You are on page 1of 36


Fall of the Transit Tax Battle Over Enterprise Zones

Starrett City's Toxic Worries
MAY 1982
The Neighborhood Front
The Urban Homesteading Assistance
Board's latest self-help update for
April, 1982 is out and available. The
newsletter contains information for
tenant-managed buildings, including a
list of Tenant Interim Lease program
participants. Call 749-0602 . ... A
project long advocated by Hope
Community in East Harlem-the reno-
vation of the IRT station at Lexington
Avenue and East 103rd Street-is soon
to commence. The MTA confirmed that
$3 million has been set aside for the
project and $30,000 of that for perma-
nent, durable art. Hope Community
collected 3,000 names on a petition for
the changes last spring . . .
apartments (also for $250 per unit) from
the city. The building has been managed
by Southside United Housing Develop-
ment (Los Sures) for several years under
its community management contract.
l'he Northwest Bronx Community
and Clergy Coalition is attempting to
convince the Exxon Corporation that
providing funds for low interest weath-
erization loans makes good economic as
well as energy sense. Exxon, thus far,
remains unconvinced. The Coalition is
interested in hearing from any Exxon
stockholders. Call or write: NWBCC
Energy Committee, 2656 Decatur
Avenue, Bronx, NY 10458,933-3101
. . .. The Kingsbridge Heights Neigh-
borhood Improvement Association,
also in the northwest Bronx, filed a
challenge with two federal banking
regulators last fall to keep Citibank
from closing a branch at Kingsbridge
Road. Citing the Community Reinvest-
ment Act, the group asked the regu-
lators to prevent the closing. Rebuffed
in that attempt, the group has since filed
to prevent Citibank from opening a
potentially far more lucrative branch on
Park Avenue in midtown Manhattan.
The People's Firehouse, along with
Los Sures and St. Nicholas NPHRC,
launched their North Brooklyn anti-
arson project with a two-day conference
in April. Funded with $75,000 in federal
Community Development funds, the
project will assist tenants and others in
preventing arson and detecting its
approach in the north Brooklyn area
.. .. The N. Y. Neighborhood Anti-
Arson Center has a computer print-out
available of all structural fires by
building address from 1978 to 1981 in all
five boroughs. This data can help con-
struct a fire history of a building or an
entire neighborhood. Call 239-9414 for
"Help for Owners of 1 to 4 Family
Homes", a guide published by the
Neighborhood Stabilization Program of
the City's Commission on Human
Rights includes summaries of resources
and agencies needed for small home-
owners. Info ranges from where to get
tax appeal assistance to how and where
to get the best prices for fuel and
insurance. $1.00 by mail from: NYC
Commission on Human Rights, 52
Duane St., NY, NY 10007. Attn: Ray
Tuite .. .. The Manhattan Valley Dev-
elopment Corporation on Manhattan's
Upper West Side is scheduled to start
the gut rehabilitation of 157 Manhattan
Avenue, one of its Community Man-
agement buildings. The building is part
of a package of three including 153
Manhattan Avenuel, . which was sched-
uled to be purchased by MVDC on
April 29. The second Community
Management building to be sold,
MVDC's first, 951 Columbus Avenue,
was bought in December, 1980 .. . The
Trust for Public Land's NYC Land
Project reports in its latest bulletin that
its two-year-old efforts to help a group
of Staten Island residents preserve a
stretch of wooded hillside property with
geologic formations dating back 400
million years have borne fruit. The
Serpentine Art & Nature Commons, as
the area is called, has been snatched
back from developers' condominium
plans, and through a combination of
land donations and the forestalling of
city auction, a nonprofit land trust
formed to own and safeguard the
:t:: land. O
~ The Neighborhood Front is a new
In what Real Estate Weekly dubbed
"one of the most intricate real estate
transactions in recent New York City
history" (That's saying something!)
Vanderveer Estates, a 2,500 apartment
community in Brooklyn's East Flatbush
was sold to an investment group headed
by Ivan Penson of Great Neck. The
sale, for $50 million, was engineered by
Helmsley-Spear Senior Vice President
D. Kenneth Patton who has been trou-
bleshooting for the complex since last
year. The long troubled development is
undergoing a difficult $25 million
renovation (see City Limits, November
1981). Several community groups are
watchdogging the rehab to assure con-
tinued vitality as low and moderate in-
come housing .... In North Brooklyn,
tenants of 76 Richardson Street, a
20-unit building managed by the St.
Nicholas Neighborhood Preservation
and Housing Rehabilitation Corpora-
tion in the Williamsburg section, have
purchased their building for $250 per
unit from the city. The sale is the first
for the group out of its Community
Management program for city-owned
buildings. The group also purchased
586 and 586A Morgan Street from the
city for the tenants residing there, said
Development Director Sandra Abram-
son. Tenants of 582 Morgan Street,
another Community Management
building, are also planning to purchase
their buildings . .. In nearby south Wil-
liamsburg, residents of 78 South First
Street became the first to purchase their
~ feature of City Limits. Please send your
~ items of interest to NOTES, City
---.. ...., Limits, 424 W. 33rd St., NY, NY 10001.
CITY LIMITS/May 1982 2
Dear Readers,
It's been a good while since we used
this space to talk about how we are
doing, and where we are headed. In the
past year, this Pllblication changed its
format, expanded in size and increased
its coverage of issues around the city.
Like community groups everywhere, we
are adjusting to changing times and
(even) slimmer resources.
Right now, we need to find out more
about who our readers are, what they
want and how we can grow if we're to
stick around for the rest of the Reagan
era and beyond.
First, some facts: as our masthead
tells you each month, City Limits is
published by three groups-the Associ-
ation of Neighborhood Housing
Developers, the Pratt Institute Center
for Community and Environmental
Development and the Urban H.ome-
steading Assistance Board. Each "spon-
sor" contributes to the upkeep of the
magaz!ne with yearly payments. These
A Leffer to the Readers
payments amount to roughly 20 percent
of the approximately $90,000 per year it
costs to staff, publish and promote City
Our approximately 1,400 paid sub-
scribers, monthly single-issue sales, and
advertising revenue account for another
25 percent, and we rely upon a few 'Very
helpful and loyal foundations and cor-
porations to supply the larger half of
our budget. Those funders have stood
by us while giving afirm nudge to
generate a bigger portion of our budget,
and move closer to becoming a self-suf-
ficient operation.
That goal is elusive. but we have
taken important steps-the ads you see
are part of that effort as are our
stepped-up promotional mailings to
bring in new readers. We're also trying
to reach out to a larger audience:
energy, transit, health and economic
development are all vital aspects of
community life and we've begun to
cover more of these and you will see . ,
, ..~ "
more in thefuture.
To give us a better idea of your
interest in such expanded coverage,
there's a reader survey questionnaire
beginning on the back cover. We urge
you to take the time to fill it out and
send it to us.
You will also be hearing/rom us in
the near future with a larger request.
We are establishing the "Friends of City
Limits", a group of readers who can
afford to make a contribution beyond
the cost of a subscription. We hope
you'l/ be as supportive of that effort as
you have been as readers.
Finally, we want to underscore once
more that City Limits is an open forum:
we welcome your letters, articles and
calls. Thefeedback we get is that City
Limits is an often co.,ntroversial, but
useful and important publication. Let
us know what you think.
The City Limits Staff
Volume XII Number 5
The Neighborhood Front
Short Term Notes
Landlord's Return
Stymies Rehabs
Savings Bail-Out
Arson on the Hudson
Jumping the 1\unstile
Small Homes Rising
Starrett City's
Toxic Worries
Combat Over Enterprise
Penn Yards Debate
NYC's Housing ltends
Home Repair ~ Slow
Cover Photo by AI Sacco

Short Term Notes
. ,
MOre Housing
Court Info
Tenl,Ults in four of New York City's
boroughs are making in
Housing Court exhibiting more self -con-
fidence and less trepidation as they are
now armed with pertinent materials
provided by tenant volunteer informa-
tional services.
Inspired by the creation over a year
ago of the Bronx Task Force on Housing
Court, the volunteer efforts iti Brooklyn,
Queens, and Manhattan have begun to
provide answers to questions from both
tenants and landlords on subjects as
diverse as how to understand what's
happening in court, serve or answer a
dispossess, secure a low-interest loan to
repair a buildirig, or simply fill out
bureaucratic court forms properly.
"We're the1youngest of the volunteer
groups," said
Betty Lorwin, one of the
organizers of the Manhattan Volunteer
Housing Information Service.
first the judges were wary of us," she
explained, "but now I think everyone
agrees that we are l\elpful-we're
another place to go to talk to people and
calm down in court." Four -months-old,
the Manhattan unit, operated on a tri-
lingual basis (Englisl1, Spanish, and
Chinese), is run by volunteers from a
dozen community . .
, "It's still a fmger in the dyke-type
operation in Brooklyn, but I guess it's
made a difference, at least in catching
technicalities and lessening the number
of defaults," said Michael Powell, one
of the founding tenant organizers in
Brooklyn, where some 22 organizations
share in this service instituted in
September, 1981.
In the Bronx where an average of 50
tenants receive help each day (Monday
through Friday), the task force has
realized'substantial courthouse improve-
ments, inCluding Written agreements
between landlords and tenants, num-
bered court cases on the daily calendar
bilingual announcements on procedures,
and denials of defaults against tenants
unless the landlord is present.OS.B.
elTY LIMITS/May 1982
April Fool's Day at Mobil
About 300 welfare mothers and their allies-union, church, feminist and community
groups-marched on the Mobil Oil Corporation's midtown headquarters on Aprill. The event was
sponsored by the Downtown Welfare Advocate Center and the Redistribute America Movement,
welfare organizing groups, One goal of the action, explained DWAC director Marq May, was
"spotlight one of the most notori()us and able-bodied recipients on the dole. " The march on MobIl
followed meetings in March between' welfare activists and several of the city's largest corporations, at
which the companies were challenged to reinvest significant amounts of their federally mandated tax
breaks into social programs. 0
Auctions Readied for Lower East Side
The city's Department of Housing
Preservation and Development is about
to initiate an end run around Commun-
ity Planning Board #3 on Manhattan's
Lower East Side. The city is planning to
disregard that board's 1979 moratorium
on auction sales of all city-owned
property within its borders. At that time
the bbard affirmed the ongoing work of
local housing organizations and actively
encouraged them to designate selected
properties for rehabilitation, sweat
equity and new construction.
That sales ban, similar to one voiced
by Community Board #7 on the Upper
West Side, has kept the city from auc-
tioning foreclosed lots and buildings to
the highest bidder. Auctions of other
city properties were reintroduced in the
spring of 1980.
Now, an internal HPD memorandum
119 vacant Lower East Side
buildings for disposal; 64 to be sold at
auction in the Fall of this year and 55 to
be sold through a competitive proposal
Many of the buildings designated are
either parts of, Qr entire pieces for
projects in various stages of planning by
local groups. Cutbacks in federal funds
and changes in city policies have
stymied many of those schemes.
The city's move, which will begin
with the submission of properties for
community review this Spring, is
expected to spark a heated loral
debate. 0
Landlords Told to Stay Within the Law
City housing commissioner Anthony
Gliedman responded last month to a
10-month-oid petition the state
Attorney General by directing the Rent
Stabilization Association, a landlord
group, to refrain from activities "not
essential to or directly related to the
administration of the Rent Stabilization
The petition, med last June, had
asked the city's Department of Housing
Preservation and Development to order
the RSA to "cease and desist" from
illegally spending its funds for activities
aimed at undermining the rent stabiliza-
tion law. Pursuing such activities, the
organization allegedly had spent
$925,000 in member dues over a two-
and-a-half year period. The RSA was
created by law to administer the stabili-
zation system, and its major task is to
fund the Conciliation and Appeals
Board, which rules on landlord-tenant
disputes in over 800,000 rent stabilized
city apartments.
"Any reports prepared on behalf of
the RSA should consist of the objective
compilation of data necessary ' for
proper enforcement of the RSL (Rent
Stabilization Law)," said Gliedman in a
letter to RSA Chairman Sheldon Katz.
The housing commissioner issued his
directive, based on the opinion of the
city's corporation counsel, on April 1.
Ten days earlier, Attorney General
Robert Abrams med suit against the
RSA on the same grounds raised in the
then-unanswered petition to Gliedman.
Minimal Impact
Spokesmen . from ?n
all sides of the issue said the directIve
would have minimal impact on the way
the RSA conducts business.
Gliedman was just ordering the RSA
to "comply with the law which it is
already doing," said Arthur Rich-
enthal, an RSA attorney. The order was
made for "political reasons,"
Richenthal contended, noting that the
day after he sent his letter to Katz, appeared before the New
York State Assembly Committee on
William Rowen of the New York
State Tenant and Neighborhood
Coalition, which originated the
complaint on which the Attorney
General's legal action is based, was
skeptical about what impact's
directive would have on the landlord
group's activities.
As an example of the RSA's con-
tinued excesses, Rowen cited a suit
brought by tenants against the Rent
Guidelines Board that charged the rate-
setting body had allowed excessive in-
creases over the past eight years. The
RSA still retains attorneys in the case to
defend the board's actions, Rowen
explained. Yet the petition called on the
RSA to stop intervening in lawsuits in
behalf of landlords.
Rent Stabilization
Sheldon Katz
such as lobbying and public relations that
favor landlords over tenants, but it will
seek restitution of at least the $925,000
allegedly spent to advocate landlord
positions, to be used instead to advocate
tenant rights. "It is very important that
wrong-doers pay a price for their
wrong-doing as a deterrent effect,"
Leventhal emphasized. 0
Tenant Coop Workshop
A full-day training workshop on ten-
ant-initiated cooperatives will be
presented on Thursday, May 27th by
the Community Development Legal
Assistance Center (CD LAC) of the
' Council of New York Law Associates.
The conference will focus on case
histories of tenant groups from a variety
of income levels who have taken over
ownership of buildings from city and
private sources.
The program will address methods by
which tenants have successfully pur-
chased buildings; steps to be taken for
cooperative conversion under New York
State law; analysis of tenant-initiated
cooperative offering plans; representa-
tion of tenant groups; rights of parties
involved in a cooperative conversion.
Conference speakers will include
private and public agency attorneys and
If tenant leaders from buildings involved
E:l in tenant-sponsored conversions. It will
be held at the Association of the Bar, 42
:s West 44th Street, New York, New York.
"The whole issue," Rowen asserted,
"is-can Mayor Koch's administration
take steps against illegal acts of land-
lords without affecting their campaign
contributions for his race for
Governor?' ,
The lawsuit against the RSA is going
ahead on two fronts, said Melvyn
Leventhal, Assistant Attorney General
in charge of consumer protection. Not
only will the suit seek to prevent the
RSA from engaging in "illegal acts"
Registration is $20 for representatives
of community organizations and tenant
associations, $35 for Council members
and legal service attorneys and $50 for
all others. Group discount rates are
available for two or more participants
from the same organization. Advance
registration is necessary and can be
secured through the Community
Development Legal Assistance Center.
36 West 44th Street. New York, New
York 10036, or call 840-1541.0
Former Owner's Return Stymies R ~ h a b
the 44 low income homesteader
families who, with the help of a $125
million loan from the National Con-
sumer Cooperative Bank, had planned
by now to be living in their rehabilitated
homes in Manhattan Valley on the
Upper West Side.
Originally scheduled to close in Sep-
tember, 1981, the loan has received
several extensions, but, according to
Philip S1. Georges, the bank's regional
director, if the lengthy and byzantine
lawsuit that has kept the homesteaders
from securing title to the seven proper-
ties on West 105th Street is not settled
by mid-June, "We will have to shift the
loan, and that's a shame."
The vacant buildings, located near
Broadway, are seven of the total IS in
rem properties in Manhattan Valley that
landlord Raleigh Davenport claims to
still own even though they were taken
by the city for nonpayment of taxes on
May 2S, 1978.
Davenport asserts that the city took
title without properly informing him of
the foreclosure proceedings, while the
city claims that Davenport's ' charges,
which resulted in the New York State
Supreme Court's restoration of title to
him in May, 1981, are invalid because it
was never properly served by Daven-
port, who won the judgment by default.
. Following the latest rounds early in
April, 1982, in both the state supreme
and federal bankruptcy courts, the fate
of these properties is- still up in the air
because no trial has been held in either
court to resolve the ownership question.
According to city tax records, Daven-
port owes at least $1.3 million in back '
taxes on 17 parcels.
Following the hearing April 13 in
U.S. Bankruptcy Court where Judge
Edward J. Ryan said he could not rule
on the ownership of the property and,
as a result, annulled a six-month stay on
interpreting this matter, Davenport
obtained another stay from a second
judge, which impedes furt'her
movement at this time on Ryan's ruling.
"Right now, I own the property, it's
all mine," said Davenport, following
this most recent court action.
"Anyone's efforts to interfere are
stayed, at least until next month."
He has applied in U.S. District Court
for the Southern District of New York
to have his case against the city and his
former tenants heard as one trial before
a jury.
No date has been set for this case, but
Davenport is hopeful that it will be
heard sometime this year.
In this lawsuit, Davenport hopes to
prove he is the true owner of the
property by establishing that the city
failed to comply with its own regulation
that stipulates that notice must be given
60 days in advance of the date in which
redemption rights expire. Two former
owners recently recovered the title to an
East Side town house worth $1 million
in a similar case in federal court.
Under city law, a landlord with tax
arrears has up to one year to repay back
"What gO()d does it do to k ~ p going
to court if the case can never be heard,"
queried Charyl Edmonds, who super-
vises homesteading efforts at the Urban
Homesteading Assistance Board, the
technical assistance group that is
helping the 44 families.
"When we ' get our day in court,"
Edmonds asserted, "we can't lose, but
in the meantime, what is he trying to
do-make us lose our loan? He can't
win this case and, besides, he owes over
$1 million."
According to Andrew Quartner, an
attorney with the law fIrm of Debevoise
and Plimpton who is handling the case
for the homesteaders, his clients still
expect to buy the buildings for the
original price of $SOO-a-unit.
"Davenport lost the buildings and
doesn't have any legal right to them,
and we intend to prove that whenever
we get the chance," he said.
Meanwhile, another Davenport
building-59 West 105th Street,
originally scheduled to be part of a self-
help rehabilitation package to be carried
out with moderate Section 8 funding-
has been severed from this loan
proposal which is about to close because
Davenport still holds title to this vacant
"There are too many' buildings at
stake here, and all he can hppe to do is
ruin plans for much needed housing for
people in this neighborhood," conclud-
ed Leah Schneider, program director at
the Manhattan V alley Development
Corporation, the nonprofit community
group sponsoring this self-help housing.
Tenant and community plans in the
other seven Davenport holdings in
;:j Manhattan Valley, some of which are in
~ the city's alternative management
~ programs, are also still in limbo because
~ of this entangled legal hattIe between
:::; Davenport and the city.OS.B.
cial backbone of moderate income
communities, the savings and loan
industry is in trouble. Buffeted by high
interest rates and banking deregulation,
literally hundreds of savings and loan
institutions collapsed or were absorbec;l
through mergers during the past two
years. The implications of this collapse
for potential homebuyers and landlords
are especially severe; the thrift industry
is historically the principle mortgage'
lenders for their communities, rather
than the more diversified commerciai
banks. f
Responding to this downward trend,
the housing sub-committee of the Con-
gressional House Banking Committee is
formulating a federal bail-out of the
savings and loan industry. Larger than
either the Chrysler or Lockheed bail-
outs, bill H.R. 5568 would authorize
$7.5 billion of federal capital assistance
for all savings and loans institutions, or
"thrifts," with a net worth of less than
2 percent of total assets and certifiable
losses for two consecutive quarters.
While the bill proposes that institu-
tions receiving capital assistance must
use 50 percent of their net new deposits
to make mortgage loans at rates 1 per-
cent below the Federal Reserve rate, a
coalition of labor, consumer and hous-
ing groups advocate for more stringent
conditions. The coalition is proposing
that 30 percent of each institution's
mortgages must consist of carefully
regulated adjustable rate or fIXed-rate
"This will be the largest bail-out of
private industry in the history of the
country," commented Alan Fishbein of
the Center for Community Change and
a member of the coalition. "The one-
percent loans are a fig-leaf that means
nothing in the real market." As defined
in the bill, few, if any, savings and loan
institutions will realize a net increase in
savings accounts for several years.
However, the bill's sponsor, Congress-
man Fernand St. Germain, Democrat
of Rhode Island, opposes too stringent
conditions. Says Fishbein, "St.
Germain fears that too many restric-
tions on the savings and loans institu-
tions will indirectly play into the hands
Readying the Savings
of the deregulators on the Senate side
who wish to lift all restrictions on in-
vestment. However, we believe that
some changes are acceptable and must
be instituted."
One reason for this insistence is the
permanent nature of the proposed bail-
out. The bill would establish a standing
fund to aid fmancially-ailing savings
and loan institutions; it does not con-
tain a termination date, known as a
"sunset provision." The thrifts would
be aided through capital guarantees
insuring all transactions, rather than by
more costly direct-cash infusions. The
coalition takes the position that unless
savings and loan institutions are forced
to offer a sizeable percentage of loans
pegged to socially stable indicators such
as two-thirds the average wage rate,
these institutions will increasingly
abandon the moderate income mort-
gage market. ,
A .further shift away from home
mortgages by the savings and loans
would only exacerbate an already dan-
gerous trend. While low and moderate
income communities have historically
maintained a stormy relationship with
the thrifts, their mortgage activity is a
key indication of neighborhood stabil-
ity. Indeed, the last ten-to-fifteen years
have witnessed an increasing take-over
,of the mortgage lending field by
completely unregulated mortgage-
lending companies leaving homeowners
much more susceptible to fraud. Yet,
ironically, as Fishbein notes, "The
chairman of the Home Loan Bank
Board said that had adjustable rate
mortgages been around ten years ago,
savings and loans could be showing a
steady profit in the long-term mortgage
field. Our coalition supports this view
and wants to establish parameters for
the adjustable rate and fIXed mortgages
before they hurt, rather than help, the
moderate and low-income home-
City IJmits Focus
Hoboken's long-abandoned ferry terminal, where the east coast's largest film studio is to be built.
throw from Lower Manhattan and
a cheap, fast train ride from Midtown.
That city's uncontested, four-term
Mayor has openly declared his intention
to make the city safe for real estate
development-in his.own words. the
only growth industry that has a fighting
chance in a town that has watched its
factory jobs disappear south. If,New
York City aims to become the inter-
national corporate capita I. then
Hoboken yearns to be its. senior
dormitory. The old row houses and
brownstones provide the raw materials
for this future, and the low income,
primarily Hispanic residents, the grist
for the gentrification mill that empties
worn-out, multi-family buildings and
turns t h ~ into duplex and floor-
through condominiums.
The PATH train's first stop in New
Jersey is downtown Hoboken.
alongside the Old Lackawanna
Terminal that once housed ferries
running to New York. A conversion of
this classic structure, assisted by federal
grants, will house the biggest filmmak-
ing studio on the East Coast. At a
crowded public hearing before the City
Council last Fall, the sponsoring entre-
I preneurs unabashedly announced that
part of the price of their seduction was
the guarantee of "better restaurants and
apartments". Within days a fire broke
out in the nearby American Hotel. an
old, half-sagging building now propped
up by scaffolding and awaiting renova-
tion. Once a rooming house for
merchant seamen, the American Hotel
was most recently a single-room-occu-
pancy (SRO) home for transients who
could sign month-to-month leases and a
temporary place for families relocated
from burned-out or unsafe buildings in
other parts of town. The fire-officially
termed arson by the city-turned a fully
occupied building into an empty shell,
leaving two dead, 16 injured and all 67
tenants homeless. Interior demolition
was started immediately; a new sign
now proclaims its condominium future.
Washington Street is the main
commercial strip in Hoboken, running
from one end of town to the other. This
thriving artery is a solid row of occupied
goods and services stores with residen-
tial units above. While some of the pubs
and fast food places are being converted
to cafes and gourmet restaurants, it is
hardly the type of area one would
expect to see charred roofs or burned-
out shells.
1200 Washington Street is a big red
brick building at the corner of 11th
Street. In late October, a multiple alarm
ftre there killed,II people and displaced
the remaining nine tenants. Again,
offtcials labeled the blaze arson. Five
weeks later, the owner sold the building
for $50,000 to real estate developers
who already owned the vacant, soon-to-
be-converted property next door .

Hoboken is a small city of 42,000 .
people, half of whom are Hispanic and
one-third of whom are poar. All told,
there are 1,352 units of public housing
and 1,200 units with federal Section 8
subsidies. Whatever else is available for
low and moderate income people is in
the city's crumbling buildings where
rents are too high and basic services, too
low. Disinvestment crossed the river
from New York some time ago, narrow-
ing decent and affordable housing
choices for the city's poor.
Five years ago, these dismal housing
conditions gave birth to a grassroots
organization called Por La Gente.
Originally formed to protect tenants
against displacement from buildings
which, ironically, were being gutted for
Section 8 development, Por La Gente
received its ftrst battle scars waging a
losing campaign for the right of former
tenants to return. Now, a new real
estate dynamic is unfolding. This one,
too, forces tenants out, and the struggle
to return is foreclosed by a book of
matches and a subsequent renovation
process that results in expensive condo-
miniums few can afford.
dered in horror at the Washington
Street and American Hotel ftres, a small
group of residents armed with pencils
and pads sought to follow their hunches
and ferret out the ftrebugs. Working
along with Por La Gente, they re-
searched the ownership and sales trans-
actions of properties experiencing sus-
picious fires. They quickly discovered
that the burned buildings already had
telltale signs of arson risk, having been
milked by successive owners who racked
up long lists of code violations, tax
arrears, smaller fires, and one too many
title transfers in a short period of time.
Moreover, the research showed that
. an unusual number of buildings with
suspicious ftres were all slated for condo
conversion. Some had legal sales agree-
ments requiring buildings to be .
delivered empty; one gave $1,000
bonuses for vacant units and reimburse-
ments for the lost rents.
In the American Hotel deal, a sales
contract with a $625,000 price tag was
signed in early October, 1981, with an
agreement' 'to deliver the entire build- .
ing in a vacant condition at the Feb-
ruary I, 1982 closing." The newly
drafted mortsage indicated condomin-
ium conversion; the general alarm ftre
broke out on November 21, 1981.
The research group documented at
least ftve other cases similar to the
American Hotel; in all but one the
buildings were totally cleared of
tenants. According to Sister Norberta
Hunnewinkel, a Franciscan sister who
has spearheaded the anti-arson and dis-
placement actions, the group is frustrat-
ingly short of having built a closed case.
Their sleuthing has revealed a handful
of names which reappear, apparently
interchangeably, as seller, buyer,
developer or lawyer for deals. Many are
present or former business partners.
frequently each other's managing agent.
The signs of one realty outfit can be
seen on many of these properties and
almost three-quarters 'of the buildings in
Hoboken slated for condo conversion.
But while law enforcement agencies
appear to be waiting to find a hired
"torch" with gasoline-soaked rags in
hand, Por La Gente has taken a more
direct path as well.
The group has led the response to the
fires with street demonstrations and a
series of demands addressed to the
Mayor and City Council. They have
continued to call for rental protections.
strict code enforcement, in-depth arson
investigations, increased police surveil-
lance, mandatory smoke detectors and
delayed insurance pay-offs. The official
city response has been meager. A fire
safety program was introduced into the
schools and some beefed-up building
inspections made. But, as Por La Gente
has found to be the pattern in
Hoboken, no real commitments have
been made to redress grievances and
protect lives and hoines.
The Hoboken residents are deter-
mined to continue their fight. Already
their actions have cooled the heat. The
weekly winter fire wave slowed, and
then stopped, although it is likely not in
permanent remission. As one resident
observed, "The fire pattern is
connected to the housing market and
sales are slow now. When they pick up
again, someone may again strike the
match." 0
Harriet Cohen is director oj the NY
Neighborhood Anti-Arson Center.
Jumping The Turnstile
The Fall of the Corporate Transit Tax
ers rushed last month to register
their yearly tribute to Uncle Sam, the
Governor signed into law a bill that
revoked a special tax on million dollar
real estate deals here. That tax was
originally enacted to aid the city's
debilitated mass transit system. The new
law-initiated by the Koch Administra-
tion, backed by Chairman Richard
. .
Ravitch of the Metropolitan Transpor-
tation Authority and passed by over-
whelming majorities in both state legis-
lative houses-granted Manhattan
developers a return the likes of which
working taxpayers can only fantasize: a
retroactive repeal which could result in
a full refund to 58 individuals and cor-
porations who tnanged to pay the "un-
collectable" transit tax since its
inception last October. The total poten-
tial windfall from the city to some of its
most affluent citizens: $9 million.
The running start that led to this ul-
timate turnstile-jump gained most of its
momentum from the influence of the
real estate industry, senior partner in
New York City's permanent govern-
Ready .. .
The now-defunct tax in question was
passed in Albany last July as part of a
package of five tariffs designed to shore
up the bus and subway system's shaky
fmancing and, in the bargain, save the
75-cent fare. The transit tax itself was a
'10 percent charge on the capital gains
(profits) derived from property sales of
a million dollars or more. Most such
sales, it was predicted, would occur in
Manhattan, and the tax was based on
what City Councilmember Ruth Mes-
singer recently called "a logical argu-
ment-that one of the reasons people
profit from having mid-town locations
is that they're served by mass transit.
Therefore, people who buy and sell
highly profitable land in the City of
New York should pay a capital gains taxi
on those sales that would go directly to.
mass transit." The measure's support-
ers estimated it would raise at least $30
million a year, and perhaps much more.
But such estimates were based on the
level of million-dollar-plus transactions
to be expected under normal circum-
CITY LlMITSlMay 1982
after the- - &0
..... 11, it became dtar
..... would face an extraordi-
.... in praetice.
/ ... w ...
Ant. with the help of the Mayor's
oftIce. the tax's effective date was
........ ""* more than two months, to
ace.a- 1.1a tile
I'IIIl estate machine moved into biIh
.... , .... nearly twice as ...,
.,.,....., &Gable .... it ha44'i1riaa
, ................ 'Notsur-
...... , the.leYet of .... fen off stated: "The City's proposed replace-
In October, when the meat rOal estate tax will do
tr8DIit duty rlDllly took effect. ' more for tile MTA tt.n the CUI'J'CIlt
Then. in November. Koch's capital pins tax it would be 8PPJO-
,..tiYe offtce a biD to ftOJD our to have tile
npeal - puIS. IDd cIJ.IIIP is place to Jtoer8te lIIIIldI\Ium
r..,a. it with mcreues In two ..... revenues. .. In closilJl.. Ravitcb, ..
.... the - real former real estate developer, urpd the
CI&ate tIaIIIfer taxes. But the new pro.. Jeaillators to "take action on this
.... was to sales of S5OO.000 ___ as.n..t..1. ... as ..-..;"' ... "
tb bhirriDa the oriaiDal . a-. .. ---.., ....---.
. Ul
1 _.; _::.1. Heaclf ltuff from the man wIao.
- --.7 lOCUS , OIl U" uuu- responding to a questkm at the Strap.
t.frh .... n cIevelopment. hanaers Campaian's IlIIIlUal .. transit
EQtranced le8isIative. carrot speakout" in April, said: "We (the
"..... buqry eyes, MTA) don't want the leaislature to tell
real eAate I most affluent SCl- us bow to run the subway system. and
ODS held oft 0Jl sales, .and we don't want to teU them what the tax
the level of transactlOns f th 'State of u-.. York -; .... t
relatively pitiful durina the enswna ;-:;-- 0 e u.ueu
months. From January 1 to mid-March, .
as the transit tax approached its demise, '
about 80 miUion-doUar-plus sales were Gol
CODSUIDIIl.ted in Manhattan; during the About two weeks after Ravitch ,sent
comparable period last year, such deals his letter to Albany, the Mayor's repeal-
totaled around 140. and-replace bill hit the Senate floor.
1be Mayor'I ' leaillative aides and Much of the debate in that body pur-
otbcr supporters of the repeal pointed ported to revolve around the poIiticaUy
to this slowdown as evidence of the sacrosanct goal of preserving the
capital pins tax'i nature. In a current transit fare. "If you care about
MIIrdl17 letter to Assembly and Senate
In Seaator
.. Muhmn, ..
KaclrI8aYitdtlQooclmaa :.__
tbat the capital pifti
bIbereDtly unworkable. "
occurred, II be asserted, "II
beI:auIe as soon as the tax was
then was an ;mnwtiate effort _ .'- ',
real estate iDdustry, the Iaqe dewIi--'_
pmicuIarly. by bIDIDDa
..., to cbaaae this tax, that 1JeOII "
1IcId bICk OIl tnaDIIIdions." The
an .... t lived up to expectl
Leicb_ aqued. "because of (be
cataiaty. wbetba' the taX was gom.
..... '.
OoocIman's reply WIll revea1iIJa.
dres8iDa Leichter. be said, " ... wbIt
invite yOQ to C".lidlr most
the Iona-l1lllll effect of havina on tit'
books taxes wbicb are geared to die'
chiIIiDa of buIineIs enterprise ... You
limply caanot. in my ' judgement.
Senator, and I think history will ampb'
prove this point, create this kind of
taxation penalty and expect any weU-
run busiDess not to pick up its affairs
and vamOOle (lie)."
Leichter diIputed the specter of
multi-national corporations leaving
Manhattan because of the capital gains
tax, and aDOtber member aruaed that,
leaden, MfA Chairman Ravitch neatly
summarized the City's line. Refenina to
the increases in exisUng property
traDlfer taxes the Mayor's proposal
called for, Ravitcb wrote: "The city
b.Hev. that the taxes will
be simpler to collect and more reliable
in their reveoue-pneratina capacity
tban the capital pins tax. It And, the
CbairmaD "the public interest
wiD .,. be served by the dedication of
IOUI'eeI which an stable, reliable, and
rcspoasivo to risin& prica in
tho iCODaaIy." Gettina to the point. he
The CaIe of the $15 MiUion SI.
The repeal of the transit tax must have been met with joy in the boardrooms
of the American Express Corporation, even more so than those of its other
corporate beneficiaries. The reason? Under the now-defllDCt tax, American
Express's impending S240 million sale of its beadquarten at 12S Broad Street in
Manhattan would have resulted in a tp bill of $18 miIIioo-IO pel'4'eDt of the
S 180 million profit on the deal. The new tax increuea that replaced the capital
gains duty, on the other band. MIlcOlst American Express, at the very most, $3
million. Thus, with help its friIIids. the ICoeh Administration bas forfeited
at least SIS million in operatina subsidies for the transit system, this on a single
transaction. 0
because they were applicable to sales of
$500,000 or more, the new increases
would spread the tax burden to already
shaky industrial enterprises in the other
boroughs. But despite this opposition,
once the debate ended and the Mayor's
bill was called to a vote, it passed the
Senate by a margin of 48 to nine. A
week later, the Assembly approved the
new measure, 118 to 24. And on April
13, when the Governor signed the
repeal, the transit tax was no
Over the Top!
In the immediate afterglow of the
tax's repeal, the business climate not
only warmed up, but got downright
toasty. The two most immediately gra-
tified benefactors were the General
Motors and American Express corpora-
GM had transferred its Fifth A venue
headquarters for $500 million last
year in a complex deal that, the com-
pany claimed, did not constitute an
actual sale and so was not taxable under
the transit levy. Mayor Koch made
fleeting headlines in January with the
announcement that GM would be sued
for its failure to pay the tax, but the suit
never materialized. Once the measure
was repealed, a city Corporation
Counsel spokesperson explained, the
issue of legal action against GM became
Back at American Express, a late
March announcement had revealed that
the financial giant would sell its lower
Manhattan corporate headquarters for
$240 million, in conjunction with the
company's plan to build a new, 5t.-story
tower in Battery Park City. An article in
the March 29 issue of Real Estate
Weekly confidently understated the
point: "The sale will not be finalized
until June and it is expected that the
State Legislature may repeal the 10 per-
cent capital gains
tax by then, saving
American Express as much as $18
Besides taking the chill out of these
two celebrated cases, the newly-passed
repeal's radiating warmth spread to the
nearly three-score sellers who actually
paid the transit tax. Of the total $9
million collected, about $3.5 million
had filtered down to the MTA by early
April, according to a spokesperson for
that agency. Regardless, under the
terms of the city's bill, all revenue
collected under the transit tax in its
lackluster six-month existence would be
refunded. Commissioner Phillip
Micha"el of the City's Finance
Department explained that none of the
funds collected would be refunded
directly to corporate taxpayers. Instead,
he noted, the first $9 million raised
through the new tax increases, which
the City expects will raise $42 million
annually, will be directed toward
refunds father than the transit system.
A Shaky Landing?
The prospect of an unconditional
refund of this sort was the crux of
opposition arguments after the repeal
became law. Said Gene Russianoff, a
New York Public Interest Research
Group attorney who had lobbied for the
transit tax since it was first proposed:
"Those people who already sold their
properties and paid the tax undoubtedly
passed along the cost to their commer-
cial tenants or co-op buyers. What's
unfair is to make riders pay for this
windfall to real estate developers." In
the same vein, gubernatorial hopeful
Mario Cuomo told the New York Times
the repeal amounted to "blatant special
interest legislation." con/mUftI on
On April 14, in response to such
charges, the Mayor called for yet
another law regarding the transit tax. In
effect, the new proposal would give real
estate developers who paid the levy the
option to instead pay the increases in
existing taxes which replaced it. That,
the city projected, would result in
cutting the refund by about half.
It was clear the City's new bill was
being hurriedly drafted in late April.
(Just a few days before this newest
proposal was announced, Claudia
Wagner, a top aide in Koch's legislative
ofice, offered an impassioned defense
of the fuU tax refund's fairness. "We
thought it would just be more equitable
to refund the money and avoid the
questions of whether the tax was uncon-
stitutional or uncollectable," she stated,
adding that the Mayor simply "wanted
to start with a clean slate." Wagner
offered no suggestion about limiting the
return.) At month's end, the new
proposal remained immobile in A l b a n ~
Opponents of the repeal were equally
immobile, insisting that any refund at
all would be unjustifiable. And despite
the questions raised by a City-backed
real estate windfall in this, an election
year, the Finance Department stood
ftrm in the contention that tax returns
filed under the capital gains measure,
and any other information about indivi-
dual refunds or their recipients, would
remain secret. '
Repairs on the IRT at 207th Street Yards.
What is not a secret, at least to
anyone who rides the subway, is the
aging transit system's desperate need
for infusions of additional funding.
Regardless of his or her knowledge
about the byzantine world of financing
and tax policy, the average straphanger
knows full well where the system's next
7S-cents is corning from. And as a fare
increase looms larger in the months
ahead, it's likely that any
funding-even $9 million-will look
increasingly attractive to the elected and
appointed officials charged with admin-
istering mass transit. Mter all, they are
the ones who will eventually have to
answer the question: Who gets a free
ride in New York City? 0
popular, low-interest, federally
subsidized small homeowner program
comes to a halt on the national level,
New York City, after more than two
years in the planning, is gearing up
belatedly to build some 2,000 new
homes and condominiums under the
saple subsidy program with construc-
tion scheduled to begin on several of the
city's 16 designated sites within the next
few weeks.
Had plans followed the original time-
table, some of the projects would have
been completed by now.
Known locally as the new Home
Ownership Program, the federal
Section 235 program of the Housing
Act of 1964 permits eligible buyers to
purchase reasonably priced homes using
a conventional 30-year, FHA-insured
mortgage at reduced interest rates of as
low as 6 ~ percent, but somewhat
higher than the four percent rate
available two years ago.
"This program is dead in terms of
Site of Coney Island small homes development.
future funding, but it seems fairly
secure now for those projects already in
the works," said housing official Tim
Flanagan, when asked to predict the
future of New York City's delayed and
specialized implementation of the 235
program. "We are not talking about big
numbers in New York City, but with the
granting of the [administrative] exten-
sions, we are talking about 2,000 to
2,200 units of 235 and mixed 235
housing, and we're pretty pleased about
that." Flanagan is director of the 235
program at the city's Department of
Housing Preservation and Develop-
On the national level, funding for the
Section 235 program, one of the major
housing casualties of the Reagan
budgetary cuts, ended March 31. In
New York City, however, all but one of
the projects in the pipeline-76 town
house condominium units in Manhattan
Valley-were extended until September
30, 1983. The subsidy for these 76
"recaptured" units expired March 31
because these units were not reassigned ~
for Section 235 use until early Decem- ~
ber, 1981, several months after the ~
September 30, 1981, deadline. ~
As a result, the developer-Manhat- ~
tan Valley Development Corporation,
the community-based, nonprofit organ- ~
ization-has guaranteed 235 subsidy
funds for 48 of these units but is still
lining up eligible 235 buyers for all but
three of the remaining units in the hopes
that the federal deadline might be
extended retroactively past March 31,
1981, by special Congressional legis-
Right now, according to HPD's cal-
culations, the most the city stands to
lose from its special 235 package is just
over 100 uriits.
Through special legislation and
dogged lobbying in Washington, the
New York Congressional delegation was
able to secure this 18-month extension
primarily because the housing will be
developed on land that is city-owned.
Under the terms of the extension, the
city is also committed to spending at
least $1,000 per unit in Community
Development funds and $2,000 in
additional city capital grant monies to
assist this housing. In some cases, the
expenditure will be much higher because
sewers and streets must be installed or
expensive engineering and architectural
surveys must be done to correct hazard-
ous building conditions.
Commenting on the federal govern-
ment's commitment to honoring New
York City's 235 program, Housing and
Urban Development official Philip
Cuiffo said, "This is a program de-
signed for your average working Joe to
buy a home, and everybody in this of-
fice is anxious to make this dam thing
go. We are talking to Washington on a
daily basis, and, with the clout this city
has, Washington listens." Cuiffo is
acting supervisor for single family
operations at HUD's area office.
"We are looking at the program on a
site-by-site basis, and not anyone site
has been shoved in the comer," Cuiffo
explained. "If there are 2,000 units,
we want to get them all going because
we are the catalyst. If this is what it
takes, we'll do it to get lenders to end up
in those neighborhoods that need
Vacant Lots and Dormant Urban
Traditionally a suburban program,
Section 235 is being used to develop
vacant lots and dormant urban_renewal
sites around the city in an effort to stem
the tide of urban blight a.1d deteriora-
tion in communities such as East New
York, Brownsville, Bushwick, Prospect
Heights, Bedford Stuyvesant, Red
Hook and Coney Island in Brooklyn;
four selected areas outlined in the
revitalization plan for the South Bronx;
a portion of South Jamaica in Queens;
and, in Manhattan, the st. Nicholas
Park area near the town houses
on Harlem's Strivers Row, Manhattan
Valley, and the Two Bridges urban
renewal site between the Williamsburg
and the Manhattan bridges on the
Lower East Side.
More than 1,100 of the units are
planned for Brooklyn, with 450 of them
to be constructed in Coney Island.
Some 300 units, with 250 underwritten
by the SeCtion 235 mortgages 'subsidy
and a $3.7 million Urban Development
Action Grant (UDAG), will be built in
the South Bronx.
In Manhattan, the two sites in
Manhattan Valley and the Lower East
Side were originally slated for low .
income housing under the Section 8
program, but these plans were
abandoned when the city failed to
secure firm commitments for this
subsidy program.
Alluding to the role of the 235
program in Coney Island, Alice Paul,
executive director of the community-
based, nonprofit Astella Development
Corporation, said, "This is not a low
income housing program, and there are
no low income families moving in here.
But these are, by and large, working
class people who want to own a house
and stay in this area and who have
expressed interest because it means 450
new houses in a very devastated neigh-
borhood." According to Paul, Astella
has already accumulated a mailing list
of some 1,000 names-60 percent are
local residents-without having adver-
tised the availability of the housing
outside the community.
Also popular with prospective buyers
is the Columbia Terrace development in
the Columbia-President Street section,
which must be built on vacant, urban
renewal land on the waterfront in South
Brooklyn. The market for the proposed
165 row house condominiums was
tested in January, 1981, and, according
to developer Ted Hilles, the waiting list
is informal but also "very, very long ...
People can't wait for us to get started."
A Tougher Sale in Brownsville
On the other hand, the demand for
the proposed 441 u n i t ~ of housing
planned for the more devastated neigh-
borhoods of East New York, Browns-
ville, and Bushwick has not been so
great because these areas are less
desirable and the prospective home
buyers, many of whom already live in
the vicinity, find it difficult, if not
impossible, to come up with the
minimum, required down payments of
$9,500 and $11,000 for three- and four-
bedroom houses, respectively. But,
according to HPD's Flanagan and Jesse
Epps, the marketer for the M.M.R.R.
Construction Company, the houses here
are larger and offer much better fea-
tures-completed basements, attached
garages, fenced-in backyards-than a
number of the model homes being
offered on more attractive sites in other
parts of the city.
"Irving Reuben [head of M.M.R.R.]
is used to building $200,000 homes, and
several folks in the community got him
involved here by convincing him of his
social responsibility," said Epps, noting
that Reuben, as a result of this pressure,
is building homes with special amenities
on all these sites, "including the one in
Brownsville, which happens to be a
block away from where he was born."
In the South Bronx, a special federal
Urban Development Action Grant has
kept the down payment price at $3,500
for the three-bedroom house, selling at
$51,000 and at $5,500, for the $60,500
four-bedroom I)ne.
"Two-thirds of the people here are
not on welfare. This is, in fact, a very
good rental market,; ' said Joe Cicciu,
project director for the Section 235
program at the South Bronx Develop-
ment Organization. "They are people
who make $20,000, $22,000, $25,000,
but their savings are not that great. If
we were forced into asking for more of
their disposable income-$9,500 or
more-we would be losing a great deal
of our market."
In Central Harlem, the lOS-unit, two
and three-bedroom condominiums
known as Landmark Houses will be
designed to complement the handsome,
late nineteenth century homes on
Strivers Row. Located on West 138 and
139th Streets, just off Adam Clayton
Powell Boulevard, only 25 percent, or
27, of them will be subsidized with 235
funds. The remaining 75 percent will
sell for between $90,000 and $100,000
"I don't know why only 27 will be
assisted through the 235 program," said
Judith Smith, of the firm of Myers,
Smith, and ' Granady, the marketing
agent. "But we see no problem with this
higher price tag for the conventional
sales," she added. "These will provide a
viable alternative to those seeking
brownstones-the black professionals
who want to return here." Under 235,
the same-styled units will sell for up to
$57,000, with $10,000 as the down pay-'
On both the Lower East Side and in
Manhattan Valley the hope is to sell all
the units-57 and 76, respectively-with
the full 235 subsidy in order to keep the
units within the price range of moderate
income families.
In Southeast Queens and Brooklyn,
however, where developer Randy Lee is
building 300 single family homes-all
with four bedrooms-the price will be
between $62,000 and $64,000 and the
interest rates will reflect what the buyer
can afford. "We want to encourage
everyone to buy," said !-ee, asserting
that all the units have been approved for
the subsidy if no one in a higher income
bracket comes forward. The consultant
firm of Philip Johnson and James
Robinson is conducting the outreach
program for the homes, which are
targeted primarily at buyers in the
$18,000 to $35,000 income bracket who
frequently do not qualify for Section 8
or 236 subsidies.
"All I can say is that we hope this
housing will be built and that we won't
have a repeat . of the housing
moratorium under Nixon," concluded
Priscilla Boyles, district manager for
Community Board ~ in the Bedford
Stuyvesant section of Brooklyn where
Lee plans to build the one and two-
family, 7l-unit Fulton Park project on
Herkimer Street between Schenectady
and Troy Avenues. "Before this, the
Boys and Girls High School adjacent to
this site was delayed for ten years be-
cause of this freeze," she asserted.
"Let's hQpe we're not headed for a
repeat of that under Reagan. We're
tired of vacant lots and dumping
grounds." 0
sprawling Starrett City apartment complex became
< concerned about chemical waste disposal in the area
when a seven-year scam involving a waste disposal
company and City Sanitation Department supervisors
was uncovered. For some time prior to that revelation,
some area residents had complained of irritating
physical symptoms of unknown origin. Armed with
increased knowledge about chemical dumping activi- r
ties, Starrett City residents have started taking action
to deal with the issue, and in April, about 950 of them
signed petitions in support of two state bills that
would enable communities to protect themselves
from illegal chemica,l waste dumping on local
The conspiracy that brought their concern to a
head occurred from 1974 to 1981, when about
$100-per"truck was allegedly paid to a New York City
Sanitation Department supervisor by Kenneth Mans-
field, a former oil-refining plant manager, to allow
toxic waste dumping at four city landfills. One of
them, the Pennsylvania Avenue landfill, is a
throw from Starrett City. Mansfield, who pleaded
guilty to federal conspiracy charges in late March, will
be sentenced on May 28 and faces up to five years in
jail. i
. Meanwhile, although dumping on the contaminat-
ed sites has ceased, residents m.ust now rely upon
Sanitation Department and federal Environmental
Protection Agency (EPA) investigators for any ina .
depth information about which chemicals were
dumped and the consequent environmental or health .
impact. These agencies are presently trying to calm
local fears.
But residents are skeptical about the validity of
such information. The Starrett City Tenants
Association and tile New York Public Interest
Research Group, which is conducting a statewide
campaign on the dumping issue, recently expressed
their dissatisfaction with tests on air quality and
surface land content recently carried out by EPA at I'
the Pennsylvania Avenue site. NYPIRG staff scientist
Walter Hang, who has co-authored reports on
pollution in the Niagara and Hudson Rivers and
chemical contamination of Long Island's drinking
water supplies, charged that the agency should do
more comprehensive testing on the site. That, he
said, would mean drilling, pumping out watery
materials and examining them for toxic waste. The
EPA tests were unacceptable, Hang said, because
they were simply air tests conducted from helicopters
over the landfill. .
The Sanitation is currently testing for
ground water and other water at the landfill and EPA
is offering technical advice. But Hang still deemed
this 'inadequate: "What I'm saying is that EPA has
CITY LIMITS/May 1982 18
Entrance to landfill station at Pennsylvania Avenue near Starrett City.
the necessary experience and technical resources to
do an efficient, co;-- : . ..,; .ensive study on the site. The
city could bumble through-hire outside firms-but
EPA already has the facilities. At minimum, the city
will have to do tens of thousands of analyses to get to
the bottom of that site's problem. " And, Hang said,
"Unless the city is prepared to do a comprehensive
study, we can't know that the site is all right." Some
locals have also suggested that asking the Sanitation
Department to handle the investigation is like asking
Nixon to get to the root of Watergate.
. Concerning EPA's report on the Pennsylvania Ave-
nue landfill and other sites it monitors, the scientist
said, "It's a political problem, .not a technical
problem. It takes a lot of money, time and staff to
conduct a comprehensive study. They (EPA) have a
. handfull of sites that they've tested and 13,052
dumping sites. Lots of time they do windshield
ture, Starrett City tenants and NYPIRG members
throughout the state are lobbying for state regulatory
legislation. The two proposed bills that Starrett City
residents supported through April's petition drive
would, it is hoped, both prevent future toxic dumping
and help clean up the damage already done.
The first proposal, the "Community Right to Know"
law, would require industries to identify what
chemicals they have dumped in the past and where
they currently dispose of their waste material. It
would also require industries to file statements with
state environmental authorities identifying
substances used, stored or transported in the
communities where they do business. This
information would be available to the public.
The second bill calls for a state "superfund" to be
used in cleaning up abandoned waste sites when
already available funding sources have been
depleted. The superfund would consist of fees
imposed on industries that create hazardous wastes
and of fines collected from hazardous waste disposal
violators. 0
Starretl City in background.
- . ~
. " . ~ .
)0 :--.. :. \
\ . ~

Combat Over The
the World Trade Center, a sun-spackled vista of the
Hudson River and New York harbor helped to lull the mixed
group of civil servants, bankers and community advocates
who had gathered to listen to speakers and discuss the topic
of enterprise zones. So it was that when a city economic
development policy planner stated that "Sweatshops would
be one form of success" for the city's zones, a few listeners
had to assume they'd been caught napping and had heard
But coming from the administration of Ed Koch, who
publicly welcomed dropping the minimum wage in any New
York zone, the criterion shouldn't have sounded strange.
One of the few givens about this lone urban revitalization
proposal of the Reagan administration is that if the
enterprise zones are ever launched at all, one will land on the
shores of the South Bronx. And whether one envisions the
high-rises of downtown Singapore rising in Mott Haven, or
the vast miles of miserable shantytowns that stretch behind
them, the issue is rapidly becoming less academic.
While the city planner's remark seemed to slip past most
of her lunchtime audience, it was later angrily challenged by
one South Bronx community activist. "What kind of
definition of success are sweat shops?", demanded Dana
Driskell, a former district manager of a South Bronx com-
munity board. "And how far is the -city planning on going in
giving away tax revenue to get an enterprise zone?"
All those questions, city officials are saying, are still
premature. While other proposals have been around for
almost two years, most notably that of Democratic
Congressman Robert Garcia of the Bronx, and upstate New
York Republican Jack Kemp, the Reagan administration's
own bill is just a few weeks old, and the city hopes a
markedly different bill will ultimately emerge from
Enterprise zones, the Reagan administration's sole and
long-promised salve for urban wounds, are only now being
examined in Senate hearings. And there remains the threat
that before any free enterprise zone flag is planted on the
shores of the Bronx or anywhere else, the entire concept will
collapse under the accumulated weight of the analyses it has
The zones idea has prompted a slew of articles, essays,
speeches, forums and conferences. Critics on the left have
seen in its no-holds-barred capitalism an opening for
"colonialism brought home," while business opponents
have labeled its tax credits and write-offs, "coercion of
businesses which should be free to locate where they want. "
But while the words used to describe the enterprise zones
are anything but peaceful, the local version of this debate is
fairly muted. Although some Bronx activists such as Dris-
kell, are militating strongly against the zones, most seem to
be waiting, dubiously, for their arrival.
The Promise
What goes into an enterprise zone anyway? The answer
depends upon whose zone you are talking about, for they've
become, as Driskell calls them, "a moving target." The genesis
of the born-again capitalism-in-the-rough program stems,
ideologically, from the U.S. government's Operation
Bootstrap in Puerto Rico in the early 19505 or, program-
matically, from a British plan launched in 1980 for ten en-
terprise zones in urban areas.
Here, the Kemp-Garcia Urban Jobs and Enterprise Act
was the best known domestic version. That first bill aimed
at the economic revitalization of distressed communities
through tax incentives to businesses which expand or locate
in a zone. To qualify, a zone has to have at least 4,000
people, an employment rate three times the national
figure or substantial percentages of its people living below
the government's Lower Living Level. Localities would
have to permanently drop property taxes by 20 percent.
Businesses would qualify for enterprise zone breaks if they
had half their employees living and working in the zone.
Once qualified, businesses would get cuts of 15 percent in
corporate income taxes, 50 percent in capital gains taxes, the
20 percent in local property taxes, a social security tax
reduction of $2,000 per-worker, per-year, as well as a highly
accelerated tax write-off, expanded- tax credits. and eased
accounting rules.
That piece was fashioned out of the much more drastic
regulation-slashing advocated by Dr. Stuart Butler of the
Heritage Foundation who proposed that minimum wages be
scrapped and a new teenage wage rate set, a" suspension of
rent control laws and business-hobbling safety rules.
Although Reagan campaigned with the zones as his only
urban program, Congress and communities waited in vain
until late March of 1982 to see what specifics the president's
bill would include. The new bill carries the same objectives
as other zone legislation, except it is expanded to include
rural areas. The Department of Housing and Urban
Development (HUD) is to pick up to 25 zones yearly for
three years from state and local submissions. The tax
incentives include: a three to five percent investment tax
credit for machinery and equipment, ten percent for con-
struction or rehab of buildings including rental housing, ten
percent income tax credit for wages to disadvantaged (this
credit, which would decline in yearly stages, is targeted only
at those of welfare elibility level), elimination of the capital
gains tax, and the promise that while Industrial Revenue
Bonds may be outlawed for the rest of the country, zone
businesses could continue to use them. Also, the bill allows
these tax credits to be carried over into years when less-
profitable businesses could make better use of them.
The administration drew back from waiving such
regulations as the pro-union Davis-Bacon law, minimum
wage or OSHA. Both Kemp and Garcia had announced
they would oppose any bill with those items excluded.
Not to be outdone, the odd couple of Congress
reintroduced their own legislation, this time, having lined up
the support of one nationwide job-training group, Dr. Leon
Sullivan and his Opportunities IndustrialIzation Centers,
calling for a larger role for community groups and for job
A number of states and municipalities have already drawn
up their own enterprise proposals. In New York,
Democratic State Senator from the Bronx Joseph Galiber
has called for the state to set up a $3 million fund for grants
to businesses which set up in zones and add new employees.
That bill, however, is bottled in the commerce committee
and isn't expected to emerge.
What Will They Yield?
" ... implementation (of the Enterprise Zone Act) could
at worst leave those targeted for assistance in a condition
overall no worse than they were prior to enactment," wrote
Dr. Gerald Jaynes of Yale University in a paper for a study
of urban issues affecting the Black community which was
released in February, 1982, by Representative Parren
Mitchell of Maryland. The program did not come, however,
wrote Jaynes, with all other government assistance remain-
ing the same. The bill is seen as a substitute for a plethora of
federal aid programs, and that, every onlooker from Mayor
Koch to his left agrees, is the largest of several maior flaws.
Numerous Congressmen have snorted derisively at the
zones bill and, most recently, the AFL-CIO announced it
was targeting the bill for defeat. (Among other threats,
labor unions in the deregulated zones would have little role) .
. The president's major urban initiative, therefore, faces a
fight, although its low cost-$4 billion in foregone taxes
through 1987-is a major attraction.
The Threat
Opponents of the zones seem to fall into two categories.
One' group believes the zones fail on their face because of
too little job training, venture capital for small businesses,
direct housing subsidies and mismatched tax credits (too
much for those large, profitable businesses moving in, and
too little for the small, borderline enterprises already there.)
The second group sees enterprise zones as a fairly insidi-
ous frrst step towards forging a permanent rearrangement of
power between employers and employees, communities and
corporations. This last group has developed a number of
wide-ranging analyses. A sampling of these helps indicate
just how stimulating the zones have been, if not to small
businesses, at least to critics. .
" ... one way to understand the enterprise zones
proposal," wrote Philip Mattera in an article last fall in the
journal Radical America, "is as an attempt to .. .in-
stitutionalize the underground economy .... The sweatshop
proprietor would no longer be a villain, but the protagonist
of a new era of economic growth."
A number of critics have {ocused on the role zones play in
recreating the conditions of cheap abundant labor and
CITY LIMITS/May 1982 22
tax incentives aimed to please international businesses which
prevail in much of the Third World. The zones, warned
William W. Goldsmith in a recent article in Working
Papers, while creating a dual labor market, "would not stay
contained. Once industry became accustomed to lower
wages, lower taxes, and limits in workers' rights in
enterprise zones, provisions would tend to spill over
elsewhere. "
The lesson driven home by a wealth of foreign and local
experiences, inCluding the factories and
warehouses the zone bill aims to tejuvertate, is that
businesses are mobile, their employees much less so. Those
cities, most represented by the sunbeltlfrostbelt axis, are
already "locked in mortal combat for footloose companies
looking for greener pastures," argued Stanley Aronowitz
and Carey Goodman of the Urban Research and Strategy
Center based in the Bronx in The Nation in February, 1981.
The zones, they suggested, "would simply add the South
Bronx to the bidding game ... "
Just about every analysis has pointed ominously to the '
experience of Puerto Rico's Operation Bootstrap.
, (Curiously, some of the zone's proponents have also cited
the Puerto Rican example, but only its early period and not
recent years.) Edward Humberger of the Resource Group
for Community Development in Washington, D.C., which
is working on developing an alternative enterprise. zones
program, desQed the ultimate results of that
boosting experiment in the Journal of CommUitity Action.

"After thirty years, it Was' evident that the free trade
zone's economy Was' stagnant, needing yet another
transfusion of industrial investment at a still higher price for
local development. By now, seventy percent of the
population Was' below the poverty line, and sixty percent
were on food stamps. Inflation Was' up forty percent and
unemployment Was' about thirty-five percent. Fully twenty-
five percent of the families earned less than $J,OOO a year. "
Local Reactions
Many in the flrst category of opponents 'Youldn't quarrel
with those long-range pessimistic predictions. But on a more
immediate level, the zones are found wanting.
The South Bronx Development Offlce, the quasi-offlcial
agency charged with planning and developing the area,
received the one million federal dollars it needed to operate
on the same day that R e a ~ a n announced the speciflcs of his
zones policy. HUD, having threatened SBDO's funding the
week previous, presumably envisions a large role for it in
any South Bronx scheme. The agency has been quiet about
the zones, however, and director Edward Logue is said to be
lukewarm about the concept.
Xavier Rodriguez, chairman of South Bronx's Commun-
ity Planning Board #3, is outspokenly cool. Rodriguez
doubles as President of the Bathgate Coalition, a commun-
ity group working to develop the Bathgate Industrial Park,
along with SBDO. The park has attracted two new busi-
nesses and has some 70,000 square feet of space looking for
"Once people start looking at the bill," he said, "they see
the pieces aren't there." The two companies successfully
lured to the industrial park are good examples of businesses,
he said, which would need more than the bill offers. Air-
craft Suppliers, a defense contractor, and Majestic Shapes,
a garment plant, were aided by some tax breaks as well as
bonds issued by the Job Development Authority. "The tax
breaks they don't really need," asserted Rodriguez. "They
need working capital at three to five percent interest. The
little companies can't tie up their own cash flow, they need
outside help-loans. That's something the zones bill won't
Housing needs, he emphasized, would also go wanting.
"Bathgate was built on the premise of 'walk to work,' " he
said. But without a substantial amount of subsidized
housing-which is being stripped in other administration
bills-there won't be housing available. "Certainly not at
$3.35 an hour," he said. "Not without some really heavy
housing vouchers."

Meanwhile, in Britain, where zones were launched with
much fanfare in 1980, the flrst reviews are coming in. Ten
zones there have been operating for a year, and recently a
Times of London correspondent, Peter Watson, warned on
the New York Times' QP ed page: "Do not expect too much
of enterprise zones."
Pointing out that there is at least one major difference
between the British version and those proposed by Reagan
(their's were aimed at urban industrial wastelands, ours at
blighted neighborhoods) Watson wrote that the majority of
the firms attracted by similar tax breaks required few
workers. Warehouses have predominated:
"One prediction by early critics appears to be coming true:
The financial incentives do not provide the capital new frrms
need; instead, they make moving in desirable for profitable
firms that need property rather than labor and that can
benefit from the tax breaks. '.'
Which are the domestic flrms that will be attracted to the
South Bronx as a haven from taxes and regulations, and
what will be the spin-off effects on local communities? As
the legislation now stands, said Rodriguez, echoing the
analyses of dozens of others, it will be the high-technology,
capital-intensive corporations who will add little to the
area's skills bank because they will import what few skilled
workers they need.
If so, not only will South Bronx residents have been short-
changed, but the city as a whole will have to gnash its teeth
over tax revenue lost to firms that don't need it.
Still, the Reagan administration, and a number of
unlikely allies, insist they have seen the future-and it is
enterprise zones. And in Congress, partially based on that
premise, the largest budget shifts of the century are being
carried out: away from those who need it and to those who
don't. Community organizations are being asked to give
their approval, and the zones are supposed to represent the
Could this be the place to draw the line? 0
. , . a quarterly ;ournal for housing activists and community
organizers, The pages 01 SHEL TERFORCE contain information.
news and analysis that can ' t be found in any other housing
publication, .
Rent Control. Conaomania,
Displacement. Government
Programs, Housing Court ...
Building a Tenant Union.
Negotiating with Landlords,
Winning Rent Control. Pulling
a Rent Strike ...
News and Analysis of housing
struggles around the country
and abroad
Book Reviews. From the
Grassroots. Facts and Figures.
Legal Developments, Films,
Jobs ...
SUBSCRIPTION: $8.00 for 6 iS8ues SAMPLE COPY: $1.50
name ______________________________ __
address, ______________________________ _
city _____________ state ____ -'-_zip __ _
SHELTERFORCE, 380 Main St . East Oranle. N ,J . 07018
I ~
Penn Yards
The 62Acre Question
I've studied men jrom my topsy-turvy
Close, and I reckon, rather true.
Some arejineje/lows: some right scurvy:
Most, a dash between the two.
-George Meredith, 1828-1909
with a planning process for the fu-
ture of the 62-acre Penn-Central rail-
road freight yards on the West Side of
Manhattan that seemed to do every-
thing backwards, the meeting-hall joke
was that it was all TOFC-turvy. TOFC
is an acronym for Trailer-on-Flat Car
facility, a freight yard with the
e q ~ p m e n t to lift truck-drawn trailers
onto flatbed rail cars. A plan to use the
Penn Yards for this purpose stands in
Second oj two articles.
sharp contrast to a billion-dollar
proposal for 4,850 units of luxury hous-
ing on the site whiCh would include
cooperatives to sell at $275 a square
foot-an average of $400,000 per apart-
ment. This proposal, put before the
West Side's Community Board In by an
Argentina-based consortium, was
named Lincoln West because it is almost
adjacent to Lincoln Center for the Per-
forming Arts-though it may soon be
nicknamed Falklands North. The Penn
Yards site runs 13 blocks along the
Hudson River from 59th to 72nd St.
and is the largest 'piece of undeveloped
land in Manhattan.
The Lincoln West proposal slid neatly
into a vacuum left by city inaction in
planning for any alternatives that might
have long-term benefits for the people
of New York City. The area could have
been made into an extension of Freder-
ick Law Olmsted's Riverside Park
which abuts the property to the North.
It could have been developed with spe-
cific waterfront uses, but although the
staff of the Department of City Plan-
ning has developed a comprehensive
Coastal Zone Management Program,
that program has been side-tracked by
legislative and fiscal restraints.
But the main issue (See City Limits,
March, 1982) was the question of
whether the existing rail yard could be
transformed into a Trailer-On-Flat-Car
(TOPC) terminal, a rail facility which
might have a profound effect on New
York's light industries which have been
hard hit by a number of factors-loft
conversions prominently among them-
but especially by high transportation
costs in a truck-dependent town without
direct rail facilities.
In the confusion presented by the
Lincoln West proposal, it was hard to
tell the "fme fellows" from the others
"right scurvy." Or was a solution possi-
ble as a "dash between the two?"
The TOPC terminal was not placed
by" the city on the agenda of Community
Board In, but to its credit, the Board
saw the conflict and switched the luxury
housing proposal-at least temporar-
ily-to a siding. It recommended that
no action be taken on the Lincoln West
proposal until the city had studied and
made a decision on the TOPC terminal.
On March 24, the City Planning Com-
mission conducted a public hearing re-
quired under the 1975 City Charter's
provision for a Uniform Land Use
Review Procedure (ULURP) , which
showed increasing support for the
TOFC terminal which was not even on
the agenda.
The ULURP process- lias a precise
time schedule so that things don't drag
on interminably. So the Planning Com-
mission convinced Lincoln West to
withdraw its applications and resubmit
the same proposal on April 6 which
would start the "ULURP clock" over
again and still give Lincoln West a final
answer before the clock ran out in the
Board of Estimate by mid-September
when Lincoln West's option to buy the
land expires. At the same time, it com-
missioned an environmental impact
study on the TOPC alternative. But by
April 20, almost a month after the
March 24 hearing, a contract was still to
be signed by the city with an indepen-
dent research company which would be
mandated to produce such a study
before the end of May in order for
Community Board In to review it and
make a recommendation before the
board's June 14 ULURP deadline.
It was still TOPC-turvy. As City
Council member Ruth Messinger
commented on the City's actions:
"Every time they've done anything,
they've stood everything on its head."
Her comment is almost a verbatim
quote from the Oxford Universal
Dictionary's definition of Topsy Turvy:
"With the top where the bottom should

goes far beyond the interest of
railroad buffs. The emphasis given to
the Lincoln West proposal at the
expense of a TOPC alternative indicates
the city's responsiveness to its own
image of the future as "a world city ...
attested to by the growth of interna-
tional finance and management" (City
Planning Commission's report on its
Midtown Development Project, 1980)
and the lower priority city officials give
to protecting blue-collar jobs.
Walter Mankoff of the International
Ladies Garment Workers Union which
supports the TOPC terminal says it
"would enhance any industry that is
labor-intensive," especially those that
employ the ILGWD's 150,000 workers
in the apparel industry. In a study of the
market demand for a TOFC terminal
prepared for the New York State Urban
Development Corporation, the indepen-
dent consultant firm, Harbridge House
Inc., estimates that there are 450,000
jobs-12.6 percent of the New York
City work force-in what it describes as
"TOPC-related industry sectors."
Those jobs in the small loft industries
-they are not all so small-have tradi-
tionally gone to population groups new
to the city, originally Europeans, many
Jewish. More recently, these jobs have
gone to Blacks, then Hispanics and now
also Orientals. The jobs provided for
many their first entry into the main-
stream of U.S. life. These groups are
also those who find the most difficulty
with housing and certainly without
jobs, housing becomes even more diffi-
cult if not impossible.
As of now, trailer trucks of
shipments to and from the city firms
which employ this work force must
drive through city streets five miles
beyond the Penn Yards site to the
George Washington Bridge, then South.
to a TOPC terminal at North Bergen,
N.J., almost directly across the Hudson
from the Penn Yards behind the
Hudson palisades. Harbridge House
estimates the hauling cost per trailer to
North Bergen to be $180, whereas the
cost to a TOFC terminal at the Penn
Yards would be $30.
This cost differential can be the
cutting edge of a decision by a small
industry to stay in New York or relocate
Par those concerned about pot-holes,
the same study notes further that "a
single tractor-trailer is responsible for
the equivalent wear and tear damage to
street pavement of 9,600 automobiles."
Estimating that a TOPC terminal could
remove as many as 83,407 heavy trucks
annually from the streets of upper
Manhattan, the removal of these trucks
would eliminate "the wear and tear
effect of 800,707,200 automobiles"-
repair of such wear and tear, of course,
being paid for by the New York City
taxpayer. To say nothing of air
pollution from deisel exhausts.
On the other hand, the real estate
industry talks glowingly of "changes in
the fabric of New York's economy"
which has been "catapulted into
position of the financial capital of the
world", as an April New York Times
real estate advertising supplement ex-
pressed it.
The question is who plans for whom?
New Ybrk State Democratic Assem-
blyman Jerrold Nadler, long an
advocate of rail freight facilities and
especially of the TOFC terminal, says
that on the Penn Yards site "The City
has tried to accommodate the develop-
er, not the people of the city."
In an urban development process, not
all happens by natural growth. In New
York City, the planning process favors
the developer of luxury housing and
facilitates to create "the world city"
through tax expenditures such as tax
abatements and through other
But planning can be for people as
well as profits and the issue is drawn
along the abandoned railway tracks on
the West Side. The issue should be one
of interest to housing organizers and
community activists throughout the
city. Housing is difficult to achieve for
people without jobs. 0
William A. Price is a long-time Upper
West Side resident and a member oj
Community Board #7's housing commit-
New York's Housing Trends Reveal
a Widening Gap Between
Photos by MARC JAHR
Brian Sullivan is Senior Planner at the Pratt Institute Center
for Community and Environmental Development.
dow lately without hitting somebody reciting some statis-
tics about New York City housing. Not only has the U.S.
Census Bureau released some preliminary 1980 figures, but
New York's own comprehensive housing and vacancy
survey was recently published, as it is every three years
under New York State Law.
In theory, the law requires the preparation of a vacancy
survey for New York City every three years to ascertain
whether the vacancy rate is still below five percent, thereby
justifying the continuation of the rent control and rent
stabilization programs. The vacancy rate, however, hasn't
been above five percent since before World War II. But the
vacancy survey is still eagerly awaited because it usually
provides some insights into the direction in which the city's
housing stock is moving. It also contributes ammunition for
the never-ending debates over whether rent control and
stabilization help or hinder New Yotk City's tenants or
This year's edition, written by Professor Michael
Stegman of the University of North Carolina, contains
ample portions of both.
Housing numbers can't be understood outside the context
of the broader demographic and socio-economic trends
affecting the city. Some major fmdings from the U.S.
Census set the stage:
New York City's population (putting aside for the
moment the "undercount") continued to decline.
From 7,895,000 in 1970 to 7,071,000 in 1980, a drop
of 10.4 percent.
New York City households, however, hardly de-
creased at all. There were 2,778,000 households in
1980, a drop of only 1.7 percent since 1970.
Although the mass exodus of whites seems to have
ceased, almost half the city's population is now
composed of minority groups. percent
are white; 25 percent are Black; 20 percent Hispanic
and three percent "other".
These overall demographic trends are reflected to some
extent in the specific features of the rental housing stock and
its occupants as described in the housing survey report,
"The Dynamics of Rental Housing in New York City."
The total number of housing units (there are
2,800,000, of which 1,980,000, or 72 percent are
rental units.) has hardly changed at all over the last
three years. New additions to the stock Ooft conver-
sions, etc.) combined with rehabs, have more than
offset the 81,000 units lost through abandonment,
demolition, fires etc. through 1978.
The overall vacancy rate remains well below the
five percent "public emergency" level required to
justify continued rent regulation. In fact, the
vacancy rate decreased significantly, from 2.95
percent to 2.13 percent during the three-year period ,
1978 to 1981.
New Yorkers continued a long-term trend toward
living in smaller households. The average house-
hold size in rental housing fell to 1.88 persons in
The number of rent controlled apartments con-
tinued to decline (dropping by 29 percent in the last
three years), but they still make up almost 15
percent of the city's rental units.
Rent stabilized units, however, increased during the
same period by about ten percent and now make up
almost half of the rental units.
The loss of Old Law tenements from the housing
stock seems to have abated. They have leveled off
at 185,000 dwelling units. But the loss of New Law
tenements-generally considered a better class of
residential construction-continues. Even after
suffering a 1978-81 loss of 22,000 dwelling units,
they still contain 553,000 dwelling units, or 28
percent of the total rental stock.
Rents increased along with everything else during
the last three years, but the overall rate of increase
was surprisingly high-up 26.2 percent to $265 per
month. But even more surprising was the 30 percent
increase experienced by rent controlled tenants
during the same period, raising their average to
$213. Stabilized rents, meanwhile, had a slightly
more moderate 25 percent increase, up to an
average of $262.
These are the type of numbers you can find in the
Mayor's press releases and the city housing department's
public on the state of housing in New York
City. When reported from these sources, the interpretation
attached to them has been and positive: "Yeah, the
vacancy rate is a little low but, in relative terms at least.
we're better off now than we were three years ago." But are
"we" really better off? Well, it depends on who "we" is.
More than anything else, the numbers contained both in
the census and in the housing survey underline the fact that
there is no "we" anymore. Rather, there is a sharp division
between the "haves" and the "have-nots", and they're
getting farther apart with each passing year.
A few examples illustrate the problem:
Thirty-four percent of white households own their
homes, compared to only 23 percent of Blacks and
8.6 percent of Hispanics.
Homeowners have incomes almost twice that of
renters, and the gap has widened significantly since
1978. Even within renter households, Blacks and
Hispanics have respective incomes of only 68
percent and 48 percent that of white renters.
CITY LIMITS/May 1982 28
The ratio between rent and income (the standard
measure of affordability of housing, which is
usually around 25 percent) increased for all house-
holds during the 1978-81 period, but is dramatically
higher for Black and Hispanic households at 29
percent and 36 percent. Of course, these are the
same households whose low incomes have been
eroded most seriously by general inflation during
the same period.
Similarly, while dilapidation has increased from
three to four percent of the housing stock in the last
three years, it is Black and Hispanic households
who are most likely to occupy such housing.
Almost six percent of the Black households and
over nine percent of the Hispanic households live in
dilapidated housing in New York.
Finally, in the city's own tax-foreclosed, in rem
housing, 60 percent of which is Old Law tenements,
virtually all of which has been "milked" and
abandoned by private landlords, lives another class
of "have-nots." These tenants, over 80 percent
minority, having only 62 percent of the median
income of the city as a whole, endure an average
rent/income ratio of 36 percent and have 58 percent
of their households headed by female single
But even these are only very general, "across the board"
numbers. They can't tell the whole story of how people
really live in New York's neighborhoods. We've become
very skilled at aggregating the lives of individuals and
families into mass socioeconomic phenomena, but we're not
very good at going the other way.
The Census Bureau can't tell you what it's like to be a
young, Black single parent looking for affordable housing
in South Brooklyn, for example, even though they know all
the relevant data. The ability to bridge that gap between
"information" and "understanding" in regard to the
problem of rmding shelter in New York City is, in large part,
the skill of the neighborhood housing movement. In store-
fronts and tenements throughout the city these a r ~ the
people who not only know the numbers, they frequently are
the numbers.
After the statisticians and analysts have made their pro-
nouncements and prognostications about the future of the
housing industry in New York, it will still be up to the
neighborhood groups to get the message across to the
policy-makers and politicians. The gist of that message is
-that housing-which has always been the fabric of our
communities-is rapidly becoming a major symbol of
divisiveness within this society. We can either keep it as a
public resource in holding our neighborhoods and cities
together or treat it as just one more demarcation line
between "them" and "us."O
Home Improvement Loans Slow
As Federal Deadline Nears By SUSAN BALDWIN
Marc, had no problem securing a ten-year, $10,000
loan for just over half the market interest rate-10Y2 per-
cent-to fix up their newly purchased older hme in the St.
George section of Staten Island.
The Sauves were also the fust New York City family to
close a loan under the city's special Home Improvement
Program (HIP), a new lending plan designed to help small
homeowners fmance the skyrocketing cost for home im-
provements. But they are only one of a very few families
who have been able to take advantage of this new loan
program that may be short-lived if more loans are not closed
in the next few weeks.
Replacing the l?-year-old, three-percent, 20-year federal
Section 312 loan program, which, died -last year under
_ _ Reaganomics, HIP provides owners of one-to-four family
homes in 16 selected areas of the five boroughs with ten-year
loans of up to $10,000 each at 1OY2 percent, instead of the
prevailing 19 to 20 percent. Underwritten by a $1.5 million
federal Urban Development Action Grant (UDAG) and a $5
million private commitment from 12 local banks, this
program is available to eligible participants whose homes
are in need of new plumbing, wiring, roofs, windows, or
energy conservation measures.
To qualify for the loan, a family of four cannot make
more than $39,900, while the maximum income permitted
for the largest family-eight or more-is $52,640. Accord-
ing to city statistics, the median income for loans processed
to date has been $22,800, with most applicants earning
between $22,000 and $34,000. Each loan recipient;must also
pass a bank credit check, live in the building slated for
improvements, and be deemed capable of making the
monthly loan payments as well as keeping up with the regu-
,lar: househol9,
But qualifying for the program and closing a loan are
another story. And the family was the exception to
the rule.
"This was supposed to be a streamlined program with a
minimal amount of paperwork and uniform criteria; but it's
not happening that way," said Gary Hattem, director of St.
Nicholas Housing Rehabilitation Committee, a nonprofit
community-based group in Brooklyn's Northside section.
"The banks are not geared up to handle this program ...
HPD (Department of Housing Preservation and Develop-
ment) has not gone after them to shape them-up, and now
the community groups with consultant contracts (with the
city) are expected to rulg on doorbells to'sell the program so
it won't be lost."
To speed up loan processing, HIP candidates go directly
to the banks. rather than to HPD as they did with the 312
applications, to fill out the necessary forms. But, in
numerous instan-ces documented by community groups as-
sisting clients around the city, many potential recipients
have been turned away because the local bank branches are
unaware of the program or are unwilling to involve them-
selves with the paperwork required for processing such small
loans. In addition, some eligible homeowners have been told
by banks that they do not live in the targeted area when they
do. Others were turned away because their income was too
high or too low, only to find the reverse was true. In short,
observers maintain, the Program has a myriad of problems
to overcome in a very short time if it is to be extended or
Approved by the federal government in March, 1981,
HIP was scheduled to be in operation by the early fall. But,
due to bureaucratic delays, it did not get underway officially
until mid-February, 1982, when the first six loans were
closed. To date, according to housing official Jennifer
Wallace, some 90 If>ans have been made, and there is intense
pressure to close at least 200 more, or a total of 300, loans
by May 31, 1982-the end of the fiscal year-if the program
is to survive another year. According to community partici-
pants, however, no more than 35 loans had been closed by
early April.
"We are talking to all the banks, and we would like to get
these 300 loans in place, but I think it's outrageous for
Washington to ask us for these 300 in this short time," said
Wallace, who recently assumed responsibility for the HIP
program at HPD. "But," she added, "I guess if I were in
Washington's position and New York City came in with
only 30 loans closed, I would say it doesn't look like you
need it ... Also, no doubt they would rather have the money
sitting in their treasury rather than in New York City
According to Wallace, the city has a total reservation of
$4.2 million in UDAG funds for this year that enable
it to make up to 600 ;')ans in the near future and up to a
possible total of 1,300 if the program were allowed to
continue into a second year.
Asked to comment on the future of the HIP program,
Housing Commissioner Anthony Gliedman said he thought
Washington would continue the program and release the
additional UDAG funds even if the city does not meet the
federal deadline by processing 300 loans by May 31.
Community groups, pressed by the city to "sell" HIP,
have charged HPD with "harassing and badgering" them
into participating in a program in which, they assert, they
had no input in drawing the boundary lines or framing the
eligibility criteria. They also maintain that the interest rates
are too high, and the banks are accountable to no one.
"Over two-thirds of our neighborhood is exCluded due to
the boundary lines, and yet we're told to sell it in another
neighborhood-Belrnont-where,just to the south, the
government plans to build a lot of new (Section1 235
homes," said Frances 'Fuscelli, director of the Crotona
Community Coalition in the Crotona section of the South
Bronx. "Our people," she said, "could use this loan for
improvements that would complement the new
housing .. . "
Another community leader finds HIP hard to sell in
Coney Island. "I can't in good conscience go out and say to
people, 'You can't turn this down.' There's not a sufficient
write-down to make it a tempting carrot to people out here,
particularly the elderly," said Alice Paul, director of the
community-based, nonprofit Astella Development Corpor-
CJTY LIMITS/May 1982 30
ation. "It isn't a good rate like the 312 was at three
percent," she added. "We haven't closed one as yet, even
though Coney Island was thought to be an ideal place for
such a loan when its predecessor was conceived." Under the
original proposal, homeowners were to repay the loan on a
sliding scale of one to nine percent, and the program was to
be concentrated in several specific neighborhoods rather
than scattered among small tracts around the city. Rising
interest rates laid that plan to rest.
Asserted Michael Powell, a community organizer in East
Flatbush, "We couldn't send anyone to the banks before
March because they didn't know anything about it. At
Chemical, 22 of 22 loan applications we screened and
processed first were turned down. I think the banks. with
the exception of the Dime Savings Bank, are only in this to
process as few loans as possible just so they can get their
CRA [Community Reinvestment Act] credit. HPD should
be on top of the banks to find out why there are so many
rejections ...
A number of the groups have reluctantly promoted HIP,
even when substantial numbers of their constituents do not
qualify for the loan or do not live in the targeted area,
~ u s e they are fearful of losing their community contracts
with the city. Several, which asked for anonymity, have
stated that their contracts have been threatened.
"At first we did accuse them [the groups] of not doing
their jobs," countered Wallace. "But then we learned from
them that some were not doing their jobs, others were, and
that they were having problems with the banks. We think we
have this under control now."
Following a special meeting of representatives from the
community consultant groups early in April, the Associa-
tion of Neighborhood Housing Developers, the advocacy
organization for the groups, sent Deputy Housing ' Com-
missioner Charles Reiss a communique outlining the
program's faults, suggesting some improvements, and
asking for a meeting of top bank and city housing officials
with representatives of the community groups to iron out
the difficulties.
"This was supposed to be an improvement because HPD
was not doing the loan processing," said Bonnie Brower,
executive director of the association. "But it took nine
months for it just to get off the ground. Also, areas were
included that don't need this loan, and now the city is
putting the blame for the program's failure on the groups.
It's ridiculous because the groups provided excellent
education and outreach to small homeowners early last
fall." She did, however, stress the importance of rolling
over the program monies into a second funding year, noting
that this UDAG and bank money could be used "with all
sides cooperating to a much better benefit for all."
Meanwhile, Roger Williams, a vice president with the
Dime Savings Bank and one of the architects of the pre-HIP
proposal, was more opitmistic about the present program's
"We had to lobby hard just to get what we already have,"
he said. "I don't think the city should give up on the
program now, and I don't think it should have any
problems asking Washington for a second round based on
the number of loans closed to date. After all, most banks
don't do the bulk of their home improvement loans in the
winter, and, in general, all loan applications are down all
over. This year it's possible, folks don't have the confidence
in their jobs and the future to take on more debt, and 10Yz
percent interest is substantial. After all, you have to repay
the loan with the income you have."
"As soon as I heard about it, I ran down to get the loan
because I live in Clinton Hill," said Barbara Washington,
who is renovating a home at 39 Cambridge Place in
Brooklyn. "Then I found out I lived in the wrong part of
Clinton Hill, just a half block away from the boundary.
This program stinks. I've been waiting since early
September just to hear there's nothing in this program for
me. But, believe me, I'm sure the city could unload 75
percent of its properties and provide homes if they had a
program to help people. I know that with $10,000 I could be
living in my house, not renting." 0
A Tribute to Bob Schur
An evening dedicated to Bob Schur will be held
Thursday, June 3, 1982, from 6 to 9 p.m. at Campbell
Hall, Sacred Heart Church (Basement entrance) at 457'
West 51st Street between Ninth and Tenth Avenues. A
Buffet supper will be held and music and remembrances
follow. A fund is, being established to commemorate and
continue Bob Schur's work. All contributions are grate-
fully accepted. Those attending are requested to RSVP
to: Neighborhood Housing I:riends of Bob Schur, c/o
Association of Neighborhood Housing Developers, 424
W. 33rd St., New York, NY 10001. 0
An International Forum of Political
Workshops Forum
Friday, May 28, 2.fl PM
Sunday, May 30, 2-5 PM
Prince George Hotel, New York City
Participants: Wade Rathke (ACORN), Heidi Tarver
(CISPES), John Lewis (Atlanta City
Representatives from the "Green" parties
in West Germany, France, Holland, and
For further information. contact: The Citizens Party, 853
Broadway, New York, N. Y. 10003 (212) 477-4627.
For June 12th Nuclear Disarmament
Cal/6731808 Ask for Tom

For a modest fee we will evaluate
your insurance program to see if
you are getting the most for your .
Energy Audits, Specifications and technical
assistance, Investigated contractors. Complete line
of conservation projects at discount, Financing
562 Atlantic Ave. (near 4th Ave.)
. 858-8803
"Specializing in IVon-Pr0fit and
Community Organizations"
Contact: Paul Sourifman
(212) 684-4770
Free Insurance Appraisal
Richards and Fenniman, Inc., specialists in insuring tenant and community
groups for over 10 years, is offering to the readers of City Limits a free insurance
appraisal of their building.
We ,know your needs, your requirements, and how to-he7p you get insurance
finanCing. And most important, we can get you the best prices.
For a free insurance appraisal of your building and an evaluation of your current
insurance program call me:
Ingrid Kaminski, Account Executive, (212) 2678080.
Richards and Fenniman, Inc.
156 William Street, New York, New York 10038
CITY LIMITS/May 1982 32
A Discriminating Fine
Fern Jones came to New York with a
degree from Yale University to enter a
management training program at
Morgan Guaranty Trust Company, but
she couldn't get an apartment until she
med suit in federal court.
Jones, who is Black, was awarded
$38,000 in early March by a jury in the
Manhattan District Court because of the
discrimination she met in trying to rent
an apartment on Manhattan's lower
Fifth Avenue.
Daniel Morgan of Morgan Builders
and Thomas Halvey, a real estate broker
of 6 West 9th Street, were found to have
violated the federal Fair Housing Act by
denying Jones the rental of an available
apartment in October and November
Miss Jones testified to her efforts to
fmd housing in New York City for six
months and her answer on October 10th
to an ad in the New York Times for the
Manhattan apartment. She said she was
told by the broker that the landlord
"really wanted to rent to a man" and
that he "preferred someone who had
been in New York longer." Her appli-
cation was taken, but never acted on.
The Open Housing Center, a fair
housing agency which investigated,
testified that the landlord and broker
were ready to rent the apartment to a
young white woman with similar
credentials who said she had been in New
York only a few months.
Suit was flIed in November by Richard
Bellman, attorney, of Steele & Bellman,
and the defendants agreed to rent the
apartment to Miss Jones who moved in
on December 1.
"Everything was all right when I
called, until I went and they saw my
face." She said that she had grown up in
North Carolina and met a pattern of dis-
crimination all her life. "But I never
expected this in the cosmopolitan city of
New York."
Betty Hoeber, director of the Open
Housing Center, pointed out that this
verdict follows within a few months the
$50,000 jury award made to a Black aide
to Manhattan Borough President
Andrew Stein in a similar housing dis-
crimination case in Brooklyn. 0
IMlcrocomputer Services I
let us: maintain & update your
mailing lists
produce your mailing
provide computer
consultant assistance
reasonable rates extended to
not-for-profit organizations
~ ~ _ c : : c :
Don't leave town without City Limits! To make sure your
SUbscription reaches your new address, simply attach your
current mailing label below, and write your new address
beneath it. Please allow 4-6 weeks for tb .. address change.
____ State ____ Zip
City limits
424 West 33rd St., New York, NY 10001
33 CITY LIMITS/May 1982
The Neighborhood Housing Services, a non-profit
community improvement program, seeks qualified
individuals with strong backgrounds in construction and
rehab contracting. Must be able to prepare accurate work
specifications and cost estimates, explain construction
process to homeowners, and assist marketing
and administering the program. Knowledge of New York
City building and housing codes is desirable.
Salary range $17,000 to $20,000, depending upon
experience and qualifications. Apply before May 15,
1982. State program preference:
,. East Aatbush (Brooklyn)
* Kensington/Winq.sor Terrace (Brooklyn)
* Laurelton (Queens)
* Sound view (Bronx)
* Williamsbridge/Olinville/Wakefield (Bronx)
Send resume to: Construction Spec. Review
c/ o Neighborhood Reinvestment
1500 Broadway, Suite 800
New York, New York 10036
Needed by non-profit housing development corporation
1. supervise and. coordinate construction of a
large rehabilitation project
2. organize and supervise annual facade
improvement program
3. develop new rehab projects in the community
for low and moderate income residents
Exciting opportunity for creative self-starter. Lots of
responsibility, training and long hours.
Experience: working knowledge of financing programs,
construction scheduling, and supervision. B.A. or
equivalent experience necessary. M.A. in Urban
Planning or Architecture helpful.
Salary: $15,000 to $16,500 depending upon experience.
Send resumes to:
Rebecca Reich, Fifth Avenue Committee, 94 Fifth Ave.,
Brooklyn, NY 11217
Neighborhood Housing Services of New York, Inc., a non-profit'
corporation promoting reinvestment in seven neighborhoods, seeks a
full-time accountant for its central office. Responsibil ities include
maintaining all books for operating fund and loan funds; preparing
monthly financial reports and special reports; performing in-house
monitoring functions including contract monitoring, reconciliation of
accounts; assisting in budget projections; maintaining payroll records
and benefit plans; advising Director and providing training as needed;
carrying out miscellaneous administrative functions. Experience with
non-profit corporations, familiarity with computers desirable. Salary
to $22,000 depending upon qualifications. Starts immediately.
Wanted for central office. Responsibilities include acting as
receptionist and typist; taking dictation; preparation of reports and
drafting of letters and memos; managing a small office; assisting in
bookkeeping; collecting data and maintaining files; scheduling and
recording board and committee meetings. Excellent typing skills
necessary. Experience with word processing desirable. Salary to
$16,000 depending upon qualifications. Starts immediately.
Send resume to Executive Director
. clo Neighborhood Reinvestment
1500 Broadway Suite 800
New York, NY 10036
Please reply by May 17, 1982.
An Equal Opportunity Employer M/F
MBA with five plus years of management, business analysis and
planning experience seeks challenging job with progressive
organization concerned with self-sufficiency. Cooperative spirit
and responsible product or service most important; salary
Write: RC, 3118, CCN 56 West 22nd St. NYC 10010 10th Floor.
Wanted to work for ACORN, the largest grass-
roots community organization in the country.
Fight for social and economic Long
Hours. Low Pay. Great Rewards.
(212) 852-9360.
OJleck your pref.rence for coverage of neigJdlorhood
iuuu in CiV
Iwan' I wan' Bo
- oiVOWDed 0 0 0
- pubUc 0 0
- hDan' righ'sl .-,'
organiJing 0 0 0
!:!: - gzpoUcy
0 0 0 ....
- tlnancing 0 0 0 .:.:
- oo-opl condo
conv.nion 0 0 0 ....

0 0 0
- historic
pruerva'ion 0 0 0
- displacemenV
g.n'rifica'ion 0 0 0
- sw .. 0 0 0
0 0 0
- u,W,iu 0 0 0
- w .. 'heriu'ion 0 0 0
dev.lopmen' 0 0 0
Co-operl'ivu 0 0 0
pollu'ion 0 0 0
Imploymen' 0 0 0
Iduca'ion 0 0 0
BeaI'h-care 0 0 0
Day-care 0 0 0
W.lfare 0 0 0
rood programs 0 0 0
Mass 'nasi'
0 0 0
Pi .... dRach this qUeRiOJlDlire and drop i' in 'h. mall h:
Limib, tH WeR SSrd S'reR, B .. York, B.Y. 10001.
0Jleck your preference for 'h. Qpe of OiV Limib
n.ighborhood cov.rag.
I wan' I wan' Bo
more Ius chang.
"Bow h" nories 0 0 0
protUu 0 0 0
anielu( g
Transt, 'lax,
Crown Beighb
housing) 0 0 0
Bumor 0 0 0
ldiwrials 0 0 0
Issays 0 0 0
rim penon
lcoounb 0 0 0
Loagr .. ,ure
noriu 0 0
ShORn ...
anielu 0 0 0
Graphics/phnos 0 0 0
.v.nbl caI.ndar 0 0 0
18. Which of 'h. following would you mod Iik. w see
Idv'Rised in Limi's? (Bel," on. or more.)
o nh.r pubUca'ioDS
o I.isure produ"s
o office equipm.nVsys'.ms
o hom. h .. 'ing a: insula'ing d.vices
o job openings
o insurance
o nh.r
19. Wha' nher pubUca'ioDS do you read regularly?
20. Do you have any observa'ioDS or SUggeRiODS for 'h.
edi'on of Limi's you've been dying '0 divulg.,
bu' nev.r had 'h. chance? (Use 'h. space below, or I
separa,. shIR.)
1.Anyft: >,
flllllll b 0 mal. ,
'iow do 1ft dtIcrlbt yoanelt?
Black 0 1Mt,;. p IIlspaJdc
Otlltr .,...N
''' M of JI;';rormaliduoatloais:
o scJlool 0 cOl1tgt 0 pod&nduw
'1. hat; is you oooapadftt _____
J01l ap iD ,!jDlIat;loDs or l

,.,. P IaoublC ..... 0 .avtrlmmtnt:al 0 "Udeal part;y /
OiHldaw .D ., .... '. $u 0 civil rljJlu
.. 'CD 4isarmamtat;
9. Cheok t;M box t;b(1MIt; _bQa.your t:oiIl bouaeIlo14
iDeom. 'for. t:Ud iBl981. _41 tdOol' fro_rau
ii lloUIebold m.mbe ... an4 au XA
o un4tr 10,000 0 16-84,999 0 100,000
o 10,14,999 tiD SS-4e,999 +. otmort
0 15-19,999 AiD 60-74,999
10.. Do 1ft .. t;oQitJ LiJIaij.t
1[ 0 ,es ;jjp no 'iii ti;;:.b.;
... It DO, wbert 40 yft:'" issues'
o aewut:u4 0' eolllJlUlJlit;j or,. omoe
o frit1l4 0 ot:her" ___
',%;* :,..:"
11. In .441t;loD t:o YOU1'ltlf, bow JIIaJll ot:her people read or
+ look t:JuoOagJlyour of 0i9 .LImlt:a? ____ _
ytl P DO iii! ..' b.eq readi,N Oit:y ,
''*::;' 0 las t;haD oa.yar', 0 1 , .a,ean 0 IS or more
18. How much t;Im. do lOU spen4C1!
leU t:IIaD an hour ,ii hoars'?', 'h
""\J., <:': x::::::
14. Whtnyou're flaishe4 rih oftJ Llmlt:I,..:
IIV. 0 _it; alon, .... y
18. In rectJlt; isnes oit;J LbDlt:a Iw coven4 atigllborh004
issues dher t;haD housing. Do 1.-,want; ust:o apu4 our
.ikcoverage, .whi1.keeJmghoubtgU' t;he" foousf
o expu4 coverage ., 0 Just; houIng-relat:e4
This survey is entirely anonymous. Please just fill it out and send it in. (Continued on inside back page.)
-. (.