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'be U D i o D i z a t i o D
o f W o r k f a r e
Pimps in Pinstripes
ave $1,695 to blow? That's a few dollars more than the two-
month allotment of public assistance and food stamps for a fam-
ily of three in New York. It's also the fee (not including room
and board) to attend the three-day "Welfare Privatization" conference
in Washington that begins March 24.
Sponsored by the World Research Group and
,.. ___ --..... ~ .. ".- the Reason Foundation, the conference features
presentations by private-sector gurus with entre-
preneurial ideas about restructuring the welfare
system, including managing partners from
ED ITO R I A l Lockheed Martin, Electronic Data Systems and
Andersen Consulting. Top billing on the confer-
ence's first morning goes to Richard f . Schwartz,
former special adviser to Mayor Giuliani. Schwartz was in charge of
paring down the city's welfare system. Promotional material proclaims
New York City "an international leader in welfare reform with
America's largest and most successful Workfare program."
Schwartz has moved into private-sector consulting to make an
income from needy government officials laboring under budget-cutting
directives. Programs he helped engineer have cut the city's welfare rolls
by more than 220,000 in the last two years and saved the Giuliani
administration more than $50 million a month in welfare spending,
according to the city comptroller.
As Schwartz has found, the most efficient way to make the welfare
system less costly is not through "reinvention" but by cutting the wel-
fare rolls. Fewer recipients, fewer benefits to be paid.
Not surprising--but conveniently overlooked by the ax-wielding
gurus-is the household income information just released by the
Census Bureau as part of the 1996 New York City Housing and
Vacancy Survey. It shows that people are worse off economically even
as the welfare rolls have been cut. In fact, they may be worse off specif-
ically because the welfare rolls have been cut.
Poverty is deepening in New York: 32.3 percent of the city's 1.9 mil-
lion renter households had incomes below the poverty line at last count,
up from 29.9 percent in 1992. The median income of all renter house-
holds dropped 3 percent from 1992 to 1995, after adjusting for inflation.
Schwartz and other folks looking to make a killing by consulting
with government on reckless welfare strategies are reminiscent of
another breed of bottom-feeder. Not long ago, we had a name for the
political and nonprofit machine denizens who made extraordinary liv-
ings off the welfare system while doing nothing for the community:
poverty pimps. They hung out in the gutters of the South Bronx, East
Harlem and elsewhere, winning contracts for their business partners
and sucking low-income neighborhoods dry.
Their heirs now occupy downtown offices and are called entrepre-
neurs. They can charge their acolytes $1,695 to listen as they pontifi-
cate on innovative strategies for making profits off of despair and mis-
ery. It's a peifect symbol for our age.
Cover Illustration by Chuck Gonzales
Andrew White
(ity Limits
Volume XXII Number 3
City Limits is published ten times per year. monthly except
bi-monthly issues in June/July and August/September. by
the City Limits Community Information Service. Inc .. a non-
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MARCH 1997
WEP: Workers Expect Paychecks ~
Mayor Giuliani has earned bragging rights to hundreds of
millions in welfare savings. But unions are joining the fight for
workfare workers' rights, and that means big changes down the
road for welfare reform. By Andrew White
Rudy's Bare Budget ~
Flush with a Bull market windfall, the mayor is talking tax
cuts to the wealthy. But low-income residents will miss out on
their Wall Street bonuses. A primer on city cuts to housing, hospitals,
youth, recycling and the Civilian Complaint Review Board.
The Apprenticeship of Money Kravis
Financier Henry Kravis teams up with nonprofit guru Kathryn
Wylde to leverage private sector millions for inner-city economic
development. Can they really create jobs without risking capital?
By Kim Nauer
Hello, I must be going. The mayor has anointed a third
housing commissioner but there's little reason to think that spells
relief for tenants of crumbling buildings. By Glenn Thrush
The threat of rent deregulation is mobilizing SRO residents,
the city' s most vulnerable tenants. By Mary Blaich
The Price is Wrong By Errol T. Louis
Cityview 132
Silent Slavery By Sushila Patil
Review 133
Broken Promises By Shawn Dove
Spare Change 138
Good Deeds Undone By Mike Arsham
Briefs 6, 7 Editorial 2
GOP seeks Vito Override Letters 4
George's April Fools Gift
Directory 36
Want the facts? Cut it out.
Job Ads 37

A Flaw" Approach? dents at the Park Avenue Armory have
been there more than two years.
I write to call attention to the blatant
bias that pervades Phyllis Vine's article
about the nonprofitization of several of the
city's shelters for single adults ("A 'Cure'
for the Homeless," January 1997).
Practically all of the shelters have been
renovated. Qualified staff is in place.
Residents are being moved into permanent
housing and jobs. Vast amounts of money
are being saved. The service needs of the
most troubled, chronically homeless are
finally being meaningfully addressed. Yet,
shockingly, Vine bemoans the loss of
capacity in drug-infested, squalid and
threatening "general" shelters.
Vine also discusses my intention to
restrict occupancy at the Harlem I Men's
Shelter to those who wish to participate in
the work and training program we offer
there. As an advocate I have always been
forthright about my position that it is not
wrong to expect responsibility from recip-
ients of public benefits. I do not believe
you act in a homeless person's best interest
when you give him or her a venue in which
to pursue substance abuse or otherwise
fester indefinitely without any progress
toward independence. However, that being
said, no responsible nonprofit would dis-
charge a client to the street. Appropriate
transfer arrangements will be made in
every case of noncompliance.
Not uncontested are Vine's claims
that most shelter residents are short-term
users of the system without major
impediments to independent living. The
New York City Commission on the
Homeless, on which I served, found that
60 percent of single adult shelter resi-
dents had been in the system for more
than a year. It also found that in random
tests, 80 percent of general shelter resi-
dents evidenced drug use. The article
itself points out that 69 out of 100 resi-
The city has made a very wise deci-
sion in investing in a more cost-efficient,
therapeutically effective alternative to the
old "general shelter" system. As advo-
cates we should encourage the move in
this direction.
George McDonald
The Doe Fund
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Phyllis Yin. r.pll.s: George
McDonald errs if he thinks my article
somehow opposed the clean-up of the
filthy, dilapidated living conditions that
nonprofit organizations have accom-
plished. They have made very significant,
laudable improvements.
The problem J sought to elaborate,
however, should not be glossed over. To
argue, as McDonald does, that the system
serves a population of predominantly
chronic shelter residents is to simply
ignore the facts.
True, if you take a survey on any given
day, as the Commission on the Homeless
and several other researchers did in the
1980s and early 1990s, you will find 60
percent or more of the men and womell in
the city shelters have been there for as
long as a year or more. You will also find
that a majority of residents have a history
of mental illness and substance abuse.
But the one-day survey is a fundamen-
tally flawed approach to establishing a
profile of the average mall or woman who
uses the shelter system, as Dennis
Culhalle, a University of Pennsylvania
professor of social work has put forth ill
(Letters, continued on page 34)
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Our new telephone number is:
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On February 13, dozens of marchers- children, puppets and rabbi
Included- called for an end to the demolilion of community gardens.
They trudged from the lower East Side to City Hall
The initial trenches of the looming
rent regulation renewal battle are
just about dug.
At press time, GOP leaders in the
State Senate were expected to
release at least two biDs outlining their
attack on protections for the richest
and poorest New York City tenants.
The plan is expected to come in
response to a bill introduced by
assembly Democrats in late February,
which called for the permanent exten-
sion of rent control and rent stabiliza-
tion. The state's rent regulation laws
are due to expire on June 15.
One Republican bill, expected to
be introduced this month, would
Short Shots
Urban League over how they should
desuibe their move to the nonprofit
tower at 120 Wall Street. The busi-

force tenants to make a deposit on
unpaid rent before they could pro-
ceed with housing court cases
against their lendlords. A second
measure, expected to come later, will
reportedly extend luxury decontrol,
proposing the elimination of rent reg-
ulations for tenants who earn at least
$100.000 a year. Currently, tenants
with incomes oyer $250,000 a year liv-
ing in apartments are denied rant cap
The already-released Democratic
Party b ~ I , produced by Assemblyman
Vito Lopez. the Brooklyone who
chairs the Assembly's housing com-
mittee, would give tenants permanent
nessman's glossy weekly says some
League staffers want to use 95 Pine
St. -the back door address-in lieu
of admitting to Wall St. on their sta-
tionary. Good thing (ity Limits is
beset by no such sense of shame as
we slink into our amply-(arpeted
new digs on Pine Street this month.
Governor George Pataki has
hatched a nasty April Fool's Day
surprise for 175 community hous-
ing groups who organize tenants,
help seniors and assist residents
in their conflicts with negligent
Community groups receiving
Neighborhood Preservation
Company grants from the state
have always relied on the gover-
nor to transfer millions of dollars
from one f i scal year to the next to
cover the gap between contract
terms and the state's fiscal year.
Since it has no effect on the state
budget, the transfer has become a
matter of annual routine. Until this
year, that is.
In his recently released budget,
Pataki for the first time omitted
NPC reauthorization. The decision
cuts off the flow of $7.5 million to
the community groups as soon as
the new state fiscal year begins on
April 1.
" As it stands now, it means I
don't have a housing person come
April 1, and I don't do a housing
program," says Catherine Piecora,
executive director of the Astoria
Development Corporation, which
uses its $65,000 NPC contract to
provide a wide range of tenant
services. "I don't think Pataki real-
izes what he's cutting. We help
seniors fill out grant forms, for
God's sake."
Calls to Pataki's budget office
were not returned.
Pataki has also proposed a 75
percent cut in the program's $11 .75
million budget for next year. The
governor slated big cuts for the
programs in each of his previous
budgets only to have them
restored by the State Assembly,
but advocates fear the welfare
reform and the repeal of rent regu-
lation laws will top the agenda this
year, leaving the housing cuts
The loss of the re-authorization
poses a more immediate threat.
Because the money is not even in
the governor's budget, local
groups will have a hard time
obtaining bridge loans from banks,
according to Celia Tkaczyk, exec-
utive director of the Neighborhood
Preservation Coalition of New York
State, an affordable housing lob-
bying group.
"It gets harder and harder every
year to ask them to keep restoring
the program when they have so
many other things to worry about,"
Tkaczyk says. -Glenn Thrush
title to their rent-regulated apart- but adds that some fellow Democrets
ments without the need for lease are increasingly open to the idea. He
renewals. It also seeks to limit rent is researching a plan to address land-
hikes when landlords perform major lord complaints that tenants drag out
repairs. The bill, co-sponsored by court cases to avoid paying rent.
Assembly Speaker Sheldon Silver, is "What we need to do is increase the
expected to pass the Assembly, but number of housing court judges.
has virtually no chance of gaining appoint like 50 new housing court
Senate approval judges so that most cases could be
GOP sources teU City limits that resolved in a month," Lopez says.
Senate Majority Leader Joseph 'We need to come up with a plan that
Bruno still plans to propose a mea- eliminates the need for rent
sure that wiU call for elimination of all deposits .
rent regulation. But Lopez predicts "If they are not talking about
Senate Republicans will push primar- deposit of rent, our ears are open,
ily for the luxury decontrol plan and says Billy Easton of the New York
the rent deposit bill. State Tenants and Neighbors
The Assembly housing chief says Coalition, one of the largest pro-ten-
he opposes the rent deposit measure ant groups. -Glenn Thrush
A(tually, you (an now reach us at 120
Wall St. NY, NY 10005.
Manhattan Borough President Ruth
Messinger behind her back.
In the moments before a February
13 mayoral briefing, the city's trans-
portation commissioner was telling
colleagues about a recent hallway
encounter between Messinger and his
friend Councilman Antonio Pagan.
Messinger, Lynn reported in a voice
loud enough to be heard dearly on
press row, said "Hi, Tony" as she

All Sarah Ludwig needed from
the city's housing agency were
some building evaluation sheets.
She had no idea they'd treat her like
she'd asked for J. Edgar Hoover's
dress size.
After a month of haggling with
records access officers, Ludwig,
executive director of the
Neighborhood Economic
Development Advocacy Project, was
summoned to the offices of the
Department of Housing, Preservation
and Development near the Brooklyn
Bridge last fall. Once there, she was
given a "sample" of whatthe agency
intended to show her.
"The guy sat me in a very com-
fortable conference room, then went
into his office and started cutting,"

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whisked past Pagan. The stocky coun-
cilman, who plans to run for the
Beep post this fall when Messinger
leaves to run for mayor, responded
with "Hello, Margaret."
According to Lynn, a puuled
Messinger asked why she had been
called Margaret. Pagan then offered
MARCH 1997
the following explanation: "It's
because you've always reminded me
of Margaret Hamilton. You know, she
played the Wicked Witch in the
Wizard of Oz."
Ludwig recalls. "When he came
back all of the important information
was excised." The results (below)
resemble a cross between redacted
passages from the Pentagon Papers
and a kindergarten origami experi-
ment run amok.
"Then we started to argue like
third graders in the playground,"
she says. The official maintained he
had the right to cut the information
out because it represented the
"subjective" judgments of the
The sheets, created by neighbor-
hood groups who inspected and
evaluated buildings for HPD in prepa-
ration for the city's massive sale of
property tax liens, are intelligence
reports on the conditions of low-
income apartment buildings, docu-
menting the
condition of
doors, plaster
and paint, ele-
vators, the
cleanliness of
lobbies, even
the presence
of rats and
" other ver-
Housing groups want the infor-
mation to make sure distressed
buildings are not being included in
the tax lien sale and to identify build-
ings on the verge of abandonment
by their owners. NEDAP is contem-
plating suing HPD for lack of disclo-
sure, Ludwig says.
HPD's press office did not return
phone inquiries. -Glenn Thrush
New York Forum
present a dialogue on
Families and New York City's
Child Welfare System:
Building Stronger Communities
Panelists include:
Dr. Salvador Minuchin, pioneer of family therapy;
Luis Medina, Executive Director,
St. Christopher Jennie Clarkson;
Nina Bernstein, The New York Times;
and others. Audience participation will be encouraged.
CUNY Graduate Center, 33 West 42nd Street
Third floor television studio
Wednesday, April 2, 9:00 a.m. to 11:30 a.m.
Please R.S'y'P' to Neil Kleiman or Sharon Karow
Phone (212) 479-3344 or fax (212) 966-3407
Sponsored by City Limits, CUNY TV and
The CUNY Internship Program
Mayor Giuliani
hands off the hous-
ing department
baton-for the third
time in as many
years-to Richard
The mayors 1995 assurances that he had a strategy to preserve
afford1.lble housing have turned up empty in '97. By Glenn Thrush
he city's ballyhooed promise
to prevent landlords from
abandoning their run-down
apartment buildings in low-
income neighborhoods has
collapsed on the eve of its implementation,
City Limits has learned.
On Halloween Day in 1995, Mayor
Giuliani and Deborah Wright, then-com-
missioner of the city's Department of
Housing, Preservation and Development,
unveiled a bold new housing initiative. It
was, the mayor said, "designed to keep
housing in responsible private hands." It
was also designed to blunt growing criti-
cism that the administration clidn't give a
hoot about housing.
In keeping with Giuliani's order that
HPD never again take ownership of build-
ings from landlords in tax arrears, the sys-
tem was to offer little in the way of direct
management of broken builclings. Rather,
the city would use technology, shoe leather
and negotiating expertise to intervene with
owners before their buildings fell apart.
The flfSt component of the new system,
Wright announced, would be an "early
warning system" to predict which buildings
were most neglected. Second, the city
would provide technical assistance and
low-interest loans to well-intentioned land-
lords who had fallen on hard times. If that
failed, Wright's agency would briefly take
over the properties, almost irnrnecliately
handing them over to pre-screened private
landlords or community-based nonprofits.
All that needed to be worked out, they
said, were the technical details.
But 18 months and two HPD commis-
sioners later, the ambitious strategy is
unfunded and unfinished. The administra-
tion's Halloween commitment has turned
out to be more trick than treat.
'The trouble is that nobody at the whole
agency really gives a shit about the issue of
housing anymore," said a former top aide
to Lilliam Barrios-Paoli, the second com-
missioner to leave HPD in a year. 'There is
no budget for the anti-abandonment plan ...
With the money, this thing could be one of
the most important programs in the history
of New York City housing."
According to high-ranking administra-
tion sources and outside consultants, the
project is dying for lack of the $20 million
that former HPD officials say is needed to
get the transfer system-the key compo-
nent of the plan--off the ground. Even
though the program requires government-
subsiclized loans and grants to aid in the
repair of poorly maintained buildings, the
administration has been unwilling to com-
mit new funds to those programs in the
Fiscal Year 1998 preliminary budget.
An equally bad problem is HPD's orga-
nizational instability. Besides the repeated
loss of its commissioners, the agency has
recently suffered the defection of its devel-
opment chief, its planning and sales direc-
tor and the head of its emergency repair
program. Gone too are nearly 100 of the
mid-level technocrats who had accumulat-
ed years of housing knowledge necessary
to make the plan work.
'They're going to just limp along,"
says Joe Center, a longtime housing
activist and nonprofit developer. "Then
they are going to let the whole anti-
abandonment thing clie in the wind. No
money. No commitment. Nothing. It's just
an unbelievable tragedy."
Mayor Surprisingly Amenable
HPD sources say the future of the plan
brightened briefly last year, when then-
commissioner Barrios-Paoli met with the
mayor to seal a deal that would have
pumped millions of dollars into anti-aban-
What happened at that meeting isn't
entirely clear, but Barrios-Paoli report-
edly asked that HPD be allowed to keep
some or part of the estimated $15 to $20
million that has been saved by selling off
thousands of tax-foreclosed, in rem
HPD sources say the mayor seemed
surprisingly amenable to Barrios-Paoli's
suggestion. ''The idea was that half of the
money would go to the anti-abandonment
program and the other half would go into
economic development initiatives," an
administration source says. "But it died
because she didn't really keep the pres-
sure up."
Barrios-Paoli denies ever having made
a deal with Giuliani, but says: "It's cer-
tainly an idea I would support. I've always
said that the resources for anti-abandon-
ment can come from money already in
HPD's budget." And HPD's newest com-
missioner, Richard Roberts, appointed last
month, told City Limits he needed to study
the issue before commenting on the need
to fight to keep the in rem money inside
the agency. (See sidebar.)
But another current Giuliani commis-
sioner who has frequent dealings with
HPD says the Barrios-Paoli cost-recovery
idea is coffin-nail dead: "Any more money
going into housing? I'd call that extreme
wishful thinking."
Indeed, throughout the Giuliani admin-
istration, the focus in housing has been to
save money, not to spend more on the
expensive building renovations that have
been the heart of HPD's traclitional mis-
sion. In fact, the only mention Giuliani
made of housing in his February manage-
ment report was that the city continued to
sell off an average of 4,000 buildings a

year to private landlords, nonprofit groups
and tenant-run cooperatives.
Ingttnlous Sch.mtt
A year ago, Giuliani's fmance commis-
sioner figured out an even more ingenious
scheme to generate long-denied revenue off
of the city's housing stock. By selling off
old tax-lien debt to private investors-who
in turn have hired collection agents to
squeeze payments from owners-the city
netted more than $400 million without hav-
ing to threaten takeover of a single building.
But in hatching the tax lien sale,
Giuliani's minions initially made no provi-
sions to protect the buildings' low-income
tenants who might have faced evictions or
deteriorating conditions if owners, unable
to payoff the liens, abandoned their build-
ings. (See "Sell Out" in the May 1996 City
Limits.) In a frenzied legislative session
before the lien sales, tenant advocates,
council staffers and Harlem Councilwoman
Virginia Fields forced the city to pluck
2,500 "distressed buildings" with 60,000
apartments out of the lien sales pool.
As importantly, the law codified the
Wright anti-abandonment plan, forcing the
administration to defend its record during
periodic oversight hearings.
At just such a hearing on January 31,
HPD Deputy Commissioner Cynthia
Fisher indicated the agency would unveil a
"pilot" version of the property transfer pro-
gram by the end of the year. When pressed
for more details, Fisher would not disclose
which neighborhoods would be involved-
but did indicate the program would rely
heavily on for-profit owners willing to
invest their own resources on buildings.
"HPD is still planning for a compre-
hensive citywide anti-abandonment pro-
gram," she assured the three councilmem-
bers that stayed for the duration of the
meeting. "But because of the limited
amount of capital dollars available, we will
make a major effort to identify owners
who can [take over distressed buildings)
without city money."
''There are enormous logistical prob-
lems," she added, in an apparent allusion
to the agency's cash and personnel woes.
Fisher said buildings that couldn't
independently find new, white-knight
ownership would rely heavily on the 7a
program, in which court-appointed admin-
istrators are empowered to take control of
distressed buildings. By using HPD-subsi-
dized 7a loans, the emergency repair pro-
gram and heating fuel drops, administra-
tors are able to stabilize poorly maintained
buildings and resume rent collections.
But, as of now, there is almost no fund-
MARCH 1997
ing for the program. Last year, Giuliani
budgeted about $1.5 million for 7a loans,
and this year's budget calls for only
$500,000 more, which would pay for the
rehab of about 70 apartments.
Moreover, HPD's recent attempts to
streamline the 7 a process have been a fail-
ure. Two requests-for-proposals sent to
community groups interested in becoming
7a administrators have been withdrawn for
retooling during the last year. And the lat-
est version of the RFP contains no refer-
ence to the use of 7a as an anti-abandon-
ment centerpiece.
Systttmatically Pur .. "
Even with a new and adequately-fund-
ed 7a program, the anti-abandonment sys-
tem would likely require extra money to
help stabilize the 60,000 units of distressed
housing that were pulled from the city's
tax lien sale because they were in immi-
nent danger of being abandoned.
How much money would be needed?
Even the most modest $lO,OOO-per-unit
repair regimen would cost the city $600
million. Yet so far, the mayor hasn't been
willing to allocate even a fraction to the
loan and grant programs that would be
used for anti-abandonment purposes.
Fisher, the highest-ranking HPD
holdover from the Barrios-Paoli regime,
refused City Limits requests to comment
on these issues.
"What you've got here is an agency
that is being systematically purged of any
knowledge and talent," says Jay Small,
executive director of the Association of
Neighborhood and Housing Development.
"And it indicates a lack of interest in hous-
ing on the administration's part."
Small and other housing experts say
existing financial tools HPD could use to
help struggling landlords stabilize their
buildings have also been deprived of seri-
0us money. The Participation Loan
Program, which combines government and
bank money to give landlords below-mar-
ket-rate loans for building rehabs, has suf-
fered both federal and city cuts in the ' 90s.
And the Article 8a program, which offers
low-interest loans for less extensive work,
has had its budget doubled in Fiscal Year
1998 to $6 million, but that's still a frac-
tion of its 1980s funding level, when HUD
bankrolled the program.
Add to this the fact that the federal gov-
ernment has stopped issuing new Section 8
vouchers for low-income tenants-some-
thing many landlords in the city's poorest
neighborhoods rely on to keep rent rolls at
a level where they can pay for basic main-
tenance-and the dimensions of HPD's
crisis becomes clear.
Foolishly Optimistic
Desperate to salvage the anti-abandon-
ment effort without reasonable funding,
agency policymakers have begun consider-
ing a scheme to take money from the rent
Mister Roberts'
ichard Roberts, the youthful new commissioner of the city's troubled hous-
ing agency, is embarking on a job that is likely to give him a few gray hairs.
Roberts, a 32-year-old fonner aide to City Hall's workfare and privati-
zation guru Richard Schwartz, was due to take over the reins at the Department
of Housing Preservation and Development at the beginning of March. Ulliam
Banios-Paoli, the culT8nt HPO commissioner, left the agency's helm after less
than a year on the job.
"Clearly the agency has been focused on implementing strategies to change
the city's role as landlord fllast resort," Roberts told City Umil$. "That will
continue to be my priority."
Roberts is a Yale Law School graduate and former vice-president of the
Edison Prqject, which promotes the privatization of public schools. He also guid-
ed the city's ANCHOR program, a public-private partnership to spur retail and
residential development in poor neighborhoods. A year ago, he left his City Hall
job to become a vice-president in the community relations department of Mount
Sinai Hospital.
What other priorities does he have in mind? "Personally, I am very interested
in seeing an expansion of the ANCHOR program," Roberts says.
Finding applicants for the job was difficult, according to agency stalTers and
advocates. "In a ~ they needed to get a young guy like Richard," a source
close to Roberts says, "because an older person would have been less willing to
jump onto the Titanic." -Glenn Thmh

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rolls of better buildings to pay for repairs
on the worst-maintained buildings with the
poorest tenants.
"It's their idea to cluster the buildings
together, the economically viable ones with
the worst ones," says Brent Sharman a
housing analyst with the Community
Service Society whom HPD consulted on
the plan. "But I think HPD's assumptions
about the average rent rolls [of the better
buildings] are foolishly optimistic. Even in
the best buildings, you're not dealing with
wealthy tenants .... I think they are increas-
ingly realizing the folly of it."
If the loan programs and third-party-
transfer system are hurting for lack of cash,
the "Early Warning System" has fallen vic-
tim to HPD's personnel turnstile. The main
architect of the system, which is supposed
to collect data on a building's viability in a
central geographic information system,
was former deputy commissioner Harold
Shultz. He reportedly got into a fight with
Barrios-Paoli and was driven from the
And although Fisher promised a pilot
of the system sometime later this year, she
warned it would be a scaled-down version
that probably wouldn't be accessible to the
public. Others offer a less charitable
description: "There's been no computeri-
zation at HPD at all," says a Giuliani
administration source.
Small believes that the administration
has been actively trying to stonewall the
dozens of community housing groups
seeking information on the status of the
system. "The early warning system is bull-
shit, it doesn't exist and there's no indica-
tion it's ever going to exist," Small adds.
Meanwhile, the nonprofit housing
groups say they need detailed early warn-
ing information-such as housing court
records, code violations, tax information
and fire department inspection records-to
help tenants fight negligent landlords or
even work out their own deals to take over
the distressed buildings.
But even the early warning system's
ills boil down to the issue of money.
Ul timately, the purpose of the system has
always been to identify buildings that can
then be channeled into the anti-abandon-
ment system. Without a funded anti-aban-
donment strategy, the Giuliani admi nistra-
tion has no incentive to identify even more
poor tenants that it can't-or won't-help.
"It 's all semantics," says ANHD's
Celia Irvine, who was instrumental in
drafting the City Council 's housing law
barely a year ago. "If you aren't willing to
commit the money, everything else is
basically useless. "

Divided and under attack, SRO tenants are finally joining forces.
By Mary Blatch
ob Grossman likes Riverside
Park, he just doesn't want to
live in it. He prefers his tiny
warren of a room crammed
with stacks of books in the
Riverside Towers Hotel , where the retired
teacher has lived for 10 years. But if the
state legislature allows rent protection
laws to expire in June, he may be evicted
from his SRO room and be spending more
time than usual in the park.
While apartment renters make up the
majority of the people who would be hurt
if the city's rent control and rent stabiliza-
tion laws aren't renewed in Albany this
June, some 40,000 SRO tenants like
Grossman probably have the most to lose.
Many are only one step away from home-
less ness, and rent protections keep them
off the street by keeping rents rising at a
slow pace and preventing arbitrary evic-
tions. Over the last two decades several
Upper West Side SROs have been
destroyed, many to make way for more
lucrative hotels and apartments. "This is a
very desirable neighborhood," says
Grossman. "They want to get rid of the
poor people."
Amid these fears, a new organization,
SRO Tenants United (SROTU), is build-
ing the first major citywide SRO rights
group founded on the principle of orga-
nizing tenants. "The rent law is the issue
people are responding to the most, but
there are a lot of particular SRO circum-
stances not addressed by the rest of the
tenant movement," says Terry Poe of the
Westside SRO Law Project, one of the
organizers of SROTU. More than 100
people were present at its third meeting on
February 6. Poe says his actual member-
ship is twice that number.
SROTU is starting simple, organizing
members to help save rent regulations by
writi ng letters and coordinating visits to
elected officials. "We are overcoming the
idea among many SRO tenants that things
are so bad nothing can be done," he says.
There is good reason for SRO tenants
to be demoralized. Over 100,000 single-
room units, among the lowest priced
affordable housing the city has to offer,
have been lost since 1960. Gentrification
in neighborhoods like Harlem and Hell 's
Kitchen has resulted in the conversion of
MARCH 1997
many SROs and rooming houses by land-
lords looking to make a greater profit.
Don Lewis, the owner of Grossman's
building, was fined $25,000 by the state in
1989 for filing improper rent registrations
and overcharging his tenants. According to
Leon Bell , the attorney at the Westside
SRO Law Project who handled the case,
rents that should have been legally set at
$200 to $300 a month had been illegally
pushed up to nearly $1,000 a month.
For his part, Lewis denies doing any-
thing wrong. "This is a very luxurious
neighborhood and the residents are living
here for pennies," he told City Limits. "The
average rent here is $300 a month. In sur-
rounding buildings, it's $2,000."
T.nants FIN
If the tenants won a technical victory at
Riverside Towers, the case also illustrated
the difficulty of organizing SRO residents.
Although about 50 tenants were involved in
the case, Grossman says many tenants fled
the building and only three of Riverside's 19
remaining residents, including Grossman,
have joined the coalition.
There are other more basic problems
with putting together a coalition of poor,
mostly solitary tenants scattered
throughout the city. "They are mostly
single people who tend to keep to them-
selves," says Poe "Some of them are
eccentric or fragile due to mental illness
or substance abuse."
To bring together such tenants, Poe
plans to fortify the coalition's structure.
"When we have a moment to breathe, the
first thing we want to do is start organizing
a network of building councils and devis-
ing a more formal structure for the organi-
zation," says Poe.
Currently, the organization is funded
by the East Side and West Side SRO law
projects, the Goddard-Riverside Com-
munity Center and member donations
from tenants, but SROTU is also applying
for foundation grants.
When the rent regulation fight ends,
they plan to study the housing codes that
affect SROs and push for legislation to
make it harder for landlords to harass or
evict tenants.
To Grossman, those larger goals and g.
his own hopes are intertwined. ~
Participation in SROTU is a matter of sur- ~
vivaJ, he says. "This guy [the landlord] '"
PIPEl iNE ..
never stops, so I will continue in the orga- Retired teacher Bob
nization," he says. Grossmall isfight-
ing to keep his
Mary Blatch is a City Limits intern.
affordable room all
Riverside Drive
~ .. ... ......... .......................... .
Frank Lee of the Leegis Group
inspecting the Flushing Chase
branch his firm renovated.
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The Chase Manhattan Bank is committed to this course. Carol
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important and rapidly growing market." Which must be music to
Frank's ears.
L....................... Community Development Group
CHASE. The right relationship is everything.
1997 The Chase Manhattan Bank. Member FDIC.
Equal Opportunity Lender (5)
he work week usually starts winding down by 4 o'clock
on Thursday afternoons at the Sanitation Department
office building in Lower Manhattan. Thi Thursday seems
about the same. All is quiet in the lobby. Until 4:05, that
is, when nearly 100 men and women in well-worn labor-
ers' clothes push open the front doors and head for the elevator bank.
They want the seventh floor, where Commis ioner John Doherty works.
"They lVon'l respeCI
us, Ihey IVan 'I listen
to LIS, .. says WE?
worker Glenn
Turner (left). He
and ACORN orga-
nizer Fred Simmons
were among the
protesters at the
Departmenl of
Sallitatioll ill earl.
Two cops intercept them. "Where do you think you're going?"
says Officer Fernandez, drawn into the press of bodies, eyes dart-
ing left, right and center. "Where you're going is not a public area.
Back up. Just back up." Officer Hawkins blocks the men and
women from stepping into the elevators. Bewildered bureaucrats
take haven in the back of the lobby.
"What do you want here?" asks Fernandez, providing the cue
for tbe protesters to begin chanting.
"We want work! We want work," they shout over and over. It's
not that they don't have "work" per se-they are on welfare,
enrolled in the city's workfare Work Experience Program (WEP).
They spend their days picking up litter on city streets. What they
want is real work with a real paycheck.
The cops don't like the frenzy. Hawkins threatens the leaders
at the front of the crowd with arrest. Sirens bellow on the street
and five more cops rusb inside.
That 's when the police pull an old trick. They offer to take five
leaders from the group-including a pair of organizers from
ACORN, the Brooklyn-based activist group that planned the
protest-upstairs to meet the commissioner. First, the rest of the
group has to move outside. The leaders agree. But once they are
on the seventh floor, Officer Fernandez informs them the com-
missioner and his aides don't want to see them.
"So we came up for nothing," says an incredulous Sharon
Bush, one of the organizers. "He's dissing us right now."
"We could lock you up right now," replies the cop, as his part-
ner hurries a few worried department bureaucrats to an inner door.
"It's time to leave the building."
Outside, a man wearing a cap and a vinyl coat stands at the
edge of Tom Paine Park beside the cop cars and 70 or 80 other
WEP workers. His name is Julius Manigault. He's just finished
his sbift sweeping the streets in Washington Heights. "I clean
streets 41 hours every two weeks wearing filthy clothes other
people have worn, picking up garbage bags in drug-infested
areas with needles and all kinds of contraband. That's not
right," he says.
"If they need this work done, they should give me a job," be
adds. "But this program, it's not designed for that."
he Sanitation Department happens to be
headquartered in an art deco box of a build-
ing put up at the height of Franklin
Roosevelt's Public Works Administration in
1935. That 's when the government put mil-
lions of unemployed men and women to work-and gave them
a paycheck, not a welfare check. The historical irony was
apparently overlooked by Doherty, the cops and Mayor
Rudolph Giuliani. In the weeks since his officers subdued the
mid-February WEP workers' demonstration, Doherty has still
refused to meet with them.
But City Hall may not be able to ignore the WEP workers and
their demands much longer. Mayor Giuliani has been stoking the
WEP program up to full fire for more than a year, placing tens of
thousands of welfare recipients in low-skilled city jobs and getting
huge value from what was once just a welfare check. During most
of that time he has kept municipal union leaders mollified by con-
vincing them their members' jobs and work standards would not
be undermined by the presence of a massive new unpaid labor
force. But the mayor's assurances have begun to ring hollow in
the halls of big labor.

As Cit)' limits goes to press, Executive Director Stanley Hill of
Di strict Council 37 of the American Federation of State, County
and Municipal Employees-which represents about 120,000 city
workers-is deliberating with leaders of the AFSCME International
on how to begin organizing New York's workfare workers on a
much larger scale. The move comes on the heels of the February 18
passage of a resolution at the national meeting of the AFL-CIO in
Los Angeles, which called for an all-out organizing campaign to
secure collective bargaining rights for people on workfare.
law last year authorized a plan to move millions of welfare recip-
ients into jobs or workfare over the next few years-including
hundreds of thousands in New York City. Soon after the bill
became law, national union leaders began worrying about the dan-
ger of creati ng a new, unpaid labor force that could knock the
floor out from beneath their members' wages and work standards.
When they saw how the program was playing out in New York,
their concerns mounted.
This could mean serious problems for Giuliani 's massive work-
fare program. In their preliminary outline of the campaign, union
officials say they want workfare programs to abide by all labor
laws, to ensure workers' access to education and training-and to
guarantee that there's a clear ladder from workfare to paid, union-
scale municipal jobs. The mayor's program offers none of these
"It's an attempt to substitute one class of poor people for
another class of workers, who, if you succeed, will become poor
themselves," charges Paul Booth, director of organizing for the
AFSCME International. "The politicians are trying to drive down
the tandards of the rest of the workforce. That's their brilliant and
evil motivation."
Ultimately, labor leaders also began to learn how workfare
workers might be effectively organized-thanks in part to close
ties between ACORN and the Service Employees International
Union, which represents municipal and low-wage workers in
many cities, and between AFSCME and another community orga-
nizing network, the Industrial Areas Foundation.
"These workers should be treated with the same respect and
dignity as our membership," Hill says. "They are workers who
need some collective bargaining. And I have to represent my
members as well, so that there won't be any displacement."
While Hill insists thi s doesn't mean he's preparing for a con-
frontation with Giuliani , a top DC 37 aide, speaking on the con-
dition of anonymity, is a bit more direct. "A lot of us are looking
at this as the fight of our lives," the aide explains. "We will do
everything we can to win this one."
"Workfare programs in New York and Los Angeles have been
sort of canaries in the mine shaft," says ACORN founder Wade
Rathke, who is also the founder of the two fastest growing locals
in the SEIU. "There's no more dramatic situation than what we've
seen in New York. It 's not a pretty sight."
The Personal Respon ibility Act President Clinton signed into
t was the group's tenants who first
raised the workfare alarm at the
Fifth Avenue Committee, recalls
Belliamin Dulchin, director of organiz-
ing for the Park Slope-based housing
and community development nonprof-
it. "Particularly people who were
going to school, getting GEDs, or in
ESL programs, who were getting
yanked out of school and being told to
report to WEP to sweep the streets."
Dulchin began going out to
Prospect Park to talk to other WEP
workers, who complained about the
lack of proper work clothes, no health
and safety training and an inadequate
grievance process. They had no means
of demanding better working condi-
tions, sick days and vacation pay, or
similar benefits afforded their paid
coworkers. As far as WEP was con-
cerned, what these folks did wasn't
even considered work. Instead, city
officials used euphemisms like "paying
back the community" and "job readi-
ness" to describe their daily grind.
They were laborers in limbo.
But Dulchin and his counterparts at
two other nonprofit groups, Paul
Getsos from Community Voices Heard
MARCH 1997
and Heidi Dorow from the Urban
Justice Center, took a different view.
Pooling their resources-and 890,000 in
grants from a number of foundations
including the Jewish Fund for Justice,
the Stern Family Fund and the New York
Foundation-the three groups started
a coalition called WEP Workers
Together to help people in the city's
workfare program fight for improved
working conditions and a chance at a
real job. It's one of three campaigns
underway citywide-the others are
run by ACORN and WorkFairness.
WEP Workers Together relies on
five part-time organizers from the
three sponsoring organizations, who
split their time between the WEP work
and their regular jobs. It's a small but
focused enterprise.
The organizers regularly go to WEP
sites armed with leanets explaining
everything from workers compensation
laws to how to file a safety and health
complaint with the state. They show up
early in the mornings before work
crews are sent out from sanitation
garages, or at lunch time, when groups
of Parks Department WEP workers are
gathered together on their break.
Often, organizers must play cat
and mouse with agency supervisors,
and getting ejected from a site is not
unusual. It's not surprising, then, that
many workers are afraid to come for-
ward for fear of being sanctioned or
losing their benefits. What's more, the
population is, by definition, a mobile
one, with workers regularly being
cycled in and out of sites, sometimes
as often as every few months. The
question, then, is how to get the most
bang for the buck.
WEP Workers Together has gener-
ated news coverage with a number of
protest actions in recent months, and
members have testified at public
hearings in the city and in Albany. It's
all part of an overall strategy that
combines site-based agitation with a
public media campaign. To date, some
500 workers have participated in WEP
Workers Together actions at 20 loca-
tions citywide.
"The issue is to create a moral cli-
mate," says Dorow. "You don't have to
organize 35,000 people to have a criti-
cal mass and create public pressure on
the city administration."
ACORN's Sharon
Bush turns her
011 the supervisors
of Sanitatioll
District J 7 ill
ver the winter, WEP workers wearing their own
clothes beneath reflective orange vests, walking
the streets with garbage bins alongside, have
become as ubiquitous as cops on scooter patrol.
They trudge through the parks in groups, clearing
brush and plucking up litter. They clean and paint hallways in city
housing projects. And they process paperwork in city offices. The
number of hours they work is based on the value of their welfare
- check and food stamp allotment, divided by the $4.75 minimum
j wage. For those on Home Relief, the welfare program for adults
without children, that can mean roughly 70 hours of work each
month for just over $320 in benefits-less than half of it in cash.
If they miss one day of work, they can be bumped off public
assistance entirely. Only a few dozen have moved into paid city
jobs, most through a special program set up by AFSCME and the
Board of Education to train cafeteria workers.
These men and women are walking evidence not so much of a
new agenda of "personal responsibility" in welfare, but rather of the
awesome labor and welfare savings achieved by the Giuliani admin-
istration during the last two years. The welfare roJls are down by
more than 220,000 since March 1995, saving the city $58 million
each month, according to the city comptroller. WEP is one of the
mayor's most effective tools for moving high numbers of men and
women off the welfare rolls. And his gains are quickly mounting.
During the 16 months ending last October, the city placed a
total of 166,683 men and women into the program, according to
the Mayor's Office of Operations. That's nearly 10,500 new peo-
ple each month. Yet the HRA press office says there are currently
only 38,000 public assistance recipients in WEP. If the adminis-
tration's numbers are accurate, then, as many as 130,000 people
have either been kicked off the welfare rolls for failing to abide by
the strict work rules, been moved temporarily out of the program,
or they've left welfare of their own accord.
Those who' ve stayed have many complaints, ranging from
the lack of uniforms to reports of demeaning or dangerous
assignments. WEP workers report that supervisors have forced
them to clean toilets and do other janitorial work even though
they' ve been assigned to a clerical job. Others say they've been
asked to handle dangerous cleaning chemicals without the prop-
er gear. But the most common complaint heard from these work-
ers is more fundamental.
"It's a matter of respect," says Keith Brabham, a sanitation
department WEP worker. He and his colleagues standing outside
a Brooklyn sanitation garage say they want assignments that teach
them new and useful skills and offer the promise of a real job. And
those already enrolled in college or training programs want to
continue with their studies and not have to clean city streets for 20
hours each week.
Many WEP workers struggle with their pride when they talk
with outsiders. They are defensive, pointing out that they've
worked and paid taxes much of their lives, and angry that the pro-
gram looks more like public punishment than ajob. It doesn't help
that WEP workers have to walk the streets and parks sheathed in
fluorescent orange vests.
"It 's like a chain gang," says Wayne Hargrove, a former air
traffic control dispatcher in the Air Force who also worked as a
medical lab technician in the 10 years since he left the military.
He's been on Home Relief for a year.
Hargrove says he sought training to update his skills, but the
city was no help in finding a program. He was doing clerical work
at the parks department as a WEP. But now he's assigned to pick
up garbage in the park. "When people learn some new skills,
that's when they put them out picking up garbage. It's debilitating.
"It's fine to demand that people look for jobs. Give people
skills. I need my lab skills upgraded. I haven't been an air traffic
dispatcher for years. But there's absolutely nothing for training.
I've looked all over for a training program. There's nothing."
P until now, only a handful of small communi-
ty organizations have set out to organize the
WEP workers. ACORN is the largest among
them, with the most organizing resources and
longtime support from philanthropic power-
houses such as the Catholic Church's Campaign for Human
ACORN has been working to build a mass base of low-income
people for nearly three decades. Its earliest work was in the wel-
fare rights movement. By expanding WEP, says ACORN New
York Director Jon Kest, City Hall has handed the group a major
"Normally it's very hard to do welfare rights organizing," he
explains. "But now you have pissed-off people forced into easi-
ly organizable units. They' re at the workplace, at the sanitation
garages and housing projects. They set these people up to be
Yet as it stands now, ACORN has only seven full-time orga-
nizers devoted to the campaign and is unlikely to muster the num-
bers they need to become a collective bargaining force represent-
ing a majority of WEP workers. "Only the unions have the
resources to organize this many people," Kest says.
On Valentine's Day, Stanley Hill and AFSCME International's
legislative director for the northeast region met with Rathke, Kest
and a handful of others to discuss what each organization was
doing on the workfare front.
Three days later, the leaders of the AFL-CIO met . in Los
Angeles and issued their groundbreaking workfare resolution. The
AFSCME International, along with the SEIU and the
Communications Workers of America, were committed to orga-
nizing the hundreds of thousands-and potentially millions--of
people already in or headed for workfare programs nationwide.
It's taken a long time to reach this point. Here in New York,
Stanley Hill has spoken out on the issue only a handful of times,
first when pressed by City Limits last summer, saying only that
DC 37's past efforts to organize WEP workers had been blocked
by the city's Office of Collective Bargaining.
Soon after, following enactment of the 1996 federal welfare
bill, Hill appeared in the daily papers denouncing the mayor's
rapid ex pan ion of the program. But he quieted his criticism after
meeting with the mayor, saying he believed City Hall was respon-
sive to concerns that WEP workers might take positions previous-
ly held by unionized workers. Part of the deal he worked out with
Giuliani included three joint committees to oversee the WEP pro-
gram, teaming top municipal union leaders with mayoral advisers
including WEP architect Richard Schwartz.
But the committees rarely met. At the beginning of this year,
Schwartz announced he was leaving the administration to market
his workfare expertise with a national consulting business. And by
that time it was increasingly obvious to all who paid attention-
and especially to tens of thousands of unionized city employees-
that WEP workers were doing entry-level jobs union people had
done in the past, from administrative assistants and office aides in
welfare offices to administrative associates in the Fire
Department. WEP workers have taken over some subway station
janitorial jobs formerly done by members of the Transit Workers
Union, and, according to Teamsters Local 237 Director Nicholas
Mancuso, 2,()()() WEP workers are now "custodial aides" at the
small political office on West 14th
Street office is home to the
International Action Center and a
few other loosely affiliated groups-
including the nascent, volunteer-run
WorkFairness campaign. The lAC was
established five years ago by former
U.S. Attorney General Ramsey Clark
and is most famous for its fight
against the United Nations economic
blockade of Iraq.
WorkFairness has a similar radi-
cal edge, but its focus is local. A
group of workfare workers staffing
desks at the city's Office of
Employment Services (OES), the wel-
fare division that oversees workfare,
started the organization last year.
"OES is like a heart pumping out
people, and that way you get con-
MARCH 1997
tacts at sites all over the place,"
says William Mason, co-chair of the
group. Early on, Mason sought the
help of Larry Holmes, a professional
political organizer with the National
Peoples Campaign and Workers
World, who is also volunteering his
time. The group has gotten in-kind
help with mailings and other tasks
from a handful of unions, including
UNITE and AFSCME Local 420.
Members travel to small communi-
ty meetings to provide hands-on
counseling to welfare recipients. But
their greatest strength may be in
mobilizing the traditional left. "We
bring to it not just the base, but
women's groups, radicals on campus,
ministers," says Holmes. "Folks
whose cause was EI Salvador 15 years
ago, now it should be WorkFairness."
In mid-February, about 15 work-
fare participants showed up at the
14th Street office to hear the leaders
speak-and to get help on their indi-
vidual complaints from an equal num-
ber of activist volunteers.
Mason's co-chair is Vondura
Jordan, an eloquent orator who just
finished a year-long WEP assignment
at Harlem Hospital and is now trying
to mobilize union members. "I tell
them, 'I'm your past and I'm your
future,'" she says. "I'm struggling to
keep a roof over my head and I'm try-
ing to get people to stand up for their
rights, just like the unions years ago.
And I'm your future because I'm where
you're headed. No job. Just work-
fare." -AW
The leaders of the
all-volunteer Work
Fairness campaign
hope to build a
political base
amoJlg stlldellls
and the traditional
left. Organi:er
Larry Holmes (left)
and campaigll co-
chair VOlldura
Jordall . a WEP
1V0rkel; lead a
meetillg at their
14th Street office.
Housing Authority. Last month, Mancuso threatened t9 take the
city to court on the job replacement issue. Members in some of
DC 37's own locals, particularly the hospital and social service
workers, were growing angry.
"There have been a number of major complaints," says Bill
Henning, vice-president of Communication Workers of America
Local 1180, which represents 6,500 middle-level supervisors in
several city agencies. "Certainly the WEP workers are doing work
that used to be done by members of the unions."
For several months, DC 37 officials said they did not believe
they had legal standing to organize the WEP workers. The main
difficulty was a 1981 decision by the city's Office of Collective
Bargaining, based on an earlier incarnation of the WEP program,
that outlawed workfare unionization. But a number of lawyers and
unionists now argue the 1981 decision is irrelevant: the cun'ent
WEP program, they charge, bears virtually no resemblance to that
of 16 years ago.
With the facts underlying the ruling having changed so dra-
matically, they say, it 's time to make a new challenge. And the
unions are finally moving that way.
n the national front, AFSCME made its support
of workfare organizing explicit in January by
backing the efforts of a small, new union local in
The union had paired up a few years ago with
the Industrial Areas Foundation, a national community organizing
group, to create the Solidarity Sponsoring CommitteelLocal 1711 ,
organizing low-wage employees of Baltimore city contractors.
The IAF demanded local legislation requiring city contractors to
pay higher wages, and the legislation passed. Today, members of
the local who were making the minimum wage are now earning
$6.60 an hour or more. And jobs that had been contracted to the
private sector have returned to government agencies, helping
AFSCME's membership.
Now the city's burgeoning workfare program is a threat, says
IAF organizer Jonathan Lange. "There are rules against displac-
ing city workers. But it's not considered displacement if a low-
wage contract worker loses a job to a workfare worker in a city
agency. We don't want to defend the old welfare system, but
nobody supports the notion that reform should be done at the
expense of low-wage workers."
Local 1711 and its 400 members have mounted a campaign to
organize workfare workers, demanding they be given all the rights
of paid employees-including a living wage, not a welfare check,
in exchange for their toil.
Meanwhile, AFL-CIO leadership, including President John
Sweeney and national AFSCME president Gerald W. McEntee,
are lobbying the Clinton administration's labor and human ser-
vices officials to issue regulations that would place workfare par-
ticipants under the same labor laws as their paid colleagues,
reports one top union official.
Workfare participants "are not at this time considered to be
employees" as far as the administration is concerned, according
to Labor Department spokesman Randy Wilson. Therefore they
don't qualify for the same protections as other workers. But the
lobbying appears to be having an impact. Wilson says the work-
fare labor regulations "are being actively di scussed in various
working groups between the agencies. It's something they are
agonizing over and talking about."
But the most crucial fight is at the local level. Mayor Giuliani
contends WEP workers are not employees at all, and that if they
fail to show up for their shift, they can lose their welfare benefits.
Beyond that, his pre s office refuses to comment on the unioniza-
tion efforts.
Because WEP workers are working for the city, it's up to the
city's Office of Collective Bargaining to decide whether or not
they can unionize, says OCB spokesman Rory Schnurr. "There's
a great likelihood a case will be filed before long," he adds. At that
point, a ruling will be made by a panel of the three independent
OCB members, who are appointed jointly by representatives of
the mayor and the unions.
Whatever the city and the Clinton administration say, Rathke
says the distinction makes no difference to him.
"The question of whether a WEP worker is an employee is a
totally different question from whether or not they can have a
union," he says. "If this looks like a cow then it's a cow. And they
will stampede like cattle to protect their rights."
n an industrial area south of Linden Boulevard on the
edge of Canarsie in Brooklyn, two city sanitation garages
occupy a block-square cinder block shed.
Inside, uniformed sanitation workers stand around
talking about the overtime they will be making thanks to
two February holidays. Beside them are five WEP workers, all of
them black women and older men in civilian clothes, standing
around, speaking quietly with ACORN organizer Sharon Bush.
It's the first time ACORN has sent anyone to the site, and
some of the WEPs are wary, reticent. But 50-year-old Hartley
Stevenson speaks up, saying how unhappy he is about being
given a filthy Sanitation Department coat and second-hand
gloves to wear when he started the assignment, never being
allowed to take them home and wash them. He says he receives
$68.50 every half-month from Home Relief, plus a monthly
installment of food stamps. For that, he is supposed to work
seven hours a day five days a week, every other week. He can't
afford not to-it's just about his only source of income.
Stevenson signs an ACORN paper authorizing the group to
represent him in any collective bargaining with the city. Others
sign as well , offering their phone numbers and addresses. One
man says he can't afford to clean his work clothes-he just wears
them day after day. "I don' t mind the work," he adds. "I just want
to be paid."
Within a few minutes, two badge-toting supervisors ask Bush
to leave the garage. Outside, as a dozen trucks roar past, the two
supervisors tell her she should not be speaking with the WEP
workers while they are on duty. Bush promptly turns her organiz-
ing charms on them.
"We' re not here because of you all ," she says. "It's the WEP
program we have problems with. Don't you think it's disrespect-
ful that these men and women aren' t given coats of their own that
they can take home and wash?"
"Yeah, I see what you' re saying," says one of the supervisors,
Mr. Sampson. But it's not his business. "Talk to the assistant bor-
ough supervisor," he says.
Bush is careful not to antagonize the bosse . Her approach
has its payoff: At 8 a.m. in the District 5 sanitation garage on
MARCH 1997
Montauk Avenue, WEP workers are piling into a van to head
out to their street assignments. The supervisors turn their backs
and head into their offices as Sharon goes into the garage to
chat for a few minutes with the workers, most of whom know
her. She's pushing them to come down to an ACOR meeting
on Lincoln's Birthday, a city holiday. And she lets one or two of
them know that the group may try to shut down a work site in a
couple of weeks if Commissioner Doherty doesn' t agree to
meet with the workers.
At this point, Bush and the other organizers are vi siting their
sites at least once a week, maintaining contact. Despite orders
from headquarters to keep community organizers out of the
garages, some Sanitation Department employees are quietly
allowing the organizing work to go forward. ACORN reports it
has gathered collective-bargaining authorization signatures from
about 2,000 sanitation WEP workers (many whom may have
since left the program), and about as many altogether from with-
in other city agencies.
However, that 's only a tiny percentage of the tens of thousands
of people flooding into the WEP program.
Seven community organizers are nothing combined to the
power of an established union's potential organizing and lobbying
capacity. When DC 37 gets involved, the participation of paid
city employees is likely to become far more explicit.
Paul Booth, the AFSCME International's organizing director,
says one of the union's most powerful tools will be its shop stew-
ard , who already work at most of the sites where WEP workers
are a signed. "Combined with the groups doing the organizing on
the outside, I think we will have the ability to reach 35,000 or
50,000 workers," he says. "The stewards will give them a card to
sign up for the union at the appropriate stage."
Neither he nor Hill will give any details about when the union
effort will kick into gear, nor will they say how many organizers
are to be committed to the task. As City Limits went to press, Hill
said he was scheduling meetings with AFSCME International to
layout the strategy. In the meantime, AFSCME and its fellow
AFL-CIO unions are working on the Clinton administration.
"Congress left undefined whether these people are workers," says
Booth. "We will make government change their mind.
"A worker is someone who is commanded to work. We' ll just
have to get the government to do what's right."
A voter's guide
to three years
of Mayor Giuliani's
~ .... money maneuvers.
/ ~ - - ~ .
clutched his retractable pointer and
began buggy-whipping a long series of
huge management charts in front of
his fawning commissioners and the
yawning press.
"I tliink this shows the responsibility
of our administration," Rudolph Giuliani
lectured, soothed by the reassuring
drumbeat of his steel against the compli-
ant, taxpayer-financed placard.
But by the time his special events staff
brought around the seventh rile of charts,
a reporter in the first row 0 City Hall
pews moaned loudly enough to be heard by
the mayor's right-hand man, Randy Mastro.
"Good lord, not another stack." The smile
that had been fixed to Mastro's lips through-
out the briefing was instantly drained of its
good will. But the mayor was cheerfully
oblivious and prodded forward, the head
of his 'pointer thwacking away.
"Okay," he added, "this next
graph shows .... "
For Giuliani, the arcane city
budget and agency performance
I , I \ , I I I
By RJ. Matson
charts were tools of self-validation, proof
of his sobriety as a city manager and,
ultimately, his fitness to be mayor again.
"The thing that he wants to project is
the sense that he's ushered in a more
responsible era of fiscal management,"
says Glenn Passanen, a budget analyst for
the City Project, which has often criti-
cized the mayor's cuts to social services.
What the record really shows is
considerably more complex. The bare
truth of Giuliani's budgets is that they
reveal a more consistent record of his
priorities than any of his recent prede-
cessors. He's spent an increasing propor-
tion of the city's strained resources on
cops, firemen and child protective ser-
vices. He hasn't placed much of a premi-
um on housing, education, child care,
hospital care for the poor, recycling or
welfare. True to his word, he has all
but dismantled the agencies that pro-
vide for those needs.
What follows is a summary
of the mayor's money decisions
and their impact on the city's
The mid-'gos have been the
Great Leap Backwards in the city's commitment
to developing and preserving its low-income
housing stock.
It's not totally Giuliani's fault; he just deliv-
ered the coup de grace. The hemorrhagic cuts to
the Department of Housing Preservation and
Development, which began in the last, trou-
bled year of the Dinkins Administration,
have grown ever deeper each year of
Giuliani's reign.
The administration has tried to shift funding
to reduce city contributions and maximize the
use of federal dollars. But the city's overall
housing capital budget has plummeted from
$372 million in 1993 to $261 million last
Capital funding levels will hold steady for
next year, but in the Fiscal Year 1997 budget
Giuliani slashed a third of HPD's bricks
and mortar, wiping out nearly $53 mil-
lion worth of apartment rehabs and
new construction for low-income
tenants. Only $10 million of that
decrease was replaced by new fed-
eral money.
While the cuts have devastated the agency, the
administration has moved aggressively to divest
itself of its in rem stock, turning over nearly 10,500
apartments in 758 buildings to private landlords,
nonprofit groups and tenant-owned coopera-
tives-while at the same time placing a ban on
the city's takeover of any new tax-arreared
buildings. The agency's shrinking manage-
ment burden has freed up millions, but that
money was pumped into the city's general cof-
fers to cover the budget deficit instead of being
put into HPD's stalled anti-abandonment pro-
gram (see "Dead on Arrival," page 8).
What's the impact of the budget carnage? A
veritable shutdown of new low-income housing
initiatives and a sharp drop-off in the repairs and
services the city used to provide-"the virtual
elimination of the agency," according to housing
advocate Jay Small.
The most important single indicator of HPD's
mission is the number of rehab jobs started in any
given year. In 1991, at the apex of HPD's capital
funding boom, the city started 19,000 moderate and
major rehab projects on apartment buildings. This
year, the city embarked on only around 8,000 rehabs.
Even more dramatic is the agency's abandonment of programs
that have provided permanent housing for the homeless. In 1991 ,
HPD created 4,173 apartments for the city's most desperate resi-
dents. This year the agency will be lucky to chum out 1,200 new
apartments--even as scores of families spend night after night
sleeping on the floors of the city's homeless intake unit. And
despite former Commissioner Lilliam Barrios-Paoli 's promise last
year that HPD would once again focus on homeless housing, the
agency plans to construct only 230 units next year.
In the meantime, most of the worst-maintained privately-
owned apartments in the city are going uninspected by HPD
code-violation teams. In 1991, the city issued 569,000 violations
to negligent landlords; Last year, the number of tickets plum-
meted to 129,000. At the height of the city's commitment to
housing inspections in the early 1970s, the city fielded some 693
inspectors. That number is down to about 250 today, largely
because the city has never allocated replacement dollars for the
$8 million drop in state funding in the early 1990s-despite
repeated promises early in the Giuliani administration to shift
federal dollars into the program. - Glenn Thrush
Every major poll predicts that
Rudolph Giuliani will be re-elected on the merits of his crime-
fighting record. The logic is simple. The number of murders in the
city per year has dipped below 1,000. The crime rates in seven
major felony categories are as low as they have been in 27 years.
But if he gets the good publicity, he should bear some of
the responsibility for the apparent rise in reports of
police misconduct-abetted, some experts say, by
Giuliani 's attempts to cut off funding to the four-
year-old agency charged with investigating bad-cop
Since he was elected, Giuliani has attacked the
budget of the Civilian Complaint Review Board.
In Fiscal Year 1998, the board will likely see a
$628,000 cut from its $5.2 million budget, which
will result in the layoff of 24 investigators, effec-
tively crippling the agency's capacity to attack its
massive case backlog. This occurs at a time when
the CCRB bas seen a steady rise in com-
plaints-including a 19 percent jump this
year alone to around 5,700.
"I'm not advocating throwing money at
problems, but [the administration] has to have a
sincere interest in investigating the problem at
band," says Detective Terrance Wansley, vice-
president of the Guardians, an association of
black police officers. -Kiema Mayo
For the kids in New
York City'S public schools, there's nothing quite
like an election year. After three years of wrenching
spending cuts-more than $1.6 billion worth-
Mayor Rudolph Giuliani has suddenly discovered
the value of public education, securing some $160
million in new funds for the Board of Education
in his Fiscal Year 1998 budget.
The most ambitious initiative in the mayor's
new budget is Project Read, a $125 million early grade literacy
program for students with reading problems. Other items slated
for spending include 40,000 computers ($22.7 million), six new
schools for students with anti-social problems ($2.7 million), and
arts programs ($2.5 million, with another $22 million possible
down the road).
Last November, after the unexpected upsurge in tax revenues,
Mayor Giuliani announced there would be $70 million in funding
for new textbooks in addition to $605 million in new capital funds
over the next three years-including $88 million
for mobile trailer school rooms, $16 million to
rehabilitate existing space and $392 million on
modular classroom units that can be attached as
wings to existing schools.
That's the good news. But education activists
are quick to point out that these spending initia-
tives restore only 10 percent of the $ 1.6 billion
cut from public schools in the mayor's first
three budgets. "It's too little, too late," says
Noreen Connell, executive director of
Educational Priori tie Panel. "They do not
reverse the impact of the previous cuts."
Connell adds that the new funds for text-
books are committed for only two years.
Currently, the city spends about $36 per stu-
dent on text books, compared to as much as
$120 per student in many suburban dis-
tricts. "We can't have one or two years of
additional money-and that's it," she says.
The recent upsurge in capital expendi-
tures seems a pittance in light of the mayor's three
previous budgets. A five-year, $7 billion school
construction plan that began in the Dinkins admin-
istration was slashed to $2.3 billion when Giuliani
became mayor, and later restored to $2.9 billion.
Last year, the mayor and the City Council, to great fanfare,
agreed on a four-year, $ 1.4 billion plan to rebuild deteriorating
public schools. But Giuliani and Council Speaker Peter Vallone
have made only a non-binding commitment to
fund the plan over the next few years and they,
not the Board of Education, get to determine how
the money is spent.
So far, none of the money has been spent,
although $200 million is budgeted for this fiscal
year, officials say.
Some of the new spending initiatives are wel-
come, activists say, but there is still no coher-
ent plan to deal with chronic overcrowding
and other daunting problems currently facing
the system. According to John Fager, executive
director of the Parents Coalition, a public school
advocacy group, there could be as many as
120,000 students without adequate classroom
space by the next school year.
- James Bradley
Mayor Giuliani seems
to be trying to tie a toe tag onto the Health
and Hospitals Corporation, which runs the city's
I I municipal hospitals and has a mandate to serve
poor New Yorkers.
In the mayor's first three budgets, HHC
received some of Giuliani's most extreme ampu-
tations. And if the mayor's proposed 1998 budget
goes through, the administration will have cut its subsidy to the
city hospitals by nearly 85 percent since the final year of the
Dinkins administration. Before Rudy, city hospitals got $350
age 24 of the mayor's
February management
report unveils Rudy
Giuliani's erstwhile campaign
against "The Way Things
Used to Be." Under that
heading, the mayor has tallied
a list of the $926 million in
tax hikes enacted under
David Dinkins in 1992.
In 1997, faced with a flush
of tax dollars from Wall
Street's boom, Giuliani can
afford to do something the
deficit-strapped Dinkins never
could: cut taxes and denounce
the fiscal irresponsibility of his
Democratic predecessor.
"It's not quite fair to trash
Dinkins," says Martin Arrick,
director of the public finance
department at Standard and
Poor's, which downgraded the
city's bond rating during the
March 1997
first year of the Giuliani
administration. "Dinkins man-
aged to balance the budget
every year, as has Giuliani. It's
hard to compare the two
because Dinkins was mayor at
a time when we had a particu-
larly nasty recession. Now that
the economy is doing better
Giuliani can afford to do some
things that Dinkins couldn't."
The mayor is using the
Wall Street-generated revenue
to cover tax cuts he has
already pushed through the
state legislature, including cuts
in the commercial tax, the
hotel tax and coop-condo
prorerty tax. All told, the city
wi! lose $622 million in
potential revenues by Fiscal
Year 1999.
Moreover, Giuliani plans
to go to Albany to press for
additional cuts that will tally a
half-billion dollars per year by
century's end. Among the
taxes included in the package
are the wildly popular elimi-
nation of the city's share of
the sales tax on clothing pur-
chases under $500, additional
reductions in the commercial
rent tax and the unincorporat-
ed business tax.
"People are generally
happy with the idea that the
city is decreasing the tax
burden, but people are very
concerned about whether the
city can really afford tax
cuts," Arrick adds. "We've
got to realize that the Wall
Street boom isn't going to
last forever.
"One good year doesn't
make up for five terrible
years." -Glenn 1hrush
million in city funding. Next year they'll see
barely $55 million. And with privatization of
three municipal hospitals his priority,
Giuliani has not made any capital invest-
ment in HHC. Instead the corporation has
floated bonds on its own.
Beyond the mandatory 25 cents the
city must contribute to every Medicaid
dollar spent, Giuliani has basically
stripped the city's financial commitment to
HHC down to paying the corporation for
three services-emergency care for uni-
formed workers, in-patient care for
inmates and management of the city
Advocates say the mayor's budget
ignores the city's responsibility to care for
uninsured patients who will be locked out of
Medicaid when federal welfare and
immigration reforms take effect. They
say the state pool that reimburses hospi-
tals for the cost of caring for unin-
ured patients won't be large
enough to cover the post-wel-
fare reform crisis, and that
Giuliani needs to fill the gap.
Even before welfare reform, the number of
uninsured patients was rising rapidly, from 1.3
million in 1994, to 1.6 million in 1995, accord-
ing to Judy Wessler of the Commission on the
Public's Health System.
The administration's previous cuts have
already taken a significant toll. Between
1994 and the present, Giuliani has forced a
25 percent staff reduction at HHC, which
now has 10,000 fewer employees-of all
kinds-than it had when the mayor got elect-
ed. And sources within HHC tell City Limits
more layoffs are in the offing. During the
mayor 's tenure, the city has eliminated
1,500 general-care hospital beds, a move
the mayor says is essential to streamline
HHC's operations in the era of managed
Governor George Pataki's proposal to cut
Medicaid means there's more trouble ahead. The
mayor estimates that Pataki's plan-which he
supported because it also cuts the city's
matching-fund contributions-will translate
into a $79 million reduction in the Medicaid
contribution the city will owe HHC. It may save
the city taxpayers some money, but HHC officials
estimate the governor's plans would mean an overall decrease of
$600 million for city hospitals.
The influx of uninsured patients coupled with shrinking
Medicaid reimbursements mean the city's private non-profit hos-
pitals known as "voluntaries" won' t be able to pick up the slack,
says Community Service Society President David Jones, an HHC
board member. - Robin Epstein
The outcry following the beating
death of young Elisa Izquierdo, which led to the creation of the
city's new Administration for Children's Services in January
1996, has dominated the Giuliani-era child welfare debate.
Largely in response to the incident, funding for child welfare has
remained steady during the Giuliani years and the mayor has com-
piled an impressive record on protective services. He has increased
the number of protective caseworkers from 712 to 915 and created
a team to target responsibility in children's deaths and abuse. He has
also dedicated $30 million for child support enforcement.
But while those areas of the budget have thrived, the adminis-
tration has left important preventative services exposed to severe
state budget cuts. And those programs, say advocates, are the most
potent resources for keeping children in stable homes-and out of
foster care.
In 1995, Governor Pataki passed along a $131 million
child welfare cut to the city that has had a disproportionately
damaging impact on several preventative programs. The
Family Rehabilitation Program, a nationally-recog-
nized intensive program that targets drug-addicted
mothers, suffered a $1.6 million cut in 1995 and
another $1.1 million cut in 1996, resulting in the
elimination of it drug treatment component. The
result: some of FRP's 300 drug-addicted parents
have been referred to state caseworkers who han-
dle five times as many cases; others haven' t
been transferred to alternative programs. What
percentage of their children have gone into fos-
ter care is as yet unclear, providers say.
Giuliani also eliminated a program that pro-
vided on-site counseling services for children in
city-run day care centers. And the administration
crippled a program which assigns casework-
ers to visit mothers and children in their
homes and help them deal with acute med-
ical problems or chronic and abusive emo-
tional problems, slashing its budget by $1.7
million. Because no other program provides
similar services, the impact of the cuts are
hard to gauge.
The administration has also taken a bite
out of key juvenile justice programs
designed to prevent at-risk kids from com-
mitting crimes or becoming repeat offend-
ers. Family Ties, an intensive alternative-to-
jail program recognized by the state comptrol-
ler's office for its 82 percent success rate, was
eliminated in Fiscal Year 1997, resulting in
the layoff of 12 staffers who provided
intense in-home mediation between parents and
kids along with supervision of troubled youth.
Aftercare, another much lauded program, has
found its staff and caseload cut roughly in half under Giuliani.
The program, which helps young veterans of the Spofford juve-
nile lock-up re-adjust to life back in their home communities, has
been the most successful approach to keeping kids from becom-
ing repeat offenders, according to City Comptroller Alan Hevesi.
Still, no segment of the city's youth budget has uffered nearly
as harsh a fate as The Agency Fornlerly Known As The Department
of Youth Services. After three years of deep cuts,
a succession of three commissioners in three
years, a rash of contracting scandals and lawsuits
over funds that were eventually impounded by
the mayor, the agency was consolidated within
the Community Development Agency.
The youth department's overall budget
was cut from $74 million in the last year
of the Dinkins administration to $54.7
million last year-a 30 percent slash that
has forced the total shutdown of 100 groups
that provided after school sports leagues,
homework help and tutoring, mentoring
programs and arts instruction, according to
the City Project.
Other programs have been unable to
plan for their future or preserve organization-
al stability in the face of the Giuliani adminis-
tration's perpetual assault on their survival: Teen
mothering classes, crisis nurseries and juvenile
prostitution diversion programs have all been tar-
geted for elimination by the mayor, only to be
completely re-funded by the City Council in both
1995 and 1996.
This year, for the first time under the current
mayor, youth programs have been left largely
untouched. - Scott Klein
Last year when the
mayor gouged nearl y $30 million out of the
recycling budget, he cut collection from weekly
to twice monthly in the Bronx, Brooklyn, and
five Manhattan community boards, making it
likely that millions more bottles and cans are
being tossed in the regular trash.
In 1996, the City Council had been able to
restore some of Giuliani's $23 million in recy-
cling cuts, but last year they used their restora-
tion funds to cover other gaps-and filed a law-
suit instead. Perhaps the most damaging long-
term part of the cut was the zeroing out of edu-
cation and outreach programs, which experts
say is essential to helping residents understand
the bewildering separation and bundling regu-
lations they must follow.
The overall level of city recycling-about 14
percent-hasn't changed much since the
Dinkins administration, but it is sti ll far short of
the 25 percent mandated last year under city law.
But all that wa before the Fresh Kills
Landfill Closure Task Force estimated that
when the Staten Island dump closes in five
years, the cost of shipping New York's dross out
of town will be $150 to $200 million per year.
In his proposed Fiscal Year 1998 budget,
the mayor hasn't brought back weekly collec-
tions but he has set aside nearly $9.5 million
for a bulk metal and mixed paper recycling
pilot project he killed last year.
March 1997
The Giuliani administration has done pretty
well by city parks as far as capital improvements
are concerned-he set aside nearly $170 million
this year alone-but his maintenance budgets
haven't kept pace. The mayor projects that the
full-time work force will number 1,906 in
June of 1998, says Charlotte Fahn, planning
and design director for the Parks Council.
Even in 1992, when Dinkins made brutal
cuts to the overall parks budget, there were
still 3,436 full-time parks workers.
The 5,000 workfare participants assigned
to the parks have lessened the blow of the
headcount reduction on trash pickup but
not on more serious maintenance problems.
Says Fahn: ''There's a desperate shortage of
plumbers for the drainage systems, fountains
and toilets, masons to fix crumbling walls, horti-
culturists who recognize plant diseases and people to
fix the roofs of park buildings."
In 1996, the Citizens Budget Commission deter-
mined that maintenance funding wa less than 10
percent of the amount needed to keep parks in a
"state of good repair."
- Robin Epstein
For 20Years
We've Been There
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212 269-8080 800 635-6002 212 269-8112 (fax)
1he Apprenticeship 0
athryn Wylde has never been one to shy away from
using, and re-using, the big metaphor. Lately it's
been a handy skill. As the new president of
financier Henry Kravis' $57 million New York City
Investment Fund, it's been her job to explain how
infusions of borrowed corporate money, innovatively used, might
result in big economic gains for the city's poorest New Yorkers.
Think about the empire Ross Perot built on government computer
contracts, she says.
"Look at what Ross Perot did! He used private capital to build
a multi-billion dollar company that's entirely supported by gov-
ernment funds . That," she insists, "is the model."
A large nonprofit-at the moment she's thinking, perhaps,
United Neighborhood Houses (lJNH)--<:ould capitalize on the
federal government's new welfare-to-work requirements by, for
example, helping mothers open their own daycare businesses.
Assuming the government provides new money for child care, this
could be a way for entrepreneurial moms to cash in and keep gov-
ernment dollars in the neighborhood. Private seed money would
jump-start the operation; government money would support it. The
potential? Wylde reckons maybe "one hundred thousand jobs."
"Capital," she says, serving up an echo of Oliver Stone's
Gordon Gekko, "is catalytic."
Listening to Wylde talk, some might wonder if the air isn't get-
ting a bit thin up there in the world of high finance. After all, the
city's booming restaurant industry barely supports 130,000 jobs.
Nonprofits that have been struggling to set up such program-relat-
ed investments, all the rage with foundations right now, certainly
report no such luck. At best, these enterprises have been generat-
ing 10 jobs here, 50 jobs there. Even UNH's Emily Menlo Marks,
who approached Wylde for help with a day care business, ventures
that in the first two years her enterprise would employ no more
than 80 women.
But Wylde maintains these are exactly the kinds of limits non-
traditional investors like the Investment Fund can effectively push
against. In the last year, New York City has seen the formation of
at least three notable corporate-funded risk capital pools designat-
ed, at least in part, for community reinvestment purposes. This
money has been set aside to back all manner of businesses, from
manufacturing plants to technology start-ups, high-skilled to no-
skilled, profit and nonprofit.
While it's too early to say if this is a trend, backers claim the
new money is part of a growing recognition on the part of the cor-
porate world that urban investment is not only important but
potentially lucrative. Retail chains, which backed out of city
neighborhoods long ago, are moving back to stave off suburban
competition. Business school academics are touting the competi-
tive advantages of the inner city market.
And not insignificantly, the nonprofit sector is beginning to
build its own expertise, using profit-making enterprises to support
jobs training and program goals. Wylde says she has already
received more than a dozen such proposals. And she expects that
eventually, by necessity, most of the city's community develop-
ment organizations will be driven into profit-making partnerships
to subsidize their work.
'This is really the next generation of not-for-profit activity now
that government and philanthropic funds are less and less available
and housing development money, in particular, is drying up," she
says. "We all havdo rethink our assumptions about this stuff."
uch talk is not surprising, coming from the non-
profit world's doyenne of the deal . In her
former incarnation as head of the
New York City Housing
Partnership, Wylde
presided over the financ-
ing and construction
of 13,000 subsi-
dized one- and two- ' ~ i i i ~ i i i i i i i ~ i i i i family homes for
working class fami-
lies. With bewildering
efficiency, she has placed
these homes in some of
the city's most distressed
neighborhoods. Part of her
secret was a web of personal
connections acquired over
nearly three decades in the
city's banking and develop-
ment world. As important, she
could count on a useful con-
stituency of civic-minded cor-
porate funders and conserva-
tive policy makers cultivated
by her bosses at the New York
City Partnership and Chamber
of Commerce.
By the mid-1990s, with
public funding for housing on
the wane, the cachet of her
brand of development rose, in
particular as Mayor Rudolph
Giuliani searched for politi-
cally palatable ways to
slide government out
of the affordable
housing business.
Giuliani's first stab
gram, was considered vintage Wylde. Designed by a protege, NEP
provided a select list of local landlords with a cut-rate opportunity
to manage, rehabilitate and eventually own some of the city's more
marketable apartment buildings. To blunt problems with tenants,
the buildings were to be serviced by a local nonprofit. And every-
thing would be controlled by Wylde, a manager endowed, in the
words of one community developer, "with the subtlety of a
steamroller with a broken clutch."
Judging from interviews with those
approached early in the Investment Fund's
capitalization effort, Wylde has
been useful to Kravis for
similar reasons. As
co-founder of Kohl-
. berg Kravis Roberts
& Co., Henry Kravis
is one of the city's
most respected-and
feared-financiers . He
pioneered and profited
mightily from controver-
sial corporate restructuring
techniques that, not inci-
dentally, were also blamed
for the destruction of thou-
sands of jobs nationwide
over the last decade. Now
he found himself on the
other side of the looking
After conceiving of the
idea with developer and
former Partnership chair-
man Jerry Speyer, Kravis
embarked on a campaign to
get 100 of the city's wealth-
iest corporations and givers
to "invest" $1 million each
for 15 years with no guar-
anteed return.
Willie the goal of sup-
porting civic-minded eco-
nomic development projects
sounded laudable enough,
Kravis' initial pitch-
expanding the mori-
bund Jacob Javits
convention cen-
ter, underwrit-
ing a Kennedy
airport rail link,
development-focused on traditional concerns of the business com-
munity. Some business people already financing community devel-
opment work thought the plan was uninspired and even appalling.
They felt the money should be used for more philanthropic purpos-
es. "If it was anyone else but these guys," says one banker, "they
would have been kicked out of my office immediately."
Kravis, according to Wylde, began to refocus when, still at the
Housing Partnership, she pitched him the idea of having the fund
invest in shopping strips to serve her retail-starved housing devel-
opments. Kravis was looking to support projects that would have
a "huge ripple effect" because he had only managed to raise $57
million, not a huge sum in New York City's $300 billion econo-
my. The two agreed the fund's money would be best spent pro-
viding start-up capital to innovative businesses or projects that
showed promising job growth potential and were unlikely to
receive conventional fmancing.
Problematically, loans made by the fund are going to be
large-likely $250,000 to $3 million-and the payback period
will be short. Borrowers will have to repay the fund, along with at
least enough in interest to cover administrative costs, within three
to five years. They will have to make a strong start-and refinance
their businesses after just a few years. .
Wylde admits this could be difficult. Her own financial
experts tell her that viable ventures typically take seven to 10
years to tum a profit. To make this work, she says, all 56 investors
must contribute their corporations' staff time, connections and tal-
ent to the community start-ups that borrow from the fund.
Relying so heavily on free corporate help may sound risky, but
investors hint that no one dares disappoint Henry Kravis. "He's
one of our biggest clients," says one volunteer, explaining his
he way the fund has been structured, at least 40
percent of the investment must be used on projects
or businesses benefiting low-skilled workers or
low-income neighborhoods. And according to the
fund's written program goals, this percentage is
likely to be much higher. Wylde asserts non profits will have an
unprecedented opportunity to work closely with venture capital-
ists, corporate financiers and tum-around specialists, people who
structure deals more complicated and innovative than anything
typically done in the community development world.
Take, by way of example, United Neighborhood Houses' at-
home day care project. Wylde performs a quick calculation:
Point one: UNH, an umbrella organization for 37 settlement
houses citywide, already has a $230,000 foundation grant to
launch the project.
Point two: Kravis' KKR just bought 85 percent of KinderCare
Learning Centers, the nation's largest day care chain. Executives
there could probably be persuaded to help out with UNH's project.
Point three: Some 300,000 children will need daycare if the
welfare law is fully implemented, Wylde estimates. Assuming one
worker for every three children, that's 100,000 new daycare jobs
Financier Henry
Kravis is one of the
city's most respect-
ed-and feared-
investors. He 's
depending on corpo-
rate volunteerism to
boost the value of
his $57 million
investment fund.
that organizations like UNH could provide.
Add it all up: With KinderCare's assistance on its business
plan-and possibly some financing from the Investment Fund-
UNH could be expected to build a fonnidable at-home daycare
network. The Investment Fund, she cautions, has not even begun
to formally consider UNH's proposal. But it's a simple example
of how corporate money and connections could be used to
squeeze the most out of foundation and government funds.
But what is the fund really going to be able to pull off? At its
first board meeting last month, the staff passed around a one-inch
thick book of proposals under consideration while Kravis com-
plained that the media was already hounding him for results.
"They keep pulling the carrot out of the ground and asking when
it will grow," he joked.
For the most part, the potential projects have only been drawn
in outline. Six committees of corporate volunteers are studying
proposals from nearly a dozen employment sectors, including
health and science, manufacturing, and retail and tourism. So far,
however, the fund has not committed to anything-except sup-
porting Wylde's plan for developing retail plazas at her Housing
Partnership sites.
Wylde's original pitch to Kravis worked. A month before the
fund officially opened its doors, Kravis found himself standing
before reporters with Governor George Pataki and Mayor
Rudolph Giuliani, announcing that the Investment Fund would
contribute $2.5 million to a $16 million package of federal, state
and city loan guarantees to develop eight new shopping develop-
ments in Partnership neighborhoods.
Others in the community development world look at this in-
house deal and wonder aloud if Wylde, in keeping with her auto-
cratic reputation at the Housing Partnership, will use the Investment
Fund to reward businesses and nonprofits she has long done busi-
ness with-while freezing out those she views as "competitors."
Several nonprofit community groups never took part in the
Housing Partnership'S programs because they felt it required a
near-total loss of autonomy. Others simply didn't see the need for
Partnership-style housing in their neighborhood. Even so, they are
wary of Wylde's influence
with the powers-that-be in
business and government.
''They're scared shitless of
her," says Sarah Ludwig,
executive director of the
Neighborhood Economic
Development Advocacy
Ludwig says nonprofits
shouldn't be parochial about
this; most of them can bene-
fit from whatever help and
advice they can get from the
business community. But
she wonders how effective
the Investment Fund will be,
given that the volunteer
committees reviewing pro-
posals don't include anyone
who has actually struggled
to set up an inner city busi-
ness. "Is this really going to
be translated into the neigh-
borhoods? The proof will be
in the pudding."
Wylde maintains these concerns are unfounded. "If I wanted to
control this thing, I couldn't. It's too big," she says. "With most of
the stuff I'm doing, I'm the most ignorant person in the room."
And she adds that the fresh perspective these outsiders from cor-
porate New York bring to the field is essential.
To wit, the Investment Fund has a team of volunteers-from
companies like Merrill Lynch, Citibank, Goldman Sachs and
Tiffany-working on marketing and financing for the Partnership
Plaza retail plan. Edward Toy, a private investment director for
Teachers Insurance and Associates Annuity, the country's largest
pension fund, is devising what some might consider a radical
approach to financing small business start-up costs. He would
package the entrepreneurs' debt and sell it on Wall Street's asset-
backed market, with the fund underwriting some of the risk. "It's
an alternative to the plain vanilla loan," Toy says. "Lease streams,
receivables, anything that generates cash-you can put it together
and sell it these days."
This is the kind of thinking that will make a difference, Wylde
says with a laugh. "I feel like I'm an old lady with a bunch of kids."
he true test of the Investment Fund will be in
those deals that lie outside of Wylde's well-
honed area of expertise. And businesses-par-
ticularly those that support living wages and
worker training-are infinitely harder to build
than housing, points out Ellyn Rosenthal, director of the
food sector initiative at the Women's Housing and Economic
Development Corporation (WHEDCO). Putting together
self-sustaining businesses that support a larger social mis-
sion has always been a kind of Holy Grail for those in the
community development movement. Millions of government
dollars were poured into such enterprises throughout the
1970s-and millions were lost. It has onl y been in recent
years, as nonprofits began approaching these experiments
with more rigorous attention to business detail , that there has
been greater success.
Yet it's exactly this concern over the bottom line that leaves
Rosenthal and others wondering how useful the Investment Fund
can be, given the three- to five-year repayment schedule on its
loans. WHEDCO has launched a catering and restaurant business
in the South Bronx this year to train kitchen and food service
workers. Looking at her balance sheet, Rosenthal says she doesn't
expect to turn a profit for another four years-and that doesn't
include the cost of training, rehabbing the space or buying the
kitchen equipment. The space and training are on a different bud-
get, supported by public and private grants, and the kitchen equip-
ment was donated.
Rosenthal says the kitchen equipment alone would have cost
$215,000 to purchase. If she had borrowed that money from the
Investment Fund, WHEDCO would have had to take out a con-
ventionalloan in the year 200 I to pay back the fund. "I couldn't
do it," she says. "I would have to get much leaner and meaner to
pay anyone back."
While risk capital pools like the Investment Fund may be a
useful source of money for nonprofits, no one should think they
can replace government subsidies and other grants, she says.
Rosenthal adds that Wylde's corporate volunteers are likely to find
accounting far more challenging when improving the lot of the
employees is part of the equation.
"Capitalism is a system that really successfully exploits labor.
Profit margins can hang on how much an employer pays its work-
ers," she says. 'That's why I think it's really hard for a nonprofit
to do this."
n an essay that's been making the rounds in the economic
development world, Harvard Business School professor
Michael Porter comes to a similar conclusion. The author
argues that community-based organizations have been
successful in low-income housing development primarily
because they could rely on heavy government subsidies and
develop a specialized talent for the work. In business, he says,
they lack the resources to hire large numbers of people and their
mission almost inevitably puts them in conflict with the for-prof-
it company's bottom-line interests.
Porter believes the best hope for the future of inner-city job
development lies within the for-profit business community. Once
bosses understand and become comfortable with what he calls the
"competitive advantages" of city neighborhoods, they will be able
to more clearly evaluate opportunities there.
Among his suggestions, Porter says corporations should estab-
lish long-term relationships--either in the form of joint ventures
or supplier agreements-with smaller, established inner-city busi-
nesses. "Such relationships, based not on charity but on mutual
self-interest, are sustainable ones," he says. "Every major compa-
ny should develop them."
But what if there were a way for nonprofits to negotiate these
relationships? New York City, after all, is home to a few "prof-
itable" nonprofits, such as Bronx 2000, a community develop-
ment group with a successful plastics- and wood-recycling busi-
ness, as well as innovative cooperatives like the employee-owned
Advanced Technological Solutions, a computer restoration plant
in Bedford-Stuyvesant.
Wylde suspects that major corporations could be convinced to
take these success stories to larger scale. Given that corporations
routinely take advantage of government subsidies, such as tax
breaks, to expand or relocate their businesses, working with sim-
ilarly subsidized nonprofits only makes good business sense.
At least that's the notion the Investment Fund has been trying
to sell to one of the world's leading car companies.
In a project that's shaping up to be Kravis and Wylde's first
foray into program-related investment, the Doe Fund, a local
homeless assistance program, is seeking to open a multi-million
dollar auto parts factory in the city's Northern Manhattan-South
Bronx Empowerment Zone. Some 200 to 300 formerly homeless
men and women would be trained and employed in a state-of-the-
art factory, says the Doe Fund's chief operating officer, Bill
Spiller, adding that the factory could also serve as a teaching
model for other manufacturing firms looking to improve the effi-
ciency of their own shop floors.
The proposal now under review by the car company would set
up a for-profit subsidiary of the Doe Fund, with the profits used
to help support the organization's other housing and work pro-
grams. With more than $100,000 in consulting help provided pro
bono by the business consulting firm Deloitte & Touche, the Doe
Fund developed a pitch emphasizing the organization's financial
stability and the raft of tax and utility cost breaks for which their
factory would be eligible. The "pre-business plan" also empha-
sized the Ben-and-Jerry-like public relations benefits of running a
factory in collaboration with a homeless organization and detailed
the success of a similar venture in Michigan, Focus Hope, sup-
ported by Ford and General Motors.
"This is a credible, logical proposal," says Steven Gunders, a
partner at Deloitte & Touche. "At the time we got it, it was a half-
baked cake. Now it's a fully-baked cake."
It also probably didn' t hurt that Henry Kravis fired off the pro-
posalletter-and personally pitched the plan to company higher-
ups. Spiller says the automobile company, which he can' t identify
MARCH 1997
for fear of scuttling the deal , has expressed serious interest in the
idea. But the real answer will come when and if they negotiate a
business plan, pinning down the true costs of the venture. The
company, he admits, is worried about New York City'S reputation
as an expensive place to do business. Spiller is hopeful that exec-
utives will be mollified when they calculate the value of the
Empowerment Zone subsidies and state-subsidized tax and utility
breaks. "We think we're on the right track," he says.
So will the Investment Fund have the "huge ripple effect" that
Kravis wants to produce? Wylde says she's hopeful it will. But if
nothing else, she adds, it will commingle people from the city's
insular corporate and nonprofit worlds-and that alone is likely
to have important ripple effects. "People have to see the big pic-
ture," she says. "Parochial thinking is not going to do any orga-
nization any good."
KaThryn Wylde
combines "The
vision of MOTher
Teresa wiTh the
tactics of Saddam
Hussein .. says one
of her colleagues
in the community
development field.
Can she make the
New York City
InveSTment Fund
work ?
The Price is Wrong
Errol T Louis,
a City Limits board
member, serves
Oil the COllsumer
Advisory COLlllcil
of the Federal
Reserve Board.
By Errol T. Louis
magine buying a brownstone in an up-and-coming neigh-
borhood like Clinton Hill or Crown Heights, and pouring
$25,000 worth of repairs into your new house-only to be
told, after all the time and effort, that your home's market
value is basically the same as or even less than what you
paid to acqnire and restore it. Imagine that this crucial decision
about the value of your home was made in a matter of hours by
a suburban property appraiser who visited your neighborhood
for the very first time, took a look around and wrote
"Questionable character of residents" as a reason to knock
down the value of your house.
That's exactly the scenario being played out in New York
City and throughout the United States. Families and commu-
nity organizations are taking on the difficult task of acquiring
and rehabilitating property and turning their neighborhoods
around-only to have their work undone by a property
appraisal process that is extremely subjective, often arbitrary
and in some cases openly discriminatory. All too often, in
communities of color, skewed appraisals knock property val-
ues down just as revitalization is beginning to
take hold.
It is common for homeowners to take equi-
ty loans against the value of their property in
order to start or expand businesses, make home
repairs, send their children to college or even
buy other homes and buildings. U:1dervaluing
property in inner-city neighborhoods means
those areas are denied a much-needed source of
capital that would otherwise contribute to eco-
nomic revitalization.
In recent months, studies and articles on
the subject have begun to appear, revealing a
problem of national dimensions.
In Springfield, Massachusetts, a Latino
community development organization poured
more than $70,000 into a residential property
and was preparing to sell it to community res-
idents, until an appraiser determined that the property-even
after the improvements-was "objectively" worth only $30,000.
This made it nearly impossible for the group to find a buyer. No
bank would lend a family $70,000 to buy a home that an apprais-
er said was worth less than half that cost.
In rural Arkansas, the Elk Horn bank-a community
development bank affiliated with Chicago's Shorebank-has
been criticized by government bank examiners for investing in
properties that appraisers said weren't worth the value claimed
by the bank. Instead of approving the bank's efforts to buy and
improve distressed properties, the examiners wamed Elk Hom
against endangering its capital by placing funds in substandard
investment-that is, "substandard" as defined by outside
appraisers who decided the finished project wasn't worth as
much as Elk Hom claimed.
An appraiser is a licensed, professional estimator of the
worth of a piece of real estate. He or she considers seeming-
ly objective factors like the recent prices paid for similar or
comparable properties in the same neighborhood. They are
also expected to use their subjective opinion of the quality
and desirability of a neighborhood in determining the value
of a property.
In theory, any two licensed appraisers are supposed to
arrive at much the same value for any given home. In reality,
however, appraisers can reach wildly different conclusions,
especially when it comes to interpreting the "quabty" of a
neighborhood-its schools, commercial life, availability of
parking, proximity to transportation and so forth. These sub-
jective decisions can have enormous economic consequences
because banks, real estate brokers and insurance companies
use appraisers' figures to make crucial decisions about whether
or not to approve loans.
A bank, for instance, usually won't lend $80,000 for a
home if an "objective" appraiser determines the property is only
worth $50,000. Even if the homeowner finds a buyer willing to
pay $80,000, the bank can end up killing the deal or forcing a
sale at a lower price.
The devaluation process quickly snowballs. Once a few
homes have been sold at low prices, the next appraiser will con-
tinue to assign low values to the area, using recent sales as evi-
dence that a neighborhood's property values are declining and
that the area is "undesirable." Banks, in turn, become more
reluctant to make loans.
Consider the case of Cleveland, Ohio. For years, com-
munity organizers had complained that appraisers were sys-
tematically understating the value of inner-city homes, mak-
ing it more difficult for African Americans to get loans.
Cleveland area banks denied it was a problem. FinaUy, in
1994, to get to the bottom of the charges, a task force drawn
from a cross section of the mortgage industry asked four dif-
ferent appraisers to evaluate the same property in Hough, a
mostly African-American neighborhood.
The results were stunning. One appraiser said the home
was worth $83,500. Another appraiser initially placed the value
at $28,OOO-but quickly bumped it up to $36,000 when a
banker expressed surprise at the low number. That still left huge
discrepancies in what "objective" appraisers claimed the home
was worth.
My Bedford-Stuyvesant-based company, the Central
Brooklyn Federal Credit Union, encountered a similar prob-
lem when we moved to a former bank building donated by
Chase in 1994. We immediately set out to record the market
value of the donation on our books-not only because tax
and accounting rules require this, but also because the value
of the building would become part of the permanent capital
that belongs to the 5,000 Central Brooklyn residents who
own shares in our financial cooperative. It represented one of
our proudest achievements.
To establish the value of the three-story building, we flrst
contacted a Westchester-based appraiser, who concluded that
the building, its contents and the land beneath it were all worth
$145,000. The figure was too low to take seriously, so we con-
tacted the head of the Bedford-Stuyvesant Real Estate Board
for a new appraisal. Within a matter of weeks the building was
re-appraised at close to $300,000.
William Pittenger, the chief appraiser for a $42 billion
bank holding company in Florida, has written extensively
about the problems caused by slack or discriminatory
appraisal practices. "Look critically at the appraisal process,"
he wrote in a banking industry journal, "and you will discov-
er the potential for discrimination at almost every step along
the way." Part of the problem, according to Pittenger, is that
suburban property standards dominate the appraisal industry
and can lead to gross misinterpretations of life in a racially
diverse urban setting. As late as the 1970s, the guidebooks
used to train appraisers included very specific instructions to
lower the value of homes in African-American and Latino
neighborhoods. While that kind of overt racism is now ille-
gal, more subtle biases still exist. Pittenger urges appraisers
to stop using coded phrases like "undesirable neighborhood,"
"poor neighborhood pride of ownership," or "questionable
character of residents."
In instances of grossly discriminatory appraisals, a home
owner can file a lawsuit. But these are costly to pursue and
don't address the larger problem of sloppy or discriminatory
appraisal practices.
On my Crown Heights block alone, there are 61 build-
ings. Nearly all are brownstones built in the I 890s, with high
ceilings, stained glass windows, skylights, wrought iron gates
and tiled fireplaces. The average appraisal price of the e
housing gems is only about $85,000, an artificially low num-
ber. Assuming a 10 percent undervaluation by outside
appraisers, there could be nearly a quarter of a million dollars
in unrecognized wealth on my block alone. Multiply that by
the thousands of blocks in Central Brooklyn, and you begin
MARCH 1997
to uncover hundreds of millions of dollars in
unrecorded capital.
What would happen if these properties were
systematically reappraised? Home equity loans taken
~ :
against the value of the buildings could be used to start business
and upgrade property-which, ultimately, is how wealth is built
and poverty eradicated.
Three steps taken by New York's political and economic
leaders could put an end to the appraisal crisis in our inner city
I. The extent and seriollsness of the problem need to be
made clear. A high-profile examination of appraisal prac-
tices-a Cleveland-style test of sample propertie in key New
York City neighborhoods perhaps-would make explicit the
highly subjective nature of appraisals and place the issue
high on the city's agenda.
All too often, in communities
of color, skewed appraisals
knock property values
down just as revitalization
is beginning to take hold.
2. There should be a systemic reappraisal of inner-city
neighborhoods. In key neighborhoods, reappraisals should be
performed by local, not suburban, appraisers. A tax rebate
could be provided to homeowners to help offset the cost of
new appraisals. To encourage new appraisals in distressed
areas, the city should agree to gradually phase in any
increased property tax assessments that result from the
increase in value.
3. Major banks should commit to using local appraisers.
One place to find seasoned inner-city appraisers is the National
Association of Real Estate Brokers, an association of African-
American real estate professionals that has long fought against
discriminatory appraisal practices and attempted to assign fair-
er, more accurate values to inner-city properties. A bank's
agreement to use NAREB appraisers for inner-city real estate
could come to be seen as a favorable item when the bank's com-
munity reinvestment record is reviewed.
At a time when capital for inner-city development seems
to be scarce, we should be trying to leverage every bit of wealth
that can contribute to economic development.
Communities have to loudly reject the views of outsiders
and voice their own views on what our homes, schools and
neighborhoods are worth. An unfair appraisal is ultimately a
legalized form of theft. Most of us wouldn't meekly let a
stranger walk into our home and cart off 10 or 50 percent of our
wealth. But that's what happens when appraisers use subjective,
discriminatory parameters to determine financial values .
---_ ....... -. . . ".-
Sushila Pati!
is a health
educator and
volunteer with
South Asian
Women, a
resource and
advocacy group.
Silent Slavery
By Sushi/a PatiZ
, 'Ibegan trembling throughout the day with fear and
starvation. Although I was given $50 at the end of
every month, I did not want to spend it on food
because I had no idea what the future had in store
for me," recalls Meena (not her real name), a 40-
something Indian woman who was a live-in domestic worker
for a Westchester family. She says her work conditions were so
ting a visitor's visa would be easier. This is true, but mislead-
ing. Employers often secure 90-day tourist visas for their
domestics, but when that expires, they tum around and threat-
en the workers with arrest and deportation. Work visas can take
years to obtain.
Others who legally employ domestic workers sometimes
convince the workers that they should hand over their passports
horrible she actually thought she would die
in this house thousands of miles from her
family. "If you had seen me, you would
have thought you were bumping into an
old lady, 80 years old," she says.
Coming to the United States is not
Many domestic workers find themselves
trapped in their employers' homes.
necessarily a liberating experience. For some South Asian
women, arrival here means isolation and exploitation in a land
that is becoming increasingly hostile to immigrants. Yet domes-
tic work in the United States--<:aring for children or the elderly,
cooking, cleaning and doing other household duties, often while
living in an employer's home-is one of just a few options
available to many immigrant women struggling to escape pover-
ty or domestic violence in South Asia. Sold a myth of American
social freedoms and opportunities, many women choose domes-
tic work with upwardly mobile South Asian immigrant families
as their ticket to the states, only to find themselves literally
trapped in their employers' suburban homes.
Often, women who come here through legal channels
from Bangladesh, Sri Lanka, Pakistan and India
are responding to an ad or an employer's
request. Unbeknownst to them, they may be
working illegally in the United States because
their employer has failed to get them a work
visa. Such "sponsors" put up the money to
bring the worker to the United States, later
insisting she pay back her debt. This "fly now,
pay later" scheme is a new form of indentured
servitude wherein domestic workers are
forced to submit to an employer's every
demand. Women become trapped as employ-
er fail to pay them regularly and fairly, leav-
ing them with very small amounts of money
for long periods of time.
Meena told me she had always
dreamed of making money for the education
and marriage of her three daughters. She had accepted an
employer's offer of $200 per month-she received $50 and the
rest was to be sent home to her family in India-far below min-
imum wage but more than she had earned in India.
Financial control is only one means of exploitation. The
other popular trick is threatening to reveal a worker's immi-
gration status to authorities. When Meena asked her employer
for a sponsor letter to obtain a work visa, she was told that get-
or green cards for safekeeping, and then hide the documents to
keep the women hostage in their home. A domestic worker 's
ability to fight such exploitation is especially difficult for immi-
grants who are prevented from learning English or from speak-
ing with people outside of the house. Domestic workers depen-
dent on employers for money, food, transportation and shelter
live in fear. In many cases, if they are disobedient or try to
escape, they can lose everything, even the roof over their head.
The law does little to protect domestic workers. Deemed
"private household workers," they are even excluded from
some basic civil rights. According to the Center for
Immigrants Rights, nearly all United States workers may
invoke the protections of the Labor Relations Act and are
allowed to form unions, but not domestic workers.
Additionally, the exclusion of domestic workers from New
York City human rights anti-discrimination statutes silences
them further, especially in cases of sexual harassment-to
which domestic workers are particularly vulnerable.
Generally, domestics file complaints against employers
only under extreme circumstances. But there have been small
victories. After being taken to Manhattan Federal Court in
1995, Meena's employer settled out of court rather than pub-
licly reveal the facts of the case. He offered $9,000 in payment
of back wages and compensation for undue physical and psy-
chological hardship.
"I am not fighting for the money," Meena proclaimed. "I
do not want their money, because it is made at the cost of sweat
and blood of many women like me. I want people to stop treat-
ing us like slaves. They want us to tolerate misery just because
they brought us to America."
Organizing to build the necessary structures to increase
domestic workers' bargaining power and their ability to negoti-
ate better work conditions is imperative. We must bring these
women into the sphere of law so they may assert rights and pro-
tections other workers take for granted. Until all women's labor
participation in this country is acknowledged and regulated by
law, it will be an uphill battle to remove thousands of domestic
workers from their isolation, invisibility and silent slavery .
.. _.M .... - - ~ " -
Broken Promises
. - ~ . ........ ~ ~ ,, '
By Shawn Dove
"Fixing Broken Windows, "
by George L. Kelling and
Catherine M. Coles, Free
Press, 1996,319 pp., $25.
ile I was reading
George L. Kelling and
Catherine M. Coles'
"Fixing Broken Win-
dows: Restoring Order
and Reducing Crime in OUf Communities,"
I heard New York City'S police commission-
er on the radio proposing that his department
install surveillance cameras in various city
hot spots. This tactic seems to be the antithe-
sis of the police and citizen "connection" the
authors of this book describe as the basis for preventing and
reducing crime in neighborhoods. And that's odd, because
Kelling's observations were among the most significant influ-
ences behind Rudolph Giuliani's winning "quality of life" elec-
toral campaign four years ago.
In their book, Kelling and Coles offer a compelling philo-
sophical approach for controlling and reducing crime. They
provide an in-depth history of policing strategies in the United
States and suggest that the traditional role police take on as
agents of law enforcement has failed in this country. They write
that cities should return to the initial tenets of police practice
created by Sir Robert Peel, who founded the London
Metropolitan Police in 1829. Peel envisioned the police as part-
ners with the citizenry, acting as peacekeepers and developing
trusting relationships with neighborhood residents.
The premise of Kelling and Coles' theory is this: when peo-
ple walk down a street and notice a broken window, they will
assume no one cares about the bUilding. After a period of time,
when more windows have been broken and remain so, passers-
by will conclude that no one is in charge of either the building
or the street that runs past it. As a result, lawful citizens will stop
walking down this particular street.
Kelling and Coles argue that while police traditionally focus
most of their resources on serious crimes like robbery and mur-
der, citizens are more immediately concerned with signs of dis-
order in their communities such as public drunkenness, prosti-
tution, panhandling and graffiti. They write that disorderly
behavior eventually builds to a critical mass of fear in a neigh-
borhood, ultimately resulting in more serious crime. The
authors maintain that the critical issue police must address,
then, is not the actual level of crime in a given community, but
the level of fear. This means putting more police foot patrols on
MARCH 1997
the streets and having officers become closely
involved in issues they might consider more
appropriate for social workers.
The book cites New York City policing suc-
cess stories such as "taking back the subways"
and employing a police presence as opposed to a
police force in order to transform Bryant Park
and Times Square during the late 1980s and
early '90s. But from my perspective, in Harlem
there is a chasm between the theory and prac-
tice suggested by Kelling and Coles.
While the book offers a model for commu-
nity-based crime prevention and police collab-
oration with neighborhood citizens, these tech-
niques have not taken root in New York. The
perception from many comers of this city is
that police are not at all connected to the com-
munities or the people they are paid to serve.
Kelling and Coles admit this is a hard sell, particularly in
communities like Harlem, and especially with young people
whose perceptions of the police are mo tly negative. The
authors state that "America's crime problem is a male youth
problem, fourteen to seventeen year-olds being the single
largest offender group .... Some 6 percent of youths who commit
crimes in the United States account for more than 50 percent of
all such crimes committed." They say police must find a means
of controlling what they call these "six percenters"-but they
totally ignore how police might repair the hostile relationship
they have with much of the remaining 94 percent of young peo-
ple in cities across the country. Their community-based crime-
prevention model does not fully explore the role youth devel-
opment agencies, churches and schools must play.
Kelling and Coles do offer desperately needed alterna-
tives to current practices of policing across the country. But
what is needed most of all is a policing strategy to repair
"broken promises" between police and the communities in
which Uley work.
Finally, if the city government were truly concerned with
restoring stability to our neighborhoods and building a partner-
ship with its citizens, the mayor would implement this "broken
window" strategy well beyond the police department.
Imagine how housing conditions would improve if the
housing department adopted a policy of "fixing broken boil-
ers. " Or the heightened educational outcomes that would result
from a Board of Education policy of "fixing broken schools."
Ultimately, "Fixing Broken Windows" would serve New
Yorkers best if it were required reading for everyone in leader-
ship in city government.
Shawn Dove is director of the Countee Cullen Community
Center in Harlem.

(Letters, continued from page 4)
recent articles and research. The majority
of residents in a shelter on any given day
will of course be the long-term, most trou-
bled users. That's because they never
leave. Yet, when he looked at more than
five years worth of the city's shelter intake
tern to deal with the problems of the chron-
ic users is like redesigning an entire hospi-
tal to serve only the patients on permanent
life support.
LETTERS. data, Cul/wne found that the long-term
............. -l' residents comprise only 10 percent of the
total number of people using the shelter
system over the course of a year.
Culhane also found that nearly 80 per-
cent of the men and women who enter the
shelter system over the course of a year
stay for only a short time, no more than a
month or two, and then leave for good. His
research indicates that these short-stay
men and women are much less likely to
have serious disabilities.
True, the relatively small number of
chronic users end up filling most of the
beds. But to redesign the entire shelter sys-
Obviously, some number of homeless
shelter residents need more intensive ser-
vices. That's one advantage of the new
nonprofit approach, and it is especially
important at shelters like the Park Avenue
Armory where so many women have acute
NeVI York LaYlYers
for the Public Interest
provides free legal referrals for community-based and non-profit groups
seeking pro bono representation. Projects include corporate, tax and real
estate work, zoning advice, housing and employment discrimination,
environmental justice, disability and civil rights.
Still, McDonald encourages advocates
to welcome privatization because it is "a
more cost-efficient, therapeutically effec-
tive alternative. " Although many hope that
nonprofit management will move chroni-
cally homeless people into housing more
quickly, at this point the shift to nOllprofits
has not yet been proven to be less costly.
even if that is the city's goal. Furthermore.
it is the imposition of a therapeutic milieu
on those who need only temporary shelter
that worries many advocates.
While reporting the article, some advo-
For further information, cates and researchers indicated their con-
cern with the city's policy, to the benefit of
call NYLPI at (212) 727-2270. thenonprofits, totreateveryhomelessper-
son as pathological-in need of a cure.
There is no charge for NYLPI's services. Observations such as these can not be
l';;;;;=============================....!J dismissed out of hand. Apparently the only
- article McDonald would have thought
r----------------------------------. unbiased would have been a paean to the
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100 Remsen Street, Brooklyn, NY 11201, (718) 624-6850
FAMILY WORKER. Immediate entry-level opening in homeless families
project providing comprehensive re-housing services in Queens.
Outreach to families in hotels and shelters; provide case management
services; recruit for and participate in series of housing assistance
workshops; follow up with families relocated to permanent housing.
Required: B.A., related experience in housing, entitlements, advocacy.
28 hours/week. Must be flexible. $17,000 plus benefits. Contact
Yvonne Jusino at (718) 592-5757 or Steve Gonzalez at (718) 244-
7301, or fax resume to (718) 656-7584.
ASSISTANT LOAN FUND MANAGER. Seedco, a national community devel-
opment intermediary, seeks an Assistant Loan Fund Manager for
Seedco's Loan Fund which provides financial support to community-
based organizations for housing, commercial and economic develop-
ment proj ects. Responsibilities: general administration and operation
of $9MM fund, documentation and monitoriing of loans, and under-
writing support to Program Officers. Qualifications: at least 3 years
experience in real estate or small business lending preferably within a
community development financial institution; training in finance,
accounting, or credit analysis; familiarity with legal documentation of
community development projects; strong written and oral communica-
tion skills; proficiency with spreadsheets. Excellent benefits. Salary in
$40s. Affirmative action. Send resume and cover letter to Julia
Hodgson, Loan Fund Manager, Seedco, 915 Broadway, Suite 1703, NY,
NY 10010. No phone calls.
Collaborative seeks an organizer for a community workforce and eco-
nomic development initiative. The Collaborative is a joint initiative of
social service providers and the business sector, joined together to
create greater employment and economic opportunities. The organiz-
er will be responsible for developing local leadership through the
development of community computer learning centers in Williamsburg,
Brooklyn (computer expertise not required). This includes organizing
volunteers to assist them in designing their center and developing a
governance structure to run the centers on an ongoing basis. The
organizer will also be responsible for interfacing with the technical
assistance providers to set up the centers. The position also includes
engaging community youth groups and the multi-media industry to
work together to develop career opportunities for youth in the multi-
media industry, writing a newsletter, and fundraising. 2 yrs experience
in community organizing, social services, organizing volunteers,
employment services, or related experience necessary. Well-orga-
nized, computer literate, bilingual (Spanish), independent self-starter
with good oral and written communication skills are required.
Familiarity with Williamsburg and Latino and Hasidic culture are plus-
es. Mail: Director, Greater Williamsburg Collaborative, 306 Union
Avenue, Brooklyn, New York 11211 or fax (718) 388-6911.
LOAN OfFICER. For national nonprofit lender. Underwrite and/or package
complex real estate and other loans. Structure and negotiate transac-
tions with nonprofit borrowers and third party lenders in New York and
surrounding region. Implement lending programs. Requires strong skills
in financial analysis, communication/presentation ability, and creativity.
Candidates with experience in community lending and housing develop-
ment preferred. Salary from mid $40's to $50k based on experience.
Send letter of interest and resume to UHF/LO, 55 John Street, 10th
Roor, New York, NY 10038. UHF is an equal opportunity employer.
POLmCAL ORGANIZER. The New Party seeks political organizers to build
independent progressive political power for low and moderate income,
working-<:Iass, and minority communities in New York and nationally.
Build a real alternative to politics as usual! Some community or labor
experience preferred. Minority and bilingual applicants encouraged. Fax
to Fran, (718) 693-3367.
COMMUNITY ORGANZER.The Hispanic Development Corporation (HDC)
seeks a community organizer to assist residents in Newark's
Roseville neighborhood to work on grassroots issues of community
concern. Likely issues include public safety, deteriorated housing
conditions, land use, sanitation and community facilities. The suc-
cessful candidate will demonstrate a strong ability to support and
develop tenant, block and neighborhood association leaders; to
research local issues; to inspire resident involvement; and to assist
groups to develop solutions to neighborhood problems. Competitive
salary and benefits commensurate with experience. Ability to speak
Spanish necessary. Commitment to empowering local leaders and
MARCH 1997
winning effective solutions essential. Send resume to Sr. Guadalupe
M. Nieto, Hispanic Development Corporation, 545 Orange Street,
Newark, NJ 07107.
PROGRAM DIRECTOR. Northern Manhattan Improvement Corporation is
seeking a candidate for the position of program director for the
Neighborhood Strategies Project (NSP). NSP is a five-year economic
development project funded by the New York Community Trust. The pro-
ject's goal is economic and labor force development in the Washington
Heights/Inwood community. The project director has overall responsi-
bility for developing and implementing the project with active input and
direction from Northern Manhattan Collaborates! Salary $60,000
depending on education, experience. Bi-lingual Spanish/English pre-
ferred. NMIC Fax: (212) 928-4180.
PUBLIC POLICY ASSOCIATE. Must be excellent communicator, politically
astute, computer literate, self starter and team player. EXECUTIVE
ASSOCIATE. Must have office management, good communications,
staffing and computer skills. Both positions provide broad exposure to
the nonprofit sector and city and state officials. Competitive salaries.
Excellent benefits. Writing sample and resumes to Darwin Davis,
Human Services Council of New York City. 99 Park Ave. NY, NY 10017
or fax (212) 755-9183.
EXECUTIVE DIRECTOR. Fairmount Housing Corporation in Jersey City, NJ
is seeking an executive director to be responsible for property and
asset management, supervision of current projects under develop-
ment, fundraising, fiscal planning and management, community rela-
tions and staffing the Board of Trustees. He or she will be responsible
for developing a strategic plan addressing organizational development
issues and community planning, economic development and housing
goals and objectives. Requirements: Master's degree preferred; signif-
icant experience, including supervisory and administrative, in a leader-
ship role with a community development organization; demonstrated
record of success in fund raising; excellent written and oral communi-
cation skills; a commitment to community change. Send resume includ-
ing salary requirements to: Martha Lewin at Fairmount Housing Corp,
270 Fairmont Avenue, Jersey City, NJ 07306.
PUBLIC POLlCYIWRITER. The NurSing Home Community Coalition of New
York State (NHCC), a statewide coalition of consumer, civic and pro-
fessional organizations fighting for better nursing home care and qual-
ity of life, needs an individual to write position papers on issues relat-
ed to long-term care in New York State. Hours: An average of 7 or 8
hours a week for 1 year. Most of this work can be done at home. Job:
Writing a series of position papers for consumers, legislators, govern-
ment staff, media, newsletter, etc. Part of the time will be spent
researching topics through written material and calls to groups through-
out the country. Requirements: Excellent writer, independent, hard
working, prefer an individual with some public policy work experience.
References and sample of writing required. Salary: $17 to $20 per
hour depending on experience. Please call Cynthia Rudder, Director, at
(212) 385-0355.
ORGANIZER. FUll-time organizer to work with families of New York City
nursing home residents and leaders' coalition. Need experience, inde-
pendence, flexibility, commitment and knowledge of health/ elderly pol-
icy issues. Spanish or Chinese a plus. Send resume to FRIA, Friends
and Relatives of Institutionalized Elderly, 11 John Street. Suite 601,
NYC 10038.
CONSTRUCTION MANAGER. Knowledge of different construction trades,
estimating, building codes, computer programs. Operate, supervise
and follow-up on multiple projects simultaneously. Car and architecture
or civil engineering degree with experience desirable. Send resume to
Geraldine, Fax: (212) 675-7058; NHS, 121 West 27th Street, Room
404, New York, NY 10001.
FAMILY CENTER DIRECTOR. Catholic Charities seeks motivated, ener-
getic, creative and innovative program director to manage their Family
Center. Strong leadership and management skills are required.
Bilingual/Spanish experience preferred. Responsibilities include the
development of the family support services, consisting of short-term
counseling, concrete services, I and R, advocacy, group work training
and community outreach. Must have MSW and supervisory experience.
Salary high $30s with excellent benefits. Mail or fax resume to Sr.
Frances Picone, Catholic Charities, 2341 Coney Island Avenue,
Brooklyn, NY 11223. Tel : (718) 998-7321. Fax: (718) 998-8627.
.......... 5 Undone
ne Saturday morning while reading The New York Times, I came upon a story about a l4-year-old boy who
had allegedly sought initiation into the Latin Kings gang by trying to kill a housing cop with a 60-pound trash
can dropped from a rooftop. The cop leaned out of the way-but even so, my heart sank when I realized the
boy had been a member of the Manhattan community center I
used to direct. (I'll call him Rafael and obscure some details to
protect his family's privacy.)
As I flashed back on my near decade-long relationship with
Rafael, his family and his neighborhood, the Hebrew word
mitzvah came to mind. Often mistranslated into English as
"good deed," mitzvah literally means "commandment." Under
Jewish law, helping others is not optional . It's required. This
notion seems to have been lost in our society-and for me,
Rafael's story reveals the consequences.
When I first met him, Rafael was 7, the youngest of three
fatherless brothers. He was a puzzle with some of the pieces
missing. Emotionally, he was a troubling blank slate, often
silent and expressionless. Not sullen or withholding, just numb.
Even the rage and terror common among the other children we
worked with were reassuring in comparison with Rafael's dis-
connected qUality.
His mother also struck us as "not all there," but in a differ-
ent way. Ana (also not her real name) was friendly and smiled
easily, and she was not willfully neglectful. It just seldom
occurred to her to offer her sons any guidance or supervision.
Her own intellectual and emotional repertoire was also full of
blanks. Once, as I accompanied Ana and Rafael to
court to testify against some boys charged with
assaulting him, Rafael hopped a subway
turnstile right in front of a uniformed
transit police officer. Ana said nothing.
The cop shook his head and told Ana to
pay her son's fare. But I wanted
to yell at her, "Don't you under-
stand the consequences of letting
children raise themselves on the
streets of this neighborhood?" I
wanted to shake her awake. I
wish I had tried.
But it's a mistake to just zero in on the
shortcomings of Rafael's family or of individ-
ual social workers. Had local institutions dis-
played a greater sense of communal responsi-
bility-of the commandment to help oth-
ers-the neighborhood might have
offered Rafael solid alternatives to
street life.
I remember a community board
meeting where an elderly Housing Authority tenant anxiously
insisted the Latin Kings had set up shop in her project. Police
officials in attendance seemed mildly amused. You could sense
they thought they were humoring a crank. They should have lis-
I remember a nighttime visit to the project where Rafael jet-
tisoned the garbage can from a rooftop. Passing through the
central plaza with a very capable child protective worker, I saw
a parked jeep blasting rap so loudly the bass line made our
bones vibrate. Ravaged men and women quietly lined up to buy
crack cocaine at the rear of the jeep. Neither of us commented
on the scene. Nor did we define our child protective responsi-
bilities broadly enough to call the Housing Authority and
demand to know why it tolerated such blatant drug dealing. We
should have.
The same Saturday I read the Times article, I traveled to
suburban New Jersey for my cousin Randy's bar mitzvah.
Surrounded by a loving family, a caring community and over
5,700 years of tradition and spiritual belief, Randy chanted
his Haftorah. It was a moving and beautiful rite of passage
into manhood.
Rafael's rite of passage had led to his incarceration. What sep-
arates these two young men? A year in age, the Hudson
River, light years of race, social class, family histo-
ry, environmental influences. My wish for Randy
is that he recognize how blessed his existence
is and find some way to reach across those
light years to share his blessings.
My wish for myself, my fellow
social workers, the police, teachers,
doctors and elected officials, is that
we also come to recognize and
accept our mitzvahs. If more of us
did, the underfunded, understaffed
institutions that failed Rafael would
have the resources to cope with oth-
ers like him. For when it is within our power as
individuals or as a society to have a positive impact
on a child, a parent or a community, doing so is not
just a good deed. It is a commandment.
Mike Arsham is director for social service
policy at the Council of Family and Child
Caring Agencies.
MARCH 1997
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