312 loan] advertised in the newspaper
and went down to Borough Hall," she recalled. "It
took about half an hour to fill out the forms, and every-
body was very helpful. I can tell you now, there is no
way you could do this sort of repair with a bank loan. It
would take just ten years to complete their forms saying
what you would do."
Although the intent of this home repair law is to
benefit low and moderate income people, it has been
abused in areas where there is no pressure to funnel
these funds to families with modest incomes.
One Washington official at HUD reported that
certain affluent neighborhoods "where there is savvy in
packaging this loan," have benefitted greatly from the
program because there is no pressure to conform to the
low and moderate income limitations.
The 312 program, which was stifled under the Nixon
Administration, was revived by the Democratic Admin-
istration that followed in the late 1970's and is now very
popular with Congressional advocates.
In New York City, however, political pressure sup-
porting the 312 loan program seems to be confine.d to
Staten Island.
"We knew from the beginning that New York was
supposed to receive at least $7 million for this program,
and Borough President [Anthony R.] Gaeta is the only
borough president who grabbed the bull by the horns,"
said Jack Kelly, one of Gaeta's aides who has helped
residents process 312 loans. "We pushed this program,
New siding using a 3 J 1 loan at J I Kirby Court.
and we've pushed to have the eligible boundaries ex-
tended because we can see that it can work here in
Staten Island."
Staten Island has attempted to extend its 312-eligible
boundaries past the CD-approved North Shore area in
order to take in neighborhoods that are faced with
major engineering changes to accommodate the instal-
lation of sewer systems.
Official figures for the 1980 budget are not available
now, but the projected budget that Congress is expected
to pass in November calls for $185 million for the 312
loan. New York's allotment is unknown, but Washing-
ton officials say that the city is committed to spend at
least $4.6 million from its 1979 budget during the next
fiscal year.
New York City now has about 1500 applications for
the 312 loan, but with the exception of the three Staten
Island loans, its only other use of the program was the
dramatic expenditure of $700,000 last spring for the gut
rehabilitation of 13 houses on Pine Street in Brooklyn
after fire devastated this old, deteriorating neighbor-
hood.
"Our staff is overworked, but we are trying very hard
to make this succeed," Rose Brown, director of the 312
program at the city's Department of Housing Preser-
vation and Development said recently when asked why
the program was moving so slowly. "I came on board
here last year when there were only three staff members
and the outreach was very slow. Now we've hired all
these new people, and we're all being trained at the same
time . .. We've pushed the program, and it's beginning
to grow."
According to Brown, applications for the 312 loan
numbered 35 in November, 1978, when the program
first got off the ground, but have soared in recent
months to as many as 198 in August. She also reported
that each HPD coordinator is handling about 80 cases,
while the national average is about 20.
5
City officials are worried about the prospects of
delivering on the 312 loan in such a short period of time.
"There is no doubt that the funds are there if the city
can use them," said Sydelle Nepper, special assistant to
the area director at HUD. "The problem here is starting
up the program . .. They did lose some money now, but
we have a very strong monitoring system, and I am
hopeful that they will get off the ground. This is a great
program and one of the few that can be used for small
homes."
Nepper is currently developing a special program for
50 HUD-owned homes in South Ozone Park in Queens
that will be repaired by one contractor with 312 loan
monies. They will then be sold to prospective low
income buyers.
But, what does getting off the ground mean?
To Guillermo Echanique, of 123 Alden Place, Staten
Island, the second of three applicants to close the 312
loan, it means a loan at $50 a month for $10,000 worth
of repairs that resulted in a moderate rehabilitation of
his 50-year-old house.
"It was a lot of trouble, but it was worth it," Enchan-
ique said. "I was always going down to Gold Street
[HPD] to deal with some paperwork, and it took a lot of
time. But the work I got on my house was very fine. The
HPD inspector checked everything. I could never have
done this with a bank."
HPD's 312 processors also complain about paper-
work and fear new problems that will arise with the
increasing workload.
"We want to help everybody and try to do as much as
we can, but we are having problems because we're
swamped with applications," said Jack Costi of HPD's
312 unit, noting that his office is getting help from the
312 office in Poughkeepsie which has learned to use the
program very successfully.
"It's also hard to counsel people about the loans,"
Brown concluded. "A lot of them just have trouble
buying homes and keeping them going. We don't want
people to get in over their heads, and some houses need
repairs that people can't afford." One of the areas that
HPD is looking into is aiding homeowners to refinance
their bank mortgages with the 312 loan over the 20-year
period.
In the meantime, officials connected with the new
rehabilitation program for the South Bronx recently
called on HUD to issue $5 million from New York
City's 1980 budget to support 312 loans in this target
area.
Following local and Washington talks, they are now
seeking between $2 and $3 million of New York's
allotment that would be funneled directly to this South
Bronx office, whose executive director is Edward
Logue. Logue, the former head of the Urban Devel-
opment Corporation (UDC) , is developing a compre-
hensive plan for the revitalization of the South Bronx-
a plan that is focusing on the neighborhood's strengths
SOUTH BRONX RESCUE PLAN-AGAIN
by Peter MeIser
After two years in which we have seen a Presidential
visit, two still-born "plans" and the resignation of a
deputy mayor, the beginning of a South Bronx plan is
taking shape. In August, the South Bronx Development
Office, directed by Edward Logue, released its Interim
Report to Mayor Koch. The report, produced four
months after Logue began funded work, consists of
three substantial volumes .
The first volume provides an overview, and contains a
brief analysis of problems , statements of" planning
objectives and approaches and summary statements of
the "early action projects" which make up the sub-
stance of the plan. Volume Two is a more detailed
presentation of the early action projects, while Volume
Three gives the budget and administrative procedures
for developing and implementing proposals. During the
next year the SBDO will package the early action
projects for implementation and prepare a more
complete physical plan for the South Bronx.
The Interim Report proposes the expenditure of some
$420 million on early action projects and additional
sums on proposals to be detailed later. Most of this
money is already available in existing programs.
Logue's effort has been to direct expenditures of public
funds to specific areas, to coordinate ongoing develop-
ment work, and to ensure that all available funds are
utilized fully and promptly. The report also identifies
the expenditure of $84.6 million, or 20070 of the total, of
what it calls "new money."
Logue's plan is comprehensive as it claims to be, in
that it addresses a wide range of problem areas. Projects
deal with economic development, manpower training,
open space and recreation, housing, human services and
various "neighborhood improvements ." The proposed
expenditures are, however, more concentrated. Seventy-
five per cent of the project funds, or $304 million, is
allocated to housing, and $65 million of the remainder is
to be spent on economic development and manpower
training.
According to Logue's office, the housing budget will
buy 2,433 units of new construction, 3,062 units of sub-
stantial rehabilitation, 2,500 units of moderate rehabili-
tation and 150 to 250 loans for improving one-to-four-
family homes. The housing will be produced using
Section 8, Section 235 mortgage insurance for single
family homes (the first such use in New York City), a
new Section 8 moderate rehabilitation program, Section
312 low interest loans and mortgage refinancing. About
half of the development will come through the New
York City Housing Authority.
6
The largest economic development expenditures are
loans to South Bronx firms, $20 million, and an allo-
cation for the purchase of land for industrial purposes.
These numbers convey part of the context of the plan,
Jut more important is Logue's underlying strategy for
dealing with the problems of the South Bronx. The
report begins with a cursory and rather misleading state-
ment of the factors that led to the decline and devas-
tation of much of the South Bronx. The decline of the
South Bronx is portrayed as an accidental consequence
of the realization of the suburban American dream by
former residents of the area, and as the unintended
consequence of Federal housing and transportation
policies. The role of redlining, the withdrawal of private
finance, and the withdrawal of public services in the
collapse of South Bronx neighborhoods is not dis-
cussed, although these factors are very evident in the
problems the report identifies. This omission is
important because it obscures the forces with which any
revitalization effort must contend.
The merits of the SBDO plan derive from Logue's
pragmatism. His priorities are cutting through red tape
and getting the most housing for each public dollar. The
problems the plan is able to address are restricted by the
availability of the programs. Although Logue does not
like the waste of public money that Section 8 tax shelters
involve, he must use the program because of the
resources it offers. But these programs and probably
Logue's own inclination give an over-emphasis to physi-
cal redevelopment. In this approach, the primary
benefits go to outside developers and tax shelter
investors rather than to community residents. It also
means that the projects do not address the more funda-
mental problems as directly as they might or reinforce
community-based revitalization efforts as effectively as
they could. This is evident in the plan's emphasis on the
more stable Grand Concourse.
The central theme in the SBDO approach is conveyed
by the title of the report: "Areas of Strength/Areas of
Opportuni ty. " The text expands on this idea.
The approach of the South Bronx Plan which
has emerged in the first 120 days of work is
already clear: where there are strengths, to
build on those strengths; where there are viable
neighborhoods, to revitalize those neighbor-
hoods; where there has been abandonment, to
clear and spruce up the areas of disintegration
to begin the process of creating a new environ-
ment.
On the basis of this decision, Logue chooses to
j
concentrate resources on the most physically stable
areas; the Concourse, areas of 1-4 family housing and
two major commercial areas, leaving more devastated
areas for redevelopment as industrial parks or sections
of new single family housing. This approach involves a
new kind of triage: instead of concentrating on the
middle third, it devotes major resources only in the best
areas.
This approach,however,does not address the under-
lying problems. It can be agreed that if the Concourse
collapses then there won't be much left of the South
Bronx. Yet the future of the South Bronx does not
depend only on what happens on the Concourse. It
depends more on what happens to the sizable stock of
occupied city-owned housing stock; the housing that has
suffered most from the withdrawal of private finance
without yet being abandoned by its tenants. In his
allocation of funds, Logue ignores this class almost
completely. His proposals are limited to the training of
300 superintendents for city owned buildings and
"improving the flow of welfare rents." He could
propose projects to increase housing management
capacity, to train housing repair crews, to develop cost-
effective rehabilitation methods and to support the
efforts of community organizations to manage city-
owned housing and organize tenant associations. By
neglecting city-owned housing, Logue is implicitly
supporting a policy of planned shrinkage and ignoring
the needs of those residents who have borne the brunt of
housing abandonment in the South Bronx. Ignoring this
housing probably also serves to undermine the "areas of
strength" that he has chosen for concentrated effort.
The SBOO proposals also appear to fail to take full
advantage of the construction activity it is generating to
create employment opportunities for local residents.
The report identifies the lack of earned income as
perhaps the major problem facing the South Bronx and
its residents. For this reason the plan devotes a lot of
attention to economic development and manpower
training. The report proposes to establish industrial
parks and it lists an impressive number of business firms
which would either remain, or establish themselves, in
the South Bronx if publicly funded loans were available.
These proposals are good ones, but they do not offer
any guarantee that the jobs they create will go to local
residents. As well, the strategy of attracting industry to
create local jobs has nowhere fulfilled the expectations
planners have held for it. More fundamentally,
however, this strategy fails to capitalize on the only
resource that Logue can justifiably rely upon: the jobs
created by the construction activity his plans generate.
Construction-oriented job training, assistance to local
minority contractors, and requirements that construc-
tion contractors hire locally resident labor are likely to
create more local jobs quickly than are efforts to attract
new businesses. Increasing local employment would also
help boost local income with the secondary effect of
7
improving the market for local shops.
Another aspect of the SBDO plan is the working
relationship it establishes with the people of the South
Bronx and their representative institutions and with
community-based organizations. This has two aspects:
participation in the planning process and the extent to
which the plan itself helps to reinforce the existing
efforts of local residents. The report states an
emphatic commitment to both objectives. Concerning
the first, it says,
This will not be one of those efforts, not un-
common years ago where some scheme from
on high is imposed with no input from those
who know the needs and problems intimately
from their own personal experience. We have
been searching for-and we have found-
many priority ideas flowing from the neighbor-
hoods concerned and, of course, from City
agencies working in tbe communities.
The reality is more ambiguous. Logue and SBOO
staff have established firm relationships with Com-
munity Boards, meeting with them separately and col-
lectively . Logue reviews his proposals
with the Boards, and according to some people I spoke
to is responsive to what he hears. Relationships with
community organizations are less well developed.
Although the director of one community group said that
Logue was actively supporting some of his group's
projects, others said that they had n o ~ been consulted or
had had only one rather general meeting with an SBOO
staff member. This is an important omission in that as
implementing agencies, community organizations do
have ongoing programs and substantive plans for future
development. Community Boards, while bejng more
broadly representative, have more of a review function
and lack the staff to initiate substantive planning
proposals. Most of the proposals in the Interim Report
and early action projects appear to have been developed
primarily by Logue's staff, probably in consultation
with the South Bronx Policy Group, a task force of city
and federal officials of which Logue is secretary but
which has no South Bronx community leaders or rep-
resentatives.
The plan is similarly emphatic on the need to rein-
force and build upon the efforts of indigenous com-
munity organizations. It states,
and,
Even the casual observer is struck by the pro-
liferation of active and involved community
agencies, most of them small and underfi-
nanced, but many with impressive records of
accomplishment. The vigor and verve of its
indigenous community agencies is perhaps its
[the South Bronx's] most precious resource. A
developmental approach that ignores the
strong local efforts already in place would be
doomed to failure ...
Hue HOMEOWNERS WIN
CLASSACTION SUIT
After six years of court battling, some 23,000 home-
owners who lost their federally insured properties after
being rejected for a HUD program designed to help
prevent foreclosure have won a class action lawsuit that
will enable them to return to their homes at former
mortgage interest rates.
In a case known as Ferrell vs.HUD, an order signed
by U.S. District Court Judge Hubert Will in Chicago on
November 8 requires that all members of the class
action be notified in writing of the settlement before
HUD can begin reprocessing applications for the
mortgage assignment program. The decision also stipu-
lates that the former homeowners be given 30 days or
until December 18 to respond to HUD's notices and that
a 60-day moratorium on foreclosures and evictions be
instituted, beginning November 8. An extension will be
granted for good reason.
The HUD mortgage assignment program, formally
established in May, 1976, helps prevent homeowners
with FHA-insured mortgages from losing their homes if
they are unable to meet monthly payments because of
unexpected financial hardship or prolonged illness.
Under the present regulations, if a homeowner quali-
fies for the assignment program, HUD buys the
mortgage from the mortgage company or bank
(mortgagee) and develops a payment plan for the
mortgagor-a plan that can suspend payments for up to
36 months and extend the maturity date up to ten years.
In order to qualify for the program, a homeowner must
have defaulted on three full monthly payments.
Homeowners affected by this decision are those that
were rejected from the assignment program and lost
their homes from May 17, 1976, to January 31, 1979. If
a homeowner's property has been resold to another
buyer, HUD is required to offer him another com-
parable home from its inventory.
"This is a very important decision for low income
homeowners who lost their houses all over the country
for one reason or another," said Barbara Ziony, an
attorney with South Brooklyn Legal Services who has
represented many Brooklyn clients who have had prob-
lems with HUD and its FHA programs. "This is truly a
victory because even those homeowners who never
applied for the assignment program and never got a
letter from HUD about foreclosure proceedings, will
have a chance to get their homes back."
Ziony also said that HUD agreed in the law suit to
continue to use the current revised mortgage assignment
handbook, which is sympathetic to homeowners, for the
next five years and, after that, to adopt the same or a
similar set of guidelines to implement the program.
Asked why the assignment program worked so badly
for so many years, Ziony said, "For two or three years
8
the money for the program came in very slowly. There
was no training to speak of for area employees who ran
the program. The mortgagees didn't follow the regula-
tions because they found them too complex, and HUD
ignored, even showed hatred of, the program until the
new administration came in in September, 1977.
She also explained that when homeowners lost their
properties, HUD refused to allow them to stay on and
pay rent. At the same time, she added, existing tenants
in the buildings were kept on and often were offered
options to buy.
Shortly after the program began in May, 1976, Ziony
said, it became evident that HUD was mismanaging it.
Procedural errors were the rule, rather than the excep-
tion, acceptance criteria were distorted and misapplied,
and applications were denied for unfounded or no
reason at all. In mid-September, 1977, audits were
conducted in HUD's field offices and, with the excep-
tion of the St. Louis and San Francisco offices, those
audits revealed gross deficiencies in program adminis-
tration.
Under the agreement of the Ferrell vs. HUD suit, all
the area offices will be required to reprocess applica-
tions with the exception of these two offices.
According to Ziony, processing was particularly
defective in the southern offices and, in Baltimore, she
noted, only one assignment application was completed
during the three-year period.
In a letter, dated October 1, from HUD Assistant
Secretary Lawrence B. Simons, all HUD-approved
mortgage companies have been requested to "withhold
all foreclosures of insured home mortgages, acceptance
of deeds in lieu of foreclosure, and related eviction
activity until January 18, 1980, with respect to all
mortgages that HUD rejected for assignment between
May 17,1976, and January 31,1979."
For more information, call Barbara Ziony at South
Brooklyn Legal Services, 855-8003 or 855-5463, or the
Manhattan Community Action for Legal Services
(CALS), 431-7200.0
FREE LEGAL HELP
EXPANDS IN HARLEM
Free legal assistance for low income tenants (or
owners) of buildings in the Harlem area that are suffer-
ing severe disrepair is being expanded in a trial effort to
save the housing from falling into abandonment and
foreclosure.
The Community Law Office, based in East Harlem,
has established a new housing unit whose function will
be to assist tenant associations in neglected buildings or
landlords who want to make improvements to take
whatever legal steps are necessary to upgrade the
conditions.
Four lawyers plus a staff of community consultants to
provide technical assistance for buildings in most of
northern Manhattan will comprise the full-time staff of
the housing unit under a one-year, $249,000 contract
with HPD. The unit will also draw from a pool of 100
"participating" lawyers who have volunteered their
services.
There are many legal steps tenants can take to pres-
sure an owner to fix their building or to take on the
responsibility themselves if the landlord won't. In addi-
tion to representing tenants in this way, the legal unit
will also advise them on how to establish organizations,
help steer them to rehabilitation finance programs and
assist them in purchasing thdr buildings. It will also aid
landlords to obtain loans for repairs and to restructure
rents.
The contract calls for 200 buildings housing an
estimated 4,000 families to be represented by the CLO .
unit during the year. The goal is to intervene early
enough so that buildings can be rescued before condi-
tions become so bad that abandonment cannot be
avoided, leaving the city with another lifeless structure.
CLO is part of a newly created "volunteer division"
of the Legal Aid Society. For the past ten years, CLO
has offered a full range of free legal assistance to
Harlem residents, utilizing a small full-time staff of
lawyers and farming out many cases to hundreds of
private attorneys who take individual clients on a "pro-
bono" basis. The housing unit will be completely in
addition to the broader range of existing legal services,
said Sheldon Halprin, head of the unit.
David Weschler, director of CLO and head of the
Legal Aid Society's volunteer division, said the pilot
legal program will strengthen the effectiveness of exist-
ing city housing programs. "What has been lacking in
the past is that there has not been a community-based
lawyer to facilitate the process ... to help keep buildings
on track and iron out problems," Weschler said.
Assistant Housing Commissioner Joseph Shuldiner
said that while the city does initiate legal action for
housing problems, tenants and owners need representa-
tion "that goes way beyond what we feel we can live up
to because we can't represent parties or get close to
owners and tenants."
Shuldiner said he expected to take an "even-
handed" approach in deciding whether to represent the
tenants or the landlord in a given building. Even so, he
acknowledged, "probably 85 per cent of the cases" will
involve representation of tenants.
Both Shuldiner and Weschler acknowledged the
potential for a conflict of interest in cases where CLO
lawyers were representing tenants in city-owned build-
ings, but both discounted it as a problem. "We all do
want the same thing," said Shuldiner.
Asked how he would assess conditions in Harlem
after several years of working there, Halprin replied, "I
would say there are a lot of very vocal, effective people
among the residents of East, Central and West Harlem,
a lot of interested people. The area you are talking
9
about varies greatly. It has middle class blocks, terrible
blocks and everything in between.
"The more you look at each part of Harlem the more
you see it as combining different types of people in little
neighborhoods-it is not a monolithic whole. You have
people who are making progress. We've seen buildings
that have been saved. It's an uphill battle for people
living in these communities, but it's a battle that people
still are waging and, in various instances, are still
waging effectively. A lot of people are getting together
and trying to do things. Tenants working as a group can
accomplish a lot." 0
LOW INCOME TENANTS
WIN RENT REFUND
As a result of a successful class action lawsuit against
HUD, low and moderate income tenants in 4,800
federally financed housing projects across the country
are eligible to share $60 million in rent refunds for over-
charges mandated by HUD five years ago. The increases
had come in response to utility and tax hikes incurred
during the Arab oil embargo.
New York City residents of some 100 projects with
45,000 units built with a federal Section 236 mortgage
interest subsidy will participate in the settlement of the
lawsuit, initially based on II nationwide claims, that
alleged illegal rent increases between February, 1975,
and September, 1977, for as many as 750',000 families
that occupied these government-subsidized apartments.
Under the 236 program, no eligible family pays more
than 25 per cent of its income for rent.
Each family is eligible for rent refunds of up to $500.
Tenants who are still living in complexes affected by the
increase are encouraged to apply for the refund and to
supply information about neighbors who have moved.
The national $60 million limit on refunds was nego-
tiated last January after the government learned the
lawsuit could cost at least $140 million if taken to trial.
Legal aid offices are displaying posters in English and
Spanish explaining this decision. A toll-free telephone
number has also been set up to answer tenant questions
and help in locating missing eligible families. The
number is 800-824-7980. 0
The Task Force on City-Owned Property will hold an
informational forum for representatives of city-owned
buildings in the interim lease program Saturday,
December 8, from 10 a.m. until 1 p.m. at the Harlem
State Office Building, 163 West 125th Street, in Man-
hattan.
The agenda will include discussion of the city's $250
sales policy, building repairs, non-purchase of build-
ings, updating the interim lease agreement, and pro-
posed plans for Community Development VI funds.
CITY LIMITS I N'ovember 1979
CITY RECEIVES $16.5 MILLION
FOR SECTION 8 MODERATE REHAB
by Sus,an Baldwin
New York City has won a $16.5 million housing
subsidy to join the vanguard of cities in developing a
new national moderate rehabilitation program to save
older but solid housing stock in urban areas where bank
disinvestment is increasing and stable, private owner-
ship and tenancy is declining.
The new HUD plan, announced in mid-October and
known as the Section 8 Moderate Rehabilitation Pro-
gram, will permit the city to rehabilitate 4,084 units of
deteriorating housing in 25 New York City neighbor-
hoods at a cost not to exceed $15,000 per unit. City
housing officials hope to limit the renovating costs to
between $7,500 to $9,000 per unit. The national mini-
mum that can be spent for each apartment unit is
$1,000.
This moderate rehab program will provide for the
upgrading of substandard housing units to comply with
certain nationally recognized housing standards and will
underwrite the repair or replacement of major building
systems in standard housing.
Congress decreed that this program must not result in
displacing t e n a n t ~ who cannot afford to pay the higher
rents deemed necessary to cover modernization costs
and repairs.
According to a HUD Washington official, the total
national allocation for the program is $119,813,368 for
34,294 units of housing. Originally approved for 4,235
units, New York City recently was reduced 151 units for
budgetary reasons. The current projected amount of the
city's contract is $16,553,100.
Of the 4,084 units proposed for New York, 1,290 will
go for housing for the elderly, 2,079 for small families
(up to two bedrooms), and 715 for larger families (three
to four bedrooms), according to Sydelle Nepper, special
assistant to Area Manager Alan Wiener at HUD.
City housing and planning officials have indicated
that major problems with selling the program to neigh-
borhood residents and developers will be the financing
arrangements and the higher restructured rents.
"If you get a rent raise, you naturally expect to see
something for your money," said deputy housing com-
missioner Charles Reiss. "Money is tight, loans are hard
to get, interest is rising, inflation is hitting everybody,
and if you're going to raise people's rent, they would
like to see something for it-like a new lobby or a
modern kitchen."
Although specific buildings in the 25 neighborhoods
in all boroughs but Staten Island have not been selected,
10
the city's Department of Housing Preservation and
Development is currently developing an administrative
plan that will be forwarded to HUD's area office within
the next few weeks with the idea of advertising the
proposed program to developers sometime early in
January, 1980.
Administrative Plan
Emphasi!> is being placed on the selection of new-law
tenements of 20 units or less that date from the post
World War I era. The neighborhoods proposed for this
moderate rehabilitation program are those where the
city has already spent some money on revitalization and
which are considered worth saving. Some of these
communities, known as neighborhood strategy areas,
have already received Section 8 subsidies for substantial
re):Iabilitation (NSA Section 8) or are known as Com-
munity Development target areas.
Others were designated as neighborhood preservation
areas in the early 1970's when the state also authorized
the city to establish the Rehabilitation Mortgage
Insurance Corporation (REMIC) program to insure up
to 50 per cent of a rehabilitation loan in these commun-
ities and promote a concentration of private lending
activity in these areas plagued by early signs of deterior-
ation.
The 25 approved neighborhoods and their respective
housing unit allocations using the original total are:
Bronx-Grand Concourse, Kingsbridge, West
Tremont, 780 units; Pelham Parkway, Soundview, 450,
for a total of 1,230; Brooklyn-Bedford Stuyvesant,
Bushwick, Crown Heights, 955; East Flatbush,
Flatbush, Brighton Beach, 200; Sunset Park, 300, for a
total of 1,455; Manhattan-Clinton, 150; Gateway to
Harlem, Manhattan Valley, 300; Washington Heights,
Hamilton Heights, 400, for a total of 850; and Queens
-Astoria, Steinway, Corona, East Elmhurst, Jackson
Heights, Woodside, Sunnyside, 550; Far Rockaway,
150, for a total of 700.
Neighborhood distribution of the 151-unit cut was
not available at City Limits's deadline.
"We're going to try this program and know that we
will have trouble administering it because [the paper
work] promises to be labor intensive in the same way
our participation loan program is," said assistant
housing commissioner Jeffrey Heintz. In a participation
loan, the city puts up a portion of the mortgage money
needed for the rehabilitation at one per cent interest and
the private lender puts up the rest at the prevailing
market rate.
Both Heintz and Reiss have expressed concern in
today's volatile loan market over developing the
moderate Section 8 program's finance plan,which runs
for only 15 years. Most mortgage programs last 20 years
and some extend to 40 years. For current construction
loans, Heintz estimated, interest ratesl: range from 16 to
18 per cent and threaten to go up to 20 per cent in the
near future.
Under terms of the moderate Section 8 program,
rents can go as high as 120 per cent of normal Section 8
rent limits for existing housing. Under the 1978-79
guidelines, fair market rents for apartments in elevator-
serviced buildings range from $228 for a studio to $397
for four or more bedrooms and from $206 to $360 in
non-elevator buildings. Thus, the maximum rent that
could be charged for a two-bedroom moderate rehab
under this program would be $364.80 for an elevator
building and $330 for a walk-up.
$95 or $100 a Room
"This could mean that we would be charging people
who do not qualify for the subsidy $85 a room or
more," said Heintz. "And quite frankly, they may balk
at paying this much if they've been used to paying a lot
less for many years." He also expressed concern about a
building's "making it financially if we have to ask
people to pay up to $95 or $100 a room to do the
rehab." Tenants meeting subsidy requirements would
only pay one quarter of their income. Very low income
families would pay 15 per cent.
The HUD guidelines explicitly state that subsidized
and fair market rents in the same building must be
equal. No building can have two different rent scales.
"This program will require a tremendous amount of
education for both the tenants and the owners who
propose to do the work," said Rafael Carmona,
director of the multi-family housing unit at HPD.
"Whoever is serving as the loan project coordinator will
have to sit down with the families and make it clear to
them just how much more they will have to pay. If this
adds up to an unrealizable amount in order to make a go
of the building, then the best solution would be not to
proceed with the building."
The city hopes to use the moderate rehabilitation
program to save a substantial number of its better
preserved, tax-foreclosed buildings and is looking at its
alternative management programs to become partici-
pants in the program.
The programs that could qualify for the moderate
Section 8 plan are the tenant interim lease program,
community management, the 7 A Administrators
program, and the Private Management in Partnership
. program (POMP).
"The subsidy money will be attached to the housing
unit, not the individual," said Nepper, stressing that the
11
city only intends to implement this program in buildings
that are still privately owned or are under community
management or the interim lease agreement where a
non-profit neighborhood or tenant group plans to buy
the building.
"I agree with the mayor," she asserted. "The city
cannot be the landlord of last resort. This is why we
have to make this program work. We have to save these
buildings and the affordable housing they provide and
return them to the private sector."
Although community groups, to date, have not been
consulted about the selection of appropriate buildings
for this program, city officials expect to confer with
them after interested developers have come forward
with plans.
,
Little Information Available
"I know almost nothing about this program," said
Leah Schneider of the Manhattan Valley Development
Corporation. "All I heard was the numbers for each
area. There's very little information available. No one
seems to know much about it. But it certainly will be
difficult to make decisions about sharing units when
more than one neighborhood is involved." She also
wondered about the cost of the program, alluding to the
costliness of the participation loan program it resem-
bles.
Other neighborhood observers have questioned the
city's ability to find enough viable housing stock that
can be rehabilitated within the moderate cost guidelines.
"This is one of the big problems they're finding with
the community management rehabs," said one city
housing official. "When they start they plan to ~ p e n d
$7,500 to do each apartment and then when they get
into the work they find out it will cost $17,000. What do
you do here if this happens? Abandon the project with
the building torn apart?"
"All we can do is try to carry out the program and be
optimistic about it even though it has the potential for a
number of problems," Reiss reflected. "I am nervous
about it, and right now I don't think it will have the
earth-shattering impact on neighborhoods that some
would like it to have."
According to Reiss, the city is on schedule with the
timetable outlined for the program. "As a matter of
fact," he added, "we're half a step ahead of HUD, and
we think we've picked neighborhoods that were focused
broadly enough for this program to work. This also just
might mean the salvation of the cream of the crop of
our In Rem buildings."
In the next few months the city will also be talking to
developers about the merits of the Section 8 subsidy,
since many of the smaller owners are wary of becoming
too heavily involved with government subsidy programs.
The city can start spending the rehab money immedi-
ately and will have until January, 1982, to carry out its
work on the approved 4,084 units. 0
ALLSTATE TAKES HEAT
ON INSURANCE NEEDS
Disclosure by insurance companies, placement ot
agents in Upstate New York cities, removal of the 50 per
cent surcharge on the basic policy for city-dwellers and a
discount program for homeowners who undertake
repairs. These were among the major demands pressed
by some 250 representatives of communities across the
state in a meeting with officials of the Allstate Insurance
Co. on October 27.
Allstate agreed to discount policies for homeowners
who undertake repairs to plumbing, electrical
systems and roofs within a five-year period and said it
would provide a 45 to 60-day grace period for correcting
specified conditions before cancelling or refusing to
renew a policy. The company also said it would help
work for specified reforms in the FAIR Plan program.
The most controversial issue was removal of the sur-
charge, which Allstate says applies to nearly all its
policies and neighborhood representatives argued is
really only levied for city-dwellers. Allstate refused to
budge on that issue, which brought on a round of "No
more surcharge!" chants. The company also refused to
commit itself to placing agents in Upstate cities,
although officials maintained that urban policies con-
stitute an important volume of business. Allstate said it
would report back to the group on whether the company
can and will disclose by zip code the number and types
of policies, cancellations and non-renewals for many
Upstate areas .
The spirited meeting took place at the annual confer-
ence of the New York State Tenant and Neighborhood
Coalition in Marcy, N.Y., near Utica. 0
Neighborhood representatil'es meet with Allstate Insurance Co. officials.
WINTER UPDATE
. A federally funded program designed to help lower
Income people who face a crisis due to skyrocketing
energy costs this winter has been retooled to make it
to multiple-family dwellings in New York City. It
WIll take effect December 1, according to a state official.
Called the Energy Crisis Assistance Program it
provides for payments of up to $400 per eligible
hold to cover the payment of fuel/utility bills' the
provision of short-term assistance in the form of fuel
supplies, warm clothing, blankets, replacement of
broken windows, temporary shelter, health and other
supportive services, and direct cash assistance of up to
$50 where an individual has paid a fuel bill and faces an
emergency. To qualify, the recipient can earn no more
than 125 per cent of the official poverty income level, or
$6,700 for a family of four.
Congress has appropriated $250 million nationally
for the program, of which New York State's share is
about $25 million and New York City's is about $9
million. According to Eugenia Flatow, executive deputy
secretary of state, here is how the program will work in
New York City:
Of the $9 million, $6 million will be earmarked for
multiple-family buildings. Owners of buildings in desig-
nated low-income areas of the city who agree to certain
stipulations will be eligible for $300 per dwelling unit for
up to 60 per cent of the apartments in the building. The
payment will be in the form of a line of credit with the fuel
supplier rather than direct assistance to the owner.
Owners will have to agree to continued maintenance of
the building, to permit weatherization improvements
under another program and to exempt tenantsfrom rent
increases based on higher fuel costs. The funds will be
administered by HPD through the Emergency Repair
Program.
The remaining $3 million will be used for the benefit
of lower income homeowners and tenants in one and
two-family buildings. This money will be administered
by the city's Community Development Agency.
"What we are doing is trying to hold the landlords in
place for one more winter," said Flatow, adding that
existing funds will probably take care of only ten per
cent of the income-eligible population. Legislation that
would add $150 million to the program nationally is
pending in Congress.
A whole set of energy assistance bills are in the final
stages of consideration at the state level. Governor
Hugh Carey has signed two of them. One would enable
familes in all income groups to borrow at low interest up
to $1,000 to help with rising fuel bills and offer banks a
tax credit to make the loans. The customers would pay 5
per cent; the oil dealers would be liable for 9 per cent
and the state would provide participating banks with a
tax credit equal to I per cent. The other authorizes the
,.
state to advance poor and welfare families $143 million
for which the state will be reimbursed by slower-moving
federal funds.
Carey was reportedly undecided as to whether to sign
three additional bills approved by both houses of the
State Legislature. One would provide state funds for a
program similar to the Emergency Crisis Assistance
Program only for homeowners earning up to twice the
poverty level. The second bill would give senior citizens
earning less than $14,000-a-year an additional credit of
$35 on their income taxes. The third bill would eliminate
the state sales tax on residential energy use, effective
October 1,1980.0
Consolidated Edison has announced a new plan to
help senior citizens and others on limited fixed incomes
to pay energy bills this winter.
The program, which Con Edison calls CONCERN,
offers to those who are on Social Security and those
receiving Supplemental Security Income the following:
a 12-month.billing plan; bill payments to coincide with
dates when government checks arrive; modified credit
procedures to meet special circumstances; assist
customers to apply for financial aid from various
government programs; waive requests for deposits.
A postage-paid form to enroll in the CONCERN
program is being included with November bills and
specially trained customer representatives are being
assigned to the program, Con Edison said. 0
ARSON TASK FORCE
The New York City Arson Strike Force has received
three grants totalling $247,900 for projects that will
work to apprehend landlord-arsonists and provide
information to community groups.
According to Mayor Koch, the Law Enforcement
Assistance Administration (LEAA) will allocate
$195,900 to the strike force toward the development of a
computerized system that will detail ownership and
financial history of properties that have previous arson
records.
Two additional grants will come from the Florence V.
Burden Foundation, which is providing $32,000 for fire
prevention projects in arson-threatened areas of Wil-
liamsburg and Park Slope, and the United States Fire
Administration with its allocation of $20,000 for an
arson information clearinghouse in New York City.
In addition to the strike force, non-profit community
groups participating in the project funded by the
Burden Foundation grant are the People's Firehouse
and Los Sures in Williamsburg, and the Fifth Avenue
Committee and Community Board No.6, all in Brook-
lyn.
The People's Firehouse Inc. in Brooklyn has
13
announced approval of a $47,400 grant from the federal
agency ACTION to train and educate community resi-
dents to improve fire-protection and prevent arson.
The People's Firehouse is best known for its success-
ful three-year battle with the city for the testoration of
fire service in the Northside community. 0
RENEWED J-51 LAW
EXTENDS TAX BENEFIT
The City Council voted October 31 in
favor of the extension from 12 to 32 years of Section J-
51 of the city's administrative code, renewing legislation
that in 1979 alone will result in rewarding owners who
rehabilitate their multi-unit housing with $74.8 million
in tax exemptions and abatements.
Twenty-nine Council members voted in favor of the J-
51 extension which provides for moderate rehabilitation
of housing with tenants in residency. Seven were
opposed, and three abstained.
Council critics of the legislation offered nine amend-
ments that included such provisions as relocation
benefits for tenants of Single Room Occupancy (SRO)
hotels who are forced to move during the renovation
period, annual certification by owners of repairs made
to the buildings, anti-harassment guarantees for
tenants, relocation benefits for businesses with 30 or
more employees, and a December 31, 1981, deadline for
conversions of SRO's under the J-51 program. All nine
amendments were defeated.
According to James Meyer, aide to Councilman
Stanley E. Michels (D-Man.), several of the amendment
votes produced as many as 19 supporters, two short of
the number needed to pass the legislation.
Voting against the J-51 extension were: MaryT. Codd
(D-L, S.L), Ruth Messinger (D-Man.), Carol Greitzer
(D-Man.), Antonio G. Olivieri (D-Man.), Jane B.
Trichter (D-L, Man.), Henry J. Stern (L-Man.), and
Michels (D-Man.).
Those abstaining were Miriam Friedlander (D-L,
Man.), Leon Katz (D-Bklyn.), and Robert S. Steingut
(D-Bklyn.). 0
REHABILITATION FINISHED
Tenants, construction workers and community
sponsors celebrated the opening of 153 Manhattan Ave.
on Nov. 2, one of the first buildings in New York City
to witness complete rehabilitation under the Commun-
ity Management program.
Low and moderate income families were expected to
begin moving into the 21 two and three-bedroom apart-
ments almost immediately. The gut rehabilitation took
ten months and cost $17,000 per unit.
The work was done by the Manhattan Valley Devel-
opment Corp. with federal Community Development
funds provided by HPD. 0
PROSPECTUS FOR LOW INCOME CO-OPS
COSTS MORE THAN THE BUILDINGS
by Bernard Cohen
In 1976, Barbara Pacheco and 15 other families paid
$850 each as their initial investment in a low-income
cooperative at 931-933 Columbus Avenue in Manhat-
tan. The two buildings had just been rehabilitated and
the families, most of them poor and receiving a federal
rent subsidy, were anxious to assume the responsibility
and benefits of cooperative ownership.
More than three years later, the 16 families are sti11
living as rental tenants. Their achievement of legal
cooperative status has been frustrated by a state law that
is designed to protect them, but instead has made it
financially impossible for them to proceed. "I don't feel
I own this building. I don't think there is anyone in the
building who does," said Pacheco. "There isn't the
mentality that what you are paying represents the up-
keep of your property. It's rent! It's sti11 the typical
tenant-landlord relationship."
Simply stated, the issue is the prohibitive cost of dis-
closure. Under state law, prospective buyers of a coop-
erative must be given sufficient information about the
condition of the building and the cost of operating it to
make an informed decision on the merits of the invest-
ment and to be protected from fraud. The law requires a
document, call a prospectus or offering plan, that is
several inches thick with information and can easily cost
tens of thousands of dollars after legal, engineering and
accounting fees are added up. For the wealthy business-
man who can pay $200,000 for a co-op apartment, the
passed-along cost of the prospectus is an acceptable
addition to the already hefty price tag. For a low-
income family paying $250 for an apartment, the cost
for what is essentially the same document is way out of
line and the value questionable, at least in the minds of
some.
John Falk, a former legal services lawyer who has
prepared "100-plus page offering plans" for about
eight low-income cooperatives, said he doubted their
usefulness. "It's overkill for everyone, but for poor
people it's double overkill because they are over-
whelmed by the huge document they receive and do not
have individual attorneys to help them evaluate it," he
said.
The problem has been simmering for a long time, but
it reached the boiling point in the past several months
because the city is on the threshhold of what it hopes
will be a volume program of se\ling buildings to low
income tenants who have been managing the properties.
The sales cannot take place until the legal and financial
obstacles are removed.
"There are a number of buildings that are ready to
buy today that we are not selling today," said Assistant
Housing Commissioner Philip St. Georges. "It would
be fair to say that we are stalled, but it is probably
because we want to be. "
Interviews with tenant advocates and city and state
government lawyers and housing officials produced
absolute agreement that the current disclosure system
does not make sense for low-income families. The dis-
agreement lies in proposed alternatives, with one group
pursuing ways to make disclosure less costly and the
other group arguing that there is no reason for substan-
tial state regulation of low income cooperatives.
In a traditional housing cooperative, a corporation
formed under the New York General Business Law
owns the land and the building as a whole. Individual
ownership is in the form of shares of stock in the
corporation. The stock gives the tenant-owner a voice in
corporate affairs and the right to reside in the building
as long as certain conditions are met. Shareholders
enjoy tax deduction benefits not available to renters.
And co-ops are exempt from rent control and rent
stabilization laws.
Cooperatives are regulated by the New York State
Attorney General through the Martin Act , or "Blue
Skies" laws. The prospectus must be approved by the
attorney general's office before the sale can go through.
The proposed prospectus for 931-933 Columbus
Avenue contains 35 separate documents. They include a
physical description of the buildings and their major
systems; a description of the neighborhood; a budget
and anticipated carrying charges for the first year of
operation; a history of the buildings; a lawyer's letter of
adequacy stating that the cost projections are reason-
able; a legal opinion on the availability of tax deductions
for the cooperators; a description of the structure and
decision-making process of the cooperative corpora-
tion, the conditions of residence; relevant correspon-
dence with the city's housing agency; a management
agreement and applicability of the Section 8 rent
subsidy, to name only some.
Relatively few low-income groups have gone the route
of the Martin Act cooperative because of the astronomi-
cal cost. On the one hand, the city has agreed to sell
buildings in low-income neighborhoods for $250 per
apartment, or $2,500 for a to-unit building. On the
other hand, the cost of an offering plan for such build-
ings might easily be $10,000, according to Falk and
other lawyers who have prepared them without charge.
Creation of standard disclosure forms and wider use
of para-legal aides would undoubtedly bring down the
cost but there is disagreement on how much.
Robert Armstrong, who compiled the prospectus for
931-933 Columbus Avenue, estimated that as many as
22 of the 35 documents in the offering plan could be
boiler-plated.
A sizable number of homesteading groups have
adopted a different corporate form of ownership that
has so far steered them around the attorney general's
office but has left them, by their own admission, in an
uncertain legal position.
City housing officials and the state attorney general's
office, which have been trying to iron out the problems
for several months, reported in late October that they
were close to an agreement on a simplified disclosure
process under which the city would provide much of the
physical and financial information.
"We have indicated our minimum requirements and
assisted the city in providing for some kind of truncated
procedure for co-oping city-owned properties," said
Harold Lubell, State assistant attorney general in charge
of the Bureau of Real Estate Financing. "We don't
want to impose the same obligations we would with
conversion of a middle or upper income or luxury
building," he said, adding, however, that "We have a
duty to implement the laws of New York State that are
designed to protect the poor as well as the rich."
For city-owned buildings that have been managed by
the tenants (under the year-old Tenant Interim Lease
program) and are ready to be sold, the state will not
require the usual outside, independent engineering and
accounting reports, but will accept information already
available to the city, Lubell said. In most cases, the data
will be considerably less detailed than what is normally
expected of an offering plan. He said the state will
require consent from more than 35 per cent of the
tenants-the minimum set by state law governing
cooperative conversions.
The city's Department of Housing Preservation and
Development is now in the process of devising forms for
reporting the disclosure information. They will be tested
in a pilot project of 25 buildings. "We envision HPD
doing the actual work" on preparing the offering plans,
said Rita Dattola, a lawyer with the housing agency.
One reported hangup is whether the cooperatives will
be formed as standard, for-profit business corporations
-as favored by the attorney general-or as non-profit
corporations, the more traditional structure for low
income groups.
In addition, city housing sources said the state was
demanding that HPD "guarantee" the functions of the
major systems in the buildings it sells. Lubell denies that
is the case.
How this new set of procedures will benefit low-
15
income tenants who want to buy their buildings from
private owners is unclear. Lubell said his office would
cooperate with tenant-sponsored offering plans.
An entirely different viewpoint is advanced by others
who oppose this amount of government regulation and
assert that the circumstances that the Martin Act was
designed to cover simply do not exist for low income
cooperative conversions.
"The Martin Act is a securities statute," said
Lawrence McGaughey, a lawyer who has represented
numerous community housing organizations and tenant
groups. According to McGaughey, the law is intended
to oversee a process in which a private owner is selling to
unknowing buyers, huge profits are being made, sub-
stantial sums are being borrowed and shares of stock are
being issued.
None of this is the case with low income cooperatives,
McGaughey maintains. In most instances, tenants have
either been living in the building for a long time or, in
the case of sweat equity homesteading, have performed
the rehabilitation themselves, so they are well acquain-
ted with its physical condition. Under city policy, the
buyers are only paying $250 per unit, so there is no
heavy borrowing or huge profit-taking. Ownership can
be vested in a non-profit corporation with the tenants as
"members" and the sale of individual apartments
governed by the rules of the marketplace, he says.
"The key words are 'protection racket,''' Mc-
Gaughey said, referring to the rigorous disclosure
requirements of the law, and "bank tribute," referring
to the sizable debt service on bank loans for traditional
co-ops, but which is non-existent for most low-income
co-ops.
There are, in fact, many buildings in New York City
that are owned by non-Martin Act corporations. They
are known formally as Article XI non-profit Housing
Development Fund CorP9rations and informally as
consumer cooperatives. Membership is restricted to the
tenants. In most cases, no equity paper (shares) has been
issued. Banks and government agencies have made
mortgage loans to these consumer co-ops without first
requiring attorney general approval of them. As a
practical matter, there is no economic incentive to
adhere to the Martin Act because the key benefit of
income tax deductions is of no use to poor people.
McGaughey and the Urban Homesteading Assistance
Board, which provides technical assistance to grass
roots housing groups, believe that consumer coopera-
tives should be recognized as an available option,
although they acknowledge that clarification of several
legal issues, including the definition of ownership and
establishment of rent-setting ability, is needed.
"This does not mean the attorney general has no
interest," McGaughey said, noting that the state has
approval authority over Article XI corporations.
Instead, he called for very simple disclosure statements
that would involve neither the cost of a prospectus nor
GLIEDMAN - A FIRST IMPRESSION
by Brian Sullivan
Nathan Leventhal's recent departure from the posi-
tion of commissioner of HPD to become a deputy
mayor creates what is commonly known as a "hard act
to follow."
Leventhal, an energetic housing lawyer who came to
HPD from the private sector after earlier experience as
rent commissioner within HDA, was cast in the "bright
young man" mold of the Lindsay era. His administra-
tion of HPD was high profile, take charge, management
by objective.
Anthony Gliedman, author of a recent study critical
of the city's "revolving door" auction policy and
former commissioner of the Department of Ports and
Terminals, seems determined to put his own brand on
HPD, not only stylistically but also substantively. Like
Leventhal, he greets guests in his shirt sleeves, but he
speaks less emphatically and listens more intently.
Internally, he seems to perceive a need to stabilize HPD
after Leventhal's much needed shake-up, to steer the
bureaucracy rather than wrench it into a new course. It
may be too early in his tenure to offer a judgment (he's
had the office just over a month and no major policy
issues have been confronted yet), but there are some
indications of the direction in which he intends to take
the city's major housing agency.
The self-help approach to housing, specifically within
the In Rem programs, will probably enjoy a high prior-
ity under Gliedman. He has seen firsthand what tenant
cooperatives can accomplish and is acutely conscious of
the limitations of HPD in the direct management of its
vast In Rem stock. At the same time, he emphasizes the
need for more moderate rehabs to stretch the city's
limited amount of Community Development money.
Clearly this poses a problem for tenants in city-owned
buildings which need major amounts of rehab work to
assure their long-term usefulness as housing.
Similarly, he is committed, as is the entire Koch
administration, to creating a mechanism for high
volume "take-out" or sale of In Rems to non-profit
tenant organizations. But he seems to have a greater
understanding of the problem of displacement.
HPD is attempting to sell buildings to tenants at such
prices or with defects so costly to repair as to make it
impossible for low income people to afford to own the
buildings in which they now live. The issue of maintain-
ing HPD's policy of selling In Rem housing to low
income tenant groups at $250 per apartment may be the
first serious test of Gliedman's commitment to coopera-
tive home ownership for low income people in their own
neighborhoods.
Rather than defend the blatantly political reasoning
behind HPD's attempt to renege on its uniform sales
policy in Clinton, Gliedman speaks with some empathy
of the problem this may pose for the affected tenants.
He is actively looking for ways to avoid imposing the
full "market price" on tenants while assuring some
increased income to the city. Whether he can pull this
sort of balancing act off remains to be seen. In the
meantime, every organized tenant group in the city is
watching and waiting with more than passing interest.
The idea of creating a uniform sales price for all In
Rem housing in low and moderate income areas (as
defined by HUD) was greeted by housing activists and
HPD bureaucrats alike as a long overdue solution to the
problem of individually negotiating every transfer of
ownership to a tenant cooperative from HPD. The
existing mechanism,ironically named the "Direct Sales
Program," was universally recognized as a failure.
After reviewing a great deal of research by HPD staff
on the selling prices achieved at auctions, the Board of
Estimate approvea the uniform sales price of $250 per
unit for In Rem housing in all census tracts eligible for
CD funds in 1978. Thus, the way was open for a rela-
tively simple and rapid program of sales to tenant
groups as Article XI non-profit housing corporations.
Earlier this year, however, HPD decided that it might
look bad if low income tenants were able to buy valu-
able property in real estate "market areas" at such low
prices. The Clinton neighborhood on the mid-West Side
has become the testing ground for one of the most con-
troversial policy questions facing New York City. Will
the Koch administration have the commitment to
economic integration in our neighborhoods to stick to
the $250 sales price for low income tenants or will it take
the money and run, leaving low income tenants to be
displaced by the highest bidder at auction?
There are many problems facing Gliedman as he takes
over the reigns at HPD-an embarrassing inability to
spend 312 loan money, a growing empire of unwanted
In Rem property, a self-destructing demolition pro-
gram, etc.
But, none of these combines such crucial elements of
social, political, and fiscal policy as does the In Rem
sales question.
The answer Gliedman comes up with will have an
impact far beyond Clinton. It may well in the long run
determine the ability of low income people to be secure
in their own homes in neighborhoods throughout the
city. 0
Brian Sullivan is a senior planner at the Pratt Institute
Center for Community and Environmental Develop-
ment.
BRONX RESIDENTS SAY NINTH FED. REDLINES
The Ninth Federal Savings and Loan Association in
the Bronx had some unexpected company on October
20. About 50 residents of Castle Hill, Soundview and
Bronx River sections picketed a branch at 1580 West-
chester Avenue to complain that their neighborhoods
are being red lined and to demand that the bank sign an
affirmative action agreement to offer more local loans
at affordable terms. A smaller contingent went inside the
bank to press their request to attend Ninth Federal's
annual shareholders meeting in January.
The demonstration was organized by Bank on the
Bronx, a grass-roots anti-redlining coalition that was
established by the New York Public Interest Research
Group (NYPIRG).
According to data compiled by BOB, Ninth Federal
had $62 million in deposits from the Bronx in 1978, and
from 1976 to 1978 the bank originated only one mort-
gage in Castle Hill and only five mortgages, totaling
$141,500 in the entire Bronx. At the same time, accord-
ing to the data, the bank originated 25 loans totaling
$11.7 million outside the Bronx.
"This is the worst record of all the banks in the
Bronx, and God knows all of them have poor records,"
said Joyce Beverly, chairperson of Bank on the Bronx.
The group charges that Ninth Federal is in violation of
federal law (the Community Reinvestment Act), which
requires banks to meet the credit needs of their local
communities.
The affirmative action agreement proposed by BOB
would require Ninth Federal to provide at least $325,000
to meet local demand for mortgage and home improve-
ment loans; establish a minimum 20 per cent downpay-
ment with up to 30 years to re-pay the loan; offer loans
for multiple-family dwellings; enforce the "good
17
repair" mortgage clause; advertise the availability of
credit in local newspapers; advise reputable licensed real
estate brokers of Ninth Federal's programs and provide
BOB with statistical loan information on a quarterly
basis.
James Bottari, president of the bank, has refused to
sign the proposed agreement, according to BOB.
Meanwhile, a new study released by NYPIRG charges
"almost total" geographic discrimination in mortgage
lending by savings banks, savings and loan associations
and commercial banks in Central Harlem. Using 1977
records, the study said the four banking institutions
with branches in Central Harlem had combined deposits
of $197 million but held only $8.8 million in local
mortgages and home improvement loans and had orig-
inated only seven loans in the area for a total of
$87,000. The branches were those of the Bowery and
Empire Savings Banks, Carver Federal Savings and
Loan Association and the New York Bank for Savings.
No mortgage loans and only seven short-term home
improvement loans totaling $27,840 were made by the
area's four commercial banks in 1977, according to the
study.
A recent federal investigation of mortgage practices by
the Washington Federal Savings and Loan Association
shows that despite savings deposits totalling $172 mil-
lion from local residents, the bank did not make a single
residential loan in Washington Heights-Inwood in
northern Manhattan from January 1978 to March,
1979.
The investigation by the Federal Home Loan Bank
Board attributed the total lack of mortgage activity to
an "unduly restrictive" 50 per cent downpayment
policy. 0
TEACHERS BAnLE COMMUNITIES
FOR CONTROL OF CETA IV FUNDS
by Susan Baldwin
A newly formed national, community-based coalition is
mounting a fight to save some $7 billion in CET A
(Comprehensive Employment and Training Act) funds
for youth employment and training from being assigned
to local public school systems and the educational estab-
lishment around the country for after-school programs
that exclude community participation.
The group, a coalition of 22 organizations known as
the National Alliance of Community-Based Organiza-
tions, was formed in October to protect CET A funding,
primarily under CETA Title IV, for neighborhood-
based programs that encourage truant students to re-
enter the school system or receive alternative education
that will lead to job training and employment.
According to Betty Terrell, executive director of the
Association of Neighborhood Housing Developers and
one of the organizers of the coalition, the American
Federation of Teachers has been lobbying to secure this
money funded under CETA's Youth Employment and
Demonstration Projects Act for its own and other edu-
cational organizations' use (e.g. National Education
Association, Parent-Teachers Association, and
National School Boards) on the local level.
"We heard that Albert Shanker [president of the AFT
and its New York Chapter, the UFT] was trying to get
this money for his union and take it away from our
community programs," said Terrell. "What they're
saying is if you give the teachers a little more money,
they'll be able to take care of the problems they have in
the school system. They don't reach the kids in the
schools now, so what makes them think they will reach
the drop-out students through this youth training
program." She also charged that the AFT had agreed to
support President Carter in his re-election efforts as a
trade-off for White House support of this re-assignment
of youth training and employment funds.
Reached at the UFT's New York office, Susan Glass,
a spokeswoman for Shanker, said, "Of course Mr.
Shanker favors this [CETA IV funds] going to the local
school systems. There have been many budget cuts, and
this money could close the gap ... There may be some
CBOs that are doing a good job, but there are many that
are fly-by-night operations." She said CET A funding
could be used in New York City to close the expected
$45 million budget gap and keep some 3,000 teachers
from being laid off in February.
According to Jerry Morris, an AFT official in
Washington, the Department of Labor had found the
CBOs to be "unaccountable" in the past, that "there is
no information about them" .. . "no level of quality, no
measures" ... and that "these programs are short-
changing the youth. They may get a job for six months,
but there is no education and training." He also sug-
gested that CBOs felt threatened at losing the funding
because it was being used to support "their political
fiefdoms . . their political base ... their political patron-
age. "
Six months ago, President Carter commissioned Vice
President Walter Mondale to' form a task force on
youth employment that was mandated to look into the
problems of escalating youth unemployment and
apparent nonexistent education and training in the
schools. This organization, the Education Task Force
on Youth Policy, is to file a final report of its findings
with the White House early in January, in time for the
President's submission January 15 of proposed legisla-
tion and the corresponding budget for domestic projects
for the upcoming year.
This task force will also be responsible for filing data
that will influence a proposed major rewriting of youth
employment and training legislation in 1981.
"The groups in New York and elsewhere around the
country are justified in their concern about this
program," said Othello Poulard, an associate at the
Washington-based Center for Community Change, a
national technical assistance organization that provides
aid to non-profit community groups. "From what we
hear, Vice President Mondale's task force is going to
recommend that the teaching establishment get the
lion's share of this money. We also understand that the
task force will recommend that increased prerogatives
and sign-off rights should be given to the public school
systems in the new contract. "
In a position paper prepared at a recent Baltimore
conference, the task force went on record supporting
sign-off privileges for local "education agencies" and
"staff and other standards equivalent to those of the
public schools" in programs involving training run
outside the school system.
Following the conference, the organizing committee
that led to the formation of the national CBO alliance
issued a statement to the task force supporting the
president's national policy of "new partnerships," but
emphasizing that it was "adamant that citizens' groups
be included as full and equal partners in the policy
formulation process" and that "citizens' groups which
include families and youth . . . must have an active role
in the setting up of national and local priorities with
respect to the substance, methodology, resource alloca-
tion of programs."
At that time community representatives attending the
conference also agreed to collaborate with and support
local school boards and districts in efforts to improve
quality education in the schools, but opposed giving
local school boards signing-off power on any of the
CET A funding dealing with educational training. In
addition, they asked that the 1977 CET A regulations
recognizing the CBOs as "critical partners" in forming
policy and providing programs for youth be upheld.
According to Terrell, New York City's CBO contin-
gent is in the preliminary stages of meeting and planning
future negotiating strategy and does not intend to "give
up to Washington without a fight." It also expects to
have a meeting with White House officials and other
members of the national alliance in November to push
for community control of the CET A IV contract.
"As far as I know, we have a good program and
Washington thinks so too,"said William Sussman, of
the Union Settlement House in East Harlem, which has
a $100,000 CETA IV contract to train 22 young men in
building maintenance and repairs skills.
"We had the program last year and filed our report,"
he added. "They made it clear to us then that we would
be refunded this year, but so far we haven't been."
Union Settlement's after-school program, which
requires high school-aged participants to attend voca-
tional school during the day and work four hours at the
minimum wage scale ($2.90 an hour), five days a week,
expected to be refunded by September 11. City and
Washington officials recently promised funding for the
group by mid-December at the earliest.
"Manhattan Vocational School was a disaster dealing
with these youth," Sussman explained, adding, "I guess
it was for this reason-their performance-that the
government liked what we were proposing and picked
us. Now we don't know whether we will be refunded,
but the city's Department of Employment says we will.
Who knows? But, I think it's a terrible mistake to take
the community out of this youth training program,
because it should control it. It understands what's
happening. The Board of Education is up in Mars."
Poulard is optimistic about the alliance's chances of
convincing the White House of the importance of
including the CBOs in the new funding.
"We talked to the Department of Labor and sensi-
tized them on the CET A VI contract, and now this year
one-third of all the participants in Title VI are from the
CBOs. It paid off here ... We hope it will work with
CET A IV," he concluded.
Meanwhile, the city's Board of Estimate October 26
renewed ANHD's non-profit CET A VI contract in the
amount of $3,434,585, effective November 1, 1979, to
October 31, 1981. Calculated on an I8-month basis, it
also includes a six-month optional extension period. It
will provide 180 jobs to eligible city residents for work
in the areas of housing preservation, fire prevention,
community development, education, and cultural
activities. 0
19
312 LOANS continued
rather than weaknesses.
"This 312 program has been used with great success
throughout the country, and we hope to do the same
thing here, but we can't wait for the city to perform,"
said Steve Lampert, one of the implementers of this
South Bronx plan.
Representatives from Logue's office are planning
visits to cities such as Boston where the 312 loan has
been used successfully, in an effort to devise a stream-
lined program for this area of the Bronx. They hope to
be funded directly by Washington to rehabilitate full
blocks in this section of the Bronx without going
through HPD's scrutiny first.
"They may be trying to get everything together down
there at HPD," Lampert concluded, "but we don't
have time to wait. We have identified all the owner-
occupied buildings in the two-block area of our plan
where we want to help the homeowners, and we can't
afford to wait on Staten Island for ayear. Let Staten
Island and Queens wait. If I wait on my guy on Tiffany
Street, I might be getting a vacant lot one year later." 0
CO-OPS continued
the inevitable time consuming involvement of the city
and state government bureaucracies.
"We're going to need flexibility," McGaughey said,
"and the last thing a government agency has is flexi-
bility. Any time the agency wants to vary from the
boiler plate, it's going to take 10 months and have to be
signed off by four or five people. That's the way a
bureaucracy operates.
"If HPD wants to get into the business of sponsoring
co-ops, that's their business. But I would not like HPD
to say 'it's our way or no way.' I want the right to
compete."
This point of view appears to have little sway with city
and state officials. "The Martin Act expressly provides
that a cooperative interest in realty, which includes co-
ops, condominiums and homeowner associations, is a
security interest," said Lubell. "Therefore, any offering
for sale must be made in accordance with the require-
ments of the Martin Act. "
St. Georges said, "We want to have a broad under-
standing with the attorney general on buildings we sell
to tenants."
Meanwhile, the tenants of 931-933 Columbus Avenue
wait for approval. The state has asked HPD to review
the proposed prospectus. HPD has had it since early
July, according to Armstrong. An HPD spokeswoman
said it is still being evaluated by the legal office, which
should have comments and suggestions ready "in the
next couple of weeks." 0
CENSUS continued
Although the actual dollar amount of federal aid lost
by New York City because of the 1970 undercount is
difficult to determine, the U.S. Conference of Mayors
has estimated it was more than $50 million for jobs
(CETA) and $10.7 million in general revenue sharing
funds for Fiscal Year 1978 alone.
New York State currently has 39 seats in the U.S.
House of Representatives. The Census Bureau estimates
that four of those seats may be lost after 1980 due to
population shifts. Three are in New York City in
the heavily minority districts currently represented by
Rep. Charles Rangel of Manhattan, Rep. Shirley
Chisholm of Brooklyn and Rep. Robert Garcia of the
Bronx. It will take about 500,000 people to make up a
Congressional district. Some state Assembly and Senate
seats may also be lost.
If this happens, the result will be to further tilt the
political power away from older urban centers.
The Census Bureau is hoping-optimistically in the
eyes of some-to collect most of its information
through the mail. Shortly before April I, it will mail out
the questionnaires, with "short forms" consisting of 19
questions going to 86 per cent of New York City house-
holds and "long forms" made up of 65 questions going
to the rest. Both long and short forms have questions
about age, sex, marital status and ethnic origin as well
as questions about the size, cost and condition of their
living quarters. The long form also asks respondents
about their educational attainment, type of work,
income and mode of transportation. It also has ques-
tions concerning citizenship and country of origin, but
does not ask the legality of one's residence.
The Census Bureau says it is doing many new things
to improve the accuracy of the count. Teams of well-
trained "community service specialists" are being
dispatched into neighborhoods to promote the census
among local officials, schools, civic groups, community
boards, senior citizens centers, day care centers, relig-
ious organizations and community groups. One of the
things they do is explain how local groups can use the
census data to their own advantage.
"I feel reassured each day," said a community
specialist in the Bronx. "Most of the problem is lack of
education.' ,
In addition, every known occupied housing unit that
does not mail back the questionnaire will be visited by
an enumerator. The bureau says it is committed to
hiring enumerators who are residents of the neighbor-
hoods in which they will be working, a practice that was
not followed ten years ago when suburban housewives
and white college students were sent in to heavily
minority areas to knock on doors.
The bureau is also working with the Post Office and
will be buying commercial mailing lists to identify
occupied housing units. The forms themselves will also
help the bureau with this. In addition, there will be
assistance centers throughout the five boroughs, a
special telephone number for census information, a
media campaign and posters.
A new review procedure will enable local officials to
study household counts before the census is taken and
after preliminary figures are in. Census personnel will
recheck areas where discrepancies in data exist.
Criticism
Although the outreach is impressive, the problem is
formidable. A survey in early October of 368 Harlem
residents by the New York Urban Coalition showed that
only two per cent were aware of the upcoming census.
Asked its purpose, 32 per cent said it was to count
population and 4 per cent said it was for allocation of
funds. The rest said they did not know. In a dress
rehearsal census held in lower Manhattan in September,
1978, 42 per cent of the known households did not mail
back their forms.
Many people may be hard to find because they live in
unconventional housing, such as lofts or abandoned-
looking buildings. Some say the forms look too intimi-
dating and will take much longer to fill out than the
Census Bureau estimates.
The bureau has been sharply criticized for using only
English language forms in its mailings . Although
respondents can obtain Spanish language forms by
calling the bureau or returning the English language
form with the appropriate box checked off, the
procedure will undoubtedly discourage participation of
Hispanics in the census, according to many. A French-
speaking community service specialist has yet to be
hired (as of November I) despite the large Haitian
population in several areas of the city.
There is more that could be done. The state of Cali-
fornia, which is expecting to gain Congressional seats,
has appropriated funds to improve its count. New York
State, which may lose seats, has not. A city census
office, headed by David Jones, special advisor to Mayor
Koch on minority affairs, is underfunded and under-
staffed. It is developing plans, but has no money to do
much. "A bare minimum will cost $800,000," Jones
said.
The Census Bureau has made no commitment to con-
tinue the community service outreach effort after 1980.
Many CS specialists said they believe it should be made
an ongoing function. "You can't erase 20 or 30 years of
fear and apathy in one year," said one specialist who
works in Brooklyn.
Confidentiality
Perhaps the biggest obstacle to widespread coopera-
tion with the census is the touchy issue of confidentiality.
Distrust and fear of government run deep, especially
among foreign-born populations who lived under
repressive regimes and are now in the United States
illegally. Watergate and documented FBI spying have
not done much to build confidence in the U.S. govern-
ment's integrity.
There are an estimated half-million to one-million
undocumented aliens living in New York City, most of
them from Central and South America. They are sub-
ject to deportation if apprehended. In the 12 months
ending October, 1979, 14,000 undocumented aliens
were apprehended here, of whom 17 per cent were
deported, according to the U.S. Immigration and
Naturalization Service. In addition, there are poor U.S.
citizens living on public assistance for whom the
answers to some census questions could change their
status.
Among the most sensitive questions asked by the
census, according to bureau workers, are those asking
size of family, amount of income, number of pregnan-
cies and citizenship.
It is against the law under Title 13 of the U.S. Code
for the Census Bureau or any of its employes to provide
any information to another government agency, other
than the aggregate data that is made public. By agree-
ment, records are sealed for 72 years. Census workers
must swear to an oath of confidentiality, and violators
are subject to a $5,000 fine and five years in prison.
Even the Freedom of Information Act cannot be used to
get unpublished census data. The bureau proclaims
proudly that no evidence has ever been put forth of a
break in confidentiality.
Nevertheless, census employes are human, and no
absolute guarantee can be made that the law will not be
broken. "Laws are not absolute. Neither are they
perfect," the bureau acknowledges in material it uses to
train employes. "Almost all laws contain 'loopholes. '
This fact has serious implications for the Bureau of the
Census and its commitment to keeping confidential the
statistical data that it collects. "
The arrest of more than 80 Mexican citizens in the
Austin, Texas area in May of 1976 immediately on the
heels of a census pre-test hurt the credibility of the
Census Bureau, although no evidence was ever offered
that linked the arrests with the census. "We had been
getting good cooperation from people and from the
undocumenteds, but after that it came to a stop," David
Buontello, who was in Austin and now is the census
coordinator in Dallas, told City Limits.
With the stakes as high as they are, particularly for
undocumented aliens, stronger safeguards ranging from
a Presidential proclamation to new legislation to a
general amnesty are being demanded. Because of its ties
to the undocumented population through local parishes,
the Catholic Church has been actively courted by the
Census Bureau and elected officials, so far to no avail.
The Church is afraid of compromising its own credi-
bility.
"We are the ones with our heads on the block," said
the Rev. Francisco T. Dominquez, director of the Office
for Immigrant Services of the New York Archdiocese.
Dominquez, a parish priest for 23 years in Washington
Heights, an area with a large Dominican population,
believes that undocumented aliens have much to lose
21
Will the Census Bureau find Laverne Leonard and her three
children or the two other families who live in this landlordabandoned
building at 36 West 139th St.? The building has no heat or hot water.
Its top floors are gutted by fires. The building next door is tinned up.
and little to gain by cooperating with the census. "The
majority of ilIegals are badly housed and badly paid;
they don't request available services despite the fact that
various taxes are being deducted from their paychecks,
because they have to keep a low profile. They don't
want to be exposed."
A bill introduced by Garcia, who heads the census
subcommittee of the House Post Office and Civil
Service Committee, and Rep. Elizabeth Holtzman of
Brooklyn would make it illegal for the United States to
deport anyone based on information obtained from the
Census Bureau.
Bevalaqua and Dominquez said they support the bill,
but they called for a number of changes to make it even
tighter.
Jobs
Before long, there will be 20 district census offices
throughout New York City. Each will be staffed with
about 500 enumerators plus crew chiefs, clerical help
and supervisors. Each office will have a manager and an
assistant manager. Officials acknowledge that there is
a "political referral" system in which those people who
have the endorsement of their Congressman and other
elected officials will be given "preference" for referral
to the Census Bureau for jobs. Officials stress that
everyone will have to pass a test and undergo a personal
interview and that equal employment laws will prevail.
Here, according to interviews with elected officials and
bureau staff, is how the system will work in the New
York City area.
Congressional Democrats have been asked to submit
names for the assistant manager jobs. These are key
jobs, because the assistant managers will be responsible
for filling the several hundred other jobs in the district
office. Most of the district managers will be non-politi-
cal appointments made from within the bureau.
How the political referral process will work for
enumerators' jobs is somewhat less clear. The Census
Bureau insists it intends to consider names submitted by
community-based organizations, civic groups and other
sources from within the local communities. Privately,
officials say the political referral system applies
throughout, and they advise everyone who wants a job
to go through his or her elected officials, particularly
the Congressman.
"Preference will be given to those who are of the
same party as the incumbent President," said James
Robinson, chief recruiting officer for the New York
area. "There is nothing new about that. The precedent
was set by the Republicans in 1970 and 1960. The
Democrats are not breaking any new ground."
Garcia told City Limits he wants to control the jobs to
be sure those hired in the South Bronx are familiar with
and compatible with the resident population. Asked if
having worked for him politically would enhance a
person's chances, Garcia replied, "It would be helpful."
There are others, including some census workers, who
disagree with this system of recruiting. "I'm not against
political referrals," said one census employe, "but I
don't want people eliminated who are not connected
with a political machine." Another said, "The taking of
the census should be seen as neutral-a technical
process. Instead, it's going to be seen as just another
cynical, manipulative move by the government. "
Under this "Republicans need not apply" system, the
counting process could be especially hampered in areas
outside New York City where the locally elected leader-
ship is dominated by the GOP, some said.
A conference on the census and how public and
private groups may use the data, will be held on
November 28 at the Schimmel Center for the Arts at
Pace University from 9 a.m. to 4:30 p.m. 0
Anyone interested in a census job should call 620-
3516 or write U.S. Census Bureau, 201 Varick St.,
Room 401g, New York, N.Y. 10014
SOUTH BRONX continued
Enhancement of the capacities of community
agencies is the major priority of the SBDO
human services strategy.
Despite these statements, the early action projects the
report proposes do not provide direct funding to com-
munity organizations. As noted above, the plan has a
primarily physical orientation. The "areas of strength"
the plan builds upon are spatial ones rather than the
community strengths cited in these statements. Rather
than direct funding, the report proposes that the SBDO
develop the capacity to serve several support functions
for community organizations. The SBDO will assume a
brokerage role in relation to government agencies and
FEDERAL JOB LOSS
Despite a 15-month-old Presidential order calling for
the location of federal facilities in central cities, New
York City continues to lose federal jobs, according to
Comptroller Harrison J. Goldin.
Executive Order 12071, issued by President Carter in
August, 1978, as part of his urban strategy program,
requires that central cities, particularly those with high
unemployment, be given priority in the selection of sites
for federal facilities.
Yet so far, the pronouncement has had little effect in
curtailing the decline in federal employment in New
York City, Goldin says.
In a letter to Carter sent on October 11, Goldin said
that New York City lost 400 federal jobs during the first
four months of 1979. This coincides with the trend for
1966 to 1976 in which the city lost 23,996 federal jobs or
20 per cent of its federal civilian employment.
The recent decline is particularly disturbing to city
officials since nationwide federal civilian employment
increased from 2,753,000 in 1978 to 2,824,000 in June,
1979. Goldin noted that the city's overall unemploy-
ment rate in June, 1979, was 10 per cent, nearly twice
the national average.
The comptroller's office said on Oct. 31 that it had
not yet received a reply from Carter. 0 Katie Hanner
private foundations, help provide technical assistance
and training in financial management and program
development and provide information on government
programs, their regulations and requirements and the
funding they offer. While these are important func-
tions, they duplicate the services performed by other
Bronx and city-wide organizations. Strengthening their
efforts rather than substituting for them might be more
beneficial. This is as much a strategy to control the
gateways to the outside as it is a strategy to build the
capacities of South Bronx community organizations.
The plan also tends to rely upon government agencies
and outside community agencies rather than indigenous
community organizations. The one group whose
program proposal the SBDO has chosen to sponsor to
test the effectiveness of its broker role is the Girls Club
of New York. 0
Peter Meiser is a sociologist and a partner in Neighbor-
hood Development Resource, an organization that
provides consultant services to community organiza-
tions.
Thousands of people who attended a rally in New York City against "Big Oil" on October 17 heard calls for
reimposing price controls on oil and natural gas and holding them on gasoline; a federal investigation of fuel
shortages and creation of a government-owned corporation to buy, distribute and explore for oil, gas and coal.
The rally was held shortly before the major oil companies announced tremendous third-quarter profits,
including Texaco, a 211 per cent increase; Standard Oil of Ohio, 191 per cent; Mobil, 134 per cent and Exxon,
118 per cent. On November 6, the U.S. Department of Energy accused nine major oil refineries of overcharging
the public by $1.18 billion from 1973 to 1976. The rally was one of many sponsored across the country by a
coalition of labor unions and citizen groups.
HISPANIC CONFERENCE
More than 1,500 federal, state, and local elected
officials, housing and finance professionals, and grass-
roots, community-based organizations are expected to
attend the first annual conference of the National
Hispanic Housing Coalition December 16 through 19 in
San Antonio, Texas.
"Hispanic America: Milestones of the 70's-Focus-
ing on the 80's" is the theme of the conference, which is
receiving financial support from the federal Community
Services Administration.
The conference is part of an ongoing effort to
improve the quality of services delivered to residents of
Hispanic communities. Topics to be discussed include
displacement, relocation, neighborhood revitalization,
citizen participation, energy conservation, grantman-
ship, effective political lobbying, and mortgage funding.
Two conference highlights will be an Hispanic film
festival and an innovative programs plan.
For information, call Irene Packer, 202-783-1478.
or Terri Garcia, 202-783-1480, at the coalition's office,
810 Eighteenth Street, N.W., Suite 705, Washington,
D.C. 20006. 0
23
MARRERO QUITS DHCR
Victor Marrero, commissioner of the State Division
of Housing and Community Renewal, will leave that
post in the near future to become under secretary of the
U.S. Department of Housing and Urban Development.
He will be second in command to HUD Secretary Moon
Landrieu and the highest ranking official of Hispanic
origin in the Carter administration. His departure leaves
DHCR without a commissioner- for the third time in
three years.
Marrero had startled political observers by running a
close second to Stanley Simon in the four-candidate
Democratic primary for Bronx Borough President on
Sept. 11. It is generally believed that he will make
another try for elective office, perhaps a second attempt
for borough president in 1981.
In a second personnel change, Sharon Lauer has been
ousted as chief coordinator of Neighborhood Services
as a result of growing controversy within the agency
over her administration of the Neighborhood Preserva-
tion Companies program that provides state funding for
neighborhood organizations. Her replacement is Eliza-
beth Searles, who has worked as a planning consultant
to DHCR for the past two years. 0
To: The Editors. CITY LIMITS. Association of Neighborhood Housing Developer 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 oHlcial., city-
wide groups - 520.00
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Enclosed Is my check for $ ______ payable to ANHD / CITY LIMITS.
Name: ____________________________________________________________________ __
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City Limits
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IN THIS ISSUE
1980 Census p. 2
Section 312 Loansp. 4
South Bronx Plan p. 6
Section 8 Moderate Rehab p. 10
Low Income Co-ops p. 14
Gliedman-An Appraisal p. 16
CETAIVp.18
Second-class postage paid New York. N.Y. 10001

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CITY LIMITS

NOVEMBER 1979 VOL. 4 NO.8

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