CITY LIMITS

COMMUNITY HOUSING NEWS

AUGUST/SEPTEMBER 1979 VOL. 4 NO.6
CITY ACCEPTS SQUATTERS
AFTER NINE-YEAR ORDEAL
CITY-OWNED BUILDING
IS EASY LOOTING MARK
by Bernard Cohen
The siege at 1472 Montgomery Ave.is now a year old and more brutal
than ever. Every day there is less of value for Virgilio Rodriguez to defend,
less meaning in repairing the damage, less reason to put his life in jeopardy.
Rodriguez is a lone soldier fighting an army of marauders in a war of infil-
tration. His weapons are a two-foot-Iong black steel sword to fend them off
and tools to patch up the building after they've gone.
He is losing and losing badly. His one-man patrol cannot stop the inva-
sion. For every apartment he secures, five others are cleaned out. In one
year, the five-story city-owned
building with 47 apartments in
the Morris Heights section of
.. .
the Bronx has been ravaged al-
most beyond comprehension.
Thieves, working sometimes
in collusion with the few re-
maining tenants, have helped
themselves to everything of
value, ripping apart walls, ceil-
ings and floors in the process.
They have stolen dozens of
stoves and refrigerators, some-
times consolidating them in
one apartment before hauling
them away at night for sale
What is this refrigerator doing in the living room? It"s
through the stolen goods net- headed for the "chop-chop . ..
work known locally as "the
chop-chop." Toilet bowls, wash basins and radiators have been taken. In
the bathrooms, shower fixtures and toilet pipes have been wrenched from
the walls, while the floors have been excavated for lead traps and other
booty. In most of the apartments, piles of plaster mark the spots where
looters broke through walls and ceilings to get at brass pipes and fittings. A
rag is stuffed into a gas line in one kitchen, a thoughtful gesture by thieves
who snapped it open in their haste to take a stove. Rain falls through a hole
in the roof and seeps down through the building,adding to the extensive
continued on page II
by Susan Baldwin
After a nine-year struggle to be-
come legal tenants that twice flared
into major court battles, squatters
who occupy three apartment houses
across from the Cathedral of St.
John the Divine on Manhattan's
West Side have at lasf won recogni-
tion from the property's new owners
-the City of New York.
The three buildings, located at
503 West III th Street, 1046 Amster-
dam Avenue, and 500 West 112th
Street, stood vacant awaiting demo-
lition in Jul y, 1970, when some 80
families, driven by desperation from
nearby hovels, with nowhere else to
go, moved in one hot night. Three
other buildings on the site had al-
ready been torn down to make way
for an Episcopal church-related
nursing home planned by its owner,
Morningside Houses, Inc.
"The people feel pretty good
about this," said Augusto Calde-
ron, a tenant leader at 503 West
III th Street who participated in the
long months of negotiation that led
to the city's acquisition of the prop-
erty. "We have been trying to be
legal tenants for years."
The city's Department of Hous-
ing Preservation and Development
and the tenants have agreed to a
management program for two of the
three buildings that will provide a
subsidy above rent of $2,500 per
unit per year for a two-year period
that started in late August to cover
general management and mainten-
ance costs. The Manhattan Valley
continued on page 2
Development Corp. will administer these funds under
an existing Community Management contract that the
non-profit neighborhood group holds with the city.
Negotiations continue to find a suitable program for the
third building, which both HPD and MVDC say needs
to be vacated for a gut rehabilitation.
There are 83 units in the three buildings. According to
Philip St. Georges, HPD's assistant commissioner of
the Division of Alternative Management, the three
buildings will be rehabilitated with Community Devel-
opment monies under a special funding arrangement.
Two of the buildings are expected to receive $11,000
per unit for rehabilitation, in addition to maintenance
funds, while the third is slated for $15,000 to $17,000
per unit.
The history has been stormy since the squatters oc-
cupied the buildings.
"The courts were used as a way to buy time and that
did happen," said Leonard Lerner, one of the lawyers
who handled the case.
According to Lerner, no tenants were ever evicted
from the site, and at one time several years ago, the city
contemplated using its municipal loan program funds to
rehabilitate the buildings.
"People talked to them about ownership and buying
the buildings, . but it was never very serious," Lerner
added. "For the most part, they operated under an
emergency basis for the nine-year period, just holding
things together."
At one point the squatters had nine lawyers represent-
ing them.
But, what was serious were the court battles in 1974
and 1976. The squatters were saved twice from eviction
when process servers failed to demonstrate that they had
been properly served with dispossess notices.
"We were also lucky in helping the tenants stay be-
cause the Bishop [John Paul Moore of St. John the Di-
vine] helped us by buying them a new boiler and having
it hooked up," Lerner said.
Another member of the team of lawyers who worked
on the case, B. Robert Piller, said that the legal hook-up
of the boiler led to his being able to negotiate a settle-.
ment of a $50,000 gas heating bill with Consolidated
Edison to restore service.
Bishop Moore's g e ~ t u r e came in response to public
demonstrations on the Cathedral steps and other evi-
dence of citywide support for the squatters.
Commenting on the city's acquisition of the property
and the newly-concluded management agreement, St.
Georges said, "We are happy that the buildings are now
city-owned . .. We have been meeting constantly with
Manhattan Valley, and we think everything except for
minor details is all settled. And the squatters have a-
greed to pay rent."
Initial rents at $25 per room for the apartments are as
follows: two bedrooms, $112.50; three bedrooms,
$137.50; four bedrooms, $162.50
After the rehabilitation work is completed, St.
Georges said, the rents are expected to increase, possibly
to $45 per room. If tenants cannot pay this amount, he
explained, the city will seek housing subsidy for them
under the existing Section 8 program run by the Hous-
ing Authority.
"I came to live here and fight because it was a nice
place to bring up children. It is also very safe," Maria
Sanchez told a visitor recently. "For years, I'd been
looking for decent housing and it always seemed that
the poor people were being run out of the city."
"This is a good place for families to live," she added,
"because we can afford it. All over, the landlords keep
putting on these high rents-$275 to $3OO-that is too
continued on page' 13
The three 'Squaller' buildings that the cit)' {llans ((} rehabilitate.
2
..
GLIEDMAN NAMED HPD COMMISSIONER
Anthony B. Gliedman, commissioner of the city's
Department of Ports and Terminals, was named by
Mayor Koch to head the Department of Housing Pres-
ervation and Development on August 27.
Gliedmari , 37, succeeds Nathan Leventhal, who was
appointed deputy mayor for operations after two years
and seven months as commissioner.
Gliedman has headed the Department of Ports and
Terminals since April, 1978. Prior to that he was the di-
rector of agency analysis for the Emergency Financial
Control Board for two years. He began his city service
in 1967 as an assistant corporation counsel. In 1970 he
was appointed ombudsman at what was then the Hous-
ing Development Administration. From 1972 to 1976 he
was the housing agency's deputy general counsel, work-
ing primarily in the office of rent and housing main-
tenance.
In making the appointment, Koch praised Gliedman's
"outstanding record" as an administrator and
manager, with little said of his housing background. "I
have kept up with housing," Gliedman told City Limits,
"but not in a detailed way."
Gliedman said community-based organizations are
playing a "vital role" in rebuilding neighborhoods,
adding, "I don't think their potential has begun to be
fulfilled." He said he will look at how well alternative
tenant and management programs that are now working
on an "ad-hoc" basis can be institutionalized to handle
a larger volume of buildings.
He said it was too soon to discuss policy questions.
Leventhal is not the only one at HPD packing up hi s
papers. As the commissioner prepared to move to City
Hall, three of his top aides were also moving on.
After seven years at HPD, Deputy Commissioner for
Development Peter Joseph left to join the Starrett Corp-
oration. He will be working on special project s at Star-
rett, featuring small home development. According to
Joseph, he will not be involved with any of the develop-
ment projects that he handled at HPD.
Susan Gaffney, deputy commissioner for administra-
tion, will be joining the U.S. State Department Agency
for International Development (AID) as director of
planning and policy for AID's auditor general's office,
which oversees the government's foreign assistance pro-
grams. She has been at HPD for the past ten years.
Assistant Commissioner Carl Callender, who is in
charge of the evaluation and compliance unit, will leave
the agency at the end of September. Callender formerly
headed the community management program and, as
assistant commissioner, was in charge of HPD's article
8A loan, receivership, emergency repair, and manage-
ment alternatives programs. His replacement is expected
to be Joseph Schuldiner, his present assistant.
As others leave, a new arrival at HPD is Robert
3
Roher, director since June, 1977, of the West Side Clus-
ter of Centers and Settlements, a social service agency
located at the Goddard-Riverside Community Center.
He will be in charge of the c'ommunity management
program, the post formerly held by Sandra Moore.
Roher was also the director of the Northside Com-
munity Development Council in Brooklyn and holds a
bachelor and masters degree in social work from
Adelphi University. 0
SECTION 8 FUNDING
HPD has applied to the federal government for 4,235
units of housing subsidies in 22 neighborhoods under
HUD's new moderate rehabilitation Section 8 program.
I f the application is approved, the city will receive
more than $16 million in annual rent subsidies which
will translate into more than $40 rriillion in private
financing of housing rehabilitation.
According to the guidelines for moderate rehabilita-
tion, the cost permitted per apartment unit ranges from
$10,000 to $15,000.
The number of units sought for each borough are as
follows: Bronx, 1,230; Brooklyn, 1,455; Manhattan,
850; and Queens, 700. 0
.CITY LIMITS'
Cily Limils is publi shed monthly except June/ July and August / Sep-
tember by the Associati on of Neighborhood Housing Developers,
Pratt Institute Center for Community a nd Environmental Develop-
ment and the Urban Homesteading Assistance Board . Subscription
rates: $20 per year; $6 a yea r for community-based organizations and
individuals . All correspondence should be addressed to C ITY
LIM ITS, 115 East 23rd SI., New York, N. Y. 10010. (212) 674-7610
Application to mail at sewnd-cJass postage rates is pending at New
York, New York 10001 .
Editor .... . . . . ... . ... , . .. , , .. .. . . ...... .. . .. . .. Bernard Cohen
Assistant Editor ......... . .. ... . , ... ............. Susan Baldwin
Design and Layout ....... . ... , ............. . . .... Louis Fulgoni
Business Assistant. ................ . ... ... .... ... . Carolyn Wells
CopyriRhl 1979. All riRhts reserved. No porlion or portions oj this
journal may be reprinted wilhoullhe express wril/en permission of the
publishers.
This issue was funded by New York Community Trust.
r
GROWTH: AN AGENDA FOR THE 1980'S
If the preoccupation of community-based organizations in the 1970s was the painful process of getting started,
the pressing issue of the 1980s is likely to be how well groups control and manage their growth. A two-part series
on growth begins this month in City Limits. Part I looks at the ways community organizations have grown and
how expansion has affected both the administration and the mission of groups. Part II will identify some posi-
tive and negative forces that influence growth, examine the roles government, technical assistance agencies and
foundations plaY,'lDd suggest recommendations for helping organizations to take more control of their develop-
ment.
by Bernard Cohen
Imagine this. It is 1976 and you are earning $10,000-
a-year. The following year your salary triples. The next
year it triples again. Then it doubles. By 1979 you would
be making $180,000. Consider how such rapid enrich-
ment would radically change your life. That, on a much
larger scale, is the magnitude of growth that Los Sures,
a community-based organization in Brooklyn with 145
employes and a $4.8 million budget, experienced in
those three years.
In its early stages, the West Harlem Community Or-
ganization grew very slowly. In 1977, it had a contract
to manage a few buildings and was able to pull together
several small grants to pay an executive director and one
clerical position. Then, in 1978, WHCO's management
operation shot up to 15 employes, a CET A contract
added 34 more and two construction specialists were
brought on as the organizations prepared to get into
housing rehabilitation. Suddenly, WHCO was a $2 mil-
lion operation.
From 1975 to 1978, the Flatbush Development Corp.
in Brooklyn got along without a director. Members of
FDC's board personally supervised the different activ-
ities of the organization. With a staff of 24 and a
$300,000 budget, such a structure would be impossible
today.
The dynamic growth of these community-based or-
ganizations and many others in New York City (and
across the country) has enabled them to step up their
efforts to rebuild their blighted neighborhoods. Groups
have received contracts to manage, rehabilitate and de-
velop housing; provide job training, cultivate open
space, fight crime, install solar energy systems and
organize tenants under more than a dozen federal, state
and city programs.
At the same time, however, this smorgasbord of
growth has posed a new set of serious problems for
organizations, some relating to the way they are man-
aged and others going straight to the heart of why they
exist and what their mission is. Many groups have rec-
ognized the symptoms and dealt with them, often seek-
ing outside assistance. Others such as the People' s
Development Corp., the South Bronx group visited by
President Carter two years ago, have not and were torn
asunder.
The backdrop for looking at what has been happen-
ing is this . Nearly always, community organizations in
4
low and moderate income neighborhoods are under-
funded and understaffed to begin with. They are tackl-
ing the effects of problems such as housing abandon-
ment, redlining and unemployment that are beyond
their control. And they are working in neighborhoods
where the private sector and many in government have
given up.
On top of that, staff is so consumed by running pro-
grams and jumping from one crisis to the next that there
is little time left over to step back and plan or to
evaluate where a group is heading. Funding is unpre-
dictable so the temptation to grab any available resource
is powerful. Growth (and shrinkage) is often sudden.
Money to strengthen administration is always scarce.
Salaries often are not high enough to attract the most
qualified people. Founders and leaders of organizations
may lack management skills required by a growing or-
ganization. Government contracts have hidden liabili-
ties that many groups are not prepared for. And the
quantity and quality of technical assistance available is
woefully lacking.
These are some of the difficult conditions that draw
Bernard McDonald of the Ford Foundation, formerly
of the Bedford-Stuyvesant Restoration Corp., to the
widely shared view that in many ways "the deck is
stacked against community organizations."
Put another way by Richard Marans, director of
Housing Conservation Coordinators in Manhattan,
"You have to understand what difficult kind of work
thi s is and how little money there is ."
The effects of growth have been seen largely in four
areas.
A shift in organizational priorities. Many commun-
ity-based groups started out with a heavy emphasis on
advocacy and :organirzing, the neighborhood. Within a
few years, the focus rotated to program management
and physical development.
The need for new management skills, both admin-
istrative and programmatic.
The rise of bureaucracy. As organizations become
larger, different units tend to become isolated from each
other and new ways have to be found to enable them to
communicate. Casual office procedures and loosely
defined job roles have to be formalized.
The need for leaders to grow with the organization,
including a willingness to share authority often difficult
for the kind of strong individuals who shepherd
community groups into existence.
Shift in Priorities
Some say it is inevitable, others say no. The pattern,
however, is clear. Many organizations whose first prior-
ity was once advocacy-organizing tenants around dif-
ferent housing and neighborhood issues-are now
putting the bulk of their energy into running govern-
ment programs. In one organization outside New York
City, the development effort became so prominent that
the head of that office was earning more than the execu-
tive director.
Often this transition is a staff initiative. In organiza-
tions where the board is from the community, the down-
playing of direct involvement in the neighborhood has
sometimes created serious divisions.
"We realized three years ago that we couldn't combat
abandonment if we restricted ourselves simply to com-
munity education and building organizing," said Doug
Moritz, deputy director of Los Sures. "The greatest
problem to cooperation and unity has been the lack of
exposure and education and awareness by the board of
what is going on.
"The board is all tenants. What has happened is that
the staff has shot ahead so far in terms of growth-the
board still has a storefront mentality. They don't realize
that we have branched out in a more comprehensive na-
ture to address the problems of the community. "
In the process, he acknowledged, organizing and
tenant needs have been relegated to a lower priority be-
cause of time constraints on the staff, it has stirred
sharp resentment by the board and Los Sures' relation-
ship with the community should be better.
He said a lot of time has been spent on board train-
ing.
The story is similar elsewhere. "My board says to me,
'You're not in the community any more,' " said Mar-
garet McNeill, executive director of WHCO. "Due to
the fact that we were so involved with programs, we
really have not been out there in the community organ-
izing. We've discussed this with the board, and our
whole focus next year will be to do things we did once,
like organize block associations."
A number of people believe that something critical is
lost in this kind of trade-off, that the development side
should never control an organization, that the values of
personal development and physical development are
often conflicting and that robust organizations can be
rendered timid out of fear of losing a program.
Roger Hayes, director of training for Peoples
Housing Network, said organizations frequently take
on programs thinking they will serve to support their
organizing efforts, only to become consumed by the
programs. "They think that doing something is better
than nothing. As they move up they get bigger and at-
tract more programs. People are not clear if that model
is so good, especially if you're trying to create change
5
rather than just gather in programs."
The head of a community organization in the Bronx,
who asked not to be identified, rattled off all the hous-
ing projects the group was doing, then stopped and said,
"Philosophically I disagree with all of this. We wind up
as a buffer for the government. Even if you build rele-
vant housing for folks, it only works 50 per cent and 50
per cent is destructive. Some of the things you do insti-
tutionalize poverty. Sure we can get somebody a 40-year
subsidy, but that makes it easy to stay poor. We should
be telling them to get off welfare and food stamps.
The other side, he said, is that "People have to have
places to live. So I say, 'Let's exploit the situation and
see what's available for us.' We're not that good or
powerful to change the system. We just want to partici-
pate."
Andy Mott of the Center for Community Change in
Washington summarized the argument this way: "It's a
tremendous danger" when development and program
management snuff out advocacy. "Some feel it's an in-
evitable process. We hope there are ways for organiza-
tions to get into development and stay busy with the ad-
vocacy. The healthiest groups are those who do both. "
Management
More sophisticated management has become essen-
tial as organizations grow larger and take on more pro-
grams. Yet this has been a widely recognized area of
weakness.
"Most organizations are structured for today, for
what they are doing right now," said McDonald of
Ford, "and anything that comes along that changes
what they are doing threatens the whole structure."
"Most of these groups came out of struggles. They
were reacting to difficult conditions in the community-
absentee landlords, crime, lack of services. They are ac-
customed to fighting-it's what they're good at,?' said
Juan Rodriguez-Munoz, head of PRC Metronamics
Inc., a firm that provides technical assistance and train-
ing to Hispanic organizations. "What happens is that
they've now become a multi-million dollar corporation,
and they don't have to fight. They have to run a multi-
million dollar corporation as effectively as possible."
Easier said than done. "All of these groups have high
ideals, and lovely human ideas, but when you talk to
them about management they start thinking about lots
of things they rejected," said Sharry Pollack, assistant
director of the Institute for Not-for-Profit Management
at Columbia University. "They're so busy fighting
today's fire, how the hell can they look at tomorrow?"
Part of the problem - in addition to personal
resis tance - is that money to do programs is
much easier to get than so-called "glue-money" to
support good administration. "Contracts are frustrat-
ing by and large," said Judy Flynn, director of the Flat-
bush Development Corp., because they mainly cover
just straight program staff. "It is much more difficult to
find funds for administrative support." And, once ad-
continued on page 16
THE MYTH OF SELF-SUFFICIENCY
by Michael McKee
New York State has an innovative housing program
to fund the administrative and planning costs of com-
munity organizations engaged in various neighborhood
preservation activities. Enacted in 1977 from legislation
drafted by the New York State Tenant and Neighbor-
hood Coalition, the Neighborhood Preservation Com-
panies program has grown from an initial $500,000 ap-
propriation in 1977 to $6.925 million in the current fiscal
year. Now entering its second year of full operation, the
NPC program is the focus of a growing statewide organ-
izing effort around its future direction, as well as ad-
ministrative problems which have plagued it so far.
Neighborhood organizations which have been in exis-
tence for at least a year and which have something of a
track record are eligible to apply to the state Division of
Housing and Community Renewal for a one-year grant
to fund staff salaries, consultant fees and overhead
costs such as rent and utilities . The premise behind the
program is to free the community organization from
worrying about how it is going to meet this week's pay-
roll or next month' s rent on its storefront, in order to al-
low time to be spent on developing programs to benefit
the neighborhood. In the search for scarce community
development, job training or other funds, the non-
profit organization can hardly be expected to compete
with private developers, for example, without a secure
source of administrative funds. It is no exaggeration to
state that the approximately $5 million already ex-
pended by the state has resulted in $20 million of federal
funds, conservatively, being leveraged into lower
income rural and inner city communities.
At present 114 organizations throughout the state are
nearing the end of first-year funding under the NPC
program. Only eight received $50,000 or more; most
grants have been in the $25,000-$40,000 range. There is
a $100,000 cap on annual funding; only two of the 114,
both Buffalo organizations, received the maximum the
first time around. Recently another 128 organizations
submitted applications to DHCR for first-year funding.
The New York State Tenant and Neighborhood Co-
alition is preparing for a major legislative effort during
the 1980 session of the State Legislature. The major
goals are an expansion of the program's funding, crea-
tion of a capital fund from which neighborhood organ-
izations can obtain "brick and mortar" financing for
their projects, and elimination of the three-year self-suf-
ficiency clause.
The requirement for self-sufficiency was not con-
tained in the original draft legislation, but was inserted,
over NYSTNC's objections, by one of the chief
Michael McKee, coordinator of the Peoples Housing
Network, contributes regularly to City Limits.
6
Assembly sponsors of the bill. The funded organization
must become completely "self-sufficient" after three
years of state funding . Thereafter, presumably, staff
salaries and overhead expenses will be paid out of fees
generated from management of housing, or other pro-
gram activities.
It is a ridiculous concept, the kind of bag into which
many foundations try to fit community organizations,
but carried to a fantastic degree. The clause guarantees
a 100 percent failure rate for the NPC program, as no
organization working in a low or moderate income
neighborhood could ever become totally supported by
funds generated from the neighborhood, even if the
organization were willing to rent gouge poor people.
A ~ if the legislation were not bad enough, some
DHCR bureaucrats seem determined to adopt an even
more self-defeating definition. According to Sharon
Lauer, Chief Coordinator for Neighborhood Services,
"Self-sufficiency cannot be achieved through other
grants .. . 1t is the goal of this.program that the Neighbor-
hood Preservation Company develop as permanent
small businesses and thereby provide a stabilizing force
in their communities." Nothing in the statute prevents
the NPC-funded organization from using foundation
grants or other government funds to satisfy the self-
sufficiency requirement. Pending a legislative
amendment to repeal or at least restructure this clause,
NPC-funded organizations will have to resist Lauer's
restrictive interpretation.
Also of concern to representatives of NPC-funded
organizations who have attended recent meetings in
Buffalo, Rochester, Albany and New York City is the
question of how DHCR will interpret "contract com-
pliance" for first -year grantees seeking year two fund-
ing. Many have reported that at the time they signed
contracts last fall, DHCR staffers insisted on inserting
the addresses of specific buildings to be acquired, rehab-
ilitated or otherwise upgraded during the grant year.
"We were told not to worry if we didn't actually work
in those buildings," stated the director of one organiza-
tion. "I resisted putting those addresses in [the contract]
because it's impossible to know for sure which buildings
you'll be involved with in ten months, which one you
can obtain financing for, so many other factors. Now,
after telling me not to worry, DHCR is telling me
they're going to take a close look at contract compliance
before making a decision about second-year funding.
I think it' s just a threat to keep us from organizing, but
it makes me angry. " DHCR staff members have also
attempted to identify NPC-funded organizations which
are members of NYSTNC; however, the statewide
coalition has declined to furnish the agency with a mem-
J
bership list.
DHCR has been a troubled agency in recent years,
marked by fragmentation of effort and low staff
morale. Partly this results from state government's shift
away from new construction programs, DHCR's tradi-
tional frame of reference, and partly from weak admin-
istration. There has been serious discussion among state
policymakers of reorganizing or even of dismantling the
agency.
The State Legislature this spring took $400,000 from
DHCR's budget, which the agency had requested to
fund its newly-opened Albany and Buffalo regional of-
fices, and gave the money to the newly enacted Office of
Urban Revitalization. This new agency, which has a
total budget of $1.7 million although not yet opera-
tional, will be under the direct control of Robert
Morgado, secretary to Governor Carey. The statute
creating the office gives Morgado power to transfer
DHCR personnel to OUR without the approval of
DHCR commissioner Victor Marrero. The initial draft
of the OUR legislation also transferred the NPC pro-
gram to OUR; however, this was eliminated due to the
opposition of Edward Lehner, chairman of the Assemb-
ly Housing Committee and chief sponsor of the NPC
statute of 1977.
Creation of OUR and the $400,000 raid on DHCR' s
budget are widely perceived as an attempt by certain
state officials to humiliate Marrero; some apparentl y
hope to force him to resign. Awareness that his days as a
state commissioner may be numbered probably influ-
enced his decision to become a candidate in the
September II Democratic primary for Bronx Borough
President.
Still to be resolved is the question of whether the
Albany and Buffalo regional offices will be taken away
from DHCR for good. In the meantime, DHCR has
taken steps to decentralize the administration of the
NPC program with Albany director Richard Duhan and
Buffalo director Tom Jones reporting to deputy
commissioner Lois Kleinerman, rather than to Lauer.
Whatever the fate of DHCR, community organiza-
tions are beginning to work together to secure the future
of the Neighborhood Preservation Companies program,
and to mold it to fit their needs. "We can point to a high
degree of accomplishment, even with the low level of
funding most groups have received," stated Bill Rowen,
Southern Region chairman of NYSTNC. "We believe in
the basic competence of community-based organiza-
tions, and that's why we think this program can be
made to work, whatever the problems. The coming to-
gether of organizations in statewide and regional meet-
ings will inevitably lead to the right progam and strat-
egy." 0
NEW INSURANCE RULING
A state law that makes insurance redlining a crime
and reduces the cost of premiums under the FAIR Plan
to 20 per cent to 40 per cent higher than private market
rates took effect on August I .
Those rates represent a vast reduction for owners of
properties in many low and moderate income neighbor-
hoods who have been forced into the FAIR plan by the
refusal of insurance companies to do business with
them. However, they are still too high to make New
York State eligible for federal riot reinsurance, under
which the federal government shares riot risks with pri-
vate insurers .
7
State Insurance Superinfendent Albert Lewis said his
department was working on guidelines to provide re-
bates to customers who have already paid for their
FAIR Plan policies this year.
On a related matter, 25 activists from organizations in
seven upstate New York cities converged on Allstate
Insurance Co. 's headquarters in suburban Pittsford on
August 16, following an abortive negotiating session
that morning in Rochester . Refusing to leave until they
were allowed to speak by telephone to Allstate officials
at their home office in Chicago, the demonstrators
eventually obtained a commitment that a top executive
would attend the October 27-28 meeting of the New
York State Tenant and Neighborhood Coalition to ne-
gotiate lower insurance rates for inner city policy-hold-
ers and the placing of agents in the city instead of subur-
ban areas. (See notice) 0
The sixth annual membership meeting of the New
York State Tenant and Neighborhood Coalition will be
held the weekend of October 27-28 at the Bergamo East
Conference Center in Marcy, near Utica.
Attendance is open to all interested persons. Last
year' s meeting drew 250 people from all over the state.
The weekend will consist mainly of workshops and
strategy sessions on a dozen or more topics, including
insurance redlining, rent control, the state's Neighbor-
hood Preservation Companies program, public
housing, subsidi zed housing, real property tax reform
and welfare right s.
The cost for the weekend is $40 per person. Informa-
tion on registration may be obtained from the Coalition
at 212/ 533-4430. 0
CETA MANDATES MASSIVE JOB CUT
by Mae Woodley
Here in Gotham, City Hall is often relieved to find
that community organizati<ms are able and willing to
administer CET A Public Service Employment programs
in housing, day care, health and emergency services and
the arts. Many are much-needed programs that the city
itself has either abandoned or delegated to community-
based organizations (CBOs) when city agencies cannot
fully provide services or can only offer technical assist-
ance to the actual service deliverers. CBOs have approx-
imately 5,000 jobs under CETA Title VI.
Instead of awarding these groups more funds for pro-
viding services and creating jobs for grass roots people,
the city's Department of Employment has quietly di-
rected the CBOs to absorb a 24 per cent cut. This figure
is New York City' s guess about cuts in CET A monies
that Congress will make when it reconvenes after Labor
Day. It comes on top of a major 34 per cent cut imposed
on CBO's last February.
DOE has also been negligent about developing a
crucial transition-waiver plan for CBO workers whose
eligibility to participate is expiring under an 18-month
limitation enacted by Congress last year. The waiver re-
quest, covering about 1,000 jobs, was made in late
August, well after the city developed a plan for its own
CET A workers and only one month before the first jobs
will be lost under the 18-month limit.
Organizations such as the Association of Neighbor-
hood Housing Developers have been leading the protest
against CET A cuts. The New York City Housing and
Community Development Coalition included CET A on
the agenda of its annual conference held earlier this
year. Out of such concerns has come the CET A Mon-
itoring Task Force. The Task Force has been monitor-
ing city agencies that make recommendations to the
mayor about CET A (these agencies include DOE, the
Department of Personnel, and the Department of Fi-
nance),
The Task Force also presented the case of the CBOs
to the Employment and Training Planning Council,
which is one of the clearing houses that reviews the
city's CET A plan and makes recommendations to the
U.S. Department of Labor (DOL). Because of the Task
Force, the Employment and Training Planning Council
has agreed to make its meetings known to the public
through notices in the media and also promised to take
the CBOs' plight into consideration in making its recom-
mendations . The Task Force met with DOE Assistant
Commissioner Thomas McEnery in July after a demon-
stration, which led to a minor confrontation with city
personnel at DOE headquarters, where elevators were
shut off in an effort to keep the demonstrators down-
stairs.
ACE (Association of CET A Employees) and the
8
Non-Profit CETA Workers Coalition (NPCWC)
(formed by Bess Mitchell and Susan Ortega respectively)
have been relentless in their efforts on behalf of the
CET A CBO workers.
They have coordinated their efforts with District
Council 37's Lillian Roberts and the municipal CET A
Steering Committee. DC 37 has negotiated on several
issues involving the municipal CET A employees and has
managed to get an executive order from the city man-
dating that their CET A employees be given preference
when provisional city jobs become available in agencies
where the workers are currently employed. CBO CETA
workers lack a union, and ACE and NPCWC have at-
tacked the CET A VI Coalition of Nonprofit Sponsors
for not recognizing their efforts on behalf of CBO par-
ticipants. With the help of lawyers from the National
Employment Law Project, Inc., they plan to draw up a
formal complaint against New York City, alleging that
the city has not provided job-development assistance to
CETA workers during the contract period. Along with
the complaint , these groups are asking that workers be
permitted to keep their present CET A jobs until all
parts of the contract are enforced.
The activity of these groups is in part based on the
fact that Washington's apparent plan to phase out
CET A cannot work in New York-finding unsubsidized
jobs is unrealistic when the unemployment rate in this
area is about 10 per cent.
Meanwhile, several questions remain to be answered
by DOE, and channels of communication must be
opened to address them. For example:
When will the Department of Labor respond to
New York City's request on behalf of CBO CET A
workers for waivers of the 18-month limitation?
What provisions does the city plan to make for the
continuation of projects between the termination of
workers (for thousands that date is September 30th) and
the start of new contracts (for ANHD that will be
November 1st at the earliest) or the hiring of new par-
ticipants?
Whatever happened to the "administrative suspen-
sion pool," which would hold job slots open for those
participants who have not exhausted their 18 months of
employment , even though their projects have been ter-
minated?
Prior to the announcement of a 24% cut in funding
for CET A, some contractors had already presented
their full budget proposals to the Board of Estimate.
Are CET A contractors who have yet to go before the
Board being penalized because their negotiations with
"line" agencies and DOE were more protracted than
others?
What does the city plan to do in terms of job de-
l:
r
I
velopment for those workers whose CET A elegibility
ends in September?
Keeping channels of communication open is not,
however, so easily done. Three times DOE Commis-
sioner Ron Gault has cancelled meetings he scheduled
with Betty Terrell, Executive Director of ANHD, and
Ron Shiffman, Director of the Pratt Center for Com-
munity and Environmental Development, to discuss
specific CET A issues. Commissioner McEnery has yet
to get back to the Task Force as promised about CET A
issues raised at the July meeting.
The city must come forward with an equitable and
comprehensive plan for community-based organizations
and their CETA VI participants. Otherwise, thousands
of people will lose their jobs and CBOs will lose staff
either through cutbacks or through staggered waivers,
which will keep some workers on for periods of 3, 6, 9,
or 12 months. DOE must be continuously pressed to
meet the needs of CET A workers, CBOs, and city
residents in need of public services. The city must be
made to realize that CETA has given many people who
were previously regarded as unemployable much needed
jobs, many in creative capacities. These efforts should
be publicized and encouraged. Congress along with the
Department of Labor must be confronted about the
plight of the CBOs in New York, because here in
Gotham, CBOs are making a visible difference in
CETA.D
Mae Woodley is a researcher/ writer at the Pratt Inst-
itute Center jor Community and Environmental De-
velopment. She is employed under the CETA VI pro-
gram.
DAVIS-BACON
For many years, a federal law designed to prevent
exploitation of cheap labor has placed self-help housing
organizations in a bind. Called the Davis-Bacon Act, it
mandates the payment of "prevailing wages" and sets
up ratios of many supervisors for each trainee.
Most community housing groups have had serious
difficulty adhering to these regulations, but have been
hamstrung in opposing them because of the appearance
of being anti-labor.
Now, a group of people that includes representatives
of HUD, the Department of Labor, labor unions and
community organizations is trying to put together a plan
for a "pre-apprenticeship" program that would ease the
situation for these groups.
"Davis-Bacon allows lower wages if it is for an ap-
proved training program," said Elizabeth Raymond, a
labor relations specialist at HUD. "Rates can be as
much as 50 per cen t lower. "
The pre-apprenticeship program idea needs the ap-
proval of DOL. Raymond said she is very optimi stic
9
about it. "I am extremely confident that we will get
everyone together," she said. She predicted a November
decision.
The purpose, she stressed, is not to evade the require-
ments of Davis-Bacon, but to "simply open up to disad-
vantaged, unemployed teenagers and other people the
opportunity to get a skill with adequate training, so they
can use that training to get another job." 0
CITY HOUSING SURVEY
Over the summer, the Department of City Planning
has been conducting a study of city-owned (In Rem)
buildings. Some 8,700 buildings with 31,000 occupied
apartments are currently owned by the city. That is
more than 8 per cent of all residential property.
The study is looking at a diverse field of subjects re-
lated to In Rem housing, including tenant financial re-
sources, housing court, the amount of private invest-
ment in the area, alternative management and city man-
agement.
It is expected to be completed in September and will
conclude with recommendations for program changes
and new legislation. Two staff members and six students
performed the study.
Meanwhile, HPD has asked HUD for $2.55 million to
set up a computerized information system and conduct
several studies related to the problem of In Rem hous-
ing. A breakdown provided by HPD is as follows:
$1.3 million to hire architects and engineers to sur-
vey 2,000 to 3,000 In Rem buildings.
$500,000 to evaluate alternative service delivery to
In Rem buildings and determine how they can best be
maintained.
$450,000 to set up a more sophisticated computer-
ized information system that would tell officials who the
tenants are, what their rent history is, the condition of
the buildings and the frequency of repair work. 0
Six million dollars has been tentatively budgeted for
Community Development Credit Unions (CDCUs),
according to Jim Clark, executive director of the Na-
tional Federation of CDCU s. The National Credit
Union Administration and the Community Services Ad-
ministration originally requested $12 million so that
loans of up to $200,000 could be provided to credit
unions for start-up capital.
A $72 billion budget for HEW and related agencies
for fiscal year 1980, which includes the $6 million ap-
propriation for the CDCU s, awaits final approval from
Congress. This approval could come as late as the
beginning of October. 0
SECTION 510 DEMONSTRATION STARTS
A sharing by the private sector of its expertise and a
little of its wealth is the basis of a $19.2 million pilot
program intended to expand housing rehabilitation and
offer ownership to low and moderate income people in
New York City.
The federal/city-sponsored demonstration is expected
to produce 600 units of rehabilitated housing in four
targeted neighborhoods. The idea is to spin off profits
from one project and to leverage other public funds in
order to upgrade additional housing.
Each neighborhood will have one Section 8 substan-
tial rehabilitation project of 100 units plus the moderate
rehabilitation of an additional 50 units nearby using
Community Development Block Grant funds and a slice
of the syndications profits from the Section 8 project.
Participation in the program, known as the Section
510 Demonstration, will require a formalized working
relationship between developers and community
organizations through the creation of "Special Purpose
Organizations." The SPO will be responsible for imple-
menting the Demonstration plan and coordinating
funds for the limited rehabilitation.
The Section 8 building will be done in conventional
fashion by the private developer. For the limited rehab-
ilitation of the surrounding units, New York City has
committed $500,000 in CDBG funds per neighbor-
hood-or $10,000 per unit. The Section 8 syndication
proceeds, equal to at least five per cent of the mortgage
or an estimated $200,000, will be held in reserve to de-
fray subsequ.ent operating cost increases or to replace
building systems thought to have been in good
condition.
The purchase pr"ice will be $250 per unit. Ownership
will likely take place through transfer of the buildings to
a resident-controlled, non-profit corporation, with
formal low-income cooperative status established later
once legal obstacles have been surmounted.
Even so, the monthly maintenance is expected to
come in at $180 to $210 per apartment. "It's tough to
house low income people in this city," commented Sybil
Phillips of HUD, director of the 510 Demonstration.
The Demonstration guidelines stress the need to
widen home-ownership opportunities, explore a range
of tenure arrangements, establish a model process for
disposing of city-owned properties and encourage the
creative involvement of the private development sector
in upgrading low income neighborhoods. The program
is based on the belief that restoring only one building
10
in a distressed area is insufficient and often counter-
productive.
An unstated premise of the program is that private
developers must playa large role in helping the city to
reduce its swollen stock of tax-foreclosed properties but
that in the past they have exploited programs to build
low-income housing without making any significant
commitment to the neighborhood. By tying approval of
the lucrative Section 8 project to a requirement that
developers work closely with established community
organizations on an expanded level of rehabilitation,
the program hopes to capture some of the expertise that
would otherwise be unavailable for the neighborhood.
One question that has been raised is whether there is a
sufficient reservoir of tenanted buildings that are sound
enough to save for $10,000 per unit, since city-owned
buildings tend to be more dilapidated. "The city knows
its own business," said Phillips. "It has made represen-
tations that moderate rehabilitation can be done for
these dollars, and that there are buildings with tenants
in residence that could be rehabilitated under these
conditions. We're going to find out."
Initially, seven neighborhoods were listed by HUD
and HPD as eligible for the 510 Demonstration: Crown
Heights and Bedford Stuyvesant in Brooklyn; High-
bridge, West Tremont, Bronx Park South and Sound-
view in the Bronx and Hamilton Heights in Manhattan.
Officials played hot potato with Clinton in Manhattan.
Originally slated for inclusion, Clinton was dropped
after Chairman Robert Wagner Jr. of the City Planning
Commission reportedly opposed it on the grounds that
the neighborhood was attracting sufficient private
development. It was added belatedly after community
representatives favoring ownership opportunities for
low and moderate income Clinton residents mounted
political pressure on the city.
Among the things policy makers hope to learn,
according to Phillips, are the real costs of moderate re-
habilitation and how strong the movement is for low
and moderate income ownership in New York City-
factors that "may lead us to a better understanding of
how to prevent additions to the city's inventory of
housing. "
The deadline for filing proposals was extended from
August I to August 13 after developers and community
organizations complained that they were given less than
one month to prepare them. Announcement of the deci-
sion is expected in late September. 0
Siege continued
water damage caused by leaking pipes. There is no front
door downstairs.
Rodriguez has put out three fires in the building. One
of the apartments is a drug center, and one night last
May his life was threatened when he tried to chase some
junkies out of the building.
Only nine of the 47 apartments are occupied. No one
except Rodriguez and his wife pays rent. Tenants in two
of the apartments are stealing electricity, in one case by
breaking through a wall to tap the line from the adja-
cent apartment and in the other by hooking up a cord to
the hall light fixture.
Rodriguez's own apartment is barely livable. Step on
a rug in his bedroom and your foot sinks down in places
where the floor has rotted away because of a broken
steam pipe. The kitchen ceiling is marred by an ugly
hole from leaking water. "Like a pig, we live here,"
said his wife Julia, who suffered a stroke in July. She
has difficulty speaking and leans on a walker to get
around.
Rodriguez points to the hole thievl's left when they broke through
an apartment wall to get at the pipes.
Despite the conditions, the overwhelming odds and
the danger, Virgilio and Julia Rodriguez, both in their
sixties, refuse to surrender. Though small in stature,
Rodriguez is agile, his arms are strong and he has the
energy it takes to keep tabs daily on nearly 50 apart-
ments. He still makes rounds at 2:30 a.m., not knowing
what he will find, but hoping that his presence will slow
the steady exodus of appliances and pipes from the
building. He makes repairs daily, paying for the mater-
ials out of his pocket. And Mrs. Rodriguez, a licensed
real estate broker, speaks with pride of her education
and academic degrees from Fordham University.
Together, they are a model of fierce determination,
inspired by the hope that one day they will have their
building back again.
According to the couple, the building was already suf-
fering from under-maintenance when they bought it in
1976, assuming $13,000 in back taxes owed by the
previous owner. At that time, 15 of the apartments were
vacant. They said they tried to get a bank loan to pay
off the taxes and make some repairs but were turned
down. More and more tenants stopped paying rent. Fin-
ally, the city foreclosed on the building in August, 1978.
Rodriguez was hired as the superintendent. He earns
$321 per week and pays $200 a month for rent.
Word that 1472 Montgomery Ave. was city-owned
made it a sitting duck for vandalism and theft, Mrs.
Rodriguez said. "People think the building is free. Once
they know the city owns it, they'll rip it off, and there's
nothing we can do because our lives are in jeopardy. We
tell people to get shotguns. You have to arm yourself."
She said that when she tried to stop the theft she was
told, " 'What do you care? The city owns the building.
You're just the super.' "
Rodriguez complained that HPD has done almost
nothing to secure the building or repair the damage. The
little work that was done was sloppy and incomplete, he
said, adding that city handymen inflated prices and used
inferior materials. A piece of plywood nailed to a
broken door was evidence of his point. In many in-
stances, handymen came over to assess the work needed,
promised to return and then disappeared, he said. "The
job they do here is a very bad kind of job."
Mrs. Rodriguez said police protection has been prac-
tically non-existent. "We are entitled to have protec-
tion, but we have no protection," she said. "The police
only come to verify a theft. They don't want to catch
anybody."
The city real estate manager for the building, Iris
Grice, said she was instructed not to talk to reporters.
Asked how 1472 Montgomery Avenue compared with
her other buildings, she summed it up as, "pretty bad."
11
On the other hand, her boss, David Rabinowitz, said
an August 8, 1979 memorandum from his office identi-
fied the building as a "resource building" that should
be filled up with tenants. Asked why the city has
allowed a virtual open house in one of its buildings, he
said, "In under-occupied buildings it is difficult to pre-
vent vandalism."
The Rodriguezes still have a glimmer of hope that they
will again own the building, which is why they try to
protect the property. "I don't want nothing for free,"
said Rodriguez, asserting that he would never accept
welfare or food stamps. "Give me a loan. I'll work in
the building and give he money back." 0
Julia and Virgilio Rodriguez at home.
HISPANIC COALITION
A New York chapter of the new National Hispanic
Housing Coalition has been established with the goals
of improving the housing conditions of Hispanics and
increasing their opportunities for participation in all
aspects of community development.
The National Hispanic Housing Coalition was
created earlier this year with a $786,000 grant from
HUD to develop a mechanism, determine directions and
detail a methodology for improving the quality of life
for Hispanics.
The Hispanic population is the fastest growing minor-
group in the United States, according to demograph-
IC experts who say it will overtake the black population
by 1985. An estimated 12 million people of Hispanic
origin live in the United States, 1.2 million of them in
New York City, according to the most recent census fig-
ures. Those figures are considered very conservative
because of acknowledged serious undercounts.
Compared with the population at large, Hispanics
have markedly lower incomes, higher rates of unem-
ployment, lower rates of skilled employment, higher
rates of substandard housing and lower frequency of
home ownership, according to the National Hispanic
Housing Coalition.
A new report by the National Puerto Rican Forum a
non-profit service organization, says that
Hispanic and other minority groups, Puerto Ricans fare
the worst. The median income of U.S. Puerto Rican
families was $7,972 in 1977 compared with $9,563 for
blacks, nearly $12,000 for families of Mexican origin;
more than $14,000 for families of Cuban origin and
$16,000 for all U.S. families, according to the report.
The Puerto Rican unemployment rate was 13.6 per
cent in 1977 compared with a national average of 6.2 per
cent for whites, the report said, and in peak earning
years, the average New York male earns 75 per cent
more than his Puerto Rican counterpart.
In releasing the report in August, the Forum charged
that New York City had failed its Hispanic communities
by serious undercounting their size and neglecting to get
them adequate funding for training, jobs and services.
The New York Chapter of the National Hispanic
Housing Coalition lists 30 individuals and organizations
as members. Over the summer, it elected officers, estab-
lished committees and formulated a set of goals that
include:
e advocating employment of Hispanics in the
housing industry in construction, management , devel-
opment and policy positions;
. e developing tenant awareness and serving as a clear-
on housing and community development and
related Issues;
e. housing and community development
polICIes that benefit the Hispanic community.
The local chapter is a co-sponsor, with HUD, of a
12
series of workshops designed to affect greater commun-
ity participation in government programs. It is also
working with the National Center for Housing Manage-
ment to set up seminars related to housing management.
It is preparing an analysis of the housing issues that His-
panics in New York City confront. This analysis will be
presented to the National Coalition at its first annual
conference this winter.
For further information about the chapter, contact
Butch Ghigliotty, chairperson, at 585-2100. D
FREE LEGAL AI D OFFERED
ANHD has contacted two sources of free legal assist-
ance for neighborhood or tenant organizations in lower
income communities.
A private lawyer, Martin Diennor, formerly a staff
attorney with Westchester Legal Services, has agreed to
represent tenants in landlord-tenant cases, including
eviction proceedings and rent overcharge situations.
Appointments with him will be arranged through
ANHD by Anne Hartwell at 674-7610.
The New York Lawyers for the Public Interest has
also agreed to work with neighborhood-based housing
groups.
In brief, NYLPI chooses projects that appear to bene-
fit a significant segment of the public for which legal
representation is not available through the private bar
or existing free legal services programs.
Public interest law includes representation in poverty
law and civil rights matters: representation of public
rights such as those asserted in environmental or
consumer class actions, and representation, in certain
instances, of community groups, governmental insti-
tutions and not-for-profit organizations.
Except where a substantial public interest is involved,
NYLPI cannot provide assistance with traditional indi-
vidual legal problems-landlord/ tenant, family or con-
sumer matters. Nor can it provide representation in
criminal matters or to commercial enterprises.
A full description of services is listed in NYLPI's
brochure, available from Jean Murphy at 575-5138. D
ENERGY CONFERENCE SET
The New Jersey Department of Energy will hold a
tw?-day conference on energy problems in low income
neIghborhoods October 29 and 30 at the Robeson
Campus Center at Rutgers University in
Energy problems of low income residents in older
northern cities will be discussed.
information, call Camilo J. Vergara, head
mner-clty programs at the Department of Energy.
HIS telephone number is 201-648-3957. D

,.
To the Editor:
The article on the Bowery Shelter (June/ July) by
Susan Baldwin was most objectionable to us. We found
it ambivalent, and very negative.
I must say for the record that I have lived on 4th
Street for more than 30 years, during all of which time
the shelter has been functioning as a shelter for home-
less men. I must also say for the record that Richard
Boodman is NOT a longtime Lower East Side resident
"who deals in residential and commercial real estate in
the vicinity". He is a landlord, who buys every lot of
land he can by devious tricks raising the rent of incom-
ing tenants who don't know their rights. He bought the
house I live in a year ago. I was compelled to withhold
rent for the first time in my tenancy under his landlord-
ism for his failure to provide heat at night as required by
law.
Boodman and the other landlords in the area are
manipulating the tenants living in the area and as far
away as 13th Street to stop the budget to the Shelter, in
the fond belief that by so doing they will be able to
starve the shelter residents into subjection and disloca-
tion.
Certainly the article should have indicated that the
homeless men must be given a proper program, which
Squatters continued
high. And then, they don't even give you heat."
Sanchez lives at 500 West 112th Street, where prelim-
inary inspections have indicated that tenants must be re-
located in order to remove the building's major struc-
tural and service problems.
"I am afraid that if I do move out for repairs, I'll
never be able to come back in," Sanchez said. "I think
the other tenants here feel the same way."
Both the city and MVDC have assured tenant repre-
sentatives of 500 West 112th Street and the tenants they
represent that they will be welcome to return to the
building upon completion of the rehabilitation.
Tenants have also been invited to seek an independent
engineering opinion to support their claim that major
rehabilitation can be done without relocation of fam-
ilies.
"I just hope something can be worked out that we all
like," said Rufino Gonzalez, a dapper, quick-witted
older man who is one of the original squatters, as he
helped others one recent day take care of the garden that
13
Koch has not done. As Ms. Baldwin wrote, appearances
can be deceiving. And she was deceived.
Editor's Reply;
Sincerely,
Esther T. Rand
.Executive Secretary
Metropolitan Council On
Housing
East Side Branch
Ms. Rand's views on landlords are well known and
well respected at City Limits, as elsewhere. But we had
to tell the whole Shelter story-good news and bad. The
issue here is the need to provide homeless men with a
proper program, as Ms. Rand states, and not her per-
sonal relationship with Mr. Boodman. We also point
out that the article quoted several other individuals who
seem to share the same point of view held by Ms. Rand.
grows where one of the former buildings stood.
"I remember that hot night on July 26 when we came
up here and decided to move in, " Gonzalez said.
"Pointing to his own apartment at 503 West III th
Street, he added, "We wanted the decent housing and
we put that building in good shape. We do all the repairs
and have spent a lot of money-at least $250,000 for
that building alone. And we work like horses."
I just think this is a wonderful victory, and we truly
did hope that this would ultimately happen," said
Charles Brennan, one of the legal aid attorneys who de-
fended the squatters throughout their ordeal.
"At first, we had hoped that Morningside House
would step in and accept the squatters as legal tenants,
but this didn't happen. Ultimately, we hoped that the
city would step in and it did."
Brennan's colleague Piller, echoed similar sentiments.
"I have worked in many difficult cases," he concluded,
"and this is one of the few major victories of its kind. It
is definitely a people's victory." 0
CITY INVESTIGATES 'SLUMLORD'
ON PAYROLL AS HOUSING MANAGER
by Susan Baldwin
Jerome Schiller rushing into his Bronx apartment house to avoid City
Limits camera.
"There is no way that we won't follow him to the
ends of the earth. We have suffered long enough from
his arrogance which has rewarded him with a city job."
Suzanne Velasquez, a: young, vibrant leader of the
tenants at 1815 Riverside Drive in northern Manhattan's
Inwood section, is referring to her former landlord,
Jerome Schiller, who after years as a landlord of slum
property, primarily in East Harlem, has been rewarded
with a job at the city's Department of Housing Preser-
vation and Development, where he reportedly manages
39 buildings in the Bronx.
HPD claims that Schiller serves 276 tenants in the
Bronx. A spot check by City Limits found that his
workload on Prospect Avenue, for example, included
an abandoned building and a fully-tenanted three-fam-
ily dwelling that appeared not to be in need of city help.
Schiller also lives in the Bronx, in a Mitchell-Lama mid-
dle income building in the Kingsbridge section.
The tenants of 1815 Riverside Drive have been on rent
strike for 20 months and have withheld about $70,000 in
rent. Schiller owned the building from 1965 until last
June. He declined an interview about his property.
"It's almost ridiculous to discuss him now because
you have to wonder why they even gave him a job,"
14
Velasquez said. "He has such a well documented history
of brutalizing people and running down properties that
he should have a resume that no one considers, but the
end of all of this is that he gets a job at HPD. "
Until the early 1970's, records indicate that the Schil-
lers owned and managed more than 70 properties in
East Harlem that have been either demolished or va-
cated. The rubble-strewn properties that are still stand-
ing, including the site of the family's old real estate
office, are city-owned and unoccupied.
Velasquez cited lack of essential services, several early
morning questionable fires and serious gas leaks in
apartments as examples of this history. She also referred
to repairs of plumbing leaks in the building that were
wrapped with masking tape and the roof that was rein-
forced with cardboard.
"In my apartment, we were lucky that we had the
windows open arid were not asphyxiated by the gas leak
from our stove," Velasquez said. "If we had had our
windows closed, I don't know if we would be around to
tell the story. "
Schiller, by his own account, spent nine years at the
city's Department of Real Estate managing property, a
tour that ended in September, 1978, before taking up his
present duties as an HPD real estate manager.
HPD Inspector General George Dole is known to be
looking into a possible conflict of interest in Schiller's
dual role as landlord and city real estate worker. Dole
refused to comment on the case, but Martha Gershun,
head of public affairs for HPD, said, "I can't tell you
all the details, but he is definitely being investigated."
Another source said the investigation includes Schil-
ler's past real estate holdings and his present assets.
According to the Inspector General's office, a city
employe can own city property but must be public about
listing his property and should keep records of any real
estate holdings up-to-date in order to avoid a conflict of
interest charge.
"The Schiller family claims not to be involved in our
building," Velasquez said recently, noting that Mrs.
Schiller's mother, Mary Fleminger, still lives in the
building.
"All our records prove that she is still involved in the
building up the point of calling a tenant a few weeks ago
to ask why this tenant didn't pay the July rent," said
Velasquez. "If she didn't have any interest in the build-
ing and were not an owner, she certainly would not have
been calling up."
The building was sold in early June. A company
known as One Payson Realty Corporation, listing Mal-
vina Schiller as the managing agent, holds the second
mortgage for the building. This mortgage is $117,000.
The Empire Savings Bank holds the first mortgage but
refuses to discuss its financing. This first mortgage is
listed as $158,000.
Velasquez is one of two tenants of 1815 Riverside
Drive who spent 22 hours in jail in June after an alterca-
tion with the new owners of the Schiller building. They
are Abraham Dyckman, who owns 51 per cent of the
shares in the real estate company known as Drive Prop-
erties, Inc., and Robert Parody.
Reached by telephone after a number of calls,
Dyckman said, "Yes, I am the owner, and they never
told me that there was a rent strike in the building."
He also said that he would probably not have bought
the building had he known of the problems with the ten-
ants.
"I bought the building from the Schillers in June, but
they didn't tell me then that they sold this to me with
militant people like this in the building," he charged.
Questioned further, he added, "Militant people like
this will not pay rent. We were never told this. I've been
in the real estate business 25 years, and I've never run
into people like this."
The tenants at 1815 Riverside Drive have been on rent
strike for the past 20 months because, they claim, they
have not been receiving essential services, such as heat
and hot water. What services they do receive now are
provided by the tenants' association.
Meanwhile, the new owners are attempting to get
possession of the $70,000 that the tenants have de-
posited in their rent strike account.
"I represent them in court and I agree with them,"
said Councilman Stanley Michels (D-Man.) "This is a
classic building where the tenants are up against every-
thing. I can't discuss all the details, but there is a heavy
second mortgage held by the former owner. The tenants
Legislative Roundup
HUD Housing Assistance Programs: Public Housing
and Section 8.
The House and Senate have approved in Conference
an Administration request for $1.14 billion in contract
authority. HUD says this will provide "up to" 300,000
units. The Congressional Budget Office, using different
cost assumptions, says 266,000 units. The Conference
report goes back to both houses in September for final
approval. Additionally, the House has backed down
from establishment of a fixed mix of 60 per cent new
and substantially rehabilitated units and 40 per cent
existing units. HUD opposed the formula on the ground
that the distribution should be based on local Housing
Assistance Plans, not a federal mandate.
HUD Self-Help Development Fund to provide grants
and other assistance to neighborhood organizations to
prepare and implement housing, economic and com-
munity development, conservation and revitalization
projects in low and moderate income neighborhoods.
15
have a few dollars of rent strike money in the bank, and
there is a motion to release these monies, which should
be returned to the tenants. The Schillers sold the build-
ing, not the corporation, and the money should not go
to the new owners."
Michels also said that two of the tenants, Velasquez
and Ralph Sikes, of about 70 on rent strike, received
dispossess notices. According to Dyckman, the reason
for just these two actions is that it is cheaper that way.
According to the tenants and their lawyer, it is a form of
harassment.
The tenants of 1815 are looking into the possibility of
running their building themselves through what is legal-
ly known as a 7 A proceeding. They are having problems
achieving this status because a complete fire history of
the building has not been made available.
"I am beginning to see the story as speaking for it-
self," said James Meyer, Councilman Michel's aide.
"Here you have a bunch of earnest tenants who are
being harassed, and you have a sale of a building that is
questionable, and you have some very serious problems
with the building, namely, the boiler doesn't work and
the east wall is about to collapse, and the new owners
are mainly involved with trying to dispossess the two
tenant leaders."
"It's hard to begin discussing a family such as the
Schillers," Velasquez concluded. "All you can assume
is that they bought their East Harlem buildings during
the Depression, ran them into the ground and were for-
tunate enough that the people had problems fighting
back because they couldn't speak English, and then they
came over here and started the same tricks ... All I can
say is that this family deserves whatever abuse it re-
ceives ... We are out there to the bitter end in fighting
them, and that means if we have to pursue them, we
will." D
The House and Senate have approved in Conference
$5 million for FY 79 and $10 million for FY 80. The
Administration had requested $15 million. The Confer-
ence report goes back to both houses in September for
final approval.
Livable Cities Program, administered by HUD and
the National Endowment for the Arts, provides grants
and other assistance to support projects connecting
urban design, cultural affairs and other art initiatives
with neighborhood revitalization.
The House and Senate voted no funds for FY 79. For
FY 80, the House voted no funds, but the Senate
approved $3 million. In an unusual impasse, House and
Senate conferees were unable to reach a compromise
agreement, with Rep. Edward Boland (D-Mass.), chair-
man of the Appropriations subcommittee, adamant
about not funding the program. Therefore, the measure
will return again to the House floor for another vote in
September. Supporters hope for an appropriation, but
doubt that it will be as much as $3 million. D
Growth continued
ministration breaks down, she added, problems become
"all consuming" for an organization.
Specialized skills, particularly in accounting but also
legal, planning, architectural, management and con-
struction also become necessary. Many groups are run-
ning multiple government programs, each wjth its own
timetable and set of voluminous financial and program-
matic reporting requirements. "The orchestration of
funds that they have to do is as complex as any I have
seen," said Sybil Phillips of HUD. Unfortunately,
groups are not always well enough prepared.
While there is general agreement on the need for such
skills, opinion is divided on whether they should be im-
ported from outside the organization and neighborhood
or whether the emphasis should be on internal training.
"It is an absolute mistake to believe that an organiza-
tion can expand at any rate without bringing in from the
outside people who know how to manage programs,
and that means having a college degree and knowing
how to write," said Philip St. Georges, an assistant
housing commissioner and former director of the Urban
Homesteading Assistance Board.
Aureo Cardona, president of the South Bronx Com-
munity Housing Corp., takes the other view. "We've
developed our talent. I'm the classic example." Car-
dona began with SBCHO as an organizer. "It's all been
from within," said Cardona. "The housing corporation
is a school. "
Contributing to of getting the most qual-
ified individuals is the inability or refusal to pay com-
petitive salaries. One organization outside New York
CIty that is engaged in a number of major government
housing programs is looking for a housing supervisor,
but is only willing to pay $22,000. Sometimes contracts
permit groups to hire a few skilled technicians at salaries
that are out of whack with the rest of the organization.
Attrition of good people who can earn more in the pri-
vate sector is also a problem. "I was offered a job to
work three days a week for a lot more money, but I
began a training project with CET A and I want to see it
completed," said Pedro Fontanez of Interfaith Adopt-
a-Building on the Lower East Side.
Most everyone interviewed said commitment to the
cause still has to be the prime motivating factor for
people to take and stick with jobs in community-based
organizations. But organizations must not take that
commitment for granted.
"There is so much presumption of dedication to the
belief in the goals of an organization that little regard is
given to the personal needs of individuals," said Pol-
lack. "It is shocking how people who are so concerned
about the care of strangers in their community can be
absolutely oblivious to people in their own shop. People
will trade off higher salaries for a pleasant working en-
vironment.' ,
16
That can include other forms of recognition, training
for staff, additional authority and responsibility and of-
fering a feeling of participating and playing a role in the
organization.
Bureaucracy
One of the things that works against a healthy en-
vironment is the bureaucracy that is imposed on organ-
izations as they grow. Different units begin functioning
in isolation from each other and communication break s
down.
One of the causes of the near demise of the Peoples
Development Corp. in the South Bronx was the fact that
the separate teams that were set up by the organization
to run its different projects became totally isolated from
each other with no one and no structure to tie them to-
gether.
"It is very important that people get a sense of being
connected to the overall plan," said Marans of HCC.
"To do this kind of work you have to have people who
are inspired, you have to have idealists. If you can't pro-
vide them with that kind of structure, people will go.
Especially in situations where it is difficult to come up
with tangible progress you have to give people a piece of
the larger picture, otherwise it's easy to feel that they're
not doing anything, just wasting time."
At the same time, groups have to think about their
new functions, redefine roles and formalize systems and
procedures, that were once carried out much more in-
formally. Often this meets with resistance.
A surprising number of groups have turned to outside
help in their effort to prepare themselves for growth.
Leadership
The kinds of skills and personality that are vital qual-
ities of leadership as an organization is getting on its feet
change as a group becomes more developed. Leaders
need to prepare themselves for different roles and re-
sponsibilities. To start with, that means acquiring some
management sophistication. It also means learning to
delegate authority and work well with subordinates.
"Often-times, people who are leaders and starters are
self-oriented people," said a staff member in an organ-
ization dominated by the director. "They have confi-
dence in themselves and tend to do things their own
way. They find it difficult to develop a democratic,
group-controlled organization."
Moritz said that "at one time as deputy administrator
I thought I could be involved in everything." -Now, to
preserve his "sanity," he has cut his territory back 50
per cent.
McNeill acknowledged that she was accustomed to
making all the decisions for a long time, withou{tnuch
input from other staff. When the group became too
large for her to function that way, she hired staff to help
her but found herself withholding information from
them and resisting sharing of authority. "I had been ....
doing it for so long until 1 felt no one else could do it. 1
did not trust anyone else to do it," she said. "I was very
..
FORD FOUNDATION EYES SUPPORT UNIT
The Ford Foundation is seriously exploring the crea-
tion of a national center to assist moderately experienced
community-based organizations that are on the thresh-
hold of becoming sophisticated development and
management groups,
There are probably hundreds of maturing community
organizations across the country that are ready to
assume wider development responsibilities. Often they
lack some necessary legal, accounting, planning and
development skills to make the transition. And their
energies are drained by chasing down funds just to cover
their operating costs.
"Where would a community development or revitali-
zation g ~ o u p turn today if it wanted to make an orderly
though rapid transformation into a sophisticated devel-
opment entity with concrete plans and projects?" asks a
Ford discussion paper entitled Communities and Neigh-
borhoods-A Possible Private Sector Initiative jor the
1980's. "The answer is not clear."
To bridge the gap, Ford has proposed the creation of
a Local Initiative Support Center to:
provide seed money and technical assistance
designed to fortify the planning, management and fiscal
capabilities of organizations.
help stabilize their funding by facilitating access to
private and public operating and investment money.
As currently envisioned, LISC would cost $8 million
to $10 million over the first three years, half of the
money coming from Ford and half coming from a con-
sortium of seven or eight major corporations. Up to 100
community organizations would be aided over a five-
year period, with 25 to 35 getting help in the first couple
of years.
In addition to "carefully tailored" technical assist-
ance, LISC would provide grants that would have to be
matched locally by equal amounts of private capital.
The stronger candidates for inclusion in the program,
according to Ford's criteria, will be groups with a com-
bination of good leadership, solid operational staff,
solid base of community support, prior track record in
managing social services or physical development, an
understanding of the complexity of neighborhood re-
vitalization and the potential for local public and
enthusiastic about the whole (reorganization) plan. T ~ e
only drawback was that it seemed to remove me, taking
me away from what I really liked to do. "
Since the executive directors of many community or-
ganizations often do not have a management back-
ground, there is a great need in the minds of many for
more leadership training.
"I think what we have to do is take into account how
the organization has grown, and then we must acquire
those skills, meaning training," McNeill said. "We
must be open to advice, open to learning. I've constalit-
17
private sector backing. The foundation notes that few
groups if any would possess all of the characteristics.
While asserting that no final decision has yet been
made on LISC, Sol Chafkin, head of Ford's Depart-
ment of Social Development , said reaction from corpor-
ations has been generally favorable, and "We think we
are very close to getting the bulk of that amount." I f the
financing falls into place, LISC could begin to take
shape by the end of the year, he added.
Part of the intent of LISC is to circumvent problems
stemming from over-dependence on government
funding, according to the discussion paper. Whereas
government is often swayed by political pressure in dis-
tributing resources and tod cumbersome to deliver the
quality and timing of technical assistance, LISC would
combine knowledge with selectivity and flexibility.
"The idea here is to make more productive use of
existing quantities of government supports of one kind
or another," Chafkin said. "It is unlikely that the larger
programs will be financed by the private sector. There
is nothing wrong with government funds. The question
is how to use those subsidies most productively."
As stated by Ford, the LISC concept is based on the
conviction that community-based organizations have a
crucial role to play in revitalizing blighted neighbor-
hoods, that many groups have proven conclusively their
capability and that many are worthy of long term
government and private support.
"The problem therefore is to devise an approach that
can accelerate the work of creative community neigh-
borhood organizations," the LISC paper says.
Ford interviewers have been visiting community
groups around the country to collect data. In addition,
the foundation has asked other organizations, including
the Center for Community Change, the National Center
for Urban Ethnic Affairs and the National Urban
League to draw up profiles on groups with which they
are familiar.
Asked his impression so far, Chafkin said there are
many more community groups in existence than anyone
realized and "they are doing surprisingly effective
things." 0
Iy been opposed to HPD (the city's housing agency)
saying maintenance supervisors and bookkeepers
needed training, and never considering the fact that the
directors needed training. There is training for almost
everyone but executive directors." 0
Continued Next Month
There is a growing awareness of the need to plan
better for growth. Anyone interested in participating in
a conference on this subject should contact Ron Schiff-
man at the Pratt Center for Community and Environ-
mental Development 636-3486.
TENANTS FIGHT HUD 'UNSAFE' EDICT
by Susan Baldwin
I
,
1
Barbara Williamson. left. and her family in front of
her Queens home that HUD has called uninhabitable.
Faced with eviction because her landlord says her
housing is uninhabitable, Barbara Williamson, a ten-
acious mother of four , counters, "If I have to become a
lawyer before this is over, I will. I'm not going to be
moved for nothing. "
The landlord-the U.S. Department of Housing and
Urban Development-has ordered Williamson, 107-35
Inwood Street, Jamaica, Queens, and two other tenant
families of HUD mortgage-foreclosed properties to
vacate their homes by the end of September because,
HUD claims, the properties are a health and safety haz-
ard to area residents.
The tenants are plaintiffs in a class action suit
brought against then HUD Secretary Patricia Harris
that charges the government with illegal eviction of ten-
ants from HUD-owned properties without proper con-
sideration and consultation of the tenants' rights under
due process.
The lawsuit also asserts that high levels of eviction
cause housing abandonment and deterioration in the
neigborhoods where HUD has a significant number of
insured mortgages among the one-to-four family
houses.
The case, which was heard in U.S. District Court in
Brooklyn, began June 18 and ran through August 2.
Although only three tenants are initially faced with
immediate eviction, there are at least 25 other tenant
families that are similarly threatened and there could be
as many as 10,000 subjected to these stringent HUD reg-
ulations.
18
Mrs. Williamson and her husband, Ennis, live on a
quiet, tree-lined street in South Ozone Park that is
marred already by boarded up houses adjacent to their
property. The two other plaintiffs, Juan Pabon, 876
New Lots Avenue, East New York, and Ronald Brown.
752 Lexington Avenue, both of Brooklyn, live in neigh-
borhoods that have the same abandonment problems.
"It's crazy the way they went after us here," William-
son complained. "We moved in January 6, 1978, and
they already had foreclosure proceedings against the
owners for three years before we moved in ... But no one,
including HUD, told us about this. He was allowed to
take the rent money and he did."
Brown experienced the same problem with his land-
lord.
"I was just glad to have a place to live and pay rent,"
he remembers. "The landlord came around at first and
he fixed a few things. Then his daughter came around to
collect the rent. But still I had no idea that he wasn't
paying his bills and his mortgage until they (The Federal
National Mortgage Association) came around to throw
me out. But, I was paying rent all along."
And Pabon's story is similar.
"I live in this house, and I have a tire business in the
neighborhood," Pabon says. "My house has needed re-
pairs all the time, but I make them myself...Then the
downstairs gets vandalized, and of course there is no
landlord .. .l offered HUD $1,000 for my house where
my family can live, and they want to tear it down for
$4,000. I want to stay here because this is my home. "
All of the tenants are residents of houses where the
owners were absentee landlords who did not make re-
pairs or provide services to the properties. All three
plaintiffs were also prepared to buy the properties if
they had been given the chance. They cannot in their
present status because HUD does not recognize them as
legal tenants.
Under HUD's guidelines, once a property has been
foreclosed, any tenants should be notified by HUD that
foreclosure proceedings have begun and that they have
the first option to buy the property.
The three tenants who are known as plaintiff interve-
nors in the overall class action suit are being asked to
leave their homes because HUD has found them to have
structural defects that are economically unfeasible to re-
pair with tenants in occupancy. HUD has also charged
that these dwellings are uninhabitable because of health
and safety hazards that, it claims, are constant threats
to the tenants .
Although the trial focused on lengthy discussion of
how the homes appeared to be uninhabitable, a clear
definition of HUD's criteria for habitability never
emerged in the testimony.
"From the beginning, this interpretation of habitabil-
ity has been a problem for me," Williamson said,
noting that the first complaint against her propert y was
a non-working boiler. She also questioned the relation-
ship between the federal government's authority and the
city's policy on habitability.
"They change their definition from day to day of
what is habitable and what is not," she continued. " But
one thing I can tell you, they never looked at the boiler.
They said the windows here in my house were rotted
but they never tried to open them. They complained
about the roof and having a bathroom in the hallway
and about lead paint on the walls ... They even sent an
inspector who said the house was habitable."
Brian Sullivan of the Pratt Center for Community
and Environmental Development and several other
technical experts who testified during the trial, ques-
tioned HUD's insistence upon evicting the tenants.
"We inspected these three properties and found
nothing that was detrimental to health and safety," said
Sullivan. "There are some other problems with the hot
water and heating system, plumbing, tilted steps or
whatever, but there are no major structural problems in
any of these apartments . They could be repaired with
very modest loans."
Both Sullivan and Ellen Gesmer, the tenants' attorney
from the Bedford Stuyvesant Legal Services, Inc. , sug-
gested that HUD's priority was to stockpile non-ten-
anted houses.
"It starts to become very clear that HUD does not
want these tenanted houses," Gesmer said, noting that
HUD is in the process of considering new guidelines that
will make it even more difficult for people to be tenants
in HUD-insured houses. According to Gesmer, the pro-
posed guidelines are far more restrictive and exclusion-
ary than the present ones.
"It's useless for them to continue this discussion
about the tenants," said a government attorney who is
familiar with the case but declined to be named. "There
was a decision, and we won it. The three plaintiffs have
to move out."
This attorney and Peter Reimuller, acting chief prop-
erty officer of HUD' s properties section, said that they
are trying to be "reasonable" about the ' " move-out"
date for the tenants .
"We just want them out before the cold weather sets
in," said the U.S. attorney, who also cautioned that the
tenants would be found in contempt of court if they did
not move out.
"Everybody is trying to be reasonable," the attorney
said. "They have had months and months to look for
other housing .. . We even told them about other housing
in the same school district that was a lot better than
what they have here. They have to understand that they
must move. "
Although the tenants lost their case to remain in the
19
buildings, the class action suit will not be decided until
attorneys from both sides submit lengthy briefs to the
District Court.
The class action decision is expected sometime in Jan-
uary.
In the meantime, HUD has offered other tenants in
the lawsuit like Harold and Betty Johnson of 192
Madison Street in Brooklyn the option of buying their
house.
"I was clefinitely interested, " said Harold Johnson,
who explained that HUD decided to make the offer only
after he had lived in the house 25 years, and only several
days before the back wall of his house fell down.
Reached by telephone at a neighbor' s house where he
has taken shelter, Johnson said, " It was 'I'll huff and
puff and blow your h o u s ~ in.' The wall fell down before
1 ever received the letter about buying this house that
I' ve lived in so long. Now I'm sitting over here watching
my bedroom furniture and hearing my telephone ring.
And nobody is allowed in that house because it is now
being called structurally unsound.
"It's really crazy," he concluded. "In May, they told
me I could pick up the mortgage, and now I can't even
go back inside." 0
MORTGAGE RELIEF
Relief for homeowners with FHA insured mortgages
who are facing foreclosure is offered by HUD in the form
of a home mortgage assignment program. This program,
formally established in May 1976, helps prevent home-
owners (mortgagors) from losing their homes if they are
unable to meet monthly payments because of a tempor-
ary emergency situation such as a job loss or illness .
If the homeowner qualifies for the assignment pro-
gram, HUD then buys the mortgage from the mortgage
company or bank (mortgagee) and develops a payment
plan with the mortgagor. HUD can reduce or suspend
payments up to 36 months and extend the maturity date
of the mortgage for as long as ten years . By extending the
maturity date, HUD enables the homeowner to reduce
the monthly payment necessary to pay the mortgage in
full.
In order to be eligible for the assignment program.
according to HUD guidelines. the mortgagor must have
defaulted on at least three full monthly payments and
"the default must have been caused by a circumstance or
a set of circumstance's beyond the mortgagor's control
which temporarily rendered the family financially unable
to cure the delinquency within a reasonable time or make
full mortgage payments." In addition , "there must be a
reasonable prospect that the mortgagor will be able to
resume full mortgage payments after a temporary period
of reduced or suspended payments."
Before any foreclosure proceedings begin, the mort-
gagee must send out two letters informing the home-
owner of the assignment program and that housing coun-
continued on page 21
LEVENSON SAYS HANDICAPS PREVENT
RGB FROM DOING ITS JOB PROPERLY
Frances Levenson chaired the New York City Rent Guidelines Board from April, 1978 to July, 1979. The
board, mandated to establish levels of rent adjustments for some 870,000 units subject to the rent stabilization
law, has nine members, all appointed by the mayor.
Her tenure was marked by turmoil, mostly because the deliberations and decisions of the board were much
more closely scrutinized by the public than they had ever been before. The board's first rent guidelines decision
after her appointment, for leases signed between July, 1978 and June, 1979 was subsequently overturned in court
on the grounds that it had been made in closed meetings. In a series of stormy public sessions last spring, the
board reconsidered and then voted increases of one per cent above the overturned increases. Additionally, fuel
surcharges were added, raising the final rent increase ceilings to 7 per cent , 8.5 per cent and 9 per cent for one,
two and three-year leases. An application by tenants for an immediate injunction to bar the increases was denied
by a judge.
In June, the RGB voted near record increases for leases signed from July, 1979 to June, 1980 of 8.5 per cent,
12 per cent and 15 per cent for one, two and three-year leases, with an additional five per cent vacancy increase.
Levenson, who was criticized by both tenant and landlord groups as "unbusinesslike" and "autocratic," re-
signed on July 10, citing personal time constraints, the "goldfish bowl" atmosphere of the board and lack of
staff. She was interviewed for City Limits on August 22 by Judy Linscott.
Q. You said when you resigned as chairman of the Rent
Guidelines Board last July that the board needs a re-
structuring. What did you have in mind?
A. I don't know exactly. It needs staff, year-
round activity to keep abreast of what the situation is,
what is happening, to build up a data base to be able to
act, and with a full-time staff assigned to it.
Q. Would you comment on the recommendations of the
state Temporary Housing Commission to bring regula-
tions under one system?
A. I think the rent control system should be rationalized
into one system. My own feeling is that you should go
into one system of stabilization operating on a rate
making basis. I don't think at the present time you can
get rid of rent control. I might have been more sanguine
about that a couple of years ago, but the rental market
has gotten so scarce that I can't see how you could
possibly get rid of it now.
Q. Would you say that the RGB as it exists now is a rate
making agency in fact, if not in theory?
A. I think it is. It's become something it wasn't in-
tended, so it's trying to perform a function now that it
wasn't set up to perform. I don't think it can do its job
properly now, given the lack of staff and time. It's
unfair to everyone concerned.
Q. As a rate-making agency, shouldn't the RGB be more
publicly accountable, in the way of prepared findings,
filings, justification of data?
A. Sure. If there were time available, that should be
done. But as a matter of fact, meetings have been open
and the board has indicated reasons for their decisions.
I think the board has been most accountable. I think the
open meeting law in some respects can act as a counter-
Judy Linscott is a contributing editor of the Phoenix
and Villager newspapers in New York City.
20
productive tool. The board should be permitted to have
some di scussions in private although decisions should be
made in public. In order to arrive at a decision you
should be able to have a discussion. You can't deliberate
on a stage with 150 people yelling and screaming.
Q. What do you consider the RGB's function to be?
A. Its function is to do the right, proper and fair thing.
Actually, 1 think the board does that very well. I was
very impressed with the attitude, actions and sincerity of
the members. I think they did very well in what is an im-
possible situation.
Q. Would you discuss the justification for the "qualita-
tive" costs (above the Bureau of Labor Statistics index)
taken into consideration in increase decisions?
A. We have to evaluate what exists-the cost of money,
cost of refinancing, what the returns are, alternative in-
vestments . We also have to evaluate the effect of past
actions of the board. And, from the point of view of the
board members' knowledge of the general housing
market, we take into consideration the facts brought out
by the BLS, which is on a gross statistical basis, to view
on a rational basis the effect on the individual landlord.
And then the last question is the ability of the tenants to
pay, which we take into consideration, but that ' s a very
difficult question for a board of this kind to address. If
we're mandated to see that rents keep pace with costs,
it' s almost something we can't balance off one against
the other, in terms of taking into consideration that if
the tenants can't afford to pay, then the money has to
come from some place. But the board doesn't have
available any resources to provide subsidies.
Q. Then there's a very heavy reliance on the expertise
of the board?
A. Certainly, particularly under the circumstances. We
get the BLS in the beginning of June and we're sup-
posed to set guidelines by the end of June. There isn't
time for thorough-going analysis ... aside from the
individual knowledge and expertise of the board
members. They have to use their own judgement.
Q. Are you saying there's no fair way to do it?
A. Yes.
Q. Doesn't the notion of surcharges run counter to the
notion of stabilization?
A. Yes. On the other hand, in this kind of volatile situa-
tion, I don't know how else you can do it. Frankly, if we
didn't have the possibility of re-openers, I think the net
result would have been higher guidelines. You figure
you can make do for a year and then reevaluate. But
when you're setting up guidelines for three years ... I
think the board would have been bound to set higher
guidelines, particularly for the two and three-year
leases.
Q. How did the board arrive at the 25OJo increase/de-
crease figure and then reduce it to 15%?
A. I think it was originally 15% and then we had to
raise it to 25%, because if we continue at 15%, the
trigger continues to act. Once it reaches 15%, then you
have to raise above that, so we came in with an increase.
Again, that is on the basis of formulas, really, and again
we get the assistance of the research staff because you
get down to rather technical geometric and algebraic
formulas.
Q. Is it simply a problem of trying to cover too much?
A. Yes. Again, you get into a situation where stabiliza-
tion is covering a major portion of the rental market in
FHA continued
seling agencies are available to offer assistance.
Sigmund Klein, acting chief of HUD' s Single-family
loan management department of the New York area
office, states that from November 1978 to June 1979 ap-
proximately 259 of 700 cases, or 30 per cent of those
who contacted HUD's New York office were actually put
on the assignment program. Another 17 per cent were
referred back to the mortgagee and were able to work out
a revised payment plan. Nineteen per cent were rejected
or were ineligible since they defaulted because of circum-
stances not beyond their control. In other words. HUD
felt they could have reasonably resumed payment of their
original mortgage but instead chose to budget their
money elsewhere. Thirty-four per cent initially contacted
HUD expressing an interest in the assignment program
but then they never followed through on their contact.
Nationally, HUD lists that approximately 8,800 or
New York City. I think there has to be a safety valve, an
efficient and expeditious hardship procedure. My
understanding is that hardship applications (to the Con-
ciliation and Appeals Board) are not the most expedi-
tious, and that should be addressed.
Q. It would make the board's job easier?
A. Somewhat easier. My understanding is that one law
that isn't enforced at all is the rents on new leases. If
you can have an appeals system that has more teeth and
that people know about-on the other hand, I can't see
the CAB or anybody else being the kind of policeman. I
think probably a registration of new leases should be in-
stituted. As I understand it, at this moment under
stabilization there's no lease registration. Of course in
the past, there was a relatively informal situation that
worked quite well when they were dealing with a homo-
genous, small segment of the market.
Q. How would you characterize your term with the
board?
A. I think the board works much better than the press
seems to indicate. The press didn't sufficiently empha-
size that the board, under very trying circumstances, did
a very good job. Creaky though it is, I do think it does
perform its job of rough justice.
Q. Why did you leave?
A. I probably never should have gotten involved in the
first place. It was the time. I have a full-time job and I
just didn't anticipate that it would be as time consuming
as it turned out to be. 0
42,000 requests from May,1976 through May,1979, or
21 per cent were accepted on the assignment program.
Klein feels that the goal of the assignment program is
not to accept everyone who applies but that those who
meet HUD's criteria should be accepted. He adds, how-
ever, that 100 per cent of those who struck out with the
mortgage company should be given a second chance at
the bat."
The basic problem with the assignment program. says
Klein, is lack of communication. "People are afraid to
communicate with the mortgage company or the bank."
21
For further information contact Shirley Bradley at
HUD's Office of Neighborhoods, Voluntary Associations
and Consumer Protection at 26 Federal Plaza , New
York, New York 10007. The telephone number is (212)
264-0848. 0
Selwyn Eiber
CITY ENDS AUCTION MORATORIUM
Amid angry protests and shouts of "Stop the
Auctions Now," the Board of Estimate voted \0 to 1
August 16 to resume auctioning of city-owned (tax-fore-
closed) properties.
For the past year, there has been a moratorium on
this auction sale policy.
Opponents of the program maintain that it will only
lead to further housing abandonment and lack of ser-
vices in their neighborhoods as properties that were
once milked by speculators will return to the auction
block only to be bought by new or old buyers that will
follow the same old pattern.
Supporters of the auction policy claim that the only
way the city's tax-foreclosed buildings will survive is by
being returned to the private sector, and they see the
auction as the only major hope.
The Board's dissenting vote came from Stanley
Simon, Borough President of the Bronx, who first
asked that the matter be laid over until the Board's
September meeting. His motion was overwhelmingly
defeated.
During the day-long hearing, about 150 community
residents demonstrated against the auction policy in
City Hall Park and occupied Housing Commisioner
Nathan Leventhal's office seeking a meeting with him.
At a symbolic ceremony, representatives of commun-
ities, hard-hit by real estate speculation and lack of ser-
vices, deposited pieces of plaster and bricks from
buildings in their neighborhoods.
Their major objection to the auction policy is the
city's lenient proposal that permits owners a two-year
grace period to correct major (B and C) violations.
Under the city's current Emergency Repair Program,
similar violations must be corrected within a 72-hour
period.
"Tell us all the procedures," Jane Benedict, head of
the Metropolitan Council on Housing, told the Board
during the public session. "Tenants are running build-
ings, and they want them unmolested ... We don't want
their necks halfway on the auction block."
Benedict credited the city with working hard to
receive Community Development funds to run HPD's
programs for the city's tax-foreclosed buildings, but
asserted, "That's great, but we would prefer it if you
fought so hard for tenants as you do for your own
raises." The Board had to seek order after Benedict's
comments.
City Councilwoman Ruth Messinger (D-Man.) was
the only elected official to testify against reinstituting
the auction policy.
"City-owned buildings were foreclosed because they
were not sufficiently profitable to survive in the private
for-profit sector," she said. "In the past, when these
buildings were sold at auction, they soon fell into tax
22
arrears and were once again foreclosed. It is vital that
the proposed auction policy not repeat past errors."
She also warned that efforts to make these buildings
profitable "through rent restructuring places the burden
of years of landlord neglect and milking upon tenants"
and that "those unable to pay higher rents will be dis-
placed."
Ronald Marino, HPD's deputy commissioner for
policy and government, said he understood that
communities had problems with reinstituting the
auction policy and assured them that his agency would
work with groups to seek alternatives to the auctions.
"Under the new system," he said, "there will be a
discussion with the community boards and groups to see
if there are plans [for the buiidings) . And we will inform
buildings that they are to be auctioned and also that
there are alternative programs. "
Prior to the formal meeting, Leventhal met with sev-
eral tenant leaders on the sidewalk outside City Hall and
aggressively defended the city's program, asserting that
he had personally held up the auctions for a year and
that he had pushed the city to support HPD's alterna-
tive management programs.
"I don't have a list of 5,000 secret buildings to
auction off," he told the tenant leaders.
In a letter to the Board of Estimate dated July 6,
1979, HPD Commissioner Nathan Leventhal reported
that "Studies conducted by HPO' s Office of Program
and Management Analysis of properties sold at public
auction to the highest bidder revealed substantial de-
linquency in the payment of real-estate taxes and the
purchase of money mortgages. Of 885 properties sold at
public auction from January 1976, through February,
1978, only 97 buildings (11 per cent) were current in
both real estate taxes and the purchase money
mortgages."
At that time, Leventhal concluded that "it is clear
that the sale of city-owned property by the existing
public auction system has not substantially succeeded."
At the hearing Councilwoman Messillger suggested
and City Council President Carol Bellamy responded to
a proposal that would encourage the New York City
Housing Authority to undertake the management of
more city-owned property.
According to Charles Raymond, HPD's deputy
commissioner of property management, his agency is
preparing a disclosure statement that should eliminate
any auction buyers that have a hi story of milking ten-
ants. He also said that the new disclosure should be able
to screen firms that have no documented real estate
history.
HPD, Raymond added, does not expect a major
auction of residential properties until November.
But opponents still worry about the outcome of the
..
auctions, noting that the city's policies permit owners to
raise rents and seek lower property assessments without
guaranteeing basic services and correcting building code
violations.
"We realize that there are a lot of problems with the
auction policy," said Vicki Streitfeld, housing specialist
for Manhattan Borough President Andrew Stein, who
voted in favor of reinstituting the auction policy. "This
is why we should work to help HPD structure a policy
that, among many things; does notify tenants that their
buildings are being auctioned ... The auctions definitely
should be monitored, and if it's possible, the properties
should first be considered for alternative programs." 0
ALAN BELL DIES
Alan M. Bell, who worked for several years with com-
munity-based organizations in the Bronx and with the
Association of Neighborhood Housing Developers, died
on August 25 after a long illness. He was 29 years old.
Bell joined the Northwest Bronx Community and
Clergy Coalition as a research assistant in 1976. A year
later he went to work for the Morris Heights Neighbor-
hood Improvement Association where, as assistant to
the director, he oversaw operations, negotiated con-
tracts and raised funds.
After working briefly for the State Division of Hous-
ing and Community Renewal, Bell joined ANHD as ad-
ministrative assistant last February.
He attended the University of Virginia and City Uni-
versity of New York, studying urban planning and pol-
itical science.
Bell suffered from Lupus Erythematosus, a chronic
inflammatory disease that attacks the body's immune
system.
He is survived by his parents, Milton and Fran Bell of
Co-op City in the Bronx, and a married sister, Suzanne
Rosenfeld, of Forest Hills in Queens. Funeral services
were held on August 27 in Queens. 0
The Brooklyn Tenants Union is seeking to hire a full-
time staff director/ coordinator.
Candidates should have experience in community
organizing. Duties will include overseeing BTU's tenant
organizing efforts and supervision of staff. Administra-
tive duties will be light. Prefer candidates with fund-
raising experience and ability. Director will report to
and work with BTU Board of Directors. Salary: $12,000
per annum.
Send resumes to: Becky Sandbeck, Brooklyn Tenants
Union, c/ o The New Muse, 1530 Bedford Ave., Brook-
lyn, N.Y., 11216. For additional information call 691-
1050 (9AM-5PM) AN EQUAL OPPORTUNITY
EMPLOYER. 0
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Lower East Side resident preferred. Salary range:
$14,000 to $15,000. Send resumes to Nestor Cortijo,
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UHAB is seeking a bi-lingual Training-Director to
workin connection with the Tenant Interim Lease (TIL)
Training Program. Responsibilities include: Providing
classroom training in building management, coordinat-
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housing experience required and teaching/ training
experience desirable. Salary based on experience .
Please submit resumes to: UHAB, 1047 Amsterdam
Avenue, New York, New York 10025
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IN THIS ISSUE
Squatters
1472 Montgomery Ave. Under Siege
Growth Part I
FHA Lawsuit
State Neighborhood Preservation Program
Section 510 Demonstration
Levenson-Rent Guidelines Board
Jerome Schiller
Auction Policy
CETA
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