Howeo

Make
ehe
OHlice
and
Luxury
AparCmene
" Income Housina
HBORHOODS
ITY HOUSING AND NEIG
-----------------
Short Term Notes
Where The Money Is
Housing's Trojan Horse ...... . . .. ..... . ..... . 3 CHANGING THE RULES OF THE DEVELOPMENT
Midwood Gardens Tenants Face Court DecisionS
GAME .. .. . ......... . .. .. ........ .. .... . .... . 8
Getting developers to make contributions to communities in
exchange for zoning variances has largely been a game
played without rules. Institution of a Housing Trust Fund,
and a new zoning ordinance that would mandate low
income units, would change all that.
Despite New Law, SROs Still Threatened ..... . 6
Organize
Confronting the City on the West Side Urban
Renewal Project .. . .. . .. . .......... . ...... 19
ZONING LESSONS FROM THE SUBURBS . . . .. .. 9
Review
A Video View of Gentrification . . ......... . . 21
There's already an experience of "inclusionary" zoning in
some suburban areas to draw on. Some similarities, and
watchwords for New York.
Follow-Up
NEW YORK'S UNEQUAL DEVELOPMENT .. .. ... 11
Congressman Questions Jersey City Loan . . .. 22
Because New York booms in some areas while it withers in
others, a housing trust fund is both possible and necessary.
Making it work, however, will be a delicate balancing act.
Resources/Events . .......... .. ... . ... . ....... 23
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CITY LlMITSlDecember 1983
BUILDING A HOUSING TRUST FUND .. . . .. .... 13
A proposal to create a resource fund from several different
sources to help create affordable housing.
A LUXURY HOUSING TAX? .. . . .. ............. 15
A tax on luxury housing could add a quarter-billion
dollars to New York's housing funds.
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HOUSING'S
'" TROJAN HORSE
Vol. vm No. 10
City Limits is published ten times per year, monthly
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Copyright 1983. All Rights Resel'/ed.
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Cover photo by Jim Mendell
How Congress Passed Its First Housing Bill Since 1980
By Donald Sakano
O
N NOVEMBER 18, THE LAST DAY
before they called it quits for the
Thanksgiving to January 23rd holiday, the
Congress passed the largest military spen-
ding bill in the history of this nation. It
lifted the national debt ceiling, approved an
$8.5 billion contribution to the Interna-
tional Monetary Fund and - oh yes -
passed a housing bill.
No trumpet blasts or fanfare greeted the
first passage of a housing bill by the Con-
gress since 1980. Representatives and
Senators continue to give that vacuous look
when quizzed about the future of the
government assisted housing programs.
The Administration remains hostile to vir-
tually anything but its proposed
"voucher"program. The bill they all agreed
to enact is a modest $9.9 billion in new
budget authority for federal assisted hous-
ing programs and has the characteristics of
into almost every pro-
vision. And yet, in these times of small
pleasures, the Housing and Urban-Rural
Recovery Act of 1983 is a significant vic-
tory for the advocates of low and moderate
income housing.
3
This housing bill keeps the authorization
process for housing alive. The House of
Representatives knew the importance of
this when it passed its bill, H.R.l, in July.
The Banking and the Housing Subcommit-
tee which originated the bill, felt strongly
that the Congress could not afford to let
another year go by without asserting the
need to expand the nation's housing sup-
ply of decent and affordable housing units.
H.R.l also took issue with some of the
damage done to the housing programs by
the 1981 Budget and Reconciliation Act,
particularly the raising of tenants' rents in
subsidized housing from 25 percent to 30
percent of income and the lowering of the
eligibility standard from 80 percent to 50
percent of median income for the area.
Without an authorization housing bill, there
was no chance that these important issues
would be resolved.
The Senate Banking Committee also
recognized the need to improve the "vital"
signs of low and moderate income hous-
ing by reporting out its own bill, S.1338.
While sensitive to the Administration's
policies, it nonetheless called for the
establishment of a new rental housing pro-
CITY LIMITS/December 1983
duction program. Like the House, the
Senate accepted the fact that the Section 8
new construction and substantial rehabilita-
tion programs were no longer viable in the
face of sheer cost.
However, both H.R.1 and S.1338
recognized the need to say something to this
country's commitment to provide new
housing for low moderate
income households. The so-called Dodd-
Schumer new production proposal' ap-
peared as a mutual declaration of need by
the House of Representatives and the
Senate Banking Committee to keep the
federal government involved in that vital
task.
The Gift Horse of the IMF
Spurred by an outpouring of mail, phone
calls, and visits by housing advocates from
all over the country, Rep. Femand St. Ger-
main, Democrat of Rhode Island (Chair
of the Banking Committee),and Rep. Henry
Gonzalez, Democrat of Texas (Chair of the
Housing Subcommittee) got fighting mad.
Perhaps they did a little summer reading
about the ancient Trojan Wars because St.
Germain and Gonzalez returned to Con-
gress in September ready to do battle for
the housing bill.
Since it was clear that the Administra-
tion had surrounded itself with im-
pregnable walls as far as the housing bill
was concerned (it promised a veto), our
clever "Greeks" devised that the only way
to penetrate those walls was to send a gift
horse to the Administration with the hous-
ing bill tucked neatly inside. The gift horse
was the International Monetary Fund bill
(lMF), an $8.5 billion measure that is a
keystone in President Reagan's foreign
policy with Third World nations. St. Ger-
main wrote the President and told him that
he would be happy to present the necessary
votes to pass the IMF bill in the House, but
that a housing bill was a quid pro quo.
It's a strange world we live in. President
Reagan's visit to Japan had a direct effect
on the future of government assisted hous-
ing programs in this country. Evidently, the
Japanese impressed Reagan on the need for
the IME All of a sudden, the reluctant
David Stockman was sitting down with the
House and Senate Housing Subcommittees
CITY LIMITS/December 1983
to work out an agreement that would be ac-
ceptable to everybody. While H.R.l and
S.1338 were the starting point for the
discussions, a substitute measure was final-
ly worked out and attached to the IMF bill
for safe traveling through the Senate, the
House and the White House.
This bill was enacted only because of the
advocacy efforts of so many groups and in-
dividuals. In Washington, organizations
like the National Low Income Housing
Coalition and the National Housing Con-
ference pushed hard. But the real impor-
tant work were the letters, calls and visits
of thousands of tenants and homeowners to
their elected r,epresentatives in Washington.
They told Congress they wanted to hear
something about housing for low and
moderate income people. And it worked.
It is certainly not the best housing program,
but we did repair some of the damage done
to the statutes in 1981, re-established the
need for a housing production program in
this country and asserted the principle that
government assisted housing programs
have a perma.nent place in this nation's
social agenda.
What Did We Get?
In addition to the housing units already
provided for by the HUD Appropriations
bill that was passed in August (14,000 units
of Sec.202/Sec.8; 5,000 of new public hous-
ings units; 5,000 units of Sec.8 moderate
rehab; 35,000 Sec.8 certificates) there are
a number of benefits that will come out of
the new housing bill.
The Housing and Urban-Rural Recovery
Act is a two-year authorization bill cover-
ing FY84 and FY85. This means that we
will not be working on a housing authoriza-
tion bill until the Spring of 1985. The Com-
munity Development Block Grant program
is authorized for a three-year period and
the FHA mortgage insurance programs for
two year's-.
Tenant rent in government assisted
housing is held in effect at TI percent of
household income. While the Administra-
tion refused to relent to a statutory restora-
tion of the pre-1981 income/rent ratio of 25
percent, they agreed to allow a $480 deduc-
tion from gross income for every household
member other than head of household and
$400 for each elderly member.
4
A compromise was struck on the issue
of the eligibility standard for Section 8 and
public housing. Twenty-five percent of the
units within a jurisdiction (i.e. New York
City) can be reserved.for households bet-
ween 50 percent and 80 percent of median
income for that area.
A new rental production program,
under Section 17 (will the name stick?) was
inaugurated that makes $615 million
available to the nation for new construction
and moderate rehabilitation. The moderate
rehab program distributes $300 million to
the nation over a two year period. The
funds are given to cities using the CDBG
formula but must be used in neighborhoods
where the median income is not more than
80 percent of median income for the city.
The federal assistance is limited to $5,000
per unit and there is strong prohibition
against the displacement of low income
people by upper-income households.
The new construction program is de-
signed so that eligible jurisdictions must
apply for the funds in a manner similar to
UDAG. Twenty percent of the units in each
project must have initial rents that are af-
fordable (30 percent of income) to people
who are no more than 50 percent of me-
dian income for the city. The new voucher
program (see below) can be used in mak-
ing projects feasible. If you had to read that
sentence three tmes and still don't unders-
tand it, it proves you are normal. The
statute is an exercise in the art of com-
promise and the language shows it. City
housing officials have always stated that
they are happy to get more housing money
into the city .. However, they need more time
to study the statutes and the forthcoming
regulations before they can comment
seriously on the program's adaptability to
New York City.
A potentially dangerous anti-rent con-
trol provision was negotiated by Senator
Alphonse DJ\mato. The statute now says
that jurisdictions cannot apply rent control
to the new units built by the production pro-
gram, unless (here comes the escape hatch)
the jurisdiction already has rent regulation
laws or enacts them for the entire area.
There's a new $200 million demonstra-
tion voucher program in the housing bill.
Continued on page 18
Court Wants Only Some
Midwood Gardens Evidence
B
ROOKLYN'S COURT SYSTEM
offered one more shameful chapter to
the organized sacking of Boro Park's Mid-
wood Gardens apartment complex last
month. On the fmal day of an eight-week
stretch of hearings on whether owner
Lawrence Rezak and his partners should be
compelled to make repairs for the 17 re-
maining tenants, Supreme Court Judge Ir-
ving Kartell stunned lawyers and spectators
by ordering all tenants from the room.
"I won't be intimidated," Judge Kartell
told a courtroom of ten tenants and an equal
number of other viewers who had sat quiet-
ly through the opening of the November
22nd hearing. Because it was the last
scheduled day of hearings on the crucial
repairs issue, tenants and supporters had
come to court to hear final arguments.
Judge Kartell, upon finding the small cour-
troom almost filled, loudly demanded of
his clerk, "Who are those people?" He then
ordered each person to stand and identify
themselves.
After the spectators complied, the Judge
thep ordered all tenants from the room.
Steve Dobkin, a South Brooklyn Legal Ser-
. vices attorney representing the tenants, pro-
tested. When Kartell denied his objection,
Dobkin got a recess to speak to Ad-
ministrative Judge Leonard Yoswein.
Before that protest could be lodged,
however, Kartell thought better of his ac-
tion and allowed the tenants to remain.
When Dobkin returned to the courtroom,
Kartell told him, "I just want you to know,
I'm not frightened of you."
That sort of judicial behavior became
more predictable as the weeks of hearings
progressed. Kartell, who is 74 and soon to
retire from the bench, continually threat-
ened both city attorneys, Deborah
MansfIeJd of Housing Preservation and
Development and Marcia Mason of the
Corporation Counsel's office, with con-
tempt citations. The city has sought to force
Rezak: to provide heat and make repairs in
his bUildings. Rezak has countered with a
vacate order obtained through Brooklyn
Supreme Court and an injunction against
any of the Midwood Gardens tenants mak-
ing their own repairs. Judge Kartell also
refused for a good portion of the hearings
to allow Dobkin to cross-examine or in-
troduce witnesses.
MkIwood Gardeas tenants Mllda Solo,
Sol Lipschitz, Sofia Benitez and Marjorie Criscola.
While Arnold Ludwig, attorney for
Rezak's LHL Associates, was allowed to
produce financial witnesses to testify on the
outstanding mortgage debt on the proper-
ty, Kartell refused to force the landlord to
enter those records into evidence. And,
while those financial arguments were of-
fered as proof that repairs would be pro-
hibitively expensive, the Judge denied any
testimony on the owners' role in neglecting
or causing damage to the buildings.
5
Multi-Million DoUar Condo Plan
Kept Out of Case
One vital piece of evidence blocked by
KarteU was the condominium offering plan
filed lllt year by Rezak for two of the Mid-
wood Gardens buildings which are already
long empty of the low income tenants who
once lived there, but were forced out by
over forty suspicious fires and more than
500 violations accumulated during Rezak's
ownership. Had that evidence been al-
lowed, it would have shown that Rezak
plans to sell the 60 apartments for an
average of $155,000 a piece, a total of $9.3
million. Rezak has also filed his intentions
to similarly rehab and sell the other
buildings, including those that are still par-
tially occupied and have been denied ser-
vices for over three years.
Those buildings were the subject of the
hearings before Judge Kartell who began
his stewardship of the case by lifting a
vacate order obtained by Rezak attorney
William Garry. Kartelllater reinstated the
vacate order which, although technically
requiring the landlord to make repairs,
would also mean tenants could never
return. Kartell could rule in addition that
it would be "punitive" to force the repairs
on the owners. Although there are provi-
sions in both the rent control and rent
stabilization codes for landlords to file for
permission to decontrol when the cost of
building repairs exceeds their value, Rezak
has never made those applications, despite
suggestions by city housing officials that he
do so more than two years ago.
Although the Midwood Gardens tenants
fear they may be approaching their final
hours, Rezak has made numerous overtures
through his attomies and hired publicists
to settle the dispute. He has still balked,
however, at the tenants' demand, consolida-
tion into a single habitable building at cur-
rent rents.
Rezak's concerns may well be spurred by
an ongoing investigation by the city's Of-
fice of Rent Control into several harassment
complaints filed by tenants. Under provi-
sions of the new J-51 tax abatement and ex-
emption law, cmY owner fQund guilty of
harassment cannot receive the program's
tax benefits. The loss of that tax break
could cost Rezak millions in the Midwood
Gardens complex and elsewhere.D T.R.
CITY LIMITS/December 1983
Despite New Laws, SRO's Are Still Threatened
.y Carl Q,ldfarb
T
HE RESIDENTS OF 166-170 West
77th Street, a nameless SRO made up
of three adjacent brownstones, are fighting
to stave off extinction, for on the Upper
West Side SRO's are a vanishing breed, vic-
tim of a changing real estate market. Given
their location - just a few blocks away
from Columbus Avenue, one of the hottest
real estates strips in New York - it was
only a matter of time before the tenants got
caught in the crunch of escalating property
values and escalating intimidation tactics.
This current attack comes in spite of new
legislation aimed to curb attacks on SRO's.
'1'he only answer is to have a law that
totally bans conversion of SRO buildings.
Till there is a total ban, owners are just go-
ing to find new and original ways to get
around laws designed to protect SRO
tenants. That's not to say that such laws are
worthless; they're all important steps for-
ward," said Deborah Rand, an attorney with
the West Side SRO Law Project.
She wasn't talking specifically about the
tenants in 166-170 West 77th Street, but she
might well have been. Recent pro-tenant
legislation has afforded them some addi-
tional protection, but not enough. The
harassment, tenants say, continues, but so
does their determination to stay.
The tenants' luck ran out in 1980 when
longtime owner William Lubey died and
the building began to be neglected. The
tenants situation deteriorated rapidly in
February of 1983 when George Roitman
and Zenek Podolsky, reputed Brooklyn
slumlords, bought the buildings. Podolsky
also owns the Belfar, an SRO at 850 West
End Avenue that has been taken to court
by the Law Project and the city. Last March
17th, the day after tenants formally com-
plained to Podolsky about degenerating
conditions, a fire mysteriously broke out
at the Belfar, claiming one life.
Aided by the West Side SRO Law Pro-
ject, on May 14th the tenants took Podolsky
and Roitman to court. Their complaint
' cited sporadic heat, hot water, and electrici-
ty; lack of maintenance and repairs, and
people locked out of their rooms. The judge
ordered the landlords to correct 33 viola-
tions. Roitman claimed to have complied
with that tenants dispute this.
CITY LIMITS/December 1983
The Wrecking Crew
The owners upped the ante in June when
they brought in H.P. "Chuck" Lambert as
their managing agent. "Lambert is hired by
unscrupulous landlords to empty out
buildings," said Jane Wood of the Chelsea
Coalition on Housing. She saw Lambert's
techniques at work in several Chelsea
buildings, including 176 Seventh Avenue,
204 Eighth Avenue, 333 West 16th Street,
332/334 West 19th Street, and 320 West
22nd Street. "He put goons in various
houses in order to terrorize and drive out
the tenants. He brought in addicts, pro-
stitutes, and other criminal elements." said
Wood.
On West 77th Street, Lambert im-
mediately opened the vacant rooms that the
owners had tinned shut and brought in a
group.of new tenants, his "wrecking crew"
in the words of one of the new tenants.
Lambert personally threatened several
tenants and tried to bribe others into leav-
ing. A handful accepted his offer and left,
but most decided to fight for their homes.
They contacted local politicians, the
Mayor's Office on SRO Housing, the Ar-
son Strike Force, Community Board 7, and
the local block association and received
help from all of them.
After a series of meetings with represen-
tatives of Senators Leon Bogues and Man-
fred Ohrenstein's offices, Roitman and
Podolsky agreed to terminate Lambert
shortly after Labor Day and prohibit him
from returning to the premises. "The two
owners agreed to do a million things; said
Yvonne Morrow, district assistant for
senator Ohrenstein, "But it turned out it
was all words." Lambert was let go, but was
seen on and near the premises daily. Most
of the promised repairs were left undone.
The tenants responded by holding a
demonstration on November 5th in front
of the Brooklyn homes of Roitman,
Podolsky, and one of Podolsky's SODS. Over
30 people took part in the demonstration
that was covered by one of the major TV
stations.
Two days after the demonstration, Paula
Weissman, who was featured on TV, came
home from work to find that her apartment
had been robbed and vandalized. To pro-
tect her remaining possessions, Weissman,
6
who has lived in the building for 25 years,
spent the night in an apartment with a
broken lock and a gaping in the door.
"That night was a night that if I live a
1,000 years TIl never forget. All night pe0-
ple were roaming, laughing, drinking. It
sounded like a stampede of elephants.
There I was with an open door and pray-
ing. I said, 'Please, God, let me survive this
night. I have to tell the people what is go-
ing on here.' I had such pains in my chest
that I thought that was the end."
She survived the night and the laughter
of Podolsky's sons the next day when they
came to fix .her door. "I survived Hitler and
Germany; said Weissman, who was in a
concentration camp during WW n, " and
TIl survive them. I feel that one day I'll be
here and they'll be gone."
Non-Harassment Certification
The courage of Weissman and her fellow
tenants could well prove the deciding fac-
tor in making her prediction come true, for
though there are a number of agencies and
laws to help protect tenants in SRO's, liv-
ing in an SRO that the owner ' is trying to
empty is still hellish.
The new J-51 law, recently passed by the
city council and signed by the mayor,
should help safeguard some SRO residents.
In many neighborhoods the new law will
help protect them by taking away some of
the profit motivation - the previously
available special tax benefits - that led
many SRO owners to harass and empty
their buildings for conversion into lUXury
apartments.
In neighborhoods like the Upper West
Side, however, the new law won't help even
those few SRO's that are left. "By and large
the SRO's on the West Side are located in
an area with such a high profit rate that
owners will go in and convert them anyway,
even without the J-51 tax benefits," said
Councilmember Ruth Messinger who
serves the West Side.
Another law with more potential to help
SRO tenants in rapidly gentrifying areas is
a new harassment law that became effec-
tive on M!ly 3lst. Under the new law, to
qualify for a building permit to convert a
SRO, the owner must get a certificate of
non-harassment covering the last three
years from the Department of Housing
Preservation and Development. If refused,
the owners must wait three years before re-
applying.
It is too early to tell how effuctive a deter-
rent the new law will be, but a few well-
publicized harassment findings, tenant ac-
tivists say, will cause owners of currently
occupied SRO's to tread more gently. HPD
will not release figures on how many SRO
owners have applied for certification or
have been turned down, though a
spokesman did say that there had been
several findings of harassment. These,
however, were all clearcut cases in which
there was a previous court ruling of
harassment.
The Mayor's Office on SRO Housing has
been getting a number of calls from at-
torneys for developers because of the new
law, said Betsy Haggerty, field manager of
the office. Before their clients buy an empty
SRO, lawyers want to be sure that the
previous owner doesn't have a history of
harassing tenants, she explained. Under the
new law, unlike previous rules, harassment
travels with the building, not the owner.
Someone who buys an SRO from an owner
guilty of harassment must pay the penalty,
which is the lack of certification to con-
vert, for the previous owner's pUsdeeds.
"The harassment laws have always been
very strong; they just have not been en-
forced," claimed Elaine Berlin, assistant for
Senator Bogues and former head of the
Mayor's Office on SRO Housing. Part of
the problem, she explained, at least with
charges of harassment filed with the rent
stabilization board, is that they have such
a backlog of cases that it would take years
before a case was heard.
Finding the Law's Limitations
Since the new law only applies to SRO's,
HPD should be able to act expeditiously.
The difficulty will be proving that harass-
ment actually took place - unless the
landlord foolishly resorts to blatant and
transparent measures. In a case like 166-1/u
West 77th Street where the landlord rented
rooms to predatory tenants, who in tum
tyranize others, it is very hard to show the
landlord is guilty of intentional harassment
and not just a mistake in judgment. "It's
almost like proving a conspiracy," said Bar-
bara Wolvovitz, a lawyer at the West Side
SRO Law Project who is representing the
77th Street tenants. "It's very difficult when
SRO tenants ol168 and flO W. 77th Street with lawyers and orpnizers of the ~ Side
SRO Law Project.
you're holding someone responsible for
someone else's acts.
Tenant advocates welcome the new law
though they recognize its limitations. "I
hope it will work as an incentive for
landlords not to harass people, " said Rand.
"Though it's early, it appears to be work-
ing to a certain degree. Landlords seem
concerned about getting their non-
~ m e n t certificate, but at the same time
I see that tenants are still being harassed.
I don't see a lessening of harassment, I see
a change of tactics, taking somewhat
subtler forms."
Because landlords can no longer resort
with impunity to such heavy handed tac-
tics - dogs, guns, literally putting people
out on the street - tenants in SRO's have
a better chance of surviving today than they
did a few years back. "Two years ago if the
owners had moved into a building like the
one on 77th Street, the tenants would have
been gone in a flash; said Haggerty, stress-
7
ing not only the importance of the new laws
but also the various public agencies, in-
cluding the West and East Side SRO Law
Projects, that support SRO tenants.
For SRO tenants generally, hCM'eVer, and
for the residents of 166-1/u West 77th Street
in particular, the battle is far from over. The
77th Street tenants and their attorney are
considering their legal options because the
harassment continues - in ways that are
not at all subtle to them - though Roitman
said that he and Podolsky have no plans to
convert the building.
"We're made out of a different type of
fiber," said Weissman, explaining that the
tenants had no intention of being driven
from their homes. "We're going to be an
example to other people. We want to show
people who are suffering that there is a god
in the world, that there is justice."O
earl Goldfarb is a freelance writer who
writes frequently about housing issues for
the Westsider and other publications.
CITY LIMITS/December 1983
ChangiDg the Rules
of the DevelopmeDI Game
W
HILE NEW YORKERS endure a housing shortage
that grows steadily more constricted, and the number
of those unable to afford any shelter rises dramatically, more
attention is being focused on ways that revenue from com-
mercial and luxury housing development can become a possi-
ble source for helping to alleviate the crisis. Not as a panacea
- almost all the players in the unfolding debate acknowledge
it is going to take a reactivated federal government to play the
leading role in seriously addressing the housing problem -
but as one critical component, as one housing planner put it.
Thus far, questions still outnumber any answers.
Although production has fluctuated up and down with the
market, it has ~ n a boom time for private residential (all of
it luxury) and office '10nstruction over the past five years.
And even for those projects which needed special government
permissions in order to proceed, there's been a fairly light
price for developers to pay for the privilege. Last spring,
Mayor Koch tapped Mitchell Sviridoff of the Local Initiatives
Support Corporation to head a 15-member study group to
look at the city's current practices in granting special permits
and zoning bonuses, and to examine whether developer con-
tributions should be used to aid low and moderate income
New Yorkers with their housing needs.
The commission's founding came in the wake of a
number of major private projects which, while having signifi-
cant impact on their immediate areas, were played out with
no set rules as to what the developers would "give back" to
the community, even though it took public actions - such as
variances - to make those highly profitable projects possible.
The result has been a kind of gUerilla warfare carried on
around such developments as Lincoln West, a 76-acre, $1
CITY LIMITS/December 1983 8
A Housing Idea Whose Time Has COl1lt'
billion project launched in 1982 on the West Side. That pro-
ject confronted a local planning board with the immense
task of evaluating its impact and "assessing" a price. Mean-
while, just as developers have done for the past decade, the
business of getting official waivers was carried out through
politically-entrenched law firms stalking the corridors of the
city's planning commission and its board of estimate.
Although for the first time the community sought to intervene
in the process, it was handicapped from the start by the lack
of any semblance of a city policy. It was tough enough
shooting craps with the power brokers without knowing who
or what was in charge.
While there have been ground rules governing the city's
zoning varillDces for building height and density, the effect of
those rules has ultimately been to increase the value of the
development without providing a significant public benefit.
Builders of Manhattan high rises have created little-used
public spaces in exchange for the necessary - and lucrative
- variances.
Nor has the city always been able to keep adequate track
of who is building what: one e.ast side project went up several
illegal extra stories before anyone noticed. Then the local
community board had to decide what to demand in
recompense.
All of these instances have helped convince a growing
number of people that the current variance process is chaotic.
Perhaps even more important, the city is missing a significant
opportunity to use the opulence of some areas to benefit its
poorer neighborhoods.
A number of cities - with far less new construction -
have already moved in this direction. Now, it is felt, it is New
York's turn.D T.R.
A
T LEAST FIVE MAJOR CITIES in the United States
have initiated a dramatic new approach to obtain funds
for the provision of affordable housing in their downtown
areas. Programs requiring office and commercial developers
to contribute funds to assist in developing and preserving
housing for downtown workers brings to these cities a ma-
jor new resource for providing needed housing. These are
the housing trust funds.
San Francisco stimulated over $18 million toward the pro-
duction of housing since 1981 through its Office/Housing
Production Program; Boston anticipates raising between $37
and $52 million for housing over a ten year period; and
New York City may be able to expect an additional $30 to
$60 million a year from developer contributions to a hous-
ing trust fund. Seattle hopes to get funds sufficient for
4-5,000 units over the next twenty years through its pro-
gram. Honolulu and Santa Monica have developed draft
working papers for such a program and Chicago, Hartford,
and Denver are looking into similar ideas.
These are significant amounts of funds to substitute for
sharply depleting sources of housing assistance. These ar-
rive at a time when each year the cutbacks in federal and
state funds become more apparent as "pipeline" units
evaporate. At the same time, the costs of providing housing
create greater challenges and require more innovations to
make construction or rehabilitation feasible.
The ideas now being explored with the Housing Trust
Fund are not new. Many tie the current excitement with the
intrigue over inclusionary zoning in the 1970s. Part of the
popularity over the idea of inclusionary wning stemmed
from the high production of subsidized housing experienced
in the 1970s. Indeed, times are quite different today.
Where the Money Is
Zoning Lessons
from the Saburbs
By Mary E. Brooks
There are very real differences and some startling
similarities between inclusionary zoning and housing trust
funds. The idea of extracting from developers contributions
to offSet the impact from development on local services and
facilities has been operative in growing .communities for
years. And planners have long worked on the relationship
between employment generators and the demand for housing
in a variety of planning and wning schemes.
The Link Between Jobs a n ~ Housing
In fact, one of the original arguments used to support in-
clusionary zoning-being largely a suburban phenomenon-
was to increase access to employment opportunities, then
rapidly expanding in suburban areas, for low and moderate
income households by providing housing for them. This was
something the private market was not doing, and something
which suburban jurisdictions generally opposed - often quite
successfully through wning and other mechanisms.
The housing trust fund is being supported because
employment generators have an impact on the housing sup-
ply in downtown areas by increasing the demand for
available housing. Some will recall that early in the fight
against exclusionary zoning (regulations which barred
multifamily housing) a similar argument was raised in op-
position to corporations locating in jurisdictions which
refused or failed to provide housing for all of the potential
employees. The tactics were different and the efforts largely
failed. But efforts to tum those wning laws on their head
did change the tendency of suburban jurisdictions to wne
large amounts of land for commercial and industrial
development, while providing little or no land for less ex-
pensive types of housing. Nevertheless, the tie between
9 CITY LIMITS/December 1983
--
employment and housing opportunities threaded the subur-
ban inclusionary zoning efforts from the outset.
In the largest sense, both the housing trust fund and in-
clusionary zoning seek to develop a balance in the housing
supply, to relate employment and housing opportunities, and
to account for the impacts of growth.
Inclusionary zOning is largely a suburban issue. Housing
trust funds have, thus far, been limited to fairly large cen-
tral cities. There is a reason. Both are taking advantage of
responding to the demand for development. There must
be sufficient demand for development that the requirements
can be imposed on developers without adversely affecting
the market place. Indeed, inclusionary zoning ordinances
have generally not worked where developers were not suffi-
ciently motivated by an active and prosperous market. The
cities involved in housing trust funds are openly concerned
about balancing their desire for the additional housing
funds, while retaining their attractiveness as a place for
office and commercial developments to locate.
More importantly, the inclusionary zoning ordinances
were successful where there was such demand for housing.
Here, the experience of Orange County, California, with
one of the most successful and long-standing inclusionary
zoning ordinances is instructive. The demand for residential
development in Orange County was apparently unaltered by
the imposition of requirements to include low and moderate
income housing in new residential That or-
dinance has led to the creation of 2,000 such units.
To the extent that this similarity exists between inclu-
sionary zoning and housing trust funds, it bodes well for
the efforts of housing trust funds in downtown areas. And,
for the most part, the experience of San Ftancisco's Officel
Housing Production Program, the nation's most active hous-
ing trust fund begun in 1981, does not challenge this.
A second consideration in looking at efforts to "move in-
clusionary zoning downtown" is the range of housing issues
present in suburban areas versus those in downtown areas.
The foundation for inclusionary zoning is the state enabling
act and, generally, the mandate to protect the general
welfare. Thus, developers, in return for the privilege of be-
ing able to develop, were required to provide housing for
the full spectrum of income groups, particularly that hous-
ing which the market did not provide-housing for low and
moderate income people.
Housing trust funds have not, thus far, been grounded in
zoning, although, of course, they have been tied to the
development process. We have yet to see how office and
commercial, or residential developer contributions for hous-
ing will fare in downtown areas when tied to zoning. In the
largest sense, there is not a comparable situation regarding
the availability of housing for lower income households.
The concept of mitigating the impact of development on the
housing supply is not new to land use development regula-
tions. It is, nonetheless, a different notion than the founda-
tion for inclusionary zoning.
But what separates the two concepts also brings them
closer together. In both the suburban and downtown setting,
access to housing and, subsequently, to employment is at
issue. The fai,J.ure to provide low and moderate income
households that access is to deny them opportunities.
One diffurence that may be important to observe is how
developers have been able to meet the requirements placed
CITY LIMITS/December 1983
on them regarding the provision of low and moderate in-
come housing. In suburban areas, developers often opted for
providing the units required, that is, they would incorporate
the units into the development or provide them off-site
somewhere else. Evaluations of inclusionary zoning or-
dinances that have been successful, such as the Orange
County, California program, suggests that the ability of the
developer to provide the inclusionary units rests on the in-
centives offured (which have been substantial), the flexibility
allowed the developer in providing the inclusionary units
(such as design and siting alternatives), and the ability to
develop lower cost units at a fairly large scale.
Inclusionary zoning ordinances and housing trust funds in
downtown areas may not have the luxury that certain subur-
ban jurisdictions have had in allowing developers to meet
the requirements. But the lessons may be important. Most
housing trust funds are looking toward developer contribu-
tions as a more realistic option than actual construction by
the same developers of low and moderate income units.
This is probably realistic for several reasons: developers
may not have the flexibility to off-set certain development
costs; office and commercial developers, in particular, may
not be interested in residential construction; and the actual
costs of construction may present barriers.
To the extent that developers will select to make a finan-
cial contribution rather than get involved in actual construc-
tion, the rules of flexibility may be worth a second look.
While San Francisco is moving toward a more regulated
program, they view their ability to offur options for making
financial contributions as a successful aspect of their pro-
gram. While they intend to move away from negotiating dif-
ferent rates of contribution for diffurent developments, they
appreciate a certain degree of flexibility in how the funds
can be used to provide housing, particularly when there is
an effort to reach low and moderate income households.
In virtually every instance where housing trust funds are
being discussed, the problems of actually providing housing
which is affordable to low and moderate income households
is an issue. The flexibility to encourage nonprofit
neighborhood-based organizations and their development
corporations is an important response to this issue. The
willingness to consider alternative means of rehabilitating
and preserving housing for lower income households is also
critical.
Holding a Trust Fund Accountable
It is extremely important that in the early stages of mov-
ing inclusionary zoning to downtown areas, we seriously
consider the inability of suburban inclusionary efforts to
provide housing for low income households. Generally, it
has not happened and happened only to the extent that
government subsidies were available. In some cases,
municipalities didn't want to create those units, or else
could not figure out how to do it. This is not an experience
we wish to transfer. It is particularly dangerous in a setting
where the low and moderate income housing opportunities
that do exist are threatened by development. We must be
absolutely sure that the loss of low and moderate income
housing does not result and that the funds and housing pro-
duced are targetted to benefit those low income households
which the market ignores.
Also at issue, and something that suburban experiences
10
have little to offer, is how to hold the housing trust fund or
inclusionary housing program accountable to the public. It
is apparent already in central cities that this will not be
easily resolved. The competition and differences among
neighborhoods in central cities can be extreme and there is
no parallel experience in the suburban setting. The balanc-
ing requirements that will be demanded in a downtown set-
ting will require careful and open consideration.
As we move from a suburban to downtown setting,
several issues are appearing in every city. A few are:
Is it economically reasonable to require contributions
from developers for housing affordable to low and moderate
income households?
Are the funds generated sufficient to provide afford-
able housing?
Should incentives be incorporated to make it suffi-
ciently attractive and economically feasible for a developer
to comply with the requirements?
How can the funds raised through the requirements
be leveraged to provide even greater resources for housing?
Which types of housing can serve low and moderate
income households most efficiently through these
programs - new construction, rehabilitation, conversions,
contributions to existing programs, etc.
Where the Money Is
How can nonprofit organizations be involved in the
production and preservation of housing for low and
moderate income households?
How can the units provided be sustained as afford-
able to low and moderate income households?
What is the appropriate role for neighborhood in-
terests and how much participation should go into determin-
ing the use and location of the funds?
How can the programs be developed to ensure that
the provision of housing is free from discrimination and
truly responds to the needs that exist?
These are just a few thoughts to get us started and to re-
mind us that as we muddle through the mechanics and
issues of being "inclusionary" we can learn from past ex-
periences and hopefully correct some of the mistakes. 0
Mary Brooks is a housing consultant in Los Angeles. She il
currently working with the Pratt Institute Center for Com-
munity and Environmental Development on the Pratt/Center
for Metropolitan Action Inclusionary Zoning and Housing
Trust Fund Project. This paper was presented at "Inclu-
sionary Zoning Moves Downtown: A Legal Symposium," on
November 14. The papers and proceedings of the symposium
will be published in 1984 by the Planners Press of the
American Planning Association. Contact the Center for
Metropolitan Action, Queens College, Flushing, NY 11367 to
order copies.
NEW YORK'S UNEQUAL DEVELOPMENT
Tht: Trust Fund Debate Begm::>
By Rachel B. Godin
T
HE HOUSING TRUST FUND PROPOSAL has its
New York City political roots in the cruel paradox of
inequitable development. Manhattan's increased office and
lUxury housing production has coincided with an acute
shortage of affordable housing, a situation exaterbated by
the Reagan Administration's deep cuts in federal housing
assistance to people with low and moder-clte incomes. "Sec-
tion 8's demise was the spur to early discussions of the
Housing Trust Fund concept," says City Planning Commis-
sioner Martin Gallent.
The key question is how to make development's benefits
most equitable to the city at large. Even within the context
of thinking about a Housing. Trust Fund, which would be
funded by exactions from developers of office and
lUXury housing, the answers to that query vary and overlap.
The San Francisco model, now two years old, of re-
quiring office building developers to provide low and
moderate income housing units in direct proportion to the
amount of office space built, "has offered some attractive
possibilities for us; observes Gallent. Initial estimates of
units that would have been built in New York under a plan
similar to San Francisco's are encouraging, as is the lack of
legal challenges to the West Coast program. According to
Brian Sullivan of the Pratt Institute Center for Community
and Environmental Development, "The application of a
similar requirement on New York City office develQpment
could have resulted in an additional 19,500 dwelling units
for New York City over the last three years."
City Planning Commissioner Susan Motley sees a
Housing Trust Fund within the context of New York City'S
policy of incentive zoning offering the opportunity to take
into consideration "not only light and air, but public equity"
when assessing the negative impact of a project that exceeds
its as-of-right density. Motley points out that the City Plan-
ning Commission has allowed developers to build at greater
density when they have provided ways to mitigate the
negative effects of their plans. "In other words, if a project.
is going to mean that people wll be displaced, a Housing
Trust Fund could provide some way to redress that impac(
Obviously, there have been warnings from many
quarters against the possibility of granting developers
bonuses just in order to accrue contributions to a fund for
moderate and low income housing. Assemblymember Jerry
Nadler, from Manhattan's West Side, who was active in the
fight against Lincoln West (one of the developments that
pointed out to many planners and housing activists the im-
portance of a housing trust fund) believes it is imperative
that low and moderate income housing not be a substitute
for on-site improvements necessary to reduce the impact of
a projects's high density or bulk. "We want to see both
moderate and low income housing and light and air, not
housing instead of light and air. Otherwise, it wouldn't be
fair to the community," says Nadler.
What's Fair?
The question of what is fair keeps recurring, and it
makes "inclusionary zoning" particularly attractive, both
politically and from a planning perspective, for its univer-
sality of application. It would provide in the city's zoning
resolution that a fixed percentage (current proposals call for
10 percent) of all new or substantially rehabilitated housing
be set aside for low and moderate income people. Inclu-
sionary zoning would offer developers the option of either
having on-site units set aside for low and moderate income
tenants or, say, rehabilitating nearby housing for the same
purpose. City Planning Commissioner Gallent sees most of
the on-site units going for the elderly. "Clearly the money
goes further when it's spent on rehab, which I think will
seem preferable to most developers anyway."
Inclusionary zoning differs significantly from a tax
because it forges a theoretical link between the city's boom-
ing neighborhoods and those that are still struggling to sur-
vive. "Does Manhattan development have an effect on the
housing market citywide?" asks City Planning Commis-
sioner Motley pointedly. "I think the answer has to be 'yes'."
Paul Davidoff of the Center for Metropolitan Action
noted in testimony before the Mayor's Development Com-
mitment Study Commission that inclusionary zoning has
been urged by New Jersey's recent Mount Laurel II court
decision, with potentially far reaching consequences for
municipalities; "As the Jersey court said, 'the State controls
the use of the land, all of the land. In exercising that con-
trol it cannot favor rich over poor'. The time . has come for
New York City to expand its responsibilities to zone in the
CITY LIMITS/December 1983
12
general welfare, equally for rich and poor.'
But how are the equities to be balanced in the use of
any fund, which, as Commissioner Gallent cautions, will
not yield enough housing units to qualify as a "panacea"?
And who will do the balancing? Gallent believes that "the
program should be kept out of the city treasury; let the
developer do either the on-site or the rehabilitation."
And what about skewed housingcosts in projects where
the developer elects to provide on-site low and moderate in-
come units? "That could be dangerous,"says Nadler, adding
that such situations have existed for years in Mitchell-Lama
developments without too much reSntment between tenants
of differing means. "It will probably add to the cost of the
lUXury units, regardless of the way the developer meets the
low and moderate income requirement," admits Gallent, "but
I don't think the market will have trouble absorbing the
cost."
Allocation formulae seem to be the best way to manage
the allotment of Housing Trust Fund and inclusionary zon-
ing benefits, and they may prove to be one of the most
critical issues in the Housing Trust Fund's political fortunes.
Economic mtegration in the of Manhattan, Brooklyn
and Queens experiencing significant development will have
to be balanced, for example, against the housing needs of
neighborhoods still experiencing large-scale housing aban-
donment. Most of these questions of inter-neighborhood
equity have yet to be resolved.
Big Real Estate's Response?
And what of the political role of organized real estate?
Though Gallent and others do not see serious developer op-
position to the establishment of Housing Trust Fund,
already the developer-dominated Citizens Housing and Plan-
ning Council has come out against it, referring to it as
coercive. The Mayor's role will probably be decisive. Last
April he established a Development Commitment Study
Commission to make recommendations on the future of a
housing trust fund in New York. Since he was tarred as the
candidate of "big. real estate" in last year's governor's race,
Koch may want to see something established before the
1985 election to offset his negative image on the issue. The
Commission, headed by Mitchell Sviridoff, president of the
Local Initiatives Support Corporation, expects to issue a
draft report in January or February, 1984, after which it
will hold another round of hearings to elicit comments on
its recommendations.
For the Housing Trust Fund to work, of course, New
York's housing and office space markets would have to re-
main strong: if there's no new luxury or office construction,
there will be no new low or moderate income units. In a
time of serious recession, the Fund and inclusionary zoning
provisions would be little help to those people hardest
pressed financially. For different times, different approaches
will be necessary. Susan Motley notes that zoning and land
use issues are by definition not static: "When we need to
make changes, we make them. I've been watching the Hous-
ing Trust Fund discussion develop with curiousity and glee.
Something is going to happen with it; the issue is not going
away. The time has come to translate equity into public
policy."D
Rachel Gorlin is a freelance writer who lives in Manhattan.
Where the Money Is
BUILDING
T
HE MOST DETAILED AND FAR-REACIDNG proposal
for obtaining needed funds from new office and residen-
tial construction has come from a joint project of two
organizations long involved in efforts to assist low and
moderate income !lousing. Pratt Institute's Center for Com-
munity and Environmental Development and the Center for
Metropolitan Action at Queens College have combined to
study the existing markets, the governing laws, and the
possiblity for a radically altered zoning ordinance and a hous-
ing trust fund.
Their proposal is based on obtaining new housing funds
from a variety of sources, two of which would tap current
construction. Many of their proposed resources would require
legislative action, few of them could be accomplished solely
by mayoral edicts. But if each of these housing-related tax
and other revenues were appropriated, it could add up to over
$200 million in new funds yearly. When matched with federal
Community Development Block Grant funds, over $400
million becomes available. If that amount were loaned at one
percent interest and matched with private, market-rate loans,
TRUST FUND
it could generate enough funds for 20,000 to 25,000 additional
housing units per year.
The Pratt/CMA Project stresses that their figures are
preliminary, that these funds cannot be used to supplant a
federal role in assisted housing, and that any Housing Trust
Fund must be administered by a body that is directly accoun-
table to the electorate - not by an a p p o i m ~ or ad-
ministrative agency. Here are the components of their
proposal:
Inclusionary Zoning Payments: Independent of any other
exactions trom developers, New York City should enact an in-
clusionary zoning ordinance. This ordinance would be mod-
eled on those already enacted in some suburban areas to
mandate the creation of a c-ertain number of affordable hous-
ing units for every market rate development. The basis for
such a move, according to Paul Davidoff, director of the
Center for Metropolitan Action, is a "recognition that zoning
is part of the police power of the state, (and) must be exer-
cised to further the general good."
Before shifting to New York City, Davidoff headed the
13 CITY LlMITSlDecember 1983
SubUrban Action Institute, an advocacy group that helped to
win some sigrufkant concessions from municipalities in this
regard. That perspective got its most important boost from a
New Jersey Supreme Court decision, known as Mount Laurel
II. That landmark ruling ordered inclusionary wning - in-
cluding mandatory setasides of low and moderate income
housing - as a major remedy for wning regulations in New
Jersey towns that had the effect of keeping out low income
people.
An inclusionary ordinance for New York City would
mandate that 10 percent - across the board - of all new of
substantiall y rehabilitated housing units in any project over
100 units be affordable to low and moderate income
households. would be given a choice of providing
those affordable apartments within their projects, by spending
an equivalent amount rehabilitating bUildings nearby, or
donating that amount to the Housing Trust Fund. According to
Davidoff, if the funds go into city-owned buildings, the
number of units rehabbed could create housing equivalent to
25 to 30 percent of the original project.
Where would the money put into the trust fund be spent?
Twenty-five percent would be earmarked for use in the com-
munity district where the development is located. That
. district could get more, dependmg on an index of relative
housing need. Potential yield to a Housing Trust Fund: $20
million.
0fIlce Development Contributions: The most successful
housing trust fund yet established in the country is that of San
Francisco's Office/Housing Production program. That pro-
gram proceeds from the recognition that new office construc-
tion has one of the most significant impacts on the housing
squeeze. It seeks a developer contribution (it is not a law) of
approximately one housing unit for every 1,100 square feet of
space built.
From 1981 to 1983, the Real Estate Board of New York
estimates that 21,474,000 square feet of office space went up
in New York City. Had the city had a program similar to San
. Francisco's in effect, it would have resulted in 19,500 dwelling
units created in the past three years, according to Brian
Sullivan of the Pratt Center. The proposal calls for a
developer contribution of $5 per square foot of new office
space - an amount it believes to be a modest exaction. Hous-
ing Thut Fund yield: $30-60 million.
The proposal also suggests a number of other untapped
or under-utilized revenue resources which could be used to
fill out a regular housing trust fund - one that could be
replenished yearly. While most of these are mdifications of
existing taxeS', they seek,according to Pratt director Ron Shiff-
man, to link these mainly housing-generated funds with the
city's housing needs.
State Mortgage Recording Tax:Although New York City
generates about 65 percent of this, it gets none of it back
directly, and little indirectly. A certain percentage goes to the
State of New York Mortgage Agency (SONYMA) , the rest
into the state's general fund. In fiscal year 1983, $48.5 million
was earned. The proposal seeks $29.5 million of that tax f or
the Housing Thut Fund.
Limited Partnership Registration Fees: Those setting up
tax shelters for real estate investors (one of real estate'" big-
gest bonanzas) through limited partnerships now pay fairly
CITY LiMITS/December 1983
minimal registration fees. Currently, the rate is set at one-
tenth of one percent of the value of the partnership, up to a
cap. Last year, $3.65 million, almost all through filings in the
city, was earned through the tax. By doubling that fee, to
one-fifth of one percent for all partnerships up to $10 million,
and then dropping it to one-tenth of one percent again for the
amount over that level, and increasing the minimum fee to
$500, it could yield $4.5 million.
State Incorporation Filing Fees: The State's incorporation
tax generated $7.8 million statewide last year. The proposal
woula gear the tax to the size and capital assets of the cor-
poration. Estimated Housing Thut Fund yield: $2 million.
Interest on Real &tate krow Accounts: Escrow
accounts include everything from large sums ordered to be set
aside by developers of major projects, to tenant rent strike
funds held by the courts. The Pratt /CMA proposal suggests
this 'could yield $10 million per year to the Housing Trust
Fund.
Sale of City-Owned Property: Let the $32 million the ci-
ty took in from the sale of its mostly tax-foreclosed properties
go right back to the housing needs of the city's people, says
the proposal. Ass\1ming an equal volume of saleS', $32 million '
for the Housing Trust Fund .
14
Co-op and Condominium Filing Fees: In Fiscal Year
1983, $3.6 million was earned for the state through filing fees
for co-ops and condos, almost all of it in New York City. The
proposal calls' for a progressive, sliding scale .tax on conver-
sion plans, and lower fees for non-eviction plans. For projects
with offering up to $75,000. the fee would be one-tenth
of one percent of that price - the same for non-eviction con-
versions. For $75,000 - $100,000, the fee would be .0015 of
one percent . Over $100,000, the tax would go up again to .002
of one percent. The new tax would also remove the existing
cap and set an anti-speculation tax on quick co-op/condo
flips. The proposal recommends collecting a 10 percent tax
on any increase in value on resales taking place within one
year of purchase; within two-to-five years, the tax would be
7 1h percent, dropping to a five percent levy for resales in the
fifth to tenth years, and two percent of the increased value
for resales made more than ten years after purchase. Such a
graduated tax would yield $7 million to the Housing Thut
Fund.
Real Property Transfer Thx: The proposal would set
aside ten percent of the revenues earned from the current tax
on property sales of less than $1 million and an equal amount
on larger sales. If the state takes in $150 million this year (it
should) , this would mean $15 million for the Housing Thut
Fund.
Repayments of Low-Interest Loans: So far this year, the
city has taken in $8.5 million in repayments of its federally
funded low-interest loans - mainly through the Participation
Loan Program and the Urban Development Action Grants
(UDAGs) it has received. The proposal suggests that all of
these earnings should be earmarked for the Housing Trust
Fund, totalling about $10 million.
Thx Increment Finance Districts: When publicly-assisted
developments such as South Street Seaport or the Convention
Center go up, taxes in adjoining areas rise as properties in-
crease in value. This levy would tax back that increase in
value - the difference between the amount before the
development and afterwards - and apply it to the housing
needs of the area through the trust fund. Yield: . $10 million .
Where the Money Is
A LUXURY BOUSING TAX
It's SImple, f e a ~ i l i l e and relatiVely mild In Impact . And If could generate a
quarter billion dollars for hOUSing each year.
By Peter Marcuse
B
ETTER HOUSING TAKES MONEY. But, given the
fiscal crisis, there is no more money to be had, runs
the conventional answer. Lower standards, expect less, say
the pundits; we've gotten spoiled by good times, now in bad
times we (we?) have got to tighten our belts and put up
with less.
But more money is available for housing. It depends on
where one looks. Between 1981 and 1982 the increase in
the Federal defense budget was almost twice the total
budget of the Department of Housing and Urban Develop-
ment; total defense expenditures exceed housing expen-
ditures by over 10 to 1. The housing movement has a major
interest in a shift in federal prjorities; with a real shift, the
nation's housing problems could really be solved within one
generation.
But there are untapped possibilities at the state and
local levels too. Other articles in this issue deal with the
possibilities of a Housing Trust Fund, and suggest some
ways in which money might be obtained for it. Further pro-
posals were put forward as part of the Counter budget
prepared by the City Project, put together by the New York
Public Interest Group and Councilmember Ruth Messinger.
Still other sound ideas have been advanced by the New
York City Housing and Community Development Coalition
and the Pratt Institute Center for Community and En-
vironmental Development, and the Association for
Neighborhood and Housing Development. They all go very
much in the right direction.
What follows is suggested as an extension of such ef-
forts, and to open the door to a discussion of some addi-
tional approaches. The Luxury Housing Thx (actually a set
of three taxes) requires only relatively simple state legisla-
tion. It is mild in its impact, and seems immediately feasi-
ble. The fourth tax proposed, the Progressive Property Tax,
is more far-reaching (although very simple and logical); it
holds out, however, major long-term potential for pro-
gressive change.
Three taxes are suggested in the Luxury Housing Thx
Package:
A LUXURY HOUSING LANDWRDS' TAX, taxing
gross income from housing units renting at over $1,000 a
month; A LUXURY HOUSING TAX ON OWNER-
OCCUPANTS OF CO-OPS, CONDOMINIUMS, OR
HOUSES, taxing the gross imputed income from the
ownership of any owner-occupied unit worth over $200,000.
A LUXURY HOUSING SPECULATION TAX, taxing
the net profit from the sale or transfer of any housing unit
for over $100,000.
In each case, the tax should be progressive, starting
perhaps at 3 percent and ending at 5 percent for luxury
rental units, starting at one-half of 1 percent and going to 2
percent for lUxury owner-occupied cooperative/condominium
units and houses (the rate is low because the base is the full
value, not the monthly. cost), and the speculation tax might
start at 10 percent and go to 20 percent (it is a tax on net
profit, after all, so anyone who doesn't make money on a
sale doesn't have to pay it at all) . At the lower of each of
these rates, the three taxes together would conservatively be
expected to raise over $250,000,000 (see boxes). All could
be administered as part of the state income tax.
Similar provisions in each of the three taxes would ear-
mark proceeds for the improvement of the housing condi-
tions of households of low and moderate income, but leave
. it up to local communities (municipalities and counties) to
decide how. Housing Trust Funds represent an obvious
possibility. One half of the net proceeds raised in each
community or county could be returned to it for such use;
the other half could be redistributed by the state to com-
munities based on need, using a formula akin to that by
which Community Development Block Grants are now
allocated. Administrative funding should also be provided
for, so there will be no drain on general revenues.
1
-;"M __ . ~ . __
15
How 1Bxes Would Work
Each of the three taxes meets the criteria for a good
tax:
EQUITY: Each is a progressive tax, affecting only
those able to pay, and redistributing only to those having
need. The usual arguments against earmarking proceeds of
a tax can be countered here: no risk of over-expenditure, a
direct relationship between the source of the tax and the .
. purpose of expenditure. The benefits of good housing are
largely the result of public actions: providing highways, in-
frastructure, utilities, public services - and tax breaks. To-
day thoSe with higher income and better housing obtain
more benefits from these public actions, lower income peo-
ple, who need such benefits more, benefit less. The propos-
ed earmarked taxes would help correct this situation both at
the tax and at the expenditure end.
REVENUE GENERATING CAPACITY: The revenues
to be raised by these three taxes are estimated to exceed
$250,000,000 per year. These revenues will be available.
anew each year, and will keep abreast of inflation because
the base on which they are levied rises with inflation.
Because patterns of rental and sale are rather well estab-
lished, the predictability of revenues is great, particularly
important where housing programs are concerned.
ECONOMIC IMPACT: Speculation is economically
unproductive. Thxing the gains made on the sale of an ex-
isting building does not affect new production for use or
continued ownership. At most there would be a very slight
shift in incentives from the construction of speculative lux-
ury to the construction of lower-cost housing. That
seems desirable in,any event.
The Luxury Housing Landlord's Tax and the Luxury
Housing Owner's Tax are taxes on the consumption of
goods and services, not on their prOduction - and on con-
sumption at the very top' of the income pyramid. At most,
it will cause a very slight shift from investment in luxury
housing, hopefully to investment in more and/or
more socially useful, areas. Initially it is paid by the
landlord, for units; etonomically it should ultimately
drive down either profits or the price of land marginally.
For owner-occupants, and perhaps for some tenants, it
will increase slightly the costs of occupying a luxury unit,
but those involved are the highest-income households in the
state, and the tax per household is very small: only 2 per-
cent of their housing expenditure for most (which in tum is
generally less than 20 percent of income at the levels under
consideration here), so only .4 percent of their income is
taxed.
The vast majority of residents will not be subject to any
tax at all. Beyond that, the revenues from the tax will be
pumped right back into the economy, at least half locally,
as soon as they are distributed, with very significant exter-
nal (public) benefits lIS well as private benefits: improve-
ment in neighborhood quality, stability, etc.
EASE OF ENFORCEMENT. The taxes are each
extraordinarily simple. The information needed to be pro-
vided by the taxpayer can Qe put on no more than three
lines of the state income tax form, for instance. The tax
relies on self-reporting, as does the income tax, with ap-
propriate penalties. The taxes are so simple and easy to
unqerstand that issues of avoidance should rarely arise, and
evasion should be no more frequent than with the income
tax-itself or the property tax.
CITY LIMITS/December 1983
POLITICAL FEASmILITY. A tax that does not stand
a chance of passage is a tax, no matter how good it
may be on paper. These taxes, however, should be political-
ly acceptable on all sides. They are low; they affect only a
small minority of the population (we estimate 5 percent, so
that 95 percent of all households will have to' pay nothing at
all), and those they do affect are those most able to pay. In
New Jersey, a progressive modification to the state income
tax was adopted after a campaign based on very similar
arguments. The taxes return money to almost every
municipality, and leave expenditures substantially subject to
local control. And no competing equally effective proposal
is in sight.
******************************
A LUXURY LANDWRD'S HOUSING TAX:
WHAT WOULD IT DO?
Units subject to the tax (renting for over $1,000 a
month):
Constitute 4% in number of all rental units in the state
5 % in number of all rental units in the city;'
less than 1 % in number of all rental units occupied by
blacks;
but 12 % in value of all rental units in the state;
and 14% in value of all rental units in the city.
At a 3 % rate, should produce at least $37,000,000;
At a 4 % rate, should produce at least $49,344,000.
(These are estimates based on U.S. Census data for 1980,
adjusted for inflation. Presently available data does not
permit estimating revenues if the tax is progressive at
higher levels. Experience suggests the results significant-
ly understate the likely proceeds of the taxes.)
******************************
PRECEDENT. There is ample precedent for such
taxes. The present tax imposed on the recording of deeds
(while very low) is essentially a tax on real property
transfers, directly proportional to value; the Luxury Housing
Taxes are simply more progressive, lower (non-existent) at
the bottom and higher at the top. The recently enacted com-
mercial real estate transfer tax, taxing transactions of over
$1,000,000, utilizes a similar principle, but uses as its cut-
off the gross size of the transaction, and thus might hit the
sale of l.ower-priced space as well as sales of expen-
SIve footage; It excludes the properties covered here
(residential), and, apart from its cut-off feature it is not
progressive. Income taxes have often distinguished between
the taxes imposed on the sales of different kinds of proper-
ty,. or income earned from different kinds of activity
(oil actIVItIes or tax-free bonds are favored, for instance,
and excess profits have often been taxed more heavily than
normal profits); the luxury housing taxes use the same
principle.
A Progressive Property Tax
If one wanted to go further, a progressive property tax
has much to commend it. Making the existing real property
tax progressive certainly ought to be appealing. Nationally,
the property tax is still the biggest source of local revenues
(in 1980, 53.9 percent). For those interested in improving
the quality of housing and neighborhoods, it is a logical tax
to which to look for increased revenues, because it relates
16
******************************
A LUXURY HOUSING OWNERS TAX:
WHAT WOULD IT DO?
Units subject to tax (owner-occupied houses and
cooperative and condominium units valued at over
$200,000 a unit):
Constitute 3 % in number of all such units in the state;
4% in number of all such units in the city;
less than .5 % in number of all such units owned by
blacks;
but 10% in value of all such units in the state;
and 15 % in value of all such units in the city.
At a .5 % rate, should produce at least $61,510,000.
AT a 1 % rate, should produce at least $123,020,000.
(Estimates; for source and notes, see earlier box.
Because the census does not tabulate coops separately,
totals include estimates based on the city's 1981 Housing
. and Vacancy Survey.)
******************************
directly to housing and neighborhood development. As with
the Luxury Housing fues, it seems fair to let those who
are well' housed, or who own high-value housing, contribute
to improving the housing of those less well housed, who in
fact today suffer from precisely those arrangements that
benefit the well-housed and wealthy property owners.
The property tax today is regressive. A number of
reform proposals have recently been put forward (indeed,
some have been put forward since time immemorial!), and
they each have their pros and cons. Yet one possibility
stands out from all of them: why not do the very simplest
thing of all, and make the rates progressive?
The details of such a proposal should not be hard to
work out. $100,000 seems like a reasonable base figure.
Above that amount, an owner can afford to pay a little
more; below it, he or she can no doubt use the tax break
the new system would make possible (see below). The(rate
for rental property would be calculated on a per-unit basis,
so that it is not the number of units, but the value (or rent)
per unit that determines the rate. The figures suggest that
even a moderately progressive property tax can raise
******************************.
A SPECULATION TAX:
WHAT WOULD IT DO?
Units likely to be subject to the tax in any given year
(sold for over $100,(00):
Might constitute .5 % of all owner-occupied, condo and
co-op units in the state (omitting sales of rental units by
big landlords, so as not to duplicate the 10% capiiaJ.
gains tax on sales of over $1,000,000 passed at the last
legislative session);
At a 10% rate, should produce at least $153,750,000.
(Estimates; for SOUTce and notes, see earlier boxes.
Based on a 5 % turnover rate and conservative assump-
tions about gains on sales. Projections based on census
data and reports of proceeds of the 10% real estate gains
tax.)
******************************
substantial new revenue; if more is desired, the riltes can be
made more progressive.
Part of the increased revenues might then be used to
reduce the tax for less wealthy households, either through
an absolute reduction in rates below $100,000 or through
some kind of circuit-breaker system which bases tax relief
on income and need (for which there is ample precedent in
New York) . Arrangements can be made to assure the pass-
through of any such reduction to tenants.
An assessment freeze for home owners might be coupl-
ed with (and financed under) such a proposal, and make it
even more politically appealing. Suppose any household,
while it remained in occupancy of a unit worth less than
$100,000, were guaranteed that its assessment would not be
increased. Its taxes, in other words, would only be raised if
;he over-all tax rate were changed, although for record-
keeping purposes only its assessment would be kept current.
(The assessment could still be lowered, if values in fact
fell.) On a sale, however, not only would the assessment go
up to the actual sale price, but the arrears (what would have
******************************
A PROGRESSIVE REAL PROPERTY TAX:
WHAT WOULD IT DO?
Total real property taxes on residential real estate in New
York total over $9,000,000,000; in New York City, they
account for about 25 % of all tax revenues to the City.
The proceeds resulting from making the tax progressive
would of course depend on how the rates are :let. Adding
2 % to the rate levied on units worth over $100,000 would
produce over $380,000,000 a year.
(Estimates; for sources and notes, see earlier boxes. Also
based on ACOIR data on New York State real property
tax collections for 1982).
******************************
been paid if the assessments had been currently adjusted)
would also have to be paid off, perhaps with a moderate in-
~ r e s t charge. Such a freeze creates no real complication
over those that already exist; it only requires a bit more
bookkeeping whenever an owner-occupied unit is sold.
Tenants in gentrifying neighborhoods could also be aid-
ed by a freeze. Often their landlords face the dilemma of
having low rent paying tenants while property taxes rise
rapidly because high rent paying tenants would be glad to
move in. Such a landlord might be given the same right to
defer increases in tax assessments for any unit in which a
lower income tenant is living, contingent on the landlord's
agreeing to hold down the rent for the tenant and showing
that the benefit is going where it belongs. The increase in
revenues resulting from adoption of progressive rates could
help fund such a freeze.
All of the ideas suggested here, the taxes on luxury
housj.ng and the progressive real property tax, can be made
to work, given the will. There is no excuse for claiming
that money isn't available for housing until such ideas, and
~ t h e r s like them, have been tried. 0
Peter Marcuse is Professor of Urban Planning at Columbia,
a former chairman of Manhattan Commuflity Board #9's
Housing Committee and is an active member of the Plan-
ners Network.
17 CITY LIMITS/December 1983
Housing Bill from page 4
Unlike the Section 8 Certificate program,
the recipient receives a set Fair Market
Rent payment and can "pocket the dif-
ference" if the real rent is less. If rent is
more, the difference has to be made up
from other income. Jurisdictions must app-
ly to HUD for voucher funds. It seems,
oddly enough, that vouchers will only be
used in connection with the new produc-
tion program. You figure that one out. And
remember, the Secton 8 Certificate pro-
gram for existing housing is still the law
of the land and will be available this year
and next.
Other features of the housing bill in-
clude; a new $12 million Urban
Homesteading Program; the use of Sec. 8
Certificates for SRO units; a $25 million
Demonstration Program that is designed to
improve the quality of housing used by
AFDC households; a $15 million
Neighborhood Demonstration program that
will give matching grants to community
based nonprofit organizations; $60 million
in FY84 to HUD so that it can provide for
an emergency shelter program.
The Tasks Ahead
The passage of the Housing and Urban-
Rural Recovery Act of 1983 is certainly not
an adequate or appropriate response to the
housing crisis that filces this nation. In mct,
the federal government didn't enact a hous-
ing bill on November 18th, it passed an In-
ternational Monetary Fund bill with a
housing bill hanging on for dear life. All
we have done, through Trojan Horse
diplomacy, is to keep the life line going into
subsidized housing until we can organize
a national campaign reviving the commit-
ment to have decent and affordable hous-
ing available to everyone in this country.
The National Low Income Housing
Coalition has inaugurated a process to
develop both a new natonal housing policy
and programs to achieve them. Cushing
Dolbeare, president of the Coalition, is
asking localities to convene people who are
c o ~ t t e d to low and moderate income
housing in order for them to identify the
needs and offer suggestions as to how we
might structure viable new housing pro-
griuns at the federal level. In June, the
Coalition will sponsor a national con-
ference that will coalesce our thinking and
insert it into the political process, par-
ticularly the national campaign.
There is much work to be done. When
Congress returns in January we must turn
our attention to the issues raised by the
House Ways and Means and Senate
Finance Committees, particularly the
future of tax-exempt financing for single
fumily homebuyers and multi-family ren-
tal housing development. Also, there are
Fair Housing bills on the roster too.
The Housing and Urban-Rural Recovery
Act of 1983 was only a test of what the pre-
sent constituency for low and moderate in-
come housing can do. If we want a hous-
ing bill in the future that is more than
pushing a Trojan Horse through the
enemy's gates, then we must say so with
a lot more voices and say it loudly. 0
Reverend Donald Sako.no is Director of the
Office of Neighborhood Preservation of
Catholic Charities of the Archdiocese of
New lVrk, and is on the board of the Na-
tional Low Income Housing Coalition.
IS YOUR INSURANCE
TOO EXPENSIVE?
Papers Requested for New York City
Housing History Symposium
Let us evahlate your insurance
program to see if you are getting the
most for your dollars.
IISpedaUzlng in lYon-Profit and
Community Organizatloll5
11
Contact: PaUl Sourifman
(212) 684-4770
CITY LlMITSlDecember 1983
18
On October 12-13, 1984, a symposium entitled
"Working Class Housing in New York City,
1901-1984" will be held at Columbia University.
The symposium will cover the following four
themes:
1. The relationship between changing patterns of
economic activity (types of activity, nature and
level of employment, wage rates, locational re-
quirements) and housing conditions;
2. The impact of grass-roots organizations and
movements on conditions affecting housing (both
private and public);
3. The nature and causes of changes in the
spatial distribution of.housing;
4. The evolution of city policies affecting
housing.
If you would like to submit a paper relevant to
these themes that you would like to have con-
sidered for the symposium, please submit a two-
page outline of your topic. The deadline is March
15; answers will be sent by April 15.
Please submit to: Peter Marcuse, Division of
Urban Planning, 410 Avery Hall, Columbia
University, New York, N.Y. 10027, or
Richard Lieberman, F.H. LaGuardia Community
College, The City University of New York, 31-10
Thomson Avenue, Long Island City, N.Y. 11101. 0
Confro.liDg The City 0. the
West Side Urban Re.ewal Area
O
N THE SECOND FLOOR of a sturdy
but aging city-owned building at 89th
Street and Columbus Avenue in Manhat-
tan's burgeoning Upper West Side, Carmen
Torres smiled broadly and insisted her
visitor sit in one of her borrowed apart-
ment's two chairs. In the other chair, which
along with a small radio was the only fur-
niture in the room, sat Torres' grandmother,
Agostin Mercedes, frowning suspiciously.
A few days before, explained Torres, who
is 18 and a recent nursing school graduate,
she heard from someone about this rarity
in the neighborhood: a near-empty building
with large apartments and a working boiler.
She and her husband took her grand-
mother, their adopted children, Rafael 11,
and Sujeida, 7, and left the apartment they
had shared with her parents seven blocks
south at 82nd Street and Columbus.
There, in three small rooms, around the
comer from some of the neighborhood's
swankest cafes, the family slept in shifts:
four on their two mattresses, three on the
floor. Torres has lived like that for twelve
years. Three times, she said, she has made
application for public housing and Section
8. Her family has never been called.
"Here it's so roomy," she said waving her
hands at the wood floor soggy from past
water leakage and the bare, cracked plaster
walls. She showed the visitor the other
rooms they had cleared of rubbish. "I think
wel1 be able to stay," she said confidently.
What if she couldn't? she was asked.
"Wel1 just have to go back," she said
shrugging.
But it doesn't appear likely that Carmen
Torres and her family will be able to re-
main on West 89th Street. They are one of
a number of squatters, mostly single young
men and some families, who have taken
Oller this l4-unit building in the heart of the
West Side's angriest questionmark: its long
delayed and much disputed 20-block urban
renewal area. The city housing department
has called the police once already to oust
the squatters, and only a quicldy approved
judicial restraining order kept them at bay.
And that injunction isn't expected to last.
While Carmen Torres and her family
came in the simple hope of gaining larger
and affordable living space, organizers of
the squatting action had a more strategic
agenda. The occupation of 101 West 89th
Street was their counter-move to the city's
recently announced abandonment of its
more than 20-year-old pledge to build low
income family housing on an adjoining
renewal site.
Although they are clearly in the current
of a widespread community anger Oller the
city's reversal, there is vigorous disagree-
ment as to the merits of squatting at the
building. The fate of 101 W. 89th Street was
supposed to have already been sealed.
Qnce demolition took place, it would
become part of developer Jerome
Kretschmer's mixed construction of
townhouses and a highrise. Although the
bulk of his project will be luxury, 33 units
will be subsidized under Section 8. The
way most West Side activists see it, that's
more than twice what they've got now at
101. The squatters, they say, are way off
target.
Not surprisingly, the squatters disagree.
"We're holding this building hostage for Site
30; insists Russell Pinsley, a Z7-year-old
leader of the mOlle-in who was arrested and
manhandled by police at the start of the ac-
tion. Site 30 comprises the vacant block of
Columbus Avenue between West 90th and
91st Streets. There, until early September,
160 public housing units were slated to be
built which would have accommodated
families such as that of Carmen Torres.
Site 30's units would have been one por-
tion of 2,500 subsidized family dwellings
the city promised in the early sixties when
it started clearing large sections of what
became the West Side Urban Renewal
Area. Now, however, city housing officials
say it may never meet that original goal.
The city has told local community
19
representatives that it no longer wants
public family housing on Site .30. Instead,
it seeks roughly 185 private market-rate
ap&tments to be built in a nineteen-story
tower. It will provide funds for subsidized
apartments, but only about 80 of them, and
most for the elderly.
The reaction among many of the West
Side residents who have watchdogged
gOllemment performance in the renewal
area for two decades has been one of
anguish and outrage. And they are now
mobilizing to refight a battle they hoped
was already won.
Statement Gets Bishop's Support
A statement opposing the new city plans
[see box] has been circulated widely and
has won the support of every West Side
political representative 'whose jurisdiction
encompasses Site 30, as well as some 200
. individuals and organizations.
One important new signatory to that
statement is the Right Reverend Paul
Moore, Bishop of the Episcopal Arch-
diocese of New York. Reverend Moore's
position demonstrates how far some con-
c e ~ on the West Side have shifted since
the renewal plan was first proposed.
In 1971, the Episcopal Trinity School,
which sits across from the site on West 91st
Street, filed suit against Site 30's proposed
low income project. Reverend Moore, as
a school board member, was a signatory
.:.... albeit Ii reluctant one. The suit com-
plained that low income housing con-
stituted "an environmental hazard" and
should not be built in that portion of the
West Side.
The school later abandoned the suit, but
it was picked up again, this time by a
neighborhood homeowner group calling
itself CONTINUE ~ Committee of
Neighbors To Insure a Normal Urban En-
vironment. The Supreme Court eventual-
ly dismissed the suit in January, 1980.
In a letter sent on NOIIember 8, 1983, to
Mayor Koch, Reverend Moore wrote:
"Although I was on the board of Trinity
Schoof, I fought strongly to keep Trinity
from blocking housing there. rve been con-
cerned ever since that the site has lain va-
cant. With gentrification of the West Side
going at a dizzying pace, it is necessary to
stabilize the community
somewhat ... loyalty to the original concept
CITY LIMITS/December 1983
at Site 30 would help in this regard. It
would also enhance the credibility of the
administration."
The City Holds Back
Once the Supreme Court threw out the
suit, the city was left with a free hand to
build the family housing on the site. $6
million of federal funds was already set
aside for that purpose. Although the last
of five amendments to the West Side plan
made no mention of specific housing for
the site, West Side low income housing pro-
ponents believed that the legal and finan-
cial, if not the political, support was in
place.
The city, however, refused to move. Of-
ficials pointedly ducked direct questions,
and listed the site as "unspecified." Mean-
while, the West Side's real estate values
started taking off the amount of hous-
ing the six million federal dollars would
purchase continued to shrink. And when
city housing officials approached com-
munity board #7 this September, they cited
both those reasons for their decision not to
build.
"The city development office started tak-
ing a hard look at the value of the proper-
ty last year," said Robert Reach who heads
the housing department's office of Manhat-
tan development. Both the Department of
Housing Preservation and Development,
which controls the site, and the city Hous-
ing Authority which is to build on it, state
that housing for seniors would be politically
more acceptable.
That point is vigorously challenged by
members of the Site 30 Coalition, the
group that has sprung up in response to the
city's switch. They point to numerous re-
cent community board decisions in favor
of low income housing in the West Side's
increasingly tight market. Donna Peacock,
a West Side activist who has long supported
the creation of affordable housing noted
that the Site 30 Coalition has gotten in-
creased . support from West Side middle
class residents for the project. "Middle in-
come people now see themselves as being
pushed out too," she said.
But the the West Side Urban Renewal
Area may not have seen its final city flip-
flop. After stating that dollars and time left
no room for negotiation or compromise,
the city has already budged a little. It is
now offering 19 subsidized duplex family
apartments and 64 apartments for the elder-
ly instead of the all-elderly project it in-
CITY LIMITS/December 1983
sisted on in September. "First they give us
token senior citizen housing," snorted one
Coalition member, "now, it's token
family."D T.R.
A
s WESTSIDERS CONCERNED about the loss of low income family hous-
ing in oUr community, we urge the Department of Housing Preservation
and Development and the New York City Housing Authority to withdraw their
recent proposal for a high-rise luxury apartment building with a token amount
of low-income senior citizens housing on Site #30 which calls for 160 units of
low-income public housing for families on that site, for which $6,000,000 have
already been appropriated.
Because of many years of delays in implementing this existing proposal for
Site #30 - delays brought on by law suits by Trinity Epi.scopal School and by
the Committee Of Neighbors To Insure a Normal (CON-
TINUE) - We realize that the number of low-income units may be reduced
because of inflation from the original 160 apartments promised by New York
City and federal authorities. But the units should be no fewer than
the number of family-sized units (including provision for senior-citizen units)
that the $6,000,000 originally allocated and still available can provide. If this
money cannot provide housing for the full site, then the open space remaining
should be held in trust and used for park or gardens until funds are available to
provide for additional low-income public housing.
We reject the rationale as expressed by a representative of the New York
City Housing Authority that the new proposal was devised because "it is easier
to get community acceptance" for senior housing. We believe this to be a
misreading of community opinion and point out that as recently as at its regular
monthly meeting on October 4, 1983, Community Board #7 - as it has done
for many years - again placed an allocation of funds for a model SRO as its
first budget priority and that this is only one of the many expressions of com-
munity support for low-income housing.
To give in to this new "compromise"pI'oposal, which is "acceptable" to
CONTINUE, is to- concede to Trinity School and to CONTINUE, a victory
which those two organizations could not achieve in court when they attempted
to prevent low-income housing construction on Site #30.
At this late stage of the West Side Urban Renewal Area Plan, it is impossi-
ble to redress the unconscionable displacement of of low-income
from the renewal area, but at least we should not lose these family
units. The maximum number of units on Site #30 are needed to help fulfill the
commitment to a minimum of 2,500 permanent low-income units in the West
Side Urban Renewal Area made by the City in 1962, a commitment regularly
reasserted by such community groups as Community Board #7 in intervening
years.
If the promise for low-income family housing on this site is not adhered to
- a promise made to the community and to low-income families who were liv-
ing on Site #30 and who agreed to vacate their premises on the assurance that
low-income public housing would replace their homes - it will be a clear
signal to other such families never to give up occupancy of existing low-rent
premises on the promise of new low-income construction or rehabilitation. That
is, it will be a lesson to put no faith in the promise of A City agency when
low-income tenants are asked to give up the apartments they occupy:
We call upon Community Board #7, HPD, the NYCHA, the City Planning
Commission (which must also approve the substitute plan), members of the
Board of Estimate and the West Side community at large to keep the faith with
the West Side community and with the tenants who voluntarily gave up their
homes on Site #30 and to make good on the promise to build low-income fami-
ly public housing on Site #30.0
For further information. call: Site 30 Coalition. TR4-7686.
20
'Where Can I Live'
A Video Tale of Brooldya's Gealrificalioa
"WHERE CAN I UVE
n
_ A story of gen-
trification. Videotape by Erik Lewis. Col-
or. Running time, 32 minutes. Rates for
community and tenant organizations
One-half inch cassette, $35 purchase; three-
quarter inch cassette, $60. Write or call:
Erik Lewis Productions, 549-2nd St.,
Brooklyn, NY ll215, (2l2) 788-0254.
By Pat Swann
"iSoy muy orgulloso!,,("I am very proud!),
the woman says passionately. She is proud
of being a hard-working law-abiding
American citizen. Yet she has just been
served with a dispossess notice for her
apartment, and she is very angry.
This opening scene sets the tone for the
new documentary videotape, "Where Can
I Live," which opened at a screening on
November 19th at La Talleramericano.
"Where Can I Live" is the story of the com-
bative residents of a block in the Park Slope
section of Brooklyn, surrounded on all sides
by a community in the advanced stages of
gentrification.
The story began three years ago when the
owner of two buildings on the block began
pressuring tenants to relocate. He used
various means of persuasion, including
violence. After doing some research, the
tenants discovered that a group of investors
headed by the same owner had purchased
several other properties on the block: six
buildings that had been occupied were now
vacant. In a few months, these speculators
had transformed the block from a vibrant
lively place to one dominated by empty
buildings.
As Ibon Muhammed, an organizer
fearu'fed in the film, says: "It's part of the
American Dream to come in and be able to
work, be able to afford your own home and
have a safe community ... There's nothing
wrong with that ... But they're not satisfied
with owning a building, they want to come
in and buy a whole community."
Erik Lewis, who produced "Where Can
I Live; has been a Brooklyn resident for the
past twelve years, but he was astounded by
rent levels when he moved to Park Slope
three years ago. He decided he wanted to
personalize the housing crisis by portraying
on film a real-life housing crisis situation,
and the effects it had on long-time residents.
In putting the video together, he was for-
tunate to have the commitment
of Children/Youth Development Service, a
local community service agency ad-
ministered by the Sisters of the Good
Shepherd.
Was there a predetermined message he
wanted to communicate? "The best way for
a filmmaker to operate," says Lewis, "is to
without a final conclusion. To use
film as an investigative process so that the
filmmaker and the audience begin to see a
conclusion as a result."
"A Factor of the Marketplace"
This open-ended approach translates on
film as a pervasive feeling of spontaneity.
Although there is a good deal of drama in
"Where Can I Live," including a demonstra-
tion at Brooklyn Housing Court, an im-
promptu sidewalk interview with a judge
and a block "sweep" party, these events never
seem rehearsed or staged for the benefit of
the cl}l'Oera. Interspersed with events are in-
te1'Vfews with an assortment of real estate
professionals who provide their interpreta-
tions of the dynamics at work in the
neighborhood. In the words of Park Slope
realtor John Noonan, "It's a factor of the
marketplace."
The absence of rhetoric also adds to the
film's spontaneity. For example, the issue of
racism is implicitly raisedwithout allowing
ideological fine-points to intrude: i.e. to
what extent is gentrification a racist
phenomenon as opposed to an expression of
class oppression. As portrayed in the video,
the residents of 13th Street are mostly Third
21
World people: Latjn, Afro-Asian-
Americans. The few white tenants include
a young couple who are evicted their
less than six-unit building) apparently in
retaliation for their organizing efforts.
There's a heavy racial aspect [to
trificatiQn] ," says Lewis. "But the fundamen-
tal thing is whatever can make the money."
In any case, the struggle itself was a unify-
ing force in that it confronted everyone with
the reality of their common dilemma.
"Where Can I Live" is especially reveal-
ing about the critical role played by the
women of the community. Leaders such a
Elba Rodriguez are featured prominently
and it is the special quality of their strength
that moved me the most.
No doubt people will respond in different
ways to "Where Can I Live." I found it very
appealing, both personally and professional ...
ly. On a personal level, I was touched by the
earnest determination of its characters. And
as a housing advocate, I appreciate its
significance as a success story: with few ex-
ceptions, the residents of 13th Street who
were there at the beginning, are still there.
Still, it doesn't minimize the price of
success.
Unfortunately, "Where Can I Live" will
probably not be coming soon to a theatre
near you. Hopefully, tenant associations,
community groups and other unconVen-
tional forums will provide .this meaningful
production with an audience. 0
Pat Swann is a community planner at the
Pratt Institute Center for Community and
Environmental Development who also lWJrb
on media issues. She served as a consultanl
to the producer of "Where Can I Live.
CITY LIMITS/December 1983
co.oaasu. QUES .... O
JEIIIEY CIft' CONDO LOU
A
N ATTEMPT BY the administration
of Jersey City Mayor Gerald McCann
to bestow a no-strings, low interest $1.6
million loan of federal Community
Development funds on the developer of a
warehouse-to-luxury housing conversion
has questioned by the chairman of the
housing sub-committee of the House of
Representatives (Jersey City's Friendly
CDBG Loan, October, 1983).
Congressman Henry B. Gonzalez,
Democrat of Texas, has asked the Depart-
ment of Housing and Urban Development
to explain the basis for the loan which, he
told a Jersey City citizens group, could shift
Community Development Block Grant
funds from their primary purpose which
is to benefit low and moderate income
people.
The proposed loan recipient is a division
of Shayna Enterprises, headed by Stanley
Rothman and Arthur Abba Goldberg.

Goldberg is a prominent New York City
bond broker and editorial board member
of the Housing and Development Reponer.
He is also head of CASE - the Commit-
tee for the Absorption of Soviet Emigres
- a condUit for the resettlement of Soviet
Jews and other East European refugees in
Jersey City.
Shayna, which has made many Jersey
City condo conversions, is currently at-
tempting to evict the primarily low income
Hispanic tenants of 89-95 Wayne Street.
The CDBG loan was promised by the
McCann administration to Shayna as an
added payment for buying up an option the
firm held on a tract of land in the city's
Montgomery Gateway redevelopment area.
A coalition of housing groups in Jersey
City asked Gonzalez, as well as HUD's
Newark Area office to intervene. But
Walter Johnson, HUD Area Manager, told
reporter Ronald Leir of the Jersey Journal
that the city was in conformity with CDBG
regulations.
Gonzalez, however, following a meeting
with the group, wrote that "I couldn't agree
with you more about your reservations
(about the project)." The Congressman's of-
fice said they were awaiting a HUD
response. 0

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CITY LIMITS/December 1983
22
&OUIIIIO, JOBS
AlIDPUCE
r::::r HOUSING AND JOBS: A
BLUEPRINT FOR SURVIVAL:
ing federal funds to meet this country's
housing crisis is not only good social
policy, it's a wise economic investment.
Every $1 billion spent on military hardware
provides about 23 percent fewer jobs than
would investing in new homes and apart-
ments. Jobs With Peace, publishers of this
booklet, is a nationwide campaign that
aims at redirecting federal priorities away
from war and unnecessary military spend-
ing in order to meet America's needs in
housing, education, human services and
mass transit.
This short (14-page) and easy-to-read
pamphlet gives brief concise explanations,
along with simple charts, of the nation's
housitig problems, and the connections be-
tween housing, unemployment and military
spending in the economy. It also contains
a proposal for a national housing budget.
Single copies are 30e, 2-49 copies are 25e
each, 50 or more are 20e apiece. Add 20
percent for postage. Make check payable,
and send to; Jobs With Peace, 77 Summer
St., Boston, MA 02ll0n
r::::r A TENANT'S GUIDE TO HOUS-
ING COURT: NON-PAYMENT AND
HOUSING PARI' ACI'IONS is a 67-page
booklet published by South Brooklyn Legal
Services. The booklet advises tenants on
how to represent themselves in Housing
Court if they receive a petition for non-
payment of rent (dispossess) or 72-Hour
Notice of Eviction. Step-by-step advice is
offered on answering legal papers, settling
a case without a trial, appeardtg before a
judge, and conducting a trial. It suggests
defenses and counterclaims and weighs the
strengths and weaknesses of possible set-
tlements. It also outlines how to bring a
Housing Part (HP) Action and details how
to serve papers, handle a case in court and
follow-up to ensure enforcement. Basic in-
formation on Holdover Petitions and 7A ad-
ministrators is included as well.
South Brooklyn Legal Services provides
. .representation in housing, family law,
welfare and other legal needs. While its 17
lawyers and 9 paralegals still handle about
4,500 cases a year, cutbacks in federal
funding have forced it to turn away increas-
ing numbers of people. The publication of
A Tenant's Guide to Housing Court is in-
tended to help some of these people'solve
their housing problems without legal
representation. Copies of the booklet are
available for $2.00 each. Orders can be
placed by writing: Community Education
Project, South Brooklyp Legal
105 Court Street, Brooklyn, New York
11201.0
r::::r SECOND ANNUAL OltGANlZERS'
COFFEEHOUSE SERIES: A series of
coffeehouses is being sponsored by the
Education Center for Community Organiz-
ing to promote educational exchange,
resource sharing and mutual . support
among organizers. The coffeehouses will
meet the third Thursday of every month,
and will feature discussions led by activists
in the workplace and the community. The.
December ISth program will focus on
"Voter Registration and Beyond," and
features Hulbert James, Director of the
New York Voter Registration Campaign,
and activists from the Citizens' Participa-
tion Movement. Programs begin at 7:00
p.m. (6 p.m. for dinner and announce-
ments), and are held at the Hunter College
School of Social Work, 129 East 79th
Street, Fourth Floor. Suggested contribu-
tion is $3.00 ($1.00 for members). ECCO
also sponsors a basic skills series and other
activities of interest to organizers. For more
information or to reserve a space, contact
Terry Mizrahi or Cheryl Keshner at (212)
570-5064 or 570-5037.0
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 help 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) 267-8080.
Richards and Fennlman, Inc.
156 William Street, New York, New York 10038
<:)
C)


C)'. 0
~ () .

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