CITY LIMITS

COMMUNITY HOUSING 'NEWS

feb./ mar. vol. 2 no. 2
STATE AND CITY PROPOSALS
THREATEN HOUSING
MOVEMENT
Governor's State Budget Elimination of
Code Enforcement Reimbursement
May Doom City's Emergency
Repair Program
A mild surprise with major implications, tucked away among the
swarms of figures in Governor Hugh L. Carey's proposed New York
State budget for the fiscal year beginning next April 1st, is a proposed
elimination of all state funds to reimburse New York City for code
enforcement expenses. In 1976-77 this reimbursement amounts to $8
million. Thereby hangs a tale that should be of great interest and more
than passing concern to New Yorkers who would like to see our city's
Emergency Repair Program improved and expanded.
Under state law (which has been in effect for many years) New York
City is entitled to be reimbursed from the state treasury for S017. of the
city's expenditures for administration of its code enforcement
programs.
During the long years of the Rockefeller (Republican)
administration, the state used various tricks and devices to keep this
mandated reimbursement as small as possible-regardless of how
much the city actually spent. Among Rocky's gimmicks was having
his Commissioner of Health (who, until 1974 ran the reimbursement
program) issue regulations that made most of the city's code
enforcement activities-including expenditures for emergency
repairs-"ineligible" for reimbursement.
Also, even after the amount of money which New York City is
"eligible" to receive is calculated, the city does not automatically
,... receive it. Funds have to be included in the state budget as voted by the
legislature and approved by the Governor. For years, when
Rockefeller ran the show in Albany, he would request (and a
subservient state Senate and Assembly would appropriate) a far
smaller amount than the city was supposed to be entitled to
receive-and that would be all that would be paid over.
In 1974 the legislature shifted the state administration of the code
enforcement reimbursement program from Health to the State
Division of Housing and Community Renewal. Lee GoodWin, the
then Housing Commissioner, promptly announced that even though
she too was a Rocky appointee, she wasn't going to be bound by the
old regulations and would make ALL city code enforcement expenses
-including ERP--eligible for 5017. reimbursement. And so, for the
1975-76 fiscal year (with Governor Carey now in the Executive
Mansion, but with Ms. Goodwin still running the Division of
{continued on page UJ
Mayor Intends to Steal $50 Million
CD 3 Funds to Balance Expense Budget
"City Limits" has authoritatively learned that Mayor Beame and his
fiscal cronies intend to cut no less than $50 million out of the City's
Third Year Community Development Block Grant and transfer it to
cover expense budget items. A recently-prepared written summary of
the city's fmancial plan for fiscal year 1977-78, circulated among high
officials, shows this transfer to be part of the means by which the next
budget will be "balanced."
" This idea has been under discussion by the Mayor 's office, the
Bureau of the Budget and the Office of Management and Budget for
over a year, " admitted City Planning Commission Chairman Victor
Marrero to a group of community organization representatives who
met with him a few weeks ago. Hints of this intended theft have also
appeared in New York Times stories on the latest fiscal crisis
maneuverings.
Under the 1974 federal Housinll and Community Development Act,
New York City stands to $153 million of block grant
funds for Community Development Year Three - along about next
mid-summer. This represents a $51 tnillion increase over the block
grants for each of the first two years and comes about under the
complex allocation formula contained in the law. All of these funds
are supposed to be used by the city for housing and community
development purposes-to alleviate the housing problems of low- and
moderate-income residents, to prevent slums and blight and for other
urgent housing and community development needs.
The Mayor, obsessed with fiscal juggling and a determination to
satisfy Felix Rohatyn and his banker pals and to hell with the wishes
of the United States Congress and the needs of the poor and tninority
citizens of the city, seems detertnined to grab almost one-third of the
total grant and virtually the entire increase over the previous two
years, for purely expense budget items-such as salaries of regular and
Housing Authority Police and firemen, administration of new city
charter provisions, "construction management for capital projects,"
fmancial management and similar items.
Notwithstanding the plain language in the federal Act that states
that C. D. block grant funds are NOT to be used to replace the normal
expenses of city operations, City Hall is set on a course to flout and
destroy the law. And they appear quite detertnined to pull off this
ploy-which makes the fiscal gimmickry of previous administrations,
which our present Solons so piously deplore, seem like child's play.
We have, in fact, learned that the Mayor is essaying a two-pronged
{continued 011 page 8J
MANHATTAN PLAZA:
Old-Style Ripoffs Are Still Alive And Well
(Ed. Note: The story of Manhattan Plaza, as it enfolds in this
article, reveals many things about how government, in cahoots with
the private sector, persecutes the poor and needy in the guise of
providing housing for "low-income" families. Its implications
therefore go far beyond the immediate story of how one project gets
built and then bailed out at the people's expense and to the better
enrichment of the real and building industry.
The article will be published in two parts. Part I, printed below,
explains how the project got put together and then Rot into trouble as
it neared completion. Part II, to appear in the next issue of "City
Limits," will deal with the "bail-out" and what it means and implies
for the rest of us.)
PARTI
The curtain was dramatically rung down on the latest (but almost
certainly not the last) act of the drama known as Manhattan Plaza on
February 3rd last when the Board of Estimate voted unanimously to
approve eleven and a half million dollars per year (for each of the next
forty years) of housing assistance subsidies so that 1,698 apartments in
the still-unfinished Mitchell-Lama project can be rented to citizens
who could not afford the rents required to sustain the project and
repay the city its S90 mil1ion mortgage loan by means of which it has
been built. The Board of Estimate's resolution provides that seventy
percent of the apartments will go to members of the "performing
arts" professions and the remaining thirty percent to
residents of the Clinton neighborhood and the elderly.
The scene at City Hall on that fIrst Thursday in February was
indeed well-mounted and produced. Of course, there was the usual
array of city officials testifying that the plan was absolutely necessary
and predicting dire consequences if it was not adopted. Predictably,
the "community representatives" from the Community
Board and an anomalous organization known as the Clinton Planning
Council gave their blessings. What added spice to the occasion, and
assured front-page publicity, was the presence of that doyen of legiti-
mate stage and a senior citizen in her own right, Helen Hayes, and
Oscar-winning movie actress, Estelle Parsol'ls, who eloquently pleaded
in accents more familiar to Broadway than to City Hall, that the
project be allowed "at long last. . . to open its doors to Clinton and
the performing arts." As might be expected, they brought down the
house.
Another piece of stage business that should not go unreported was
the appearance that the Board of Estimate was affecting some sort of
a "compromise"-one that was attentive to concerns of the Clinton
community, the representatives of the performing artists which might
soon move into the project and even to the fIscal worries of the City
Comptroller.
From a play-reviewer's perspective, the production at the ornate,
beautifully proportioned theatre known as the Board of Estimate
Chamber, was a masterpiece. As a revelation of municipal housing
and community development policy it was a disaster.
To understand fully the true motivations as well as the implications
of what Manhattan Plaza is doing for and to the people of New York
City, it is necessary to know the story of how, why and by and for
whom it got conceived, approved and put together. Though the story
of Manhattan Plaza may be known to some, its full implications have
received little or no attention from the media. It actually goes
something like this . . .
Along about 1967, one Seymour Durst, a long-time wheeler-dealer
in midtown Manhattan real estate, had assembled a lot of run-down
property in the skid-row area of 42nd Street west of Times Square and
on adjacent blocks in the Clinton neighborhood. Desirous of lighten-
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ing the burden of these properties, he teamed up with a high class
developer by the name of Richard Ravitch and his HRH Corporation.
Ravitch was a &ood deal younger in years than Seymour, but had
already begun to make his mark as a builder of expensive Mitchell-
Lama "middle income" housing projects.
Ravitch saw in Durst's deteriorating tenements and rotting store-
fronts a chance for a possible major killing (this is called "vision" in
the planning industry), so he put together a proposal f.,r a square-
block, high-rise apartment complex running from 9th to 10th Avenues
between 42nd and 43rd Streets. Calling it "Manhattan Plaza,"
Ravitch frrst tried to peddle the scheme to the State Division of
Housing and Community Renewal. That agency turned down the
scheme, basically because they concluded the apartments, projected to
rent for S90-S100 per room per month, could not "sell" in that
neighborhood.
Undaunted, Poor Richard turned his sights on the city, which,
through the generosity of the state legislature, has the same right as
the state to sell its bonds (and thereby hock its taxpayers for forty
years at a clip) to raise money to lend to developers of middle-income
housing.
At this point, we should perhaps explain what "middle income"
means in the housing parlance of the Empire State. As a matter of
actual fact, one doesn't fInd the words "middle income" anywhere in
the New York State Private Housing Finance Law (more popularly
called the "Mitchell-Lama Law" after its principal sponsors in the
Albany legislature, Senator MacNeil Mitchell from Manhattan's West
Side and Assemblyman Ferdinand Lama from Brooklyn-two astute
lawyers who profIted mightily representing developers who sought
fInancing by using the law they, as legislators, had wrought). The law
speaks only of "persons and families of low income." But the same
law goes on to defme low income in a most strange and peculair way.
It says that a family of one, two or three members is "low income" so
long as its annual income does not exceed six times the rent charged by
the project; families of one or more persons are "low income"
provided their incomes are not more than seven times the rent. There
is, of course, no limit on the rent. So in a project where the rent is Sl00
per room per month, a four-person family occupying an apartment
with three bedrooms and a terrace (which under the Mitchell-Lama
regulations counts as 6.0 rooms and therefore rents at $600 per
month) can earn up to SSO,700 a year and still beclassified, officially
and legally and with a perfectly straight face as "low income. "
To return to our story-Our intrepid developer, Mr. Ravitch, found
the city fathers much more receptive to his plans and specifIcations.
One can only speculate why. Perhaps because the Mayor had the
benefIt of advice from a staff of "experts" known as the Department
of City Planning; perhaps because the City was nearing (after decades
of research and preparation) the publication of its long-awaited
"Master Plan" which would confidently predict the rejuvenation and
rebirth of West 42nd Street as a high-class strip of luxury hotels, shops
and apartment buildings; perhaps the brand new Administrator of the
brand new Housing and Development Administration thirsted for a
record number of new housing starts; perhaps ...
Despite a few grumblings from local residents (who are always
opposed to progress and enlightenment I) and others (who
undoubtedly bad special axes to grind) the plan sailed through HDA,
the City Planning Commission and the Board of Estimate and Ravitch
had his deal. The project was budgeted at a total development cost of
S9S million. Under the Mitchell-Lama "low income" housing law, the
city would fmance 9S.,. of about S90 mil1ion; Ravitch and his
corporation would have to put up "equity" of SS mil1ion.
Ravitcb's plan c:alled for a project which would consist almost
entirely of studio and one-bedroom apartments. Less than 10 percent
of the units would have two bedrooms and none would be Wier than
that. The intended tenants would thus be mostly sinale persons and
married couples without children. At initally projected rents of about
Sl00 per room per month (or S2SO for a studio without a balcony and
S3SO for a non-balconied one-bedroom unit), the project could only
hope to acquire as tenants YOUDJer, upwardly-mobile men and women
who were malcinl their way in businesses or professions located in
midtown Manhattan and who would be intriaued by living quite close
to work.
Perhaps Ravitch saw Manhattan Plaza as a kind of minor leaaue
farm for his other ~ g h ~ l a s s Mitchell-Lama over on the East River at
34th Street where the facades were fancier, the rooms and apartments
a little larger and the rents a lot higher. Young people, particularly
newcomers seeking fame and fortune in the Big Apple, would start out
at Manhattan Plaza and when they hit the big time, would move to
the East Side-all the while receiving the benefit of government
subsidies so their housing needs would never be an economic burden.
And so the parties proceeded to a closing. Durst sold the land to
Ravitch (probably at a tidy profit) and Ravitch signed with the City.
Don't think for a moment that Poor Richard had to ante up SS million
in cash at the signing. That's not how Mitchell-Lama works. Richard
has only to promise to come up with a total of SS million as and when
the City felt it was needed for expenses as the project progressed. At
the initial closing, Ravitch, as a matter of fact, was only asked for
SIS0,000 in cash-which he gladly put into the kitty. The City
advanced, out of its mortgage proceeds, the rest of the money needed
to get the construction underway.
Then, a strange thing happened. One day after the closing Ravitch
ceased to become the owner-sponsor-developer of the as yet wholly
unbuilt Manhattan Plaza; he had sold his entire interest to a group of
partners which included Estee Lauder, the perfume queen, her
husband, Alexander Cohen, a millionaire Broadway show business
luminary, and other-for the munificent sum of Sl2 million! For a
cash outlay of SIS0,000 Ravitch became richer by S7 million in the
space of 24 hours. Now you begin to see why Mr. Ravitch is
considered by many to be the kind of the local real estate developers
and maybe also why Governor Carey appointed him head of the
troubled New York State Urban Development Corporation.
But that ain't alll Ravtich and HRH still held a few cards in the
game. His corporation had the building contract, worth some $60
million or more, including the built-in "builder's overhead and
profit" and all sorts of professional fees which the Mitchell-Lama
regulations are so careful to specify. Through another corporation,
Ravitch held the right to manage the project when it was
completed-worth (courtesy of Mitchell-Lama regulations) around
4'1. of the then anticipated gross rent roll of something in excess of $6
million a year, or an income of about a quarter of amillion per annum.
Right from the very start, Ravitch had already bailed himself out, at
a 140 percent profit, and stood only to make more and more money.
Why, one may ask, did Ms. Lauder and her partners, so willingly
enrich Ravitch and assume the risks of ownership of an as yet un-built
housing development? The answer, in a word, is taxes. Much of the
grease that enables the wheels of large-scale real estate deals to spin is
furnished by the national government in the form of the Internal
Revenue Code. On the one hand, the tax law requires rich people to
pay huge percentages of their incomes to the government in taxes. On
annual incomes of over SI00,OOO per year single persons pay 70.,. to
Uncle Sam; for married taxpayers, the 70'1. bite stans at S2OO,OOO. At
the same time, the Internal Revenue Code offers all kinds of
inducements to high income taxpayers to reduce their incomes subject
to tax. These inducements go by the apt name of "tax shelters." One
of these shelters is called "depreciation," an interesting variety of
which is known as the "double-declining balance" type and is very
handy for owners of income-producing rc:al estate. It works out about
like this.
Suppose, as in the case of Estee Lauder and Company, you own a
brand new apartment house development which "cost" S102 million
to put up (remember, Lauder and .Co. paid Ravitch SI2 million and
the city was putting up S90 million for a total of SI02 million).
Assume that the land (which will always be there and therefore doesn't
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"depreciatC") represented S7 million of the total project cost. The
remainder, S9S million, can be depreciated. The period of time over
which this depreciation can be taken is, for this kind of project,
assumed by the tax collector, to be 40 years. That means that the
property is ___ to decline in value (reprdless of actual condition)
at the rate of 2-1/2'" of its cost, or by S2,37S million, per year.
However, if you use the lep.\ double declining balance method of
depreciation, you take off twice S2.37S million, or $4.7S million the
flCSt year. What does this do to your tax bill? Let's see what might
happen to the partners of Lauder and Co. Under the Mitchell-Lama
law, the maximum profit the owners are allowed to make from
operating the project is 6'7. per year on the cash equity-in this case,
6'7. of SS million, or S300,OOO per year. That would show up as
taxable income to the partnership. But then, in year one, the partners
subtract $4,7SO,OOO of depreciation, leaving a net loss for tax purposes
of $4,4S0,000. This loss the partners can use to offset other income on
which, but for the loss, they would have to pay taxes.
Suppose Mr. & Mrs. Lauder each contributed ten percent , or S1.2
million a piece to purchase from Ravitch the ownership of Manhattan
Plaza. They would together own twenty percent of Lauder and Co.
and they could therefore use twenty percent of the net loss from
Manhattan Plaza, or S890,OOO, to subtract from otherwise taxable
income. Suppose the Lauders have other net income (from salaries,
interest on bonds and bank accounts, dividends on stocks, etc.) of
SI,SOO,OOO. If they had no "losses" to subtract from this income they
would have to pay, at current U.S. income tax rates, a tax of
SI,02O,98O. By using the net loss obtained from depreciation on
Manhattan Plaza, they reduce their net taxable income to $610,000
and their actual tax to S397,98O. They therefore save $623,000 in
taxes, as a direct result of the depreciation loss on Manhattan Plaza.
This saving represents a "return" of more than 2S'1. on their S2.4
million investment-not a bad deal by any standards. And, of course,
to this S623,000 should be added 20 percent of the net profit of
S300,OOO actually received from operating the project, or $60,000,
making a total "gain" to the Lauders of S683,000, or 28.4'7.1
Of course, they don't "earn" quite as much in the succeeding years.
In fact, under the double declining balance method, their net savings
in taxes become less each year. But after ten years, by which time the
annual net savings would become less than half of the sum saved in the
first year, they will have "earned" an aggregate amount of almost
twice their S2.4 million initial investment. At this point, the Lauders in
effect would also own their 20'7. interest in Manhattan Plaza for
nothing. They could then sell their interest to another millionnaire in
dire need of a tax shelter, sa .. e more tax money by the "long term
capital gains" provisions of the Internal Revenue Code, and go on to
even bigger and better things.
The long and short of it is simply that the quick-turnover sale by
Ravitch to the Lauders and their friends was a very gOOd deal for both
sides-thanks to the U.S. Congress and the Legislature of the State of
New York.
Only-something went wrong between that initial closing and some
time along about I97S, when the next scene opens.
The Master Plan's bright predictions for West 42nd Street weren't
happening. Instead of bright new buildings, the old dilapidated
structures were still there. Only their former tenants who operated
pawnshops, one-arm luncheonettes and second-hand clothing stores
were being replaced by porno peep shows and massage parlors. Times
Square, a few blocks to the east, was also sleazier and more unat-
tractive than ever. New office buildings on Broadway-which were
expected to be filled with" bright, ambitious junior executives who
would rush to live in Manhattan Plaza-remained empty and in
foreclosure. Who, therefore, would want to live in the project? And it
was no longer going to cost "only" SI00 a room per month to live
there. Along with the accelerating decline of Times Square and points
west, the early years of the 19705 brought mounting inflation. The
cost of money, reflected in the interest rate the city would have to
charge if and when it ever got a permanent long-term mortgage placed
on Manhattan Plaza, became double what it was when the project was
ftrst approved. Skyrocketing fuel, utility, insurance and labor costs
made it necessary to up the projected maintenance and operating
expenses by very substantial amounts.
In short, by 1975, the developer and HDA were agreeing that the
{continued on page 8J 3
The current arctic winter has made it clearer than ever that energy is
now the major issue confronting America. Without it, there is no
economy, and the method we select to generate power will, to a large
extent, defme how we all live for years to come.
For three decades now it has been a fond dream of a large and
powerful group of scientists, politicians, and businessmen that
nuclear-power plants would provide an infmite supply of cheap,
centralized energy. That dream is now dead. But the industry remains,
a capital drail!, waiting to supplant Vietnam as the basis
of a war economy. This time, the war is on our bodies and our
environment.
Atomic reactors generat electricity by harnessing the power of the
nuclear bomb inside enormously complex, sensitive cores. What they
cannot do, however, is to turn the trick safely, cleanly, or even
economically.
All nuclear plants give off a certain amount of radiation, and this
radiation is a known cause of cancer, leukemia, and birth defects. All
nuclear plants are potential bombs. Should the core of even a
medium-sized reactor get out of control (either by accident or
sabotage), it could release thousands of times more radiation that was
spewed out at Hiroshima and Nagasaki. By the industry's own admis-
sion, such a catastrophe could kill thousands and cost billions.
All nuclear plants produce radioactive wastes which cannot be
handled, which can be turned into bombs, and which ultimately pose
an almost incomprehensible threat to the health and safety of this and
all generations to come. There is no solution now or on the horizon for
the waste problem, and any future remedy will cost billions.
For many of us, anyone of the above points is sufficient to demand
a stop to these machines.
But there is more. Nuclear reactors require huge amounts of water
for cooling. The plant intended for Seabrook, New Hampshire, would
take 1.2 billion gallons of water a day; the one for Montague, Massa-
chusetts, would use a quarter of the Connecticut River. In all cases,
the water is returned to the natural environment 4 to 40 degrees hotter,
with devastating implications for the marine environment. Sometimes
cooling towers are also used, releasing enormous quantities of steam,
with uncertain effects on weather patterns.
Despite the almost incalculable investment of human and natural
resources, the fact is that nuclear-power plants do not work. The track
record of the stations here has been so poor as to cause serious doubt
that the industry can ever pay for itself. There have been accidents,
shut-doWDS, and incredibly costly repairs. Their construction costs
have soared year after year, and delays have in some cases doubled or
tripled the bill.
Meanwhile, nuclear fuel is both scarce and monopolized. There's a
shortaae of raw uranium, and an even more critical shortaae of the
enrichment facilities without which the raw stuff is useless.
Hopes for reprocessing the spent fuel into reusable material are on
the brink of burial, as America's single working reprocessing facility
at West Valley, New York, was closed in 1972. The only other one on
the horizon-Barnwell, South Carolina-is meeting stiff opposition,
and may never open. Without reprocessing, there is not a prayer in the
world that nuclear power can pay for itself.
Partly because of this economic cul de sac, and partly because of the
downturn in electrical demand, new reactor orders in the United
States have plummeted. Major coporations have bailed out, and over-
all the nuclear investment picture is bleak at best. Predictions by the
Energy Resources and Development Administration of how many
plants the U.S. will Jleed by the year 2000 have already dropped from
1,000 to sao, and the magic number could go even lower.
As the Carter administration takes office, the cries of nuclear-
power advocates have gone from shrill to desperate. Carter promised
during the campaign that nukes would be "a last resort," and placed
4 ,
strong emphasis on conservation.
If a president ever had an opportunity to make gbod on his
promises, Carter has it with nuclear power.
There are now two vacancies on the five-member Nuclear Regula-
tory Commission, which licenses and oversees all reactors. There is at
least one more vacancy coming up with the June 30 expiration of the
term of Marcus Rowden, the current chairperson. There are also spots
to be filled in the Environmental Protection Agency and Federal
Energy Commission.
Most important, there is the plain fact that the nuclear industry will
not survive without massive federal help. The fast-breeder program is
strictly a government baby, and the fates of waste st!)rage, reproces-
sing, and enrichment are entirely dependent on the numbers in the
federal budget.
What those numbers say when Carter submits his budget this month
will not only tell a lot about Carter, but may also defme the struggle
over energy in America for some time to come.
There is a completely different road to take. A major 1974 study by
none other than the Ford Foundation showed we could, with simple
conservation measures, cut our energy-consumption growth rate in
half with minimal effects on our precious lifestyle, thus eliminating
the need for nuclear expansion altogether.
Secondly, we do have the means to generate power in other ways.
Despite an expensive and highly effective media blitz to the contrary,
solar energy and its wind, tidal, and geothermal cousins are more than
ieady to serve as out national energy source. They are well researched
and ready to go as a partilll source within the next five years and as our
total supplier by the second or third decade of the next century.
They are clean, safe, naturally harmonious sources of power that
are labor-intensive (as opposed to nuclear, which is capital-intensive)
and will create far more jobs than the highly specialized atomic
industry ever could.
N ....... eMiJ111, "lIIort, a people'. tea-oloty.
What it needs is a massive influx of the people's money. The basic
parts-giass, waterpipes, pumps, black paint, propellers-are all
there. The problems of storage ("What do you do when the sun
doesn't shine?") await only the necessary research-and-development
funds. The hurdles are infmitely less complex and delicate than the
likes of atomic-waste storage or the malting of a reactor that will
actually pay.
But the political barriers are something else again. The nuclear-
power industry is the Siamese twin of the weapons industry. The fust
reactors were built not for power, but to make the radioactive
components for bombs.
The "peaceful atom" was invented to legitimize the weapons tech-
nology. Built in are the traditional assumptions of infmite consump-
tion and expansion, into which corporations can continue to pour
excessive funds with fuD public underwriting.
Nuclear energy is also a means to keep power-both electrical and
otherwise-centralized in the hands of big money.
For the ultimate threat of natural energy is not that it might not
work, but that it might work too well. Solar, wIad, tidal, .. d po-
-.- are rnolatloa...,., _.u-ale tedtaoloales,
_bIe to local cOatroi. As such, it would be foolish to expect-or
even hope-that they will come to us without a struggle.
For years now, the environmental movement has been oriented
toward the white middle class, and its major tactic has been to lobby
in Washington. The time has come to take environmental issues to the
grass roots. in France, Germany, and Japan, mass grasS-foots
movements have already forced major confrontations at the sites of
nuclear projects, with devastating effects.
The same is now happening here. In Seabrook, New Hampshire,
[colltillued 011 page 14J
'.'
WHAT'S HAPPENING Mr. Appleby?
Responses Lagging to Demands for Direct Sales;
Community Participation in Section 8 Demonstration Programs
Way back lut November, community housina representatives from
ANHD and the Urban Homesteading Assistance Board, as well as
other neiahborhood leaders, bepn to press Administrator Appleby
for reforms of the "Direct Sales" Program. This has been one of the
plethora of non-programs at HDA. Its basic idea is absurdly simple
and could be eminently workable.
As everyone knows, the city is taking title to ever increasina
numbers of multiple dwellinp through the in tax foreclosure
process. With the adoption last December of amendments to the New
York City Administrative Code shorteniJla the period before the city
commences takeover of most real property for non-payment of taxes
from three years to tax arrears to one year, the influx of residential
buildings into city ownership is bound to accelerate even further.
Many of these buildinas that come into city ownership are occupied
by tenants. In a number of cases: the tenants are in fact mauaaing
their buildinas followiJla abandonment by their private landlords.
These seif-lIUlIllI&ed buildinas may need some repairs and renovation,
but they least livable conditio,n occupants
are prepared to continue workina to preserve and uparade them . . The
tenants are collectina their own rent monies and fmdina that they are,
or can be made to be, sufficient to cover the on-aoina costs of
operation and maintenance and leave somethina over for repairs and
replacements.
Does it not make sense, where the tenants want to continue
operatin, and livina in their buildinas, to have the city transfer title to
the tenants-who can easily create a non-profit housina development
fund company under Article XI of the Private Housina Fmance Law
to which title can be transferred by a deed from the city? Among other
things, such a transfer would immediately restore the buildina to the
real estate tax rolls and thereby begin to produce much-needed
revenue for the city.
This is not a new idea. It has been kickina around for at least a
couple of yean and has been officially endorsed and approved by
HDA. Like many other situations, when government fmally
acknowledges that there is a problem and a remedy for it, the response
is to design a categorical prescriptive program which turns out to be so
complicated and so narrowly drawn that it works, if at all, only for a
very few of the people or buildinas which it was supposed to help.
HDA's previous efforts at dealina with Direct Sales of city-owned
buildinas to tenants or to local community groups produced exactly
that result. So that, when HDA was approached some three months
810, not a single buildina had made it through the incredibly complex
pipeline that the aaeney had designed for this absurdly simple ..r--
program.
Appleby, along with his new General Counsel, sat down and
discussed the matter at length with the community representatives. He
seemed very receptive to the suggestions put forth to streamline and
simplify the process. At end, he asked that ANHD and U-HAB
JanuarY 17.197
7
Administrator .
Thomas APplebY, t Administration
Hon. . d DeVelopm
en
NYC HOUSing an
100 Gold street
k NY 10038 .
New Yor , . Rehabilitation prog .
. 8 Demonstration
Re: HUD Section
propose a new pIIOgram and procedure for Direct Sales in writing and
send it to him. This was done and on January 12, 1977 a 12-paae
proposal was duly delivered to the Administrator. Follow-up inquiries
to date are responded to only with "we're very busy, but we'll get to it
soon." Where programs to enable low-income people to help them-
selves are involved, there always seem to be more urgent priorities.
So, too, with the Section 8 Demonstration Rehabilitation Program.
This is an invention of the federal Housina and Urban Development
Department-a sort of parting "gift" from Gerald Ford's now ex-
Secretary, Carla Hills. To stimulate housiDa rehabilitation and
construction industry employment, HUD armounced that it was
settina aside SSO million worth of Section 8 housina assistance
allowance subsidies to provide low-income housing in ghetto areas.
These subsidies would be applied to lower rents in boUdings provided
they would be rehabilitated under agreements by the building trades
unions to reduce the waae rates of the workers employed on these jobs
by at least 2S percent below the present union scales.
New York City was quickly b)' f1d has,
allocated enough Section IJ funds to enable the substantial rehabilita-
tion of dwelling units. Most of the major private builders and
developers in town have already submitted proposals and indications
are that construction may be ready to start by next spring or summer.
As usual, neither HUD nor the city talked to many community
housina groups about this program. The fact that they are coming
&pin into our neiahborhoods and up our environments is of
course no reason to involve-or even speak to-the local residents.
So we went to speak to them. Specifically, to Deputy Mayor John
Zuccotti, HDA Administrator Appleby and Alan Wiener, former
Deputy Commissioner at HDA and now a Mayoral Assistant. We
made it quite clear that we were not opposed to the program or even
to the fact that the rehabilitation was goiDa to be done by private
developers usina union labor.
We did, however, point out that ihere are several aspects to this
program with respect to which community residents and neiahborhood
groups are quite concerned. These include such matters as site
selection, design and ll'.yout of apartments, relocation of existing
tenants (we urge that there are znough vacant buildings suitable for
rehabilitation so that no occupants should have to.be removed from
their present housing), participation in mandated apprenticeship-
trainina programs which the rehab contractors are obliged to conduct
under existina city and federal laws and regulations, tenant selection
and (perhaps most important of all) management of the rehabilitated
buildinas.
HDA maintains that the program is federal and outside their
jurisdiction. We are not buying this simplistic attempt to avoid
responsibility. We made this clear in a letter which was sent to HDA
on January 17, 1977, shortly after our face-to-face meetina with
Appleby, Zuccotti and Wiener at City Hall, in which we point out the
many ways in which the city must or at least may legitimately intervene
and become very much involved in this rehabilitation program.
A copy of ANHD's letter to Appleby is reprinted in full below.
Here, too, we have had only silence from HDA headquarters and
other parts of the city.
\
to the meeting held at
. coalition an
Dear Mr. APpleby, . d Community DeVelopment
d
as a follow-UP
If
, the New York City HoUSing an
On beha OJ
lover]
5
\
City HIIlI 011 JIlllIItlTy 6, 1977, at which)lOu participatl, I am ltenby rrqueSting that you Mnd us in/ormation and that
)lOll rapoNl to concwns regarding tM abolle program, as Mt forth below .
.As to tM information: 1ft! would appnciote your furnishing us with a list and description of tM areas which you submittl to
HUD as being approprilltefor the program .Also, the nama IIIId addressa of those developers who may have been in contact
with )lOur agency IIIId who halIe or intend to submit proposllls for the program. We WOUld, of COUrsl!, very much appriote
neeiving this information as soon as possible.
Our about the program, with rap:t to which raponsa from you are requl!Sted, are:
1. RriOCIItIOli of lite tDUIIIU
In view of the curnnt of vacant multiple d1ft!lIings in the neighborhoods suitable for large-scale rehabilita-
tion, 1ft! s no reason why the program cannot avoid relocation of any site tenants, i.e. the program should.be confinl to
d1ft!lIings that are pramtly vacant. Disastrous aperienca with relocation in Projt Rehab, municipal loan rehabilitations
and other programs IIIId the inability and unwillingness of your Department of Relocation to undertake or administer viable
relocation efforts give further emphasis to this view.
We would also ct!11 to your attention neent litigation in theflual court in Kansas City involving tM relocation of households
by a flually-assistl housing projt. TM U. S. District Court has there rull that Uniform Relocation Benefits are
payable to such households. We beline that the holding in that caM applies with at INSt equtJJ to tM demonstrations
section 8 program and 1ft! are pre[Nll'l to support any and all tenants who may be afftl in this city. This is still another
reason why the city should insist that tM program operate in New York City solely in curnntly vaCllllt buildings.
TMre must be some that the railhnts of tM afftl communitia will halIe an assured input with regard to tM
locations of tM projts . .At a minimum, tM city should mab it clNr that, it has tM authority and tM duty to review and
commmt to HUD on all sita proposl for St!Ction 8 subsidies, it will consider a favoroble ncommmtkltion only if tM land use
now providl under tM city cJuuter for properties to which such are applicable, are strictly followl
and adhered to.
For the same reasons, the communitil!S should have similar review and input with rl!Spect to dl!Sign and apartment layouts. Of
particular importance here is assurance of apartment s/z1!S compatible with the communitil!S' perceptions of the priority nuds
of its low-income rl!Sidents.
4. Jobs in the construction process
Not only must there be strict compliance with the city's affirmative action programs for construction projects, but in addition,
where community housing groups have CETA or LEAA-funded adult work experience job training programs involving
housing rehabilitation (as in East Harlem, the Lower East Side, Central Harlem, Manhattan Valley, Oceanhi/l-Brownsvi/le
and the South Bronx) priority in hiring minority workers as trainel!S or apprenticl!S should be assured to otherwise qualified
CETA and LEAA workers. In other cases, priority in hiring for trainee positions should be given to residents of the neighbor-
hoods in which the construction is being undertaken.
5. Building management
This is a key issue. In view of the past dismal record of private, profit-motivated management efforts in low-income areas,
I!Specia/ly in rehabilitation projects, it should be of grave concern to you and your agency. We think that the time has come to
involve community-based, non-profit organizations in allfuture low-income housing projects. The ncords of several groups in
your community management program and the rent entry of two community organizations in Mitche/l-Lama management
demonstrate that this type of management is workable as well as acceptable to the consumers thereof.
The city should insist, as part of its oversight and projt review procedures, that each section 8 developer must suk out and
negotiate with a suitable local non-profit group for the rent-up and management of its project or projects.
We stand ready to discuss thl!Se matters with you atfurther length and to assist your agency and the federal government in their
implementation. We trust that we may befavored with a prompt raponse and that we can together move toward achieving the
above-stated objtivl!S as quickly as possible.
Sincerely yours,
/s/ Robert Schur
Robert Schur
for the New York City Housing and
Community Development Coalition
6
cc. Hon. John Zuccotti
Mr. A/lan Wiener
Ron Shiffman
Innis Francis
Helen B. Atkinson
Eilunue
Frank lkrmudez
Sandra Thomas
Dan Gutman
Bruce J. Gould
Bruce J. Gould
Connie Lopez
LETTER H
HABENDUM CLAUSE - From the Latin phrase "Habendum
et tenendum," meaning "to have and to hold." Refers to the
necessary formal words in deeds of real 'property dating from a very
early ege which precedes the description of the kind and degree of the
estate being transferred (_ def. DEED).
Example: The words in a deed of a percel of land from A to 8, "to
have and to hold unto 8 and 8's heirs and assigns forever" denotes a
fee simple absolute 1_ def. FEE) of the land described in the deed.
HABITABILITY - As used with reference to real estate, a
condition of the property 'such that it may be occupied with
reasonable safety and COmfort. The term has acquired greater
significanca with the adoption by New York State of the so-called
" warranty of habitability law" (section 235-b of the Real Property
Law) which specifies that every lease of residential property shall
automatically be deemed to include a legally binding assurance by the
landlord that the living accommodation is "habitable."
HEIR - A person designated by law to inherit real property from
one who dies withoClt leaving a will. In New York State, the order of
relationship to the deceased person of the persons who succeed to
ownership as "heirs" is est8blished by section 4-1.1 of the Estates
Powers and Trust Law. (In that law, the persons are called
"descendants.")
HEREDITAMENTS - Things which are capeble of being
inherited, including real estate. The word is part of the familiar legal
phrase, used in deeds and wills, "lands, tenements and
hereditaments" and, as applied to real estate, is a redundancy. It
indicates an intention to include both the land and every kind of
property on the land (including buildings) which is of a non-perishable
nature.
HIGHEST AND BEST USE - That use of real estate which
will produce the greatest income or return. The term is used in real
property appraisals and denotes a process whereby the appraiser first
ascertains the market value of the property as presently used and
improved and then determines whether any other use or improvement
will produce a greater market value after deducting the cost of the
change of use or improvement.
Example: A parcel of land, now being used as a parking lot, is
found to have a fair market value as a parking lot of $50,000. The
property is located in an area which is zoned so as to permit t he
construction of an office building with a rental area of 200,000 square
feet, which space could be rented to produce a net operating profit to
the owner of $2.50 per square foot, or $500,000 per year. To remove
the parking lot and erect the 200,000 square foot office building would
cost $4 million. The "cost" of obtaining $4 million at the going interest
rat e (of say 9%) is $360,000. The projected net retum to the owner is,
therefore, $500,000 minus $360,000 or $140,000. This is greater than
t he $50,000 return from the parking lot. Therefore, the " highest and
best use" of the land would be for an office building rather than for its
present use as a parking lot. If, however, the operating profit from an
office were projected at only $1.00 per square foot rather than $2.50,
the reverse conclusion would be made as to the "highest and .best
U58. "
HIGHWAY - The generic term for all kinds of public ways; any
free public road, way or street which every person has the right to
use.
HOLDOVER - Used es a verb, to retain possession 88 a tenant
of leased property, after the expiration of the lease term.
Also used 88 a noun to describe a tenant who remains in ~ n
of real property after his or her lease expires.
Also used 88 an edjective to refer to the type of summary legal
proceeding (for example, as provided by Article 7 of the New York
Real Property Actions and Proceedings Law) employed by a landlord
to recover possession of real property from a tenant who fails or
refuses to vacate and leave the property and surrender its possession
to the landlord when the lease comes to an end.
HOLOGRAPHIC WILL - A will in the handwriting of the
person who made and signed it. Such instruments are usually valid
and, except in certain unusual circumstances, they must be witnessed
in the same manner as printed or typewritten wills to be legally valid.
HOMESTEAD - The home or house and adjoining land where
the head of a family resides; the fixed residence of a household and its
head member. As sometimes used today, a "homestead" may include
an apartment in a building, whether it is owned by the occupant or
merely leased.
In most states, property which qualifies as a homestead is
exempted from seizure by creditors, as distinguished from other
property owned by a dabtor which can be seized and sold by creditors
to satisfy judgments.
HONORARIUM - Any gratuitous payment for services as dis-
tinguished from services which are hired and paid for at an agreed or
s t a n ~ r d rate.
HOSTILE POSSESSION (also called ADVERSE POS-
SESSION) -Occupation of real estate by one who claims to have
rights superior to another and therefore denies that the other person
has rights to occupy the same property. It does not imply any actual
enmity or ill-will, but merely the assertion of an apparent claim to legal
occupation.
The concept of "hostile possession" is important in connection
with the notion of "prescriptive rights," since such possession, if
unchallenged by one who in fact has a superior legal right of posses-
sion, can eventually become a superior right as a matter of law.
HOUSE - Any building designed for human habitation and
residence.
HOUSEHOLD - In ancient times, a family living together.
Nowadays, the term is understood to include any regular arrangement
for living, either by a single person living alone or by a group of two or
more people.
HYPOTHECATE - To pledge any property as security for a
deot, without actually delivering the property to the creditor (where
the property constituting the security is delivered int o the possession
of the creditor, the transaction is called a " pledge"). An "hypotheca-
tion" can include a mortgage of real property, although the term is
more commonly used in connection with personal property.
LETTER I (Partial)
ILLEGAL - Any act or situation which is contrary to law.
IMMINENTLY DANGEROUS (or HAZARDOUS;
also IMMEDIATELY DANGEROUS or
HAZARDOUS) -As used in connection with housing, the term
denotes a condition reasonably certain to place life, limb or health in
peril.
The term is frequently used in housing maintenance codes to char-
acterize a more serious class of violations, for which more drastic or
severe penalties or remedies may be prescribed.
IMPROVEMENTS - In real estate parlance, any valuable
eddition made to real estate or an amelioration of the condition of real
property amounting to more than a mere repair or replacement; any-
thing intended to increase or enhance the value, utility or appearance
or to adopt the property for new or further purposes.
IMPUTED NOTICE - Information which is legally charged or
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7
assumed to be known, regardlesa of whether one actually receives or
has the information.
In real estate law, the filing or recording of e deed, mortgage or
other document affecting the title of other rights to property, in a
public office officially designated for such purpose (in New York City,
such office is the Register's Office in the Borough - County - in which
the property is located; elsewhere in New York State in the County
Clerk's Office) is considered to be "imputed notice" to everyone in the
world of the facts set forth in the document.
IN COMMON (see def. TENANTCY IN COMMON).
IN PERSONAM - With reference to a person. Lawsuits be-
tween parties whose purpose is to have a court direct one or more of
the parties to do or refrain from doing something (for example: to pay
a stipulated sum of money to another party) are called "Actions in
Personam."
IN REM - With reference to a thing (property). As distinguished
from actions in person, "Actions in Rem" have as their purpose the
direct disposition by the court of the subject matter of the lawsuit. An
example is an action to foreclose a mortgage which determines
whether the mortgagee has the right to have the mortgaged property
sold in order to obtain funds with which the mortgage is to be paid.
Another example is the legal action brought by the City of New
York where an owner of real estate fails to pay the taxes due and
owing to the City. Here, the object of the lawsuit is for the court to
declare that title to the property passes from the private owner to the
City.
INCHOATE - In real estate, an interest in real property which is
not a present interest, but which may become a vested interest in the
future, if certain events do or do not occur. Also called a
CONTINGENT INTEREST or ESTATE.
An example of an "inchoate" interest is where A, by will, gives land
to B for B's life and then to C, but if C shall die before B, then on B's
death to D. 0 has an "inchoate interest," because it is not known
whether or not C will outlive B and only if C does not live longer than
B will 0 obtain a vested interest in the property.
"Inchoate" is also used as part of the phrase "inchoate instrument"
and as such refers to a deed or other instrument which the law
requires be registered (filed or recorded) in a public office. Prior to
such registration, the transaction is legally effective only as between
the parties named in the instrument and other persons who have
actual (as distinguished from "Imputed" notice - see def. IMPUTED
NOTICE!.
An example is a mortgage which is delivered by A, the mortgagor,
to B, the mortgagee. If, before this mortgage is recorded in the
Diversion of C.D.$ continued
approach: first, his Management and Budget boys are proposing
allocations of CD funds that they hope will slip by any federal
reviews ... such as, proposing to "maintain" police and fire services
in community development areas. This simply means firing cops and
firemen assigned to low-income neighborhoods and instantly re-
hiring them on community development pay lines. Absurd as it may
seem, even such a patently fraudulent gimmick MAY work. HUD is
willing to approve almost anything these days-and let's not forget
that Honest Abe Beame was a very early supporter of Jimmy Carter
when the latter was still a longshort to retire from the peanut business.
If that won't fly, the City Hall gang has a second card up their
sleeves-an official "waiver" from HUD headquarters in
Washington. Late last month, First Deputy Mayor John Zuccotti
made a quick trip to the nation's capital to visit Ms. Patricia Roberts
Harris, the new HUD Secretary. Knowing wags are not betting that
John flew down to Washington to check out Patricia's newly-
decorated office. They are saying that John went there to ask the
Secretary to put her official blessing upon the ISO million robbery.
All this, while not the best kept secret in the city, is being done
without quite the "maximum feasible citizen participation" that the
federal act mandates-a point that may embarrass the city fathers if it
gets raised in a court action to enjoin this entire deal.
The latter is what Hizzoner and Company may well begin to be
prepared for if they persist on going through with this
legerdemain. The New York City Housing and Community Develop-
8
Reigster's or County Clerk's Office, A gives another mortgage on the
same property to C and if C's mortgage is recorded before B's, C's
mortgaga will be legally considered to have priority over B's mortgage
-at least until B's mortgage is recorded.
INCOME - A gain or retum in money from a business, labor or
an investment of capital. It is usually distinguished from "capital," as
being a gain or return derived from the investment or use of capital
whithout thereby diminishing the value or utility of the capital. Thus,
when one investa money in real estate which is rented to a tenant, the
rent is considered "income," the "capital" being considered as the
real property itself.
INCOMPATIBLE USE - A use of land which is not suitable
in conjunction with a different use by another of the same or adjunct
or nearby land. An example would be the erection and operetion of a
boiler factory in the middle of a neighborhood which is otherwise
exclusively residential.
The term is also used in connection with zoning ordinances which
prohibit uses of land other than those specifically authorized in a given
area, the prohibited uses being considered to be "incompatible" with
the authorizes uses.
INCORPORATE - To create a corporation.
INCORPORATION - The formal legal process by which a
corporation is created.
INCORPORATION BY REFERENCE - A term used in
contracts and other legal documents (sometimes in statutes and ordi-
nances as well) whereby, instead of repeating a lengthy description or
definition, in full, the document merely states the title or identifies
material in another document and makes it part of the first document
by stating that it is "incorporated by reference."
An example might be found in a deed to real property the bound-
aries of which have a very lengthy and complicated description.
Instead of describing the distance and direction of each boundary line,
the deed may merely refer to a map of the property and state that the
boundary lines as shown on the map are "incorporated by reference"
and are thereby made a part of the deed itself.
(Editor's Note: This is the eighth installment of "LlNGO" which
appears in alphabetical order as a regular feature of CITY LIMITS.
Subsequent issues will continue LINGO through the rest of the
alphabet. By cutting out and preserving each installment, you can
create a complete dictionary of words and phrases used in the
housing and development field.
If you missed any earlier installments, write or telephone us and we
will be pleased to furnish them to you.)
ment Coalition, despite its rebuff when it petitioned HUD to set aside
parts of the city's C.D. 2 program last summer, is already looking into
the possibility of legal action-as well as calling upon the city's
Congressional delegation to demand that HUD and Ms. Harris put a
stop to this blatant misuse of federal housing funds. by Robert Schur
Manhattan Plaza continued
estimated rents would have to be increased from $100 to $150 per
room per month (studios would beaba at $37S; I-bedrooms at $S2S
and the few 2-bedrooms at $67S-utilities, gas and electricity
included, of course). Even with the amenities of a swimming pool and
health club, interior landscaping and the like, the nagging question
kept cropping up: who will live there?
HDA made some kind of survey in 1975 or early 1976 and received a
gloomy answer. At $ISO per room per month, the project simply was
not "marketable." There were not, it seems, anywhere near 1698
individu!lls or families who would trade whatever housing they had,
wherever it was located, for those high-priced apartments on 42nd
Street and 9th or 10th Avenues.
All the while, Ravitch, now only the builder and potential managing
agent, kept pushing the reinforced concrete and brick facings closer to
the sky-and spending more and more of the monies that Estee
Lauder and partners were borrowing from the city. And then, one
day, the city found that it had no more money to lend. The fiscal crisis
had arrived.
(To be concluded in next month's issue) by Robert Schur
IXl@mru@
@rru@J
Teaching Tenement House Tenants How to Preserve, Maintain
and Repair Their Building and Apartments
Puttering around one's home, fIXing and replacing broken, missing
or worn-out items, has long been a legitimate hobby for perhaps
millions of Americans. The long-time popularity of "how-to-flX-it"
books and magazines attests to "home repairs" as part of the way of
life for a great many people. Traditionally, however, involvement in
such activities seems to have been largely confined to reasonably well-
to-do homeowners-especially those living in the suburbs whose
homes are large enough to set up a work bench in the basement or
attic-and to farmers who traditionally have been too isolated (as well
as often too poor) to rely on "professional" mechanics.
City dwellers, especially those whose lives are lived out as apart-
ment house tenants, seem virtuallY'never to learn even the simplest
rudiments of household repairs or maintenance. Your typical tene-
ment-dweller is lucky if he or she can replace a light bulb-for
anything else, it's always "call the super."
But what if there isn't any super? What to do under the ever-more-
frequent conditions of landlord curtailments of services, of supers
who are never available or who don't know a washer from a hole in
the ground or where the landlord has walked away from the building
and there is no maintenance-or maintenance personnel? If Y0U live in
such a building-anyone of the thousands upon thousands of multi-
ple dwellings in New York City where this is the current fact of life
and you don't have the money or access to outside mechanics or
handymen (which is another typical fact of life) you have only two
choices: either you do-it-yourself or you sit by and watch your home
collapse around your ears and wonder where you can go from here ....
Of course, you can try to call the Emergency Repair Program. Has
anyone figured the ')dds on getting a prompt, lasting repair from
ERP? Assuming, of course, that your problem qualifies under the
program's guidelines as an "emergency." .
This is, of course, a very common problem and one that did not
suddenly appear only the day-before-yesterday. Strangely enough, it is
only in the last two years that something concrete and intelligent has
been done about it. Not surprisingly, it was a community housing
activist who saw the problem, figured out a simple, logical and
straightforward solution and set about to put it into practice.
Gloria Milliken, presently the director of Housing Conservation
Coordinators (a community-based housing group active in the Clinton
neighborhood on Manhattan's West Side), began to work on the
problem as far back as 1970, when she was visiting tenement buildings
in East Harlem as a vplunteer worker for Interfaith Adopt-a-Building.
What quickly became clear to her was the basic inability of the city or
any other outsiders to get repairs made to buildings and apartments
where the landlords were not providing decent levels of maintenance.
The only persons who might do the repair work were the tenants
themselves, but they almost always lacked the know-how as well as the
tools and the money to buy them.
What was needed, therefore, was a process for training tenants in
home repairs and building maintenance. Obviously, such a process
had to be conducted in the immediate neighborhood-preferably in
the very building in which the tenants were living.
Initially, Gloria attempted to reach out to vocational schools where
she hoped there might be someone interested in conducting a few
training sessions while doing real repair work in apartments in the
buildings. There was some interest and Gloria recalls meetings with
vocational high school principals, community college teachers and
even with professors in major universities. Union, construction
companies and architects were also contacted. "Everyone was hep on
the idea," Gloria says, "but all of them insisted on doing the course in
the same way-strictly theoretical classroom training." The schools
and the professional experts claimed they had neither the time nor
facilities and insisted that doing teaching in apartments where tenants
actually lived was "out of the question."
A year later, when Gloria had moved her activities into the Clinton
neighborhood and in despair of getting help from schools, colleges or
professionals, she convinced several volunteer Adopt-a-Building
teams to begin working with tenants to improve their apartments.
Neither the volunteers nor the tenants had many skills, but they did at
least try to do the simpler things-like patching broken plaster, paint-
ing, changing washers and door knobs and the like. Distressed at her
own ineptness, Gloria became a student in a building trades program
and went to school to learn how to install window panes, caulk
windows, change electrical outlets and repair electric fIXtures. This
course cost her $265.00. "An exorbitant price for learning to do these
few simple things," Gloria says.
Back in East Harlem, Cornell Cooperative Extension Services was
conducting a tenant orientation program for the Upper Park Avenue
Community Association (UPACA). Gloria confronted the director of
the program but quickly learned that all it did was to teach tenants
how to purchase, use and maintain the various items of new
equipment and appliances in their buildings. Even this would be some-
thing, she thought, but the money ran out when the training sessions
were completed in East Harlem.
So Gloria and the tiny staff she put together to form Housing
Conservation Coordinators began to do what repair training they
could with Clinton area tenants. During the winter of 1973-74, when
the oil crisis hit and prices for fuel doubled overnight, the HCC staff
went around showing tenants how to weatherproof windows and
doors and replace broken window glass. These efforts conserved heat
to some degree and enabled the buildings to stretch a few extra days
out of a tankful of oil-fuel that the tenants themselves were obliged
to buy and pay for in buildings abandoned by their landlords.
Finally, in 1974', Gloria heard about a tenant orientation course
which HDA was giving in coor,.;ra.tion with the Cornell Extension
Service. One of the HCC staft members enrolled in the course.
Although it proved to be largely a waste of time, one brief part of the
course involved a Cornell Professor, Dr. Lelland (Lou) Gallup, who
conducted a few sessions in home maintenance. Gloria learned that
this same Dr. Gallup had created a Home Maintenance and Repair
Course which had been given up at Ithaca, New York with great
success. It actually taught ordinary homeowners (there are very vew
apartment houses in that part of the world) how to take care of and do
all kinds of repairs.
After a good deal of chasing around, HCC fmally got to meet with
Gallup and persuaded him to adapt his course for tenement dwellers
and to try it out in Clinton. Eventually, matters were arranged for a
14-week course to be given for a. maximum number of 35 students.
Gallup insisted that a "classroom" setting was required and HCC was
obliged to accede to his demands. A makeshift workshop was set up
for the course at HCC's office.
The community's response to the project was overwhelming. When
notice of the Home Maintenance and Repair course was publicized in
Clinton in early 1975, HCC received over 300 telephone inquiries, and
142 persons registered for the course even though they knew that only
35 could be accommodated. As a result, Dr. Gallup was persuaded to
conduct two courses and to enlarge enrollment to 45 persons per
course.
These first sessions were enthusiastically attended and were tre-
mendously successful. Extensive newspaper and T.V. coverage
[over]
9
brouaht a continuiq delllle of inquiries. Over 75 of the 90 enroUees
graduated and received certificates of successful completion. Gloria
Milliken, HCC and Lou Gallup knew that they bad sometbina really
good to offer.
The success of these initial training courses, even tbough given in a
classroom setting convinced the sponsors that they sbould now try
G.loria's original idea of conducting maintenance and repair training
in "live" buildings. Funds to cover instructors' salaries and materials
for tbe fust courses bad been furnisbed by an anonymous donor. New
York Community Trust then announced that it would make a grant
for a second series.
Under the supervision of Ernie Winston, tbe construction coordi-
nator for the CETA and CJCC job training programs administered by
the Association of Neighborbood Housing Developers, Inc., an
expanded curriculum was designed, based on having the students
actuaUy participate in the rehabilitation of vacant apartments in
landlord-abandoned buildings in tbe Clinton neighborhood. Thirty-
two persons participated.
At the same time, Mr. Winston designed and conducted a second
course in building rehabilitation. This course was also so successful
that RockefeUer Brothers Fund offered a grant to HCC to train the
maintenance personnel of member and affiliate organizations of
ANHD which were managing buildings-either ' owned by the
organizations themselves or by the city, the tenants or private
landlords. A condition for enrollment by representatives of
community housing groups was that they had to agree to conduct
training of superintendents, handymen and tenants in their own
communities after they completed their own training.
Additional smaU grants from banks, foundations and business
foundations have since enabled HCC and ANHD to furnish funds for
tools, materials and instructors to community housing groups to
conduct home maintenance and repair courses in their own neighbor-
hoods. Five groups are now in the process of offering courses in
Brooldyn and the Bronx as well as other parts of Manhattan.
Meanwhile, HCC has continued to give training courses in Clinton
to local residents and others. It is now offering home maintenance and
repair for the tenth time. The basic arrangement is to conduct one or
JIM NAUN AND RICHARD MARANS OF H.C.C. SURVEY THE
TOOL LENDING LIBRARY, USED BY TENANT ORGANIZATIONS
THROUGHOUT THE CITY.
10
two seSsions per week, lasting about 3-112 hours per session. The total
course is covered in 14 sessions (or about 45 hours of training).
Courses are given during the evenings or on Saturdays to
accommodate working tenants and staff people from community
groups. There is no cbarae to students and tools are provided by a
Tool Lending Library whicb HCC bas established.
Courses are conducted, flfSt, by sbowing participants bow each
item of repair or maintenance is done. This is accomplished by course
instructors lecturina and demonstrating and by the use of slides and
transparencies. Next, the students actually do everytbina that has been
tauaht. Finally, students themselves take turns in teaching each other
what they have learned. By doing as much of the teaching as possible
in and on buildings, the students actuaUy fmd themselves doing work
which has immediate and lasting value. .
As an outgrowth of die successful training and the growing demand
for home maintenance and repair, Gloria and HCC conceived the idea
for a special course for tenants and community' maintenance
personnel in boiler repair.
In April of last year. an expert heating engineer, Edward Sacher,
was located who proceeded to help to design a 12-session course in the
maintenance and repair of home heating boilers and oil burners. The
fust course, which had 10 of its sessions at the boiler room of a
tenement building under HCC management and the remaining two
classes at the Voorhees Institute of Technology. was given last faU and
a second class is now underway. Close to one hundred persons have
registered with HCC for the boiler course and inquiries have also
come from community groups who want training for their
maintenance staff and employees of community-managed buildings.
So Gloria Milliken's d088ed persistence in pursuing an idea is
paying off. Thousands of low-income residents are being made at least
a litde more comfortable in their homes this winter because hundreds
of their feUow-tenants and community workers are able to make
repairs to their apartments and buildings. This is indeed self-help at
the grass-roots level.
by Kathy Sanders and Robert Schur
LosSures
WILLIE VARGAS. ADMINISTRATOR OF LOS SURES
Very few families living in the Southside of Williamsburg in Brook-
lyn were spared from the cruelties of tenement life this. winter. Some
of the families who did pass this winter without chronic lack of heat,
hot water and other basic services were tenants who were organized by
LosSures.
Los Sures is a non-profit organization working on a variety of
housing programs and problems in the Southside area of Williams-
burg. Focussing primarily on the management and moderate rehabili-
tation of the hundreds of six-story tenements built around the tum of
the century to house the overflow of immigrants from Manhattan's
Lower East Side, Los Sures' remarkable success is due in large part to
its strong degree of tenant involvement in policy-making.
In a recent interview, Willie Vargas, a founder of Los Sures and its
recently-appointed Administrator, was quick to point out that the
residents of the Southside view Los Sures as an economic develop-
ment project as well as an organization concerned with housing.
"Most importantly," he said, "we're a self-help organization, that is
giving the people pride. All of our staff are from the neighborhood
and the majority of the Board of Directors are tenants in Los Sures'
buildings. There's a real difference in the attitude that a Los Sures
worker has. The handymen and the tenant organizers, the book-
keepers and the architects know that we're building something here.
Its For instance, Juan Montes, who's in charge of
management, made sure that none of our buildings were without heat
this winter-not an easy thing to do but he learned how to handle the
oil companies. That's the kind of dedication that you just won't fmd
in a profit-motivated management company."
Los Sures now manages twenty-six buildings on the Southside; six
Receivership buildings, three Los Sures-<lwned, two 7A-administered,
one privatelY-<lwned and the remaining de-facto tenant controlled
tenements.
"We're trying to process seven more receivership buildings with the
Office of Evaluation and Compliance but the new out-take require-
ments are impossible to meet at the present time. Yet, we're investing
a lot of time and energy assisting tenants in those buildings-without a
fee, of course. "
The most significant management enterprise Los Sures has taken on
is as renting and management agent for Clemente Plaza, a 532-unit
urban renewal project, in Williamsburg. The sponsor, Williamsburg
Housing Association, is presently embroiled in a court fight over the
renting of apartments to minority families. The United Jewish Organ-
ization, representing the interests of the Chassidic Community is
fighting the sponsor's plan to rent 75'70 of the apartments to minority
families and 25'70 to whites. The conflict has been brewing for at least
ten years between. the largely Puerto Rican minority and the
Chassidim. Leaders in the Pllerto Rican community have charged that
publicly supported housing developments have been used as !l tool for
racial discrimination for years, pointing to the shockingly low
numbers of apartm(.nts occupied by minority families in the other
existing developments in the area.
The UJO received a temporary restraining order on the renting of
apartments by Los Sures Management Co., a subsidiary of Los Sures
under the direction of Pete Miranda. However, prior to the restrain-
ing order, 114 families had moved in. The Court has upheld their
occupancy and has stated that Los .Sures had not, in its view, dis-
criminated against Chassidic or other white families. The case is
presently at a standstill while out-<lf-<:ourt negotiations are taking
place.
In the meantime, Los Sures has been workillg for over a year on the
project without a fee. Vargas admitted th.at this is the kind of thing
that can cause a "cash-flow nightmare" but that because of Los
Sures' track-record, loans were arranged through Chemical Bank to
get them through until the case is resolved.
"The single most important program that has enabled us to take on
so much has been the Department of Employment's CET A job train-
ing program," Vargas said. Los Sures now has 54 CETA lines that
have enabled unskilled and unemployed local residents to acquire
marketable skills and make a real contribution to their neighborhood
at the same time. The CETA staff, under the supervision of Doug
Moritz are involved in building trades and maintenance skills, tenant
relations, security services, bookkeeping and clerical functions.
Lookina toward the immediate future, Los Sures will be busier than
11
171 SOUTH 2ND STREET, ANOTHER H.U.D. FORECLOSURE,
BEING GIVEN A NEW LEASE ON LIFE BY LOS SURES' REHABILI-
TATION CREW.
106 SOUTH 2ND STREET, NOW THE HOME OF THE ANGEL CRUZ
FAMILY, WAS FORMERLY A H.U.D.-FORECLOSED BUILDING,
REHABILITATED BY LOS SURES.
12
ever. One project now in the planniJIa staae is a HUD Demonstration
program, whereby Los Sures' subsidiary construction company wiU
act in partnership with Metropolitan Rehabilitation Corporation, a
private developer, to rehabilitate 200 units of housing. Since the build-
ings targeted (those adjacent to receivership buildings to maximize the
impact on the block) are in need of gut rehabilitation, Section 8
subSidies have been committed. Los Sures will manage the buildings
after rehabilitation, and will share 1/3 of the tax shelter benefits which
will be turned over to the parent, non-profit Los Sures to be used on
the tenement buildings.
Another project Los Sures is working on is its CD 113 proposal,
which received first priority from the Community Planning Board.
The proposal, totalling $1.5 million in CD funds, would provide for
the rehabilitation and maintenance of four abandoned buildings to be
used as a "half-way" house for victims of the growing number of fires
in the area. Rather than being relocated to other parts of the city, the
families could live temporarily in the "half-way" house until Los
Sures secures suitable apartments for the burned-out victims in the
area. In addition, the proposal calls for a contractull arrangement
with the city for Los Sures to provide emergency repairs, demolition
and seal-up of buildings in the area.
The Los Sures' staff is now housed in two storefronts in the South-
side. The large windows that look out on a number of abandoned
buildings directly across the street serve as a constant reminder to the
overworked staff that the problems they face are enormous. Vargas
said, "Sure, we get discouraged. It seems that for every victory there
are two defeats. A big part of my job is keeping morale high. We rely
on small successes to get us through. Until we develop the resources
and obtain a real commitment from the city to do the job that needs
doing we'U always be less than satisfied with our accomplishments.
We won't be satisfied until every family in the Southside lives
decently." by Robert Schur and Richard Zeitler
...
'.
ORGANIZATIONS CALL FOR MAJOR
CHANGES IN COMMUNITY
PROGRAM
A coalition of ten national. regional and state-wide organizations
has sent to HUD Secretary, Patricia Harris, detailed
recommendations for drastic changes in the regulations and admini-
stration of the federal Community Development program. The most
significant proposals are designed to insure that the block grants to
cities are allocated principally to aid low- and moderate-income
persons. The coalition urges that at least "three-fourths of all com-
munity development doUars and three-fourths of blight-related doUars
should be for low- and moderate-iltcome persons. "
In a covering statement sent to community organizations
throughout the country. the coalition urged endorsement of its new
commitment to a redirection of the CD program which will:
"-maximize its impact on the most pressing urban and rural com-
munity development problems, and especially the needs of blighted
areas and low- and moderate-income people; and
"-effectively enforce the safeguards written into the law by the .
Congress."
ANHD was pleased and proud to communicate its endorsement of
the Coalition's program and to join in a refutation of the Ford-
Downs-Starr principles of benign neglect, triage and planned neigh-
borhood shrinkage. The battle, however, has only begun. Com-
munity groups must lend their support to this fight to turn HUD
around and to stop continued rip-offs of C.D. funds. such as we have
suffered for the past two years here in New York City.
To get a copy of the Report and Recommendations entitled
"Community Development Block Grants - Implementing National
Priorities," write to Center for Community Change, 100 Wisconsin
Avenue. N.W . Washington. D.C. 20007. Then add your voice to the
growing list of community groups demanding that HUD change its
ways and that it put a stop to municipal perversions and misalloca-
tions of C.D. doUars. CD-3 is almost at hand. Do it now!
ERp STU
Pc J'\ fOrtY-two Page R Dy RELEA.SED
Dir C>grilln has JUSt bee on New l'
ector, Bob n ISsued b Ork City's E
OJlerations of th:
hur
, the repa: rJ'\NHD. Written Repau.
mendations for its and COn the OriBin: Its. Executive
MUch of th llJIProveQJent tains some fifteen history and
COnunUQjty in the r:""" concrete recom_
the Em V1Sts Which -.-vrt Was co .
d ergency Repau. grew Out of . mpiled by a tas
K:.;rve major credit J:C>grIlln. The m a Coauti k force of
lCOu, Emn. Or the r eQJuocrs of th on to Save
Publication SllJIon, SUSah were: Nathan
e
task force, Who
debacle whi the repart . en,Kathy Berry Weber N
It is to be h ch aCComPanied mOst timely, given.
L
and Bar"';a s:;?
repa' oPfld that . e COldest ..,e recent .. '.
rt S slJgg-, City and slat . WInter weath. no heat"
rence f -LiOns Which e Policy ft L er m man
tL:. 0 the sUfff!ri .. _ ' if iJDpleQJ -fIl ... ers Will PI h y Years.
'us Year. --- Which so ented COUld y ecd to th
Co . many N' prevent e
to of the repart ew Yorkers have a recur_
SOLAR ENERGY GRANTS - meQJbers UPo may be had by SeQtf;ft_ undergone
n request.) _ $2.00 to
ti has just for its new round of demonstra- ANItD. (Free
ons 0 solar energy m resIdences Th . d lin '
Grant Application " enco .' ese gw e es, 'Request for
. urage mterested sponsors to apply 'th
prOjects which demonstrate solar heat; .. e I;ft_ d . WI
h ..... ; .. e '. omestic water
-....... or combmations of these systems . 0; .. _1 '.
residential units Under this ' m ___ e or multi-family
the solar en '. program, HUn will pay for the cost of
be imancederfgy eqwpment or methods; basic rehabilitation costs mUSt
rom other sources.
r::UO for project selection will favor smaller buildings and
which can be in one year. Projects with a weU-
reren: program descnbed on the application form will receive pre-
the application and all suPPOrting materials by
The Association and the Energy TI$k F .
desCription and application. The of the
assISt you in preparin li . orce could
G' . Sh g your app cation. If you are interested call
lD1 eery at 674-7610 or Travis Price at 228-S044.
----
13
Housiq), 58 million wu appropriated for reimbursement-just
about half of the city's total code enforcement expenditures of $16
million.
1977-78 brinp us into a state election year. The present Governor
seems determined to make the voters believe that he is a paragon of
fiscal integrity and conservatism. (He, too, hu recently put 'an ex-
Wall Street investment banker named John Heimann in charge of
Housing and Community Renewal, replacing Ms. Goodwin, who
resigned last summer over the Co-op City fracu.
So, for the coming fiscal year, Carey out-Rocks Rocky and
proposes to provide zero funds in the state budget for code
enforcement reimbursement. Now the city must go it entirely alone in
paying for its inspection, violation placement and correction and
emergency repair services-despite what the state law plainly says to
the contrary.
The Governor, at first blush, seems to have a fair excuse for putting
the ax to this item of the budget. The reasoning goes that, since code
enforcement is an eligible item under the federal Housing and
Community Development Act, cities like New York can and (says the
Governor) should allocate part of their federal community develop-
ment block grant funds for code enforcement (including ERP). Such
an allocation would "cost" the city nothing out of its own budget, so
it shouldn't be necessary for the state to have to make any reimburse-
ment. In short, both the city and the state come out ahead and the feds
pay for the entire program.
Sounds eminently logical. But, of course, there is a catch-two
catches, in fact . Catch number one is that under a recent HUD ruling
involving Washington, D.C., a citywide ERP program may NOT
utilize federal community development funds-ERP would have to be
restricted to areas of the city designated for other community develop-
ment activity. Under this ruling, Williamsburg in Brooklyn, although
decidedly a low-income neighbohood and one which has a high inci-
dence of ERP calls, could not be serviced under a federally-funded
program.
Catch No.2 is that, without city (as opposed to federal community
development) funds, New York City simply cannot operate an ERP
program. The reason for this is that when federal funds are used, that
old bugaboo, the Davis-Bacon Act, automatically comes into play.
Under that law, so-called "prevailing" (read building construction
trades union scale) wages must be paid for all rehabilitation, repair
and maintenance as well as new construction work.
The contractors who make emergency repairs for the city under
ERP are virtually all small non-union concerns who do not and cannot
pay "prevailing wages." Nor does (nor, by any stretch of the
imagination, can) the ERP workshops qualify under the restricted
training program provisions of Davis-Bacon. Consequently, the city,
much as it might wish to do so, simply cannot use federal dollars to
pay for emergency repairs. The city must money from its own
capital or expense budgets. But without the state sharing the cost, will
the city not use the fact that it must fund ERP alone to provide just
the excuse the Mayor and Carey's satraps on the Emergency Control
Board are looking for to scuttle ERP entirely-or emasculate it as
Hizzoner did in '74,?
Some state legislative representatives from the city are already
aware of the problem. They can be expected to put pressure on the
Governor to amend the budget and restore at least sufficient funds to
provide the state's proper share of ERP costs. But will the Governor,
hell-bent to outflank the upstate conservatives and insure his re-
election in 1978 on a platform that consigns the city's poor to soup-
kitchens and heatless homes, be moved? His record to date does not
provide much upon which to hope.
Without state fiscal support for ERP, that program in the hands of
the present city administration, has to be considered to be in very big
trouble.
At least that is what the city's lawyers seem k> be saying; we have
good opinions to the contrary (i.e. that Davis-Bacon doesn't apply to
mere repairs) but the current legal attitude in the city bureaucracy is to
interpret all laws and regulations in such a way as to justify NOT
doing anything.
14
NUCLEAR contlnu8d
more than 200 people were arrested this past AUJUSt in the f'J.rSt mass
non-violent demonstrations in the name 'of ArDerica's
Significantly, the demonstrations received strong support from locai
Native American groups. This spring, occupations of nuclear sites are
to again in Seabrook, and in Diablo Canyon, in San Luis
ObiSPO, California. More important, organizers have begun to go
There are no more potent voices than those of the
neighbors.
Humanity has never faced an issue of such lasting impact. What's at
stake is the preservation of the human gene pool and the elimination
of by-products which must be isolated to virtual perfection for
250,000 years.
What's also at stake is the chance for a decentralized energy demo-
cracy, built on simple, accessible technologies and a reasonable cur-
tailment of pure indulgence.
. The choice is ours to make. And like the domestic struggle over
Vietnam, the bottom line will be drawn by marching feet.
by Harvey Wasserman
CITY LIMITS
published monthly by the Association of Neighborhood
Housing Developers,lnc., 29 East 22nd Street, New York,
New York 10010. (212)674-7610.
Executive Director .... .. .... ........................ ........ Robert Schur
Editor .................. .... ... ........ ..... ...... ...... .. ... .. .. Kathy Sanders
Design and Layout ...... ... ........... .. ....... .. .. .. .... .. Louis Fulgoni
Research Assistants ...................................... Richard Zeitler
and Bruce Ricklin
Production ... ... .... .. ........ ... ........... .. ....... .... Marianne Czernin
Copyright 1976. All rights reserved. No portion or portions
of this Newsletter may be reprinted without the express
written permission of the Association of Neighborhood
Housing Developers, fnc.
.
L
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15
IN THIS ISSUE
O ~ 9 L vL9 U ~ O ~ O O ~ "A"N '>jJOA MaN lSSJlS pUlllse3 6l
":>UI sJadOlaJ\8a 5U!snoH
POO4JOQ45!8N JO UO!lB!:>OSSV
Los Sures - A Growing Concern
The 50 Million Dollar Ripoff
Home Repair And Maintenance Program A Smashing Success
Manhattan Plaza - A Primer In Profiteering
Update On CD III
The Coming Nuclear Reaction
Lingo, News, and More