Вы находитесь на странице: 1из 28

THE NEWS MAGAZINE OF NEW YORK CITY HOUSING AND NEIGHBORHOODS

FEBRUARY 1982
$1.50
Who Is the Public Service Commission?
Deeper in Debt with the 'New Mortgages'
Reassessing Property Taxes
New Alternatives for City-Owned Property
Short Term Notes
Plugging the Holes in Stabilization
Ever since the Rent Stabilization Law
was passed in 1969, tenant advocates
have pointed to two glaring holes in the
law which, they warned, could render the
act meaningless. The law that placed all
newly vacated and constructed apart-
ments under the stabilization system was
to be enforced through an appeals board
which in turn would be funded by a
quasi-officiallandlord organization, the
Rent Stabilization Association. As a
result, the Conciliation and Appeals
Board has suffered from what critics
claim is chronic underfunding.
Also, since apartment rents did not
have to be registered with the city
housing department, new tenants would
fmd it difficult to verify what the old rent
for their apartment had been, and there-
fore whether the new rent was legal.
Now, as the City Council prepares to
consider the extension of the Rent
Stabilization Law this spring, a bill intro-
duced by Manhattan Councilman-At-
Large Edward Wallace, and co-spon-
sored by 11 others, would attempt to
remedy both of these problems.
Intro 1192, says New York State
Tenant and Neighborhood organizer
Michael McKee, stands a strong chance
of passage because of the general un-
settled atmosphere in a Council that has
not been re-elected and has new district
lines for itself. The uncertain fate of At-
Large Councilmembers will also make
these legislators more responsive to a
well-organized tenant campaign, said
McKee. The bill should be debated, he
added, at the same time that the
Council's Housing and Building Com-
mittee takes up the extension of the
stabilization law in March.
The bill would effectively sever the
Rent Stabilization Association from the
system, shifting its present administrative
functions to the city housing depart-
ment. It would also require landlords of '
rent stabilized apartments to register
legal rents and what tenant services are
Cover Photo byAl Sacco
provided with the city. By contrast, rent
controlled tenants can get a rent and ser-
vices history from the city. Passage of
the bill, advocates say, would go far
towards eliminating illegal overcharging
and cutbacks of required services.
NYSTNC is urging tenants and their
VISTA Workers
organizations to lobby their Council
representatives on behalf of Intro 1192,
and to urge Councilman Thomas Man-
ton, chair of the Housing and Building
Committee, to schedule its hearing for
March. For more information, contact
Michael McKee, 964-7260.0
Pulled From Williamsburg
The Peoples Firehouse, the Southside
United Housing Development Corpora-
tion (Los Sures) and the St. Nicholas
Neighborhood Preservation & Housing
Rehabilitation Corporation (St. Nick's),
three non-profit housing organizations
working in North Brooklyn, were
recently notified of the terminatiion of
their joint VISTA project. Volunteers
who were secured through the VISTA
program had been actively involved in
improving housing conditions and
restoring vital building services for low
income tenants. Although the three
community groups had been anticipating
continued federal program cuts, repre-
sentatives of the organizations learned
that the termination came not as a result
of budget considerations, but rather due
to the nature of the services they were
providing.
In a certified letter from Jim Burnley,
Director of VISTA, the groups were
informed: "The reason for my decision
is the same as that given to you for the
tentative decision to deny renewal, to
wit: community organizing is not a
priority of this Administration-The
decision is effective immediately" .
The impact of this decision will be felt
heavily by the numerous tenants who
have been receiving the direct services of
the VISTA workers. Most of these
tenants reside in landlord-abandoned
buildings where the VISTA volunteers
have helped organize and assist tenants
associations to collect their own rents
and maintain and upgrade their build-
ings. Without this help many of these
highly vulnerable buildings may deter-
iorate to the point of where the tenants
themselves abandon the structures.
Faced with a rapidly shrinking hous-
ing stock and fewer options available to
low and moderate income families,
representatives of St. Nicks, the Fire-
house and Los Sures have expressed
difficulty in understanding how VISTA
organizers who are helping to stem these
trends can be viewed as not working in
concert with the goals of the new
administration.
The VISTA contract, which, when ter-
minated, amounted to less than a total
$15,000 annual budget was for all three
neighborhoods offering services to more
than 20 buildings. In a poll of the
affected organizations, it was learned
that each of them would be unable to
compensate for the loss of VISTA
volunteers and they will have to imme-
diately curtail the services they have
offered. 0
Symbolic protest ojthe lack oj government initiative to meetAmericans' basic needjorsheiter, erected in Washington DC's Lajayette Park, across
jrom the White House, in January. Theejjort to dramatize the plight ojthe homeless, carried out by membersojthe Creative Community jor Non-
Violence, also included a tent camp, on the other side oj the park, which has been dubbed "Reagan ville. "
Illegal Eviction: A Criminal Offense?
T
HE CITY COUNCIL HELD
hearings in January on a bill that
would make it a crime punishable by up
to six months in jail for a landlord to
illegally evict tenants.
There has been growing demand that
some steps be taken to halt illegal evic-
tions, which are occurring with increas-
ing frequency particularly in low rent
buildings which landlords want to con-
" vert to higher-priced and hence more
profitable housing. Some landlords have
employed tactics that include arson,
physical attacks on tenants,lock-outs,
robberies, burglaries and vandalism. The
increasing number of homeless people in
the city, now estimated at 36,000, is
attributed in part to illegal evictions,
according to social service groups, the
Catholic Archdiocese of New York and
some city officials.
Proponents of the bill, which was in-
troduced last fall, say it would deter
landlords who realize that they may go to
jail instead of merely risking the
payment of damages to a tenant in a civil
court proceeding. It would also increase
the power of the police, who could order
a landlord to reinstate a tenant on the
spot or face immediate arrest. .
However, there is some question
whether the police will want to get
involved in landlord tenant disputes,
"which they have traditionally avoided,
even if illegal evictions are reclassified a
misdemC1Ulor. Many lawyers and gov-
ernment officials believe the police cur-
rently have the power to arrest landlords
because the act of illegally evicting a
tenant usually includes the commission
of other crinies.
To a large measure, the solution to the
problem depends on.he commitment of
the city administration to protecting the
rights of tenants. State Assemblyman
Dick Gottfried, who has sponsored simi-
lar legislation in Albany for several years
now, said that the city to ~ t e has done
nothing but raise objections and throw
roadblocks in front of both the state and
local bills.
At a hearing in the council last week,
city housing officials stated that existing
civil remedies are adequate-an assertion
that the bill's author, Councilman Ed-
ward Wallace, characterized as "prepos-
terous." They also urged limiting the
scope of the legislation to single room
occupancy hotels (SRO's) only, since
that is where the problem is now the
most pervasive.
A city lobbying memo now circulating
in Albany opposes any law that would
subject officials of the city, which owns
over 9,000 buildings, to criminal sanc-
tions, according to Gottfried. "Rather
than support Gottfried's bill or push its
own more limited proposal he said, the
city effectively sabotaged both last year
when it publicly asserted that the City
Council could pass identical legislation. 0
Hank Perlin
CCITYUMI1S)
CONTENTS
Volume VII Number 2
Short Term Notes 2
Lower East Side Tenants Victory 4
Laws to Douse the Arson Business 5
Home Repair for Tenants 6
Loft Tenants Squeeze 7
Reassessing Property Thx Law 8
Mortgages: Deeper in Debt 10
Apartments for the Disabled 12
New Alternatives for City Property 15
A More Responsive Housing Policy 18
Flak-CatchingattheP.S.C. 22
Chelsea Saturday Night 27
CORRECTION
" The cover illustration for the January,
1982 City Limits was inadvertently run
without a credit. The illustrator was Andy
Epstein, who also did the drawings fea-
tured in the focus on housing policy.
CITY Li M ITS/February 1982"
Tenants Claim Victory in Lower 'East
Side By JIM MENDELL
T
ENANTS OF A LOWER EAST
Side city-owned apartment building
claimed victory last month when a real
estate developer who had contracted with
the former landlord to reclaim the build-
ing failed to make payment to the city.
Pressure from the six tenants of 229
East 4th Street, and community groups
who lobbied and picketed in their sup-
port, forced developer Peter Buckman to
abandon his plans to buy the six-story
building, according to, Robert SchUr,
attorney for the tenants.
Buckman, president of American
Oreo, Inc., a firm investment
opportunities in the, "East Village," filed
to reclaim the building on the next to last
day of the 12O-d.ay period during which
former owners may automatically redeem
their properties. The building was seized
last April when the city took title for non-
payment of taxes. The apartment house
now enters a 2O-month period in which it
can be reclaimed only with city approval.
Last July, 229 East 4th entered
the Tenant Interim Lease program.
Tenants who have been renovating and
managing their building for the past three
years expect to purchase their apartments
from the city.
Buckman is apparently still smarting
from two demonstrations' held at his Park
Avenue South office last year. When
asked for comment, he declined.
When they first learned that Buckman
was attempting to reclaim their building,
tenants paid him a surprise visit to tell him
they intended to stay. In November, over
60 Lower East Side tenants'and support-.
ers from community groups throughout
the city picketed the offices of American
Oreo.
"We labored for thousands of hours
on the building and invested over $50,000
in repairs including a $10,000 loan from
the city to fIX the plumbing," said Dennis
Boody,' a tenant and court-appointed ad-
ministrator for the building. The former
landlords, Rabbi Melich Horowitz and
CITY LIMITS/February 1982
his son Yakov, abandoned the building in
the fall of 1978, reportedly owing five
years in back taxes. Essential services had
long been neglected. Tenants say they
went without heat for more days than
they had it for two winters and shared one
bathroom among them. They replaced
beams in the basement and closed huge
holes in the ceilings,
Two-twentynine East Fourth Street
Buckman's move to the build-
ing in August also revealed to tenants that
Horowitz had sold the building to David
Holloman in February of 1979. Their at-
tempts to reach Holloman were unsuc-
cessful, since his listed address on Eastern
Parkway in Brooklyn proved only to be a
mail pickup.
After filing with the city, American
Oreo listed the building with realtors as a
five-unit apartment house selling for
$100,000. The building actually has six
apartments, the minimum required to be
covered under Rent Stabilization law.
4
The plan apparently was to attract
. investors who could then raise rents
without regard to prior levels, said
Boody.
To counter this attempt to speculate,
the tenants displayed a "Letter to
Speculators" in a front window, stating
that the apartment house was rent stabil-
ized. They also put photographs of their
demonstration on display at the Ameri-
can Oreo offices, and painted the words
"SPECULATORS OUT" in large red
letters over the building's entrance. A
sheet adorned with the words' 'Nosotros
No Nos Mudaremos" (yVe Won't Move)
was hung from the fourth floor windows.
The tenants say a number of potential
investors who carne to look at the site
balked in the face of such organized
opposition.
To redeem the building, Buckman
would have had to pay $38,500 to the city,
and $5,000 to Holloman for the right to
make the purchase. When the redemption
deadline passed, and the city's bill went
udpaid, Buckman was engaged in negoti-
ations with the tenants. Under one plan,
Buckman would have bought the build-
ing and then sold the apartments to the
tenants at affordable prices. The profit
margin on such a deal, though, wou!j
have been small.
The East 4th Street property was to
serve as a prototype for other investment
projects in the American Oreo pipeline.
According to company employee Law-
rence Blumenthal, American Oreo, which
incorporated in 1980, still does not own
any properties but has contracted to sell
several Lower East Side buildings. 0
LalNS to Douse the Arson Business
Although the fight against arson-for-
profit begins and ends in the neighbor-
hoods, battles are also being fought in
insurance company boardrooms, city
government offices, police and fire aca-
demies and state legislative chambers. In
each of these arenas the anti-arson objec-
tive is to reduce the incentives for fraud
fires and increase the risk of their detec-
tion. While much remains to be done,
some inroads have been made. Out in
front with a few other states' laws are the
New York initiatives that have attacked
the issue head-on; in particular, laws
involving the fire insurance claims that
frequently provide the arsonist's booty
and owner information and reporting
laws that disclose arson risks.
Four new bills have been proposed for
this year's legislative session by the Arson
Strike Force, New York City's inter-
agency coordinator for anti-arson ef-
forts. Two of these are designed to plug
loopholes in previously enacted laws.
One proposal would strengthen exist-
ing legislation by making sure that indivi-
duals listed as mortgagees for a building
are in fact legitimate. In arson-for-profit
scams, owners often list their business
partners as mortgagees so they can maxi-
mize the amount of the insurance claim
they collect for themselves. (In New York
State, mortgagees have the first right of
claim to a building's insurance proceeds
and a municipality with liens against the
property for back taxes, demolition or
other services has the second crack at the
funds. The owner of record collects -after
these two are satisfied.) The second pro-
posed bill would allow tax districts to re-
view and approve all insurance claims to
affIrm the legitimacy of mortgages. Both
these proposals would reduce the incen-
tives to commit arson because, in effect,
they would limit the amount dishonest
owners could collect on insurance claims.
The other two proposed bills are more
significant for community groups
involved in housing preservation. One
would allow tenants and code enforce-
ment officials to secure from a landlord
and amount. Such information could be
used by tenant associations to notify
insurance companies when building con-
ditions deteriorate to arson-prone status.
The other proposed bill calls for manda-
tory on-site building inspections to be
performed by insurance companies prior
to issuing fire protection policies to arson-
prone properties.
The need to fmd out more about arson-
pr6ne buildings was the catalyst for a
package of arson prevention bills devel-
oped and passed during last year's legis-
lative session. That package included the
introduction of a two-tier insurance
application mandatory for bllUdings in
New York City and Buffalo <lnd volun-
tary in other cities around the state. The
new form requires landlords who affirm-
atively answer questions that suggest their
buildings are arson-prone to disclose
more detailed information to insurance
companies. The additional disclosure
includes such items as a building's oc-
cupancy, tax liens and code violations,
the mortgage holder's identity, title trans-
fers over a three year period and the
cant's frre loss history.
Other recent victories that
anti-arson lobbyists hope to buttress this
year include: information disclosure
measures that facilitate communication
among government officials, law en-
forcement agencies and insurance com-
panies involved in arson investigations; a
law extending from 15 to 30 days the per-
iod insurance companies are allowed to
investigate suspicious fires prior to paying
a claim; and a measure requiring multi-
family dwelling owners to report details
of their insurance coverage to local
housing agencies. -
While such legislative measures seem
far removed from the day-to-day toll
arson-for-profit takes on low and moder-
ate income neighborhoods, advocates of
arson prevention are convinced that they
are increasingly important tools for
waging and winning the fight. 0
Harriet Coben
the name and address of his insurance Harriet Cohen is director of the NY
company, as well as the policy number Neighborhood Anti-Arson Center.
S CITY LI M ITS/February 1982
Quick Quiz on Home Repair:
1. A parting strip is (A) the last act in
"Sugar Babies"; (B) an insulating strip
for doors; (C) part of the double-hung
window jamb that separates the sashes.
2. A dresser union is (A) made of No. 14
wire; (B) being organized by the
ILGWU; (C) used by plumbers to repair
breaks in unthreaded pipe.
3. A common nail is (A)
normally sold at a discount; (B) rapidly
beiIig replaced by 30-penny nails bearing
Sergio Valente's initials; (C) three inches
long.
Correct answer for each question is
the same as the first letter of this sen-
tence. How did you do? If you got more
than one wrong, maybe you're a candi-
date for the Home Maintenance and
Repair course given by the Clinton-based
organization, Housing Conservation
Coordinators (HCC).
Still going strong six years after its in-
ception, the HCC course is longer, more
intensive and less expensive than many
similar courses now available. In 1975,
HCC director Gloria Milliken and Cor-
nell University Cooperative Extension's
Janet Brown and Lelland Gallup com-
bined forces to create a hands-on
program' specifically oriented for the
low-income apartment dweller. The
innovative features of the program
attracted wide media attention at the
time. Though less in the news nowadays,
this "grandmother" of the many similar
courses still sets the standard.
"The HCC course, for the price, is
probably the best in the city;" states
plastering and sheetrock instructor Mark
. Russo; "you couldn't get one equal to
CITY LIM ITS/February 1982
Home
Repair
for the
Low Income
Tenant
By GARY ERIKSEN
JOHN OR TH
this for $200." Tuition for the course is
currently $20; the Hebrew Technical In-
stitute has funded the rest of the costs.
North Shore Unitarian VEATCH also
contributed.
"We don't advertise the course to the
general public because it really is for low-
income city apartment dwellers," states
Pat Whitcomb, program director for this
and HCC's weatherization and boiler
repair course. "This year I sent out
notices to some 400 TIL buildings." She
notes that one of the difficult parts of
her job is rmding and keeping good in-
structors, ones with an ability to explain
to novices.
This summer, HCC's eleven-week
course met two evenings a week from
"
6
June fnto August, at 777 Tenth Ave. in
Manhattan. In the 22 sessions, each
lasting 2Yz hours, lectures, demonstra-
tions and practice are used to show the
students-in the first section on plumb-
ing-how to size fuses, what is safe wir-
ing, how to repair a broken lamp, wire a
socket, and follow safety rules.
The plastering and sheetrock lessons
demonstrate everything from tools
needed, uses of spackle, plaster, and
joint compound, to sheetrock cutting,
nailing, taping and beading. Also critical
(or the buildings where the lessons will
tX, employed is the section on doors and
windows-types and parts of a window,
how a double-hung window works, re-
placing chains and weights, and aligning
doors. '
The course draws tenants from the
Bronx, Brooklyn, Queens and Manhat-
tan. Mary Dunn is the superintendent at
312 West 49th St. in the Clinton area of .
Manhattan and doubles as treasurer of
the tenant association which entered the
TIL program last November. "So far I
figureTve saved our house over
$1,000," she said, as a result of new skills
acquired at HCC. She took the boiler
repair coUrse last winter.
Annie Walker, a court-appointed 7A
administrator for two South Bronx
buildings, took the course because she
wanted to learn what to expect from
building repairmen. "You get people to
do work, 1 don't know whether it's done
right or not" , she noted. 0
Gary Eriksen is a tenant in a tenant-
managed building in Little Italy and tOQk
the maintenance course at H. C. C. this
past summer.
Loft
Tenants
Caught
in the
Squeeze
By CHUCK DELANEY
D
EPENDING ON THE ANSWERS,
New York City loft tenants' three
main questions about the future suggest
that 1982 may turn out to be "The Year of
the Landlord': How much will it cost?
How bad can it get? How much can loft
tenants take?
How much will it cost? The Mayor has
a loft bill pending in Albany, which he
hopes to pass in the next few weeks.
Designed to be acceptable to the Repub-
lican-dominated New York State Senate,
the proposed bill covers loft buildings
with three or more units in most New
York City wnes. It also provides rent
stabilization at a new Initial Legal
Regulated Rent which will include old
base rent, guideline increases, and
tenants' payback of the full cost to the
landlords of bringing their buildings up to
residential code. This payback can be
amortized over 15 years, in
which case the tenants pay interest
charges as well. This would be the flrst
form of rent regulation that ever allowed
interest charges to be passed on to
tenants. It would also give stabilization to
three-unit buildings, unlike the apart-
ment -stabilized system where the cutoff is
six.
Loft activists know their community
sorely needs legislative protection, but the
Mayor's proposal may not even meet the
minimum needs. Rent increases are likely
to be very large if the tenants pay flnanc-
ing charges at today's interest rates. It is
not yet clear what percentage of artists
and old-time loft pioneers, whom this bill
is intended to protect according to city
spokespeople, will be displaced by the
very instrument designed to save them.
Legalization will likely enhance luxury
conversion and gentriflcation trends.
How bad can it get? With or without a
loft bill, the future looks rough. Some
suggest that this might be a good time to
trade one set of problems for a new set
under the Mayor's bill. Here's why. In the
past, landlords evicted commercial
tenants via "ejectment" proceedings in
Supreme Court. This ineffIcient and
time-consurning procedure was replaced
by "streamlined" summary-holdover
proceeding in Civil Court. The tenants'
main salvation in court in the past four
years has been that, since buildings with
three or more residential units have been
found to be de facto mUltiple dwellings
despite commercial leases and commer-
cial-occupancy status, landlords cannot
in most cases institute a holdover pro-
ceeding without a multiple dwelling
registration number. This has protected
many tenants from eviction. Now, since
the Loft Fviction Moratorium lapsed last
June, alrn')st one hundred ejectment suits
have been flied. Winning may still be
tough for landlords, but the cases will
likely take years and cost many dollars in
legal fees for tenants to defend them-
selves. Early results show that the eject-
ment procedure may work rather well for
landlords over the long haul. More eject-
ment suits are expected as tenants' leases
expire. .
How much can loft tenants take? In
mid-January, a flve-unit loft building in
Williamsburg, Brooklyn was totalled by a
flre that broke out at 11 AM. Tenants and
dogs escaped; flve of seven cats died.
Firemen labelled the fife suspicious. The
tenants' flight was impeded by the fife
escape's hazardous condition. They had
three minutes warning before the smoke
became impenetrable. One painter lost
twenty years of work -one hundred can-
vases.
Many buildings are without heat for
the second or third straight winter. The
city Heat Complaint Bureau will not even
log a loft resident's complaint because the
building does not have a residential Certi-
flcate of Occupancy and MDR number.
Instead they obligingly give the
7 TONYBUTER
complainant the telephone number for
Lower Manhattan Loft Tenants.
Last week, loftonia's lead case, Lipkis
v. Pikus almost ended when the Appellate
Term awarded landlord possession. A
seven-day stay was granted pending fur-
ther appeal of issues in dispute. Tenants'
losing possession would leave the
landlord with a fully-occupied, illegally-
converted residential building and no
apparent punishment. All the tenants'
back rent remains held by court to go to
landlord if he ever gets a residential Cer-
tiflcate of Occupancy. To date, it would
appear that it is preferable to collect
market rents in an illegal building than to
flx it up, even though the rent held in
court is over one hundred twenty thou-
sand dollars. 0
Chuck Delaney works with the Lower
Manhattan Loft Tenants, an organizing
and advocacy group. LMLT's address is
P. O. Box 887, New York, N. Y. 10004.
Reassessing
the New
Property
TaxLaw
By FRANK OOMURAD
I
N AN A1TEMPTTO FINALLY RE-
solve a long-running, politically thorn-
y issue, the New York State
voted in early I)ecember to override a
gubernatorial veto of its comprehensive
property tax bill. The purpose of the bill,
which is now law, was essentially to legi-
timize existing assessment practices
around the state. It repealed a law requir-
ing "full-value" property tax assessment,
sustaining the traditional practice of
taxing commercial property at a higher
rate than residential buildings. When
Mayor Edward Koch threw his political
weight behind the override of Governor
Hugh carey's tax bill veto, he figured
New York City had seen the last of the
spector-increases in homeowners' tax
bills-that "full-value" reassessment
would have created. But two months and
one court case later, the city fmds itself in
serious violation of the new law, and the
major point of contention is, once again,
reassessment.
By legalizing current assessment prac-
tices, the legislature's tax measure seemed
to forestall the complete reassessment
that a "full-value" system would require.
But in so doing, it skirted an issue of vital
concern to inner city property owners: the
general underassessment of property in
affluent communities at the expense of
overassessed building owners in poor
neighborhoods. And that is the crux of
the city's new legal entanglement.
The situation is a long-standing scan-
dal, particularly in New York City; study
after study has shown that property tax
assessments are inaccurate and highly in-
equitable. In theory, assessments on all
real property, or at least all real property
of the same type, should be set at some
uniform percentage of the property's
CITY LI M ITS/February 1982
market value. A $50,000 home located in
nonheast Queens should pay exactly the
same tax as a similar home in the South
Bronx. But in reality assessments have
little relationship to market value.
Chaotic Situation
A year ago the New York Public
Interest Research Group published a
report on residential assessments, City of
Unequal Neighbors, which outlined how
chaotic the situation was for one and two
family homes. Based on a computer anal-
ysis of 26,000 homes sold in 1979, it
revealed that two out of every three
homeowners' assessments are incorrect,
that the average assessment error is
almost fifty percent, and that the owners
of less expensive houses are badly
taxed. The study also showed that nearly
half of the City's 260 neighborhoods were
overassessed, with poor neighborhoods
being assessed at a rate two and a half
times higher than wealthy neighbor-
hoods. Areas such as the South Bronx
and northern Brooklyn, including Bed-
S
ford-Stuyvesant and Crown Heights,
were being hit with tax bills double and
triple what they should be.
Similar fmdings for other types of
property were disclosed in a repor from
the city Comptroller's office shortly after
NYPIRG's investigation. Properties of
lesser value in poorer neighborhoods
were generally overtaxed, while larger
parcels in affluent communities usually
enjoyed tax breaks. Elevator apartment
buildings in the South Bronx and Crown
Heights, for example, found themselves
assessed at 250 percent the rate of more
luxurious buildings on Manhattan's
Upper East Side. In fact, according to the
study, virtually all types of property in the
South Bronx, from factories to office
buildings to private homes, were being
victimized by massive assessment
discrimination.
Avoiding Reform
Confronted by this mounting evidence
about assessment inequities and the need
for property tax reform, the Mayor took
TwoOl.W!S ofinequilable New York City laxassessml!1IIS: uql, a OM-family building In the /ncreosinglyqffluenl Park $/ofM3eCllon of Brooklyn. A.ssts.W In 1979al
S14,ooo.il-.ssoldIMISII1TIeyeorforSI15,(}()(). TIullyeoralwo-fmnilybuildingoWtf'astore,alright,lnFlllIIJush,lkooJclyn,-.s
assesst!d al SJO,(}()() and sold IheSOml!Yf!OT fOT IltestutWprlce. Property lax: $1,685.
refuge behind a facade of studied indif- northeast Queens, the wealthier sections
ference. He placed his hopes for avoiding of Brooklyn and other areas.
reform on the prospect of new state legis- When Senate Bill 7000-A, the Lcgisla-
lation and on the legality of a lower court tures comprehensive property tax
ruling, the Colt Industries case, which measure, became law in December, the
had determined that the city's Adminis- Mayor was even more pleased. While the
trative code sanctioned the existing bill mandated all real property in each
practice of assessing different types of assessing area to "be assessed at a
property at different fractions of market uniform percentage of value," it speci-
value, by "ward or section." The practice fically excluded New York City from this
was euphemistically identified as "classi- norm pending the outcome of the Colt
fled assessment," and under Koch's Industries appeals. In effect, the city
wide-open interpretation, it would thea- could continue to maintain the status quo
retically enable the city to assess about and apply "a classified assessment stan-
850,000 classes of property at varying dard."
rates-one for every building in New The only problem was that the New
York. Prior to the Colt decision, when . York State Court of Appeals refused to
state law had called for assessments in the buy into the arrangement. In early Janu-
city 10 be calculated uniformly at full ary of this year it rejected the lower
market value, the mayor had been loathe courts' opinion that the city's Adminis-
to put the law into effect. Not only had trative Code sanctioned the practice of
there been the possibility that a reassess- classified assessments. "To hold, as the
ment at full vallie would lead to a tax cut courts below have, that this procedural
for business and a tax hike for homeown- provision is legislative authorization for a
ers, but it also would have alienated large classified system of assessments in the
blocks of affluent homeowning voters in Oty of New York improperly expands the
9
scope of the section," the Court stated. In
other words, the Big Apple, like the rest
. of the state, would in the future have to
assess all real property at a uniform
fraction of market value, a goal that
could only be reached through a general
reassessment.
Whether the Mayor will be any more
concerned about the city's sudden and
dramatic violation of a property tax law
he vigorously supported than he was
about the previous full value legislatior.
remains to be seen. But while he is making
up his mind, unfair property tax assess-
ments will continue to exact high tribute
from property owners and neighbor-
hoods least able to foot the bill. Next year
the Oty will foreclose on I,SOO one and
two famBy homes for failure to pay
property taxes. Virtually all of these fore-
closed buildings are in neighborhoods
that are tragically overassessed.O
Frank DomUTtJd is tax reform directOr of
tM New York Public Interest Research
Group.
CITY LIMITS/February 1982
The "New Mortgages"
Deeper and Deeper in Debt
O
VER THE PAST YEAR A
good deal has been written about
the "new mortgages" that baftling
array of bome fmandng deals hatched
by bankers spurred on by spiking interest
rates. But for every guide to the menus
featuring such indigestibles as balloon
mortgages. shared appreciation mort-
gages. rollover mortgages and others,
new entrees are steadily being prepared
for the prospective bome purchaser.
While the differences between the instru-
ments can mean widely varying costs to
the consumer, the thresbold of pain
induced by these adjustable rate mort-
gages-the catchall title-is beyond the
capacity of most.
Home builders are closing up, would-
be purchasers are shuddering and poring
over newspaper ads for an owner-
fmanced deal, and some hardy souls are
shouldering the first of payments that
will swell, year-by-year, for as long as
interest rates stay high. .
CITY LIMITSIFebruary 1982
It comes as little surprise, then, that
the initial surveys of community rein-
vestment groups suggest that the long-
term cost of these loans will be measured
in more than just their hefty monthly
payments. Says Allen J. Fishbein of the
Center for Community Change's Neigh-
borhood Reinvestment Project, the con-
sequences on inner city neighborhoods
may include:
More conservative and restrictive
lending criteria.
Discrimination against minorities,
women and those not perceived as
being upwardly mobile.
A resurgence of redlining in neighbor-
hoods viewed as not appreciating
rapidly enough.
An increase in gentrification as
Jenders target the areas thf'J view as
quickly rising in value.
It's not just that all of this kicks the
crud out of the 1978 Community Rein-
vestment Act which called on lenders to
10
By TOM ROBBINS
do more for inner city investment needs,
say anti-J'C!'.idlining activists, but that the
whole concept of homeowner equity is
being stood on its head. Bankers now
breezily calculate the 'negative amorti-
zation' mortgage payments will produce:
for the consumer, this pocket computer
wizardry means simply that monthly .
payments will fail to cover the growing
interest, let alone the principal, therefor.e
the unpaid interest is added to the
balance. After several years of payments
borrowers could end up owing more
than they asked to borrow in the first
place.
Under this scenario, a harrowing
vision of what could befall some neigh-
borhoods has been projected by Fishbein
and others. With almost all the restric-
tions lifted by government regulators,
mortgages can increase by up to ten
percent a year. In many cases, the equity
built up by the homeowner could be
eliminated. "The erosion of that equity
would dramatically increase default
rates," wrote Fishbein in the Journal oj
Housing last November. "In many
cases, the borrower could end up owing
more than the house is worth-'a nega-
tive equity' situation." The prospect of
massive defaults lurks not far gehind.
Bankers, of course, don't look
forward to becoming owners of housing
the market can't move because of the
high cost of credit. But they have, on the
other hand, become apparently gleeful
partners with their regulators in devising
the new instruments.
Anti-redliners, as a result, have had to
dramatically shift gears downward.
Activists are now pushing for an easing
of the tight money policy of the Federal
Reserve and insist that while banks push
their adjustable rate mortgages, they also
be forced to maintain pools of old-fash-
ioned fIxed-rate home loans for small
borrowers.
A coalition of over 60 organizations
headed by the Center for Community
Change is calling for a number of
affIrmative steps to be taken by Congress
and the Reagan administration. Chief
among these are the prohibition-or
severe restriction-of negative amorti-
zation; pegging payment increases to
rises in workers' wages; rate adjustments
just once a year; a universal index for
setting rates and standardized
disclosure statements so borrowers can
get a clear picture of the costs over the
full term of the mortga
While devising all this new protective
armor for those forced to plunge into the
new mortgages, the coalition is also seek-
ing a number of government moves that
would assure the continued availability
of fIxed-rate mortgages for home buyers.
Bills were introduced last November in
the Senate and the House of Representa-
tives which would have called upon the
President and the Fed to assure an ade-
quate flow of credit to small borrowers
at affordable rates. The bill was soundly
defeated in the Senate and wasn't voted
upon in the House, thus making the
prospect of government action unlikely.
Yet government has played a crucial
role in boosting the new mortgages. A
June, 1981 decision by both the Federal
National Mortgage Agency and the Fed-
eral Home Loan Mortgage Corporation
-the two federal agencies which pur-
chase mortgages from private originators
and then sell them on the secondary mar-
ket-to buy the adjustable rate mort-
gages with unlimited interest rate
increases gave the new mortgages their
biggest boost of all.
In addition, the federal lending
industry regulators-the Comptroller of
the Currency which regulates national
banks, and the Federal Home Loan
Bank Board, charged with regulating
and loans and whose regulations
are the same as those for New York State
chartered banks-have helped open the
flood gates.
1n a series of steady retreats before the
clamor of the lenders and the juggernaut
of high interest rates, limitations on the
kind of mortgages banks may make have
decreased. The FHLBB has no cap on
how much a mortgage can increase dur-
ing its life, and allows those changes to
be computed using any index. The
comptroller offers slightly stricter
regulation with a maximum of two
percent charge per six months.
While the thrift
banks and savings and loan associations
-is being buffeted hard, with major
lenders forced to merge with other insti-
tutions in order to survive, commercial
banks have posted greatly increased
earnings. That lopsided development
hasn't made it any easier for those
lOOking for solutions. Home builders are
looking at new sources of mortgage capi-
tal-pension plans and other untapped
sources-and offering easy start-up
terms for new buyers. Savings banks
point towards their sister institutions that
have come close to sinking under the
weight of long-term fIxed-rate mortgages
made when money was cheaper, and
warn away those who would squeeze
them any harder. And the Federal Re-
serve Board, pegged as a greater villain
than Reaganomics by many reinvestment
activists-no mean feat-continues to
hold tight to the national money supply,
befuddling all attempts thus far to loosen
its grip. 0
Fecls Hear Tales of High Interest
On Saturday, January 16, the New
York City Coalition Against Redlining, a
group of neighborhood organizations
that has concentrated in the past on
pressing fmancial institutions to fulfill
their community reinvestment responsi-
bilities, took the initiative on an issue that
has become central to the question of
urban reinvestment: restrictively high
interest rates. That initiative took the
form of a public hearing, held in conjunc-
tion with similar recent hearings in cities
around the nation, during which citizens
aired their grievances and recommenda-
tiolls to representatives of the Federal
Reserve, the semi-public banking body
that controls the country's credit flow.
The fIve Fed reps' heard an after-
noon of testimony from an array of
. representatives that included some of the
strangest bedfellows in recent memory:
non-profIt housing developers, realtors,
homeowners, representatives from the .
National Association of Builders, a trade
union leader and neighborhood organiz-
ers, among others.
Phil Gallagher, who
11
heads a reinvestment advocacy group
called Bank on Brooklyn of East F1at-
bush, urged the Fed representatives to
help develop a policy to subsidize fInanc-
ing for housing construction and rehabil-
itation. "If it is just and desirable to
create tax shelters and investment-induc-
ing mechanisms for the wealthy and for
large corporations," Gallagher asked the
representatives, "then why is it not both
desirable and just to use the powers of
government to induce greater develop-
ment of housing for the lower and middle
classes?"
To that end, Coalition members re-
quested that the offIcials from Washing-
ton convene a meeting among the Fed,
the nation's 20 largest commercial banks
and neighborhood residents to explore
the feasibility of establishing a low
interest line of "neighborhood credit."
Fed General Counsel BradfIeld declined,
On a more hopeful note, the New York
Fed offIcials agreed to meet with the
Coalition groups, as they have on several
occasions, to monitor the progress of
reinvestment around the city. 0
CITY LI M ITS/February 1982
I
Proiect Open House
Creating barrier-free apartments ac-
cessible to the handicapped is a slow,
expensive process. While federal laws re-
quire subsidized housing to include a
small number of barrier -free units there is
little incentive for private developers to
create them.
One t ~ o l to increase the supply is a
federally-funded pilot program called
Project Open House. Administered by
United Cerebral Palsy in conjunction
with the city housing department and the
Mayor's Office o( the Handicapped, the
program has thus far paid to have alter-
ations made in 130 New York City apart-
ments to accomodate handicapped resi-
dents. The average cost of the repairs has
been $1,100. Changes have included
widening doorways, installing grab bars,
modifying bathrooms and kitchens. One
housing project with more than one
disabled tenant had a ramp installed
through the program.
The project accepts applications from
those whose mobility is impaired and
meet federal low income guidelines. After
evaluating the needed changes and getting
I contractors' bids, an agreement is signed
with the building owner to permit the
alterations. While the work is carried out
at no cost to the owner, once the original
tenant has left the owner is under no
obligation to continue renting to tenants
who are disabled. The units, however, are
listed with the Data Bank Referral Service
which will forward other handicapped
apartments seekers should the unit
become vacant.
"We've spent almost all of our original
$190,000 grant," said project director
Sylvia Schmitz, "but we have high hopes
of being refunded and we welcome new
applications." With 250 disabled seekers
of apartment alterations on file now, the
project is in no danger of running out of
applicants and, like most housing subsidy
programs, the demand is far greater than
the supply. Still, the,' project encourages
those in need to contact them and apply. "
Project Open House, United Cerebral
Palsy, 122 E. 23 S1. NYC 10010. (212)
677-7400.0
f
Finding
Apartments
forthe Disabled
BY KATHERINE HANNER
F
INDING AN APARTMENT IN A CITY LIKE NEW YORK, WHERE THE
vacancy rate hovers close to zero, is no easy task. But for the half million handi-
capped New Yorkers, some 30,000 of whom are wheelchair-bound, and generally
have incomes below average and require special amenities, the job can be nearly
impossible.
Yet an innovative service has begun helping disabled people fmd housing.
Established by the Settlement Housing Fund, a non-profit housing development
group, and funded with $140,000 in federal coinmunity development monies, the
Housing Data Bank Referral Service matches the housing needs of disabled apart-
ment seekers with available units. Since its May, 1980 launching, the Data Bank has
placed 330 disabled people in apartments designed to m ~ t their needs.
Thelma Schiffres, a polio victim since childhood, now resides in a two-and-a-half
room barrier-free apartment in a West Side low income rehab project which she
located through the Referral Service. Schiffres, who alternates between using a
wheelchair and crutches, had been living alone in Brooklyn when she suffered a fall.
Doctors told her to find a more physically 'accessible apartment.
Finding an apartment, however, that had ramps and doors wide enough for a
wheelchair to pass through was very difficult. "You have to know where the
apartments are," she explained. "You call up-they have a five-year waiting list, a
seven-year waiting list. I wrote letters, nothing happened.
"Then one day I got the State Advotate-(a periodical for the disabled), caught a
glimpse about the Data Bank, called the telephone number and got an application.",
A few months later Schiffres received information about units designed for the
handicapped at Clinton Manor, and moved into the development last October.
For some, the link provided by the Referral Service has helped them fmd not only
an accessible apartment but also an opportunity to live more independent lives.
Joyce Williams, 24, who moved into Borinquen Court in the Bronx, a Section 8
low income development designed for the elderly and the handicapped, previously'
lived with her mother on Manhattan's West Side.
"I lived with my mother all my life and our lives were totally centered around each
other. Everything the family did was l;Iecause of me ... concerning Joyce, ... how
Joyce will fit in. "
Today, she says, her move has brought new independence not only to herself but
to her mother as well. "I wanted my mother to see that it was time she lived for
herself; and she's doing it I'm proud to say."
Two other residents of Borinquen Court, Jackie and Tony Wilmont, were also led
to the development through the Data Bank connection. Their,new barrier-free
apartment has meant an escape from the structured life-style of their former group
home residence. As Tony Wilmont explained it, "They wanted you involved in every
activity they had. As long as you were awake they wanted your hands doing
something. Here, you're really on your own. The only thing they require you to do is
pay the rent. " ,
12
Thelma Schi//res, a polio victim since childhood, in the living room 0/ her new barrier-free apartment in
Clinton Manor, a subsidized development on Manlfattan's West Side.
S
O FAR, ACCORDING TO SAM KOLODNY, PROJECT DIRECTOR OF
'the program, approximately 3,000 disabled persons have registered with the ser-
vice. Most of these enrolled through the Mayor's Office of the Handicapped, while
others made application through 14 different social service agencies. It is those
agencies which receive the apartment listings and are expected to inform their clients
of available housing.
Many of the agencies, Kolodny notes, had to overcome an initial skepticism before
becoming involved. With an extremely limited supply of housing, relative to demand,
they were dubious of the benefit the service could provide. But the program's ability
to link up apartments and people has, she feels, demonstrated its usefulness.
Still, fmding available housing has been more difficult than fmding clients. A
distribution of questionnaires to 149 housing projects built with some public funds
brought only 23 responses of which only eight indicated interest, and just three
reported vacancies. An. appeal to private owners yielded similar results.
Continued on tbe next page 13
Rent Hike
Exemption Proposed
A resolution that would give low
, income disabled tenants the same protec-
tion from rent increases that senior citi-
zens now have is presently sitting in a City
Council committee awaiting discussion.
Introduced in November by Council-
man Stanley E. Michels, Democrat-Lib-
eral of Manhattan, and co-sponsored by
15 others, the resolution would extend the
Senior Citizen Rent Increase Exemption
program to low income disabl tenants.
"All low income tenants are adversely
affected by ever-rising rents and the
critical shortage of housing," said
Michels at the time, "but none more
severely than those with disabilities."
The rent increase exemption program
currently applies to senior citizens
62-years-old or over with annual income
up to $8,000. It exempts them from all
rent increases that exceed one-third of
their income. Landlords may deduct an
equivalent amount from their real estate
taxes to compensate them for the uncol-
lected rent.
Michels, who sponsored a bill last year
raising the income limitation from $6,500
to $8,000, is now proposing that disabled
tenants who meet the same income re-
quirement, regardless of age, be made
eligible for the same exemption from rent
increases. The resolution called on the
State Legislature to pass legislation the'
Council needs to amend the rent exemp-
tionlaw.
The Councilman noted that although
data on disabled persons in the city is
limited, approximately 35,000 disabled
tenants who are not already eligible as
senior citizens might qualify for the
exemption.
Michels is urging concerned people to
write letters in support of the resolution
to Councillnan Thomas Manton who
heads the Housing and Buildings Com-
mittee.O
Prod Chase on Weatherization Loans
T
HREE RELIGIOUS ORDERS
reCently fIled a shareholders resolu-
tion with Chase Manhattan Bank to
provide weatherization loans. The
resolution calls on the bank to establish a
new program offering long term, low
interest loans to owners of apartment
buildings and one- to four-family homes
in low to moderate income neighbor-
hoods.
With fuel costs consuming from 40 to
60 pere<ent of the budgets of many build-
ings, weatherization improvements have
shown to be an effective tool for cutting
costs and making buildings more econo-
mically, viable. A number of government
initiatives have been made to encourage
weatherization, including tax exemption
and abatements. But the largest pool of
funds has come through federal com-
munity development block grant dollars,
a pot of money that has thus far re-
mained largely intact, but it is being split
into many more different pieces as a
result of federal retrenchments.
'The resolution calls on Chase to help
fill that growing gap between the
and the supply by establishing its own
weatherization program-a concept-the
resolution suggests IS prompted by
President Reagan's_call for greater
initiative by the private sector.
The resolution was introduced by The
Sisters of Charity of St. Vincent de Paul,
the Society of the Holy Child Jesus of
Drexel Hill, Pa., and the Community of
the Sisters of Saint Dominic of Caldwell,
New Jersey. The orders belong to a
working group on community invest-
ment issues coordinated by the Interfaith
Center on Corporate Responsibility.
In preparing the Chase resolution, the
groups worked closely with the
Northwest Bronx Coriununityand
Clergy Coalition, an eight-year-old
umbrella organization of a Clozen major ,
groups.
Bill Frey, of the Coalition, said his
group has had much success using the
community development-funded lo.;m
pools, but had vastly increased their
effectiveness by combining them with
adclltionalloans from banks and
insurance companies. "The federal
pipeline is drying up," said Frey. "so
CITY LIMITS/February 1982
there's going to be more of a need to
supply the private dollars. We think an
institution like Chase has the resources to
put together a substantial pot of funds
and effectively market the loans
citywide. "
The reinvestment group has used the
introduction of shareholders' resolutions
before as a tactic to place discussion of
social issues on the corporate agenda.
Last year another religious order, The
York Province of the Society of
Disabled Continued from page 15
Jesus, used its 1:500 shares of Citicorp to
prod the bank into making a larger com-
mitment in low interest loans to low
income neighborhoods. That resolution
was soundly defeated, just as the Chase
initiative is to be, but it
provided the basis for discussion and
negotiation with bank officials both
before and after the stockholders
meeting. The Chase stockholders
meeting will take place in the early
spring.OT.R.
The Data Bank has had much more success in units cUrrently being built
under the federcU Section 8 program. A 1973 law mandated that five percent of all
units in multifamily developments and 10 percent of those in buildings for the elderly,
be designed and accessible for the physically handicapped. Of the 270 developments
currently registered with the project, 174 were built under Section 8.
Yet, while federal regulations require a percentage of barrier-free units, there is no
rule that these units actually be rented to the disabled.
For that reason, Kolodny explains, at the onset of the program, the Settlement
Housing Fund met With' federal Housing and Urban Development officials asking
that this problem be addressed. After several meetings HUD agreed to recognize the
Data Bank Project as a community resource for outreach, and to distribute their
materials to developers and managers at pre-occupancy meetings. HUD said it would
exact a "good faith" pledge from the developers to rent the apartments to the
handicapped,
The Fund would like to see added a policy whereby once these units are vacated
they would still go' as a priority to the handicapped. Currently these apartments are
offered to anyone on the waiting list. .
The handicapped community, which has become increasingly vocal and organized
in recent years, has applauded the Data Bank's achievements, but is alsQ looking for
it to do more, and do it faster. Paula Nessoff, who works for the Center for
Independence of the Disabled in New York and serves on the advisory committee to
the Data Bank project, is looking to see more of the disabled registered with the
project and additional support services provided.
Kolodny agrees that the project's clients need to be given more information than it
currently offers. She said many clients reject referrals because they lack important
information such as how accessible social service, stores and transportation are in the
new neighborhood.
Under terms of the contract, tIle program will shift to city administration next
August after training has been provided. When thflt switch occurs, some, such as
Nessoff have expressed fear that clients may get lost in the bureaucracy. She also
pointed out that the future of the effort also is partially hinged on social services
spending for needed assistance such as' home care attendants. She said many disabled
who have made the transition to independent lifestyles through the program could
still be forced back to institutionalized living because of the cuts.
"In a city like New York," added Georgia McMurray, an advocate for the
handicapped who works for the Community Service Society, "where there are so
many to getting around on your own, so many disabled ar1 still trapped in
their apartments. The issue isn't even related to income. My attempts to frnd an
apartment-are on my own-and I can't take an apartment with stairs. The need for
this project is enormous." 0
Katherine Hanner is a planner who works in the Community Management program
of the city housing department.
14
New Altematives for
. City-Owned Property
By ANI HURWITZ
W
ITH DEVASTATION WREAKED ON so MANY
programs and services for poor people, tenant and
community organizations involved in the city's alternative
management programs for tax-foreclosed in rem buildings
may feel like lucky surVivors. True, the admission of new
buildings into the programs, which are designed to provide an
alternative to the auction block for in rem properties, has
.slowed to a trickle. Long-promised repairs in many city-
owned properties remain undone. And city pressure on tenant
and community managers to buy their buildings is growing,
while resolve to sell apartments for $250-the price once
generally agreed upon for tenants in the programs-is
weakening. Yet the Division of Alternative Management
Programs in the city housing agency remains seemingly
intact, and public pronouncements from upper echelon
housing officials bemoan developments at the federal level
which threaten DAMP's viability. But in light of the
programs' history and current status, city policy may really be
the biggest threat.
Three years ago, an intensive campaign by neighborhood
housing groups resulted in the expansion of programs within
DAMP which allow tenant and community organizations to
manage their buildings in preparation for purchase. But the
Department of Housing Preservation and Development has
yet to develop a comprehensive sales policy that is responsive
to tenant and community organizations, nor has it established
the sorts of guidelines necessary for handling a sales program
of any size. To fully understand the desperate need for such a
policy, one has only to recall the city's rationale for
alternative management and the repeated reminders of that
rationale: to return in rem buildings to private ownership and
the tax rolls.
To that end, tenant and community groups have rescued
hundreds of ' 'unsalvageable" buildings in some of the City's
most devastated neighborhoods, buildings that were simply
abandoned by their owners, and transformed them into
decent housing which their tenants, virtually all poor, can
afford.
Pressure On Groups
Despite these successes, HPD and the Koch Administration
seem impatient. Privately, HPD staff are telling tenant and
community groups that they had better buy, and buy quickly,
or DAMP will disappear. Lack of sufficient sales has been
cited as the reason for new, restrictive admission criteria to
the Tenant Interim Lease program, designed for eventual
ownership of in rem buildings by capable tenant organiza-
tiohs. A proposal to auction occupied city-owned buildings
was submitted by HPD to the city's Board of Estimate in
June. Applications by former owners to redeem buildings
15
foreclosed by the city appear to be increasing. New legislation
to ease the redemption process has been introduced in the
City Council by the Administration. These actions, along
with the lack of a clear sales policy, call into question the
City's commitment to alternative management.
I
Proposed Sales Policy
The Task Force on City-Owned Property, a private non-
profit advocacy organization, recently proposed a sales policy
to begin meeting the needs of tenant and community organi-
zations and satisfy the city's desire for volume sales. Prepared
with the assistance and suggestions of groups and individuals
active in the neighborhood housing movement, the
recommendations fall into four major categories:
-Assistance Before Sale: Buildings foreclosed by the city
have sUffered years of neglect by their former owners. In
CITY LIM ITS/February 1982
many cases, tenants are being asked to purchase buildings in
which repairs to structure and systems (electrical, heating,
plumbing) remain incomplete, undone and unevaluated.
Given the economics of running low-income cooperatives, the
physical condition of buildings at the time of sale is the key
element in their survival. It is therefore crucial that minimum
physical criteria for an adequately functioning building be
established. Weatherization standards are particularly
important. The Task Force study found that fuel is not only
the largest single expense, (ranging from 30-50 percent of
total budget) but also one of the few expenses where
significant savings can be achieved. In fact, conservation
improvements can cut a building's fuel bill by up to 50
percent. Independent contractors should be hired to evaluate
the building's condition so that tenants can make an
informed decision regarding their building's readiness for
sale.
-Sales Process: Although past city policy has been to sell
buildings for $250 per unit, tenants and'groups in gentrifying
neighborhoods have been told that they must pay "fair
market" prices-in one negotiation, a price of $13,000 per
unit was suggested. Even for those in "non-market" areas,
there is no firm guarantee at what price buildings will be sold.
It is unreasonable to ask tenants to commit their labor, time
and money to reclaim their building without knowing the
eventual purchase price. The city should remove this obstacle
by writing into all leases and contracts a legally binding
commitment to sell all units at $250 regardless of location.
The city should also provide the same 7Y2 percent, 20-year
purchase money mortgages to tenant and community organi-
zations now offered to prospectiJ: owner-occupants at
auction. These buildings went in rem because of the inability
of private owners to run their properties successfully.
Without such guarantees and assistance, the city is creating a
situation in which failure becomes a real possibility.
-Assistance After Sale: Recognizing that long-neglected
buildings will have more than their fair share of unanticipated
repairs, HPD's current set-aside of low-interest loan money
for emergencies should be expanded and made available to
buildings to correct problems before they become
emergencies. Where buildings are sold with incompleted
repairs, pre-processed, low-interest loans should be available
for signing at the time of purchase. In addition, tenant and
community-owned buildings should, like other low and
middle-income housing projects, be allowed to make a
payment of five percent of each building's rent roll, minus
fuel and utility costs, in lieu of taxes. Because of the
enormous number of dollars in foregone revenue to the city in
the form of tax abatements and exemptions-primarily to
luxury and middle income housing-it has been predicted,
only half-jokingiy, that the only real estate taxes collected will
be from low-income cooperators in previously city-owned
buildings. In fact if a 5 percent payment in lieu of taxes were
adopted, the fiscal impact on the city would be minimal but
would provide a significant benefit to the tenants.
-Intake: Buildings with an organized tenant association
should be encouraged to enter alternative management. New,
more restrictive criteria for admission into the tenant
managemeI\t and ownership programs fail to consider the
CITY LI M ITS/February 1'982 16
significance of local residents in their neighborhood's
revitalization and also drain the city's treasury: Buildings in
the TIL Program cost the city only $%9 per unit compared
with $2,161 per unit in buildings centrally managed by HPD
staff-a savings of $1 ,192. In addition, rent collections in TIL
buildings averaged 90 percent (a significant measure of tenant
satisfaction) compared to 63 percent in Central Management.
The City must again actively encourage tenants in city-owned
buildings to organize and manage under TIL. 0
All concerned New Yorkers are urged to write letters en-
dorsing these sales policy recommendations and mail them to
the Task Force on City-Owned Property, 40 Worth Street,
Room 1215, New York, New York 10013. For more active
ways to show your support, call the Task Force at 619-0480.
Copies of the Task Force report, Tenant and Community
Ownership: A Proposed Policy, are available from the Task
force.
Ani Hurwitz works with the Task Force on City-Owned
P,roperty.
ONE. STOP SHOPPING for your
DRY -WALL PRODUCTS
DISTRIBUTORS OF NATIONAL GYPSUM.
U.S. GYPSUM GEORGIA PACIFIC
BOOM EQUIPMENT UP TO 6 STORIES
GYPSUM WALL BOARD DRY WALL STEEL PRO
DUCTS DRY WALL SCREWS NAILS JOINT
CEMENTS & TAPING TOOLS INSULATION
NOISE CONTROL STRUCTURAL STEEL FRAMING
SHAFTWALL SYSTEM COMPONENTS ADHE
SIVES & SEALANTS POWER FASTENING TOOLS
FIRE 'RETARDANT LUMBER SUSPENDED &
CONCEALED CEILINGS & COMPONENTS. STRUC
TURAL LUMBER PLYWOOD POWER TOOLS
HARDWARE DOORS & BUCKSMETAL & WOOD
(212) 8759700
550 Hamilton Ave., Brooklyn
.
Limits on Tenant
Newly instituted restrictions on the entry of city-owned
buildings into a housing agency program designed to facilitate
tenant management and eventual ownership have raised the ire
of in rem tenants and at least one City Council member.
The new entry criteria for the . Tenant Interim Lease
program, through which 33 of the city's 9,000 tax-foreclosed
residential buildings have been sold to tenants, were developed
by Murray Dropkin and Company, a private accounting firm
being used by the Department of Housing Preservation and
Development. Under the new guidelines, buildings eligible for
TIL must have a 5 percent occupancy rate in habitable apart-
ments occupied, be on a block that is more than 50 percent
occupied and be located in a neighborhood that is not deterior-
ating. Previous regulations called for 50 percent occupancy
and viable tenants associations.
A joint statement on the new criteria released in mid-
January by Council member Ruth Messinger and the Task
Force on City-Owned Property, an ad hoc group working on
in rem housing issues, asserted that limiting acceptance into the
interim lease program would drain the city's housing funds.
"Tenant management not only saves housing, it also saves
money," said Messinger. She cited a Task Force analysis
which showed that in fiscal 1981 the city spent $969 for each
apartment managed by TIL tenants, compared to $2,161 for
each occupied unit managed directly by the housing agency.
Bill Smith, director of the interim lease program, said.he
could not comment on the comparative figures because he
. didn't know what methodology was used in the Task Force
analysis. As to the new guidelines' official status, Smith said
"more o ~ less, they're in effect, but any building that doesn't
meet them can come in and discuss it." He added that over a
dozen buildings have been accepted into the program since
_September 1, and more than 20 applications are still pending.
Smith said the new restrictions had not resulted in a
"noticeable slowdown, although there has been a slowdown
recently because no more buildings have been taken [tax-
foreclosed] for a while. I know of no buildings," he
concluded, "that have been rejected on the basjs of the so-
called 'deteriorating neighborhood.' "
A Task Force spokeswoman countered that, because of city
tenants' awareness of the housing agency's new policy,
"certain buildings have self-selected themselves out." In
addition, she asserted, Smith's comments were "no assurance
for the future."
Tenants in one East ~ a r l e m building have already felt the
new guidelines' effects. "The tenants in 350 East 119th Street
were organized and anxious to mange their buildings when
they applied to the Tenant Interim Lease program in early
December," said Nancy Foxworthy of the Renigades Housing
Movement, a neighborhood housing organization." But HPD
refused to accept their application since 10 of their 24
apartments were vacant. These criteria sabotage the efforts of
tenants to save their buildings. If the tenants in 350 East 119th
Street had been given a lease by the City, many of these vacant
apartments would now be occupied, instead of remaining
17
vacant."
The 235 TIL buildings now under tenant management re-
portedly showed rent collections of 90 percent in fiscal 1981,
compared to a 63 percent collection rate in HPD-managt:(!
apartments during the same period.
"HPD officials have repeatedly touted tenant management
as the best means of providing services in City-owned buildings
and returning buildings to the tax rolls," said Messinger. "This
makes their recent practice of restricting entry into the Tenant
Interim Lease Program that much less comprehensible. HPD
should actively encourage tenants to organize and manage
their own building."OT.L.
BROOKLYN ENERGY COOPERATIVE
Energy Audits, Specifications and technical
aSSistance, Investigated contractors. Complete lirie
of conservation projects at discount, Financing
options.
562 Atlantic Ave. (near 4th Ave.)
858-8803
CITY LI M ITS/February 1982
Last month's special issue oj City Limits made the point
that the age oj austerity has arrived, at least in terms oj
jederal housing assistance. Fiscal year 1982's Housing and
Urban Development budget, substantially cut in virtually all
areas, already reflects the reducedjederal role in housing
development, andjurther large rescissions are likely as part oj
the 1983 Reagan budget, scheduled to be submitted to
Congress on February 8. Many housing and neighborhood
activists are reacting to the cuts wistfully, lamenting the loss
oj jederal housing assistance ejjorts that were born in the
spirit oj the New Deal and grew slowly until the end oj the
Carter era. In thejollowing article, Cushing Dolbeare looks
beyond that kind oj nostalgia, toward jormulating a
responsive national housing policy that has been lacking even
in the most enlightened Democratic administrations.
Toward a More Responsive
Housing Policy BY CUSIDNG N. DoUlFARE
T
HE GROWING GAP BETWEEN LOW INCOME
housing needs and the capacity of low income housing
programs to meet them is appalling. More than four decades
of federal housing assistance have produced fewer units than
the private sector, unaided, provides in two good years. Small
wonder that most poor people, unless they are lucky enough
to have purchased their homes during times of higher income,
are forced to spend more than half their incomes for housing
-often seriously substandard housing.
Not only has the scale of federal housing assistance been
too small, but federal programs have had serious shortcom-
ings. And, in housing, unlike other areas, our failures are
conspicuous by their presence. A good assisted housing
project melds into the surrounding community and is not
easily identified by passers-by as "a project." A bad develop-
ment is often assumed to be assisted whether or not it actually
is.
Ask most laypeople what they think of when the words
public housing are mentioned, and the answer is almost
always the picture of St. Louis' Pruitt-Igoe project being
demolished. In far too many cities, public housing projects
stand at least partially empty. A neighborhood which
welcomes or seeks assisted housing is unusual indeed.
It's time for a new approach to providjng housing assis-
tance. I suggest we begin by defining "decent housing" and
then examine what needs to be done to enable everyone to live
in it:
Decent housing is soundly built, watertight, weathertight
and energy efficient, with enough rooms to provide
reasonable privacy for its occupants, and With adequate
cooking and plumbing facilities, heat and cooling as climate
dictates, and ventilation.
Decent housing is within the means of the people who live in
it. This means that total cost, including utilities, should be
no more than 25 percent of income.
Decent housing provides people with choices of location,
tenure, and price. This requires an adequate hOllsing supply,
inoluding a range of housing types in every community and
public policies that both prevent displacement and provide
equal housing opportunity for all, regardless of race,
nationality, color, $ex, religion, income, or household
CITY LlMITS/February 1982
18
composition.
Provision of decent housing, under this rubric, requires
improvement and conservation of the existing stock and
contruction of new housing. And" it requires measures to
prevent displacement, provide equal opportunity of access,
and reduce or stabilize housing costs. More important, it
requires making household programs more responsive and
shaping them to conform to our convictions about the im-
portance of home, family, neighborhood and community
life. Some basic principles should be followed as we do this.

Housing should be much more closely tied to the basic
values oj jamily, neighborhood, and community. It's
probably implicit in a lot of approaches, but they might be
different if these values were acknowledged explicitly in the
development of housing programs. This would create a
context for production and other programs, and might help
HUD move away from its close ties to the housing industry.
It might also make it possible to raise housing as a political
issue without either missing the major problems or getting
shot down for advocating politically disastrous programs.
One critical question here is whether housing assistance
should be provided directly to individuals, who can then
choose their own units and have the option of renting or
purchasing, or whether the assistance should go to organiza-
tions-nonprofit or profit developers or public agencies, such
as housing authorities.

The purpose oj housing programs (and related programs)
should be to help disadvantaged people, a goal which is
assumed to be met by these activities with little hard analysis
on whether or not they do. The slum clearance programs of
the 1950's were, after all, intended to lead to better housing.
More recently, cities and the federal government have en-
couraged revitalization and economic development efforts
that have had disastrous results for many low income people.
One simple test on benefit is whether or not displacement
occurs: the disclipline of designing projects that don't create
involuntary displacement from neighborhoods would force
them to benefit the disadvantaged. Several years ago, I
estimated involuntary displacement at one million households
,.
annually or 10070 of all movers.

Housing for disadvantaged (those who don't have or can't
afford decent housing n0w) should be dealt with as a human
need, not as a commodity. Rather than assuming 'a predomi-
nant role ' for the private for-profit sector in housing, we
should explore new and more responsive delivery mechanisms,
such as community-based housing development and manage-
ment operations. Ideally, housing programs should both build
neighborh()ods ~ d provide individuals and families with
some real choices of housing tenure, type and location. Much
of the support for public housing comes from those who
agree with this proposition-but all too often housing author-
ities are controlled by authority board members whose pri-
mary business activity is the for-profit development, manage-
ment, or fmancing of housing.

We must face up to the real costs of providing housing
assistance for low income people. A reluctance to do this has
led to the design of programs with huge deferred and/or
hidden costs. Some of the earlie, ones are coming due (the
build-up of outlays from earlier commitments) and current
budget authority levels are becoming politically (and
substantively) insupportable. We should either eliminate (or
visibly account for) such subsidies as tax-exempt financing
19
.and other tax incentives in favor of more efficient subsidies
where they are needed. But, we shouldn't select assisted
housing as the only place to eliminate tax-exept fmancing, as
was attempted last year.

Looking at both demographics and the physical character-
istics of the housing stock, the real shortage is of units
designed for elderly occupancy (now 25 percent of all
households). Especially after we get over the hump of high
rates of family formation (about the mid-80's), we will need
to face both shrinking over-all demand for new housing, and
the implications of the expanded elderly population.
Moreover, elderly people tend to have relatively low incomes
and their houses are often low in value. Ironically, the "202"
program Iof construction of elderly housing by nonprofits is
usually thought of as the elderly program. But it is marginal,
in terms of numbers. Public housing, Section 8 and the rural
rental housing program of the Farmers Home Administration
have all provided more units for elderly people than has 202.
Not much is being done, other than inadequate levels of
energy assistance and local circuit-breakers, to help the 70
percent of elderly who are home owners; reverse annuity
mortgages have limited utility where housing values are low.
We cannot meet elderly housing needs without considering
the problems of elderly owners.
In addition to building more units specifically designed for
CITY LI M ITS/February 1982
elderly people-preferably in small developments so they can
remain in their present neighborhoods if they so choose-we
should explore encouragement of home-sharing and other
alternative housing arrangements.
One major objection to concentrating new production on
elderly units is the need to assist large families. But this is a
constraint imposed primarily by the inflexibility with which
we enact and administer housing programs. Most families
with children would vastly prefer to own single-family units,
rather than to rent. Half of new Section 8 and roughly half of
all public housing is elderly. This would pose no problems if
we had other ways of meeting the housing needs of large
families. Why not, for example, provide home ownership
assistance so they can occupy the larger units vacated by
elderly households?

As housing becomes a problem for a growing proportion
of the population (young families, particularly), there are
growing pressures to broaden the range of assisted housing
programs. Unless additional funds are provided, this will
divert resources away from lowest income people, with the
worst problems. On the other hand, particularly for young
families, the problems are far less intractable than those of
lower income people. It is probably a mistake to keep our
housing programs as categorized, by beneficiary, as they now
are-but it will be tricky to move away from this without
harming low income people.
A major expansion of subsidies for home ownership,
including operating subsidies if necessary for very low income
people, coupled with reasonable recapture provisions could
expand the range of housing assistance without making costs
unacceptable. There is much talk these days about assisting
"first-time" home buyers. Any such efforts should use an
inclusive definition of "first-time"-notjust young, upward- .
ly mobile families, but others who traditionally have been
excluded from home ownership because of the bias toward
forcing low income families to rent.
If only because of their cost and growth, hOUSing-related
tax expenditures need to be addressed, particularly home
owner deductions. These deductions cost the federal treasury
far more than a similar "entitlement" to housing assistance
for low income households.
Lumping together both direct and tax expenditures for
housing, we find that in 1981, for example, the cost of
housing assistance for households with incomes under $5,000
was $4.2 billion, or 14 percent of total federal housing
expenditures; only one household in eight in this income
group lived in assisted housing and the average cost per
recipient household was $132 per month. At the other end of
the income scale, housing-related tax expenditures claimed by
households with incomes above $50,000 cost the treasury $7.5
billion, or 26 percent of all housing costs; four-fifths of all
households in this income group claimed housing tax deduc-
tions and the average cost of these deductions, per taxpayer,
was $309 per month.
Moreover, the cost of homeowner deductions for mortgage
interest and property taxes, the largest component of
housing-related tax deductions, is increasing dramatically. In
1976, Treasury estimated them at $8.9 billion. The estimate
CITY LI M ITS/February 1982 20
for 1981 is $28.1 billion (which is probably low, as actual costs
always exceed the estimates). Indeed, I've unearthed an
interesting housing "constant" in reviewing budgets over the
past couple of years: the total outlays for all HUD-assisted
programs since 1937 is slightly lower than the cost of housing-
related tax deductions in the current year. And the deductions
are increasing rapidly enough so that this appears likely to be
sustained. (Last year the Joint Committee on Taxation esti-
mated that they would double in five years.)
Converting the deduction, which benefits only those with
enough income to itemize deductions, to a 25 percent credit
would both control the cost of these deductions and be far
more equitable.

There is no future for private, unassisted rental housing
production, primarily because of the existence of home owner
deductions. The other factors which are more widely dis-
cussed (rental control, lack of sufficient investor tax incen-
tives, etc.) are peripheral. Very few who can afford to rent
unassisted housing want to because of the impact of home
owner deductions. Conversions and abandonment are also
eroding the existing rental stock. Providing comparable
deductions for renters would be expensive, too and would
just compound the inequities of the homeowner deductions.
One could easily become pessimistic in viewing this scene.
Or one could conclude that there is really almost nowhere to
go but up. Indeed, there are grounds for optimism. President
Reagan's housing commission, for example, while operating
within the narrow constraints of limited federal spending, is
attempting to redirect federal housing assistance toward very
low income people. Housing vouchers offer an opportunity
to do this and, used creatively, can be the vehicle for much
neighborhood-based housing improvement. Vouchers, even
if limited in scope, can provide the income necessary to
support housing operations-a major problem now for both
public and nonprofit housing.
It seems clear that major changes are in the works for
federal low income housing programs. It is also clear that
both the Administration and the Congress are open to new
ideas and approaches, particularly those that would, in fact,
result in providing low income people with a range of housing
choices and access to decent housing. This, in itself, is ground
for hope, particularly if we can prevent housing from
becoming a narrowly partisan issue.
The important thing, I believe, is to break out of the mould
of the past and to continue to develop new, responsive,
community-based approaches to use whatever limited
assistance is made available.
Once housing programs are perceived to be successful, the
pressing needs of low income people will force their
expansion to more nearly adequate levels.

The writer is president of the National Low Income
HOUSing Coalition. The views expressed in this article do not
necessarily represent the positions of the coalition:
Chemical Banks
Urban Finance Representatives:
. , cdring for you as you care for
most important clients.
Servides for small businesses '
and housing concerns;
SBA ICertified Lender
Construction Financing for Low
and Moderate Income Housing
6. . I 914-9!17-1534
GIBSON WINDOWS, INC.:
'We Can Save You Money"
Minority Owned
Distributor of
Thermal , Break
Alum DHA2.5
HP90Windows.
Also storm win-
dows and doors.
1
I VC '
9 BROOKDELL DRIVE .,/

Y9RK.20530 /'
'. DAVID M. GIBSON/"
/" PRESIDENT V
!/A////
I
21
1 ,
Chemical Bank's
Urban Finance Department
Broadway
New York, N.Y. 10015

1111 aalSTM'S JUS' IUGIIT AI
Member FDIC
, 309 FIFTH AVEN,(JE
NEW YORK, N.Y. 10016
SPECIALIZING IN
GROOP LIABILITY AND
HEALTH INSORANCE
PROGRAMS
Contact: Paul Sourifman
, Vice President
(212) 684-4770
CITY LIMITS/February 1982
The Public Service Commission:
- -
-- ......
:...-....:.....:..---'---'- _. ---

Flak-Catchers or Rate-Setters?
T
HE PUBLIC SERVICE COMMISSION IS A SEVEN-
member gubernatorially appointed board charged with
regulating utility rates in New York State. The Commission's
assorted experts and bureaucrats operate within a sterile
universe of day-to-day economic reality. Only the Governor
can be held accountable directly for Commission decisions,
although such a connection is infrequently made . . The people
who make up such commissions must, therefore, provide
some measure of political protection for the Governor, acting
both as flak-catcher and cooly distant authority. The PSC
does both.
The current chairman, Paul Goioa, a former legal counsel
to ex-Senator Jacob Javits and Governor Hugh Carey, had
no prior energy experience but has proven adept at short-
circuiting consumer groups by shuffling across the state,
CITY LI M ITS/February 1982 22

meeting with local activists, then promising nothing but
patience. Meanwhile, he has appointed as general counsel a
lawyer whose prime distinction as counsel to the New York
State Senate Energy Committee was an unabiding opposition
to the Utility Users Bill of Rights, legislation which placed
constraints on the ability of utilities to shut off their
customers' service.
Ed Larkin is the PSC's senior commissioner. He is a
former building contractor from Long Island who once voted
against a Con Ed rate increase because it was too modest.
Recently Larkin realized a long-sought goal, ascending to the
presidency of the prestigious National Association of
Regulatory Utility Commissioners. Larkin erected, with
dispatch, an Ad Hoc Committee on the Financial Health of
the Electric Utility Industry. The ftrst wave of NARUC
recommendations extol the virtues of utility management,
sympathize with investors trying to weather the inclement
economy and propose streamlining the rate-making process.
Neither Commissioners Harold Jerry nor Carmel Carring-
ton Marr have ever voted against a Con Ed rate increase.
Jerry, the strongest environmental voice on the PSC, appears
to genuinely believe that higher rates will lower electric
consumption across all classes of electric users. Marr, a black
Republican from Brooklyn, shows little interest in the rituals
of designing utility rate schedules, but has sought more
genuinely courteous customer service policy for consumers.
Raymond Shuler, a Cornell University economist, has been
hailed as a disciple of Alfred Kahn, another Cornell
economist, formerly Jimmy Carter's anti-inflation czar and
chairman of the New York PSC. As Kahn took credit for
instilling a zeal for deregulation among Carter monetarists
even before supply-side economics became state religion, so
Shuler disdains "social ratemaking" (attempting to rectify
social inequities through rate design) and wonders aloud if the
electric industry might not benefit from deregulation.
Rosemary Pooler, former director of the Consumer
Protection Board, has an unbending pro-consumer history.
Unfortunately unlike the CPB's executive, no utility
Commissioner has'any staff; all research performed by staff
is supervised by the Cpair .
Ann Meade has been the most consistently independent of
the Commissioners; possessing none of the self-importance
characteristic of partisans on all sides of the utility wars, the
former Family Court Judge from Suffolk, achieved a record
of high quality and integrity in her first term. Hundreds of
consumer and environmental organizations throughout the
state rallied to endorse her gubernatorial reappointment last
spring. Carey acquiesced, Meade regained her seat and the
public interest community was overjoyed. Two months later,
Anne Meade emerged as point woman for the PSC's historic
$450 million rate increase award to Con Ed. Commissioner
Meade justified the increase in the New York 1lmes by
proclaiming the need "to send a signal to the investment
community tha the PSC could be sympathetic" .
A
s THE FLOWER OF EVEN THE ONCE-RELIABLE
Commissioner Meade wilts under the heat of Reagan-
omics, it seems an appropriate time to look back at the
criteria the PSC has employed in its past Con Ed rate-making
decisions. Essentially, the cast of characters listed above has
generally followed a policy of gorging the utility with nearly
unlimited capital regardless of managerial performance. A
more provocative approach might be to reduce some of the
utility's specific charges in an effort to allocate the cost of
electricity according to use, reducing the cost to the low-use
consumer while recovering lost revenues at the higher
plateaus of usage. But the PSC has so far resisted the
establishment of this principle.
Two of the more inequitable fees are the customer charge
rod the summer surcharge. The customer charge is that part
)f the monthly bill assigned to cover the cost of basic services
:uch as metering, billing and connecting the customer's home
Ir apartment to the system. The customer is required to pay
lis fee every month even if he or she consumes no electricity.
23
The PSC raised Con Ed's customer charge from $3.33 to
$3.98 in the last increase, accepting the utility's rationale that
the provision of basic services which account_ for the customer
charge actually costs over $8.00, and should be assigned per
customer, regardless of usage, income or accessibility.
The Commission could have required the Company to
recover these fixed costs in the price of electricity being sold.
The sale of electricity could be compared to the sale of gOOU;)
in a supermarket, where fixed costs such as cash registers,
cOunters, and the like are included in the price of the goods
sold rather than being assessed against the customer in the
form of an admission fee. Con Ed argues that this analogy
suffers imperfections, particularly in that customers travel to
the market to transact business while Con Ed must send
power to the home. The PSC has chosen the company's argu-
ment; whatever the' philosophic rendering of these cost allo-
cations, the customer charge in effect decreases the per
kilowatt hour cost of consumption. The higher the customer
charge, the more expensive the rate for initial units of
electricity.
As a result, the low-use customer again pays more per unit
than the consumer of large amounts of energy. To the extent
that reducing or eliminating the customer charge would
reallocate costs according to use, such a charge would benefit
conservation by increasing the cost per kilowatt hour ,
especially discouraging use in the upper level of copsumption.
Principles of equity, usually strangers in Public Service Com-
mission hearings, argue against the high custotner charge.
Demand for minimal electricity requirements has almost no
elasticity (low-users occupying multiple dwellings fu New
York City use only 240 kwh monthly, an astonishingly small
amount of power). Also, the low-income consumer usually
inhabits a service area where the most depreciated,
deteriorating equipment resides: The customer charge pays
for this investment; the newest plant and distribution network
finds its way into the more affluent communities. The
subsidies continue, redistributing wealth upwards.
The summer surcharge raises hackles everywhere. Con Ed
charges residential users more for electricity from June 1 to
September 30 than it does during the rest of the year. The,
summer rate, originally .5 cents, was designed by the PSC in
1973. The argument for the summer surcharge centers a r o u n ~
the economic fact that when usage rises, peaking capacity is
being utilized. The cost of maintaining peaking capacity is
included in the rate for each unit of electricity produced
during peak. In the sUmmer, the season when most stress is
placed on the Con Ed system, production of any single unit
of electricity is more expensive and may require new construc-
tion of power plants.
There is a logic to this reasoning, however tortured. It is
fair though, to ask the PSC whether the customer who is not
creating the peak demand should pay for it. Con Ed has
composed a report for the PSC indicating that among its
customers who earn less than $7,000 a year, 80 percent use
less than 250 kwh; 62 percent use less than 200 kwh. In the
same income group, 11 percent use more than 500 kwh and
only 2 percent use more than 1000.
Clearly the most controversial users of light and power are
also the poorest citizens in New York City. What swells '
CITY LIMITS/February 1982
electric consumption in New York City in the summer is the
abundance of air conditioner use. The surcharge, attached to
hapless low and moderate users already numbed byextraor-
dinary rates and who in turn have shed usage in each of the
last four years, simply levies a prohibitive tax on a class of
customer who can no longer respond.
The PSC, embattled in their harrowing world of computer-
ized, theoretical rate-making, never could reach a decision on
these two mundane proposals. On a whole range of issues,
from the costs of nuclear outages at Indian Points I and II, to
the Company's bloated equity structure, to what percentage
of profit the Commission guarantees Con Ed, the consumer
would be far better protected if the regulators would stay
confmed to the airy wastelands of their economic mythology.
Their arrogant assumptions have performed the miraculous
feat of making elected officials appear accountable. 0
Both houses of the state legislature passed a bill last year
which would have waived the surcharge for those customers
who used under 500 kwh. The Governor promptly vetoed the
bill. But he signed into law legislation which cover the
consumer with new layers of protection from utility shutoffs
and a bill which builds a floor on buy-back rates for small on-
site producers of electricity who sell excess power to utilities.
Richard Schrader is a radio commentator for WBAl in New
York.
Tenants Contest City Rent Hikes Report on 1981 Tax Act
A group of tenants in city-owned
buildings have fIled a class action suit in
federal court protesting the city's right to
arbitrarily raise rents. Filed in January
with the assistance of the Bronx Legal
Services office, members of the Union of
City Tenants, a group consisting of over
200 dues-paying members located in city-
owned buildings throughout the city,
claimed their rights to due process and
equal protection are being denied.
Buildings that fall into the city's hands
because of tax arrearages automatically
New York Hispanic Housing
Conference
The First Annual New York Hispanic
Housing Conference will be held March
4th and 5th at the Doral Inn in New York
City. Entitled "The Housing Crisis:
Resources and Strategies," the confer-
ence will enable community leaders,
policymakers and others to discuss
neighborhood development. Workshops
will include co-op conversions, alterna-
tive management, home ownership,
housing development, multi-family fi-
nancing, tax benefits and others. For
more information contact, Hector
Pinero, Chairperson, New York Hispanic
Housing Coalition, c/o Community Ser-
vice Society, 105 East 22nd St., New
York, NY 10010. (212) 254-8900 ext.
257.0 -
CITY LI M ITS/February 1982
are removed from nOI'!Pai rental regula-
tions that apply to multi-{ainiIy buildings
in the city. Tenants of several buildings
in various city management programs
have protested that rents have been
raised without regard to improvement in
services. Previous attempts, however, to
have courts rule that the buildings'
removal from rent protections is illegal
have failed. 0
Copies of a guide on how the new tax
law affects the preservation and rehabili-
tation of older buildings are available
from Preservation Reports, Inc., 1016
Sixteenth St., N.W., Suite 275, Washing-
ton, D.C. 20036. The report, first pub-
lished last summer shortly after the
enactment of the new tax law, has been
revised and updated. 0
Here's How
BENEe
Saves You
Energy
Dollarsl
Customized Energy Audits
Recommendations With Under 3 Year Paybacks
General Contracting For Retrofit
Heat Distiibution Balancing
Energy Management Micro-computer Design
and Installation
. New York. NY 10016
BENEC
S3 East 34th Street
Industries Inc 212 689-4499
Complete Energy Efficiency For Buildings
Lerner, VVaIker, Levy & Cohen
1960 Broadway
New York, New York 10023
Attorneys at Law (212) 873-7900
T e n ~ t Representation
24
Think how much cheaper it would be
if all the people, like yourself,
got together and bought oil by the millions of gallons
Well,. it's already happening.


.. .....

. \:



.. ... ;.:.







',':;\
::,:'
. ... ..'
BUY FUEL CHEAPLY, QUICKLY AND RELIABLY
We have been serving over 200 buildings for three years
NO MEMBERSHIP REQUIREMENTS OR FEES
Call 239-9418 for latest prices for #2, #4 and #6 oil
ANHD
THE ASSOCIATION OF
NEIGHBORHOOD HOUSING DEVELOPERS'
424 West 33rd Street
New York, N.Y. 10001
HOUSING COURSES AT THE NEW SCHOOL
HOUSING CHOICES FOR THE '80'S
Instructor: Anthony Gliedman, NYC Housing Commissioner
(#516) 6 Tuesdays, 7:45-9:30 pm, beginning February 9. $80
A survey of the issues facing New York City in preserving its housing stock, developing new
forms of ownership, financing rehabilitation/new construction, promoting racial and
economic integration.
PRINCIPLES OF REAL ESTATE INVESTMENT
Instructor: Abraham Barkan, President, James Felt Realty
Services, Inc. (#517) 6 Mondays, 5:50-7:35 pm, beginning March 29. $80
An analysis of the real estate market in the metropolitan area and of real estate offerings for
all types of property-vacant land, residential, commercial, industrial.
LANDLORDS, TENANTS AND THE LAW
Instructor: John A. Milano, Judge, Housing Part, Civil Court (#518) 6 Tuesdays, 5:50-7:35 pm,
beginning March 30. $80
An examination of the legislation, procedures and legal precedents affecting rent control,
rent stabilization, code enforcement, rights of landlords and tenants. The jurisdiction and
procedures of the Housing Court.
THE NEW SCHOOL
66 WEST 12th Street
New York, NY 10011
741-5690
Work Shop
PROGRAM DIREOOR
South Bronx communitybased housing organization. To administer
small home development project in on historic district. Salary
)25.000.
PROGRAM ASSISTANT
Bilingual Spanish/English. Public relatiOns. communications skills. typo
ing. Salary )15.000.
Send resumes to, l.H.D.C.A. Inc.
947 East 156th Street
Bronx. MY 10455
ORBAN HOOSING SPECIALIST
Provide home and building owners with information and
counseling on housing issues, building code requirements,
and rights and responsibilities under existing rent
regulations.
Provide information, counseling and technical assistance
concerning mortgage availability, rehabilitation financing,
insurance alternatives and tax incentives/abatements both
public and private sources; act as loan coordinator.
Encourage private sector investment through assistance to
owners in filing loan applications, determining work scopes,
obtaining cost-estimates, and analyzing rent structure and
cash flow. Present viable loan proposals to existing mort-
gages, private sector lenders and appropriate government
agenc!es.
Qualifications B.A. degree plus two years working experi-
ence (or equivalent training) in housing finance and/or
mortgage counseling. Familiarity with loan applications,
pro formas, work scopes and financing mechanism essen-
tial, as is knowledge of government loan programs such as
HIP, Article SA, PLP, SONYMA and Section S.
Salary commensurate with experience.
Resume to: PAce Housing Office
201 Dekalb Avenue
Brooklyn, New York 11205
EXECUTIVE SECRETARY I
OFFICE MANAGER
Person with excellent secretarial and organization-
al skills, plus experience and background in hous-
ing or community organizing sought to do heavy
typing and assist Executive Director in running
large, non-profit, community-based housing
organization.
Salary to $16,000, depending on experiehce.
Resume to: Director
ANHD
424 West 33rd Street
New York, NY 10001
Equal Opportunity Employer
Commercial Revitalizlation Project Director. Salary $15,000. To administer
community-bascd commercial revitalization program in Brooklyn, NY.
Some experieitce in revitalization or proposal writing preferred.
Send resumes to: Midwood Development Corp.
1416 Avenue M
Brooklyn, NY 11230
Attn: E. Brickfield, Exec. Oir.
COMMUNITY DEVELOPMENT-HOUSING
SPECIAUST
A newly-formed. non-profit development corporation requires
an Energetic and Independent Person having the experience
and knowledge to
-Develop support services to organlze-operate tenant
organizations
-Educate-counsel tenants & owners on bldg. rehab. and rent
restructuring
-Conduct housing surveys and assemble financial data for
multi-family rehab. financing
-Prepare-<lisseminate informational materials. Masters in
Urban Planning or related preferred.
Send resume and salary history to:
Mr. M. Bialek
CoO Jewish Community Council
990 Pelham Parkway South
Bronx, New York 10461
KOUSmG MAlTAGEIl
Oversee management of lBO-unit, Section 8 senior
citizens housing development; structure and implsment
standa.rd1zed management systems for growing stock of
7 A buildings; interface with Community Management
Program; explore and test opportunities for managing
privately owned buildings; oversee and develop in-
cubating energy assistance project.
Requirements: housing management experience
(Certified Housing Manager preferred);
7 A training; w1l.l1ngness to serve as 7 A
Administrator; supervisory exprience.
Must be a self-starter, ambitious,
dependable, and w1l.l1ng to work hard.
Salary: $18,000 - $20,000, depending on experience
lend I'UUDUta k: Gary Hatwm, Exec. Dir., St. Bicholu
Beighborhood Preservation a:
JIouaing Development Corporation,
11-88 catherine St., Bklyn, BY 11811
E!lEBGY SPECIALIST
Carry out defined neighborhood energy strategy; serve
as in-house energy expert; provide ongoing energy
audits and monitoring services to all housing corpora-
tion owned, managed and assisted buildings. Must also
aggressively market audit services for privately owned
buildings; fac1l1tate home owners' usage of a subsidized
home improvement program to finance weatherization
improvements, coordinate weatherization materials
purchases and contracting.
Requirements: experience in conducting weatherization
audits and writing up the recommended work programs;
ab1l1ty to negotia.te with vendors and contractors;
experience in energy training programs; initiative and
w1l.l1ngness to learn aJrea.dy developed audit program.
Salary: $16,000.
Chelsea Saturday Night
Tenants in the Chelsea community on Manhattan's West
Side chose a subfreezing Saturday night to confront the
harassment by landlords they say is accompanying that
neighborhood's rapidly rising reputation and rents. The
group's demonstration (1.) wound up not only scaring away
some patrons of a Tenth Avenue sidewalk cafe owned by a
building manager they say is behind some of that har-
rassment, but also helping one victim put his alleged
tormentor in jail. The group began picketing Moran's Clam
House at West 19th Street and Tenth Avenue on January 9th
with leaflets and placards denouncing Moran's proprietor,
Thomas Lydon, as a "criminal" who employed thugs to push
the remaining tenants out of three buildings up the block.
Lydon, a retired police lieutenant, later said his role as
manager of the buildings had ended last November when the
buildings were sold. The charges against him, he said, were
"preposterous." "It's the Red Brigades, that bunch," the
clam house owner said later.
The demonstrators moved on to another harassment site
and marcher Anthony Shimkus (2.) left for his home at 334
West 19th Street (a building with no connections to Lydon).
Once there, Shimkus was confronted by Louis Babalou,
another tenant who, Shimkus believes, has an assignment
from the owner to drive him out. Babalou was said to have
threatened him with a knife and told him he'd better clear
out. It wasn't the nrst such encounter between the two, and
Shimkus already had a court order of protection against
Babalou.
Returning to the tenant group, Shimkus told, them what
had happened and, along with others, went to the Tenth
Precinct (3.) told his harassment tale, and got police to go to
the building.
There, police arrested Babalou (4.), charging him with
attempted menacing and assault. Babalou was handcuffed
and taken to jail.
Anthony Shimkus, however, still didn't feel safe. With the
help of fellow protestors, he moved out of the building that
night. 0
Photographs by AI Sacco/Photonews
2
3
4
27
CITY LI M ITS/February 1982
CITYLI
SUBSCRIBERS
K
HY.
City Limits is the magazine that for six years
has provided news and analysis of what is hap-
pening to our communities and why.
City Limits readers know why owner abandon-
ment has ravaged some neighborhoods while
long-time residents in others face displacement.
Why fair housing is still an issue in New York City_
Why city residents are battling for open space_
These are just a few of the stories City Limits
covered in the past year. In the coming months we
will continue to look at these and many other
issues_ We hope you' ll join us_
.. I