City Limits Magazine, August/September 1987 Issue

August/September 1987 52.
00
B U S I N E S S S W E E T E N E R S G O S O U R D L O N D O N ' S H O M E L E S S
L O W I N C O M E L AN D M AR K I N G D D E V R O P E R S S U E R E S I D E N T S
2 CITY LIMITS August/September 1987
CIty L ' ' ' ' ' ~ s
Volume XII Number 7
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City Limits (ISSN 0199-0330)
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Editor: Beverly Cheuvront
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Copyright <C>1987. All Rights Reserved.
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EDITORIAL
Cleaning House at DHCR
Last year, South Brooklyn Legal Services reports, a woman and her
nine children and grandchildren were evicted from their rent stabilized
apartment largely because the state Division of Housing and Community
Renewal failed - even under subpoena - to submit critical informa-
tion on her case to housing court.
It is shocking that an agency charged with protecting the rights of
tenants could play so pivotal a role in creating homelessness, but to
housing advocates who work regularly with DHCR, the incident comes
as no suprise. That is business as usual at a bureaucracy where laws
are enforced arbitrarily, hearing examiners are untrained, letters go un-
opened, files are misplaced or lost, cases languish for years and pleas
for help hang on unanswered telephones.
In hearings held earlier this year, tenants, housing activists and even
landlords turned out in droves to vent their frustrations with DHCR
(See City Limits, April 1987). Their testimony, together with statements
from DHCR employees and documents from the agency, are compiled
in a just-released report by the Assembly's Committee on Housing and
Committee on Oversight, Analysis and Investigation headed by Alexan-
der Grannis and Brian Murtaugh_ The report paints a portrait of govern-
ment gone awry, at a cost of homeless ness and displacement, thousands
of dollars of incorrectly assessed cases, and untold agony for those
seeking redress through its services.
The report finds that: DHCR falsified reports on its case backlog,
systematically violated the law in processing cases, improperly dismis-
sed or gave favorable treatment to cases involving certain realty and
management companies, and has no management and employee training
systems. DHCR frequently overturns its own rulings in appeal, and it
is making no effort to change the legislation that hinders its operation,
the report charges.
DHCR Assistant Commissioner Thomas Viola contends that the report
accentuates the negative and ignores the positive. Since it took over the
rent regulation system in 1984, DHCR has resolved more than 300,000
complaints and awarded more than $36 million to tenants; in the pre-
ceeding 11 years, the Board of Conciliation and Appeals awarded tenants
only $4 million, Viola points out. He denies many of the allegations in
the report. and insists that cases rarely get lost and current cases take
about six months to process. "They should throw flowers at us instead
of bricks," says Viola.
City Limits remains unconvinced. The Grannis report proposes 17
worthy measures to overhaul DHCR's operation, all common sense steps
that must be implemented immediately. One recommendation calls
for an internal audit and analysis of DHCR's management system to
develop a strategy for change. But the seriousness of the some of the
findings in the report - especially those dealing with violations of the
state's housing laws - warrant a full-scale investigation by law enforce-
ment officials. Governor Cuomo should order a thorough investigation
into DHCR's actions and insist that the agency clean up its house. OB.C.
Cover photo by Cindy Reimon
INSIDE
FEATURE
Red Hook: Gloom with a View 12
For years an industrial wasteland where the city
dumped its poorest residents, the Brooklyn water-
front community now faces an uncertain future as
residents demand more services and developers eye
a new frontier.
DEPARTMENTS
Editorial
Cleaning House at DHCR ..... . ........ .. 2
Short Term Notes
De-Capitated ........... . .............. 4
New Jersey KOs Tenant Laws ............. 4
Brooklyn's Agency Allies ................ 4
Housing Money ............. .. ......... 5
Neighborhood Notes
Bronx .. .. ......... ... ......... . ...... 6
Brooklyn ... ......... . ................ 6
Manhattan ............................ 6
Queens .............. . .......... ...... 7
Pipeline
Fear of New York ..... .. ........ ... ... .. 8
Historic Preservation: A Tool for
Stabilization? ............. . .......... 16
Legislation
Federal Fair Housing Bill Draws Mixed
Reviews . .. .... .. . ... ............. ... 10
City Views
False Promises: Tax Abatements
as Business Incentives ... ...... .. .. .... 19
Building Blocks
Let There be Light - At Low Cost .. ..... 22
Workshop . .............................. 23
August/September 1987 CITY LIMITS 3
London/Page 8
Red Hook/Page 12
SHORT TERM NOTES
DE-CAPITATED
Developers outside
Manhattan would be able to get
J-51 tax abatements even for
pricey apartments under new
regulations approved in the
state's 1987 legistative session.
Despite opposition from
housing advocates, the
legislature agreed to lift a cap
that prohibited the use of J-51
for any building whose
apartments would have an
assessed value of $38,000 or
more after renovation. If signed
by Governor Cuomo, the
legislation would make
developers eligible for the tax
breaks no matterwhatthefinal
value of the apartments.
However, it would not apply
below llOth Street in
Manhattan, where other
restrictions are in effect.
J-51 encourages the
rehabilitation of apartments
through tax abatements and
exemptions, but the program
has from its start been criticized
as a giveaway for landlords and
developers, who frequently
used the program to convert
affordable housing into luxury
apartments.
The 30-year-old program last
was renewed in 1983, when the
legislature prohibited its use for
any building with an average
assessed value over $38,000.
Advocates have argued that the
limit is necessary to maintain
affordable housing and ensure
the stability of changing
neighborhoods.
"If you lift the cap, you are
saying the city should provide a
subsidy for the renovation of
housing, regardless of the
extent to which that housing will
be available to persons of low,
moderate and middle income,"
said City Council Member Ruth
Messinger, a longtime critic of
J-5l.
The recent battle in Albany,
which pitted tenant activists
against real estate lobbyists, was
fought over whether to maintain
the $38,000 cap, create a
higher one, abolish it altogether
or target various caps for
diffe .... nt areas.
Under the proposed law,
which would expire at the end
of 1991, the city abates the
developers' taxes for 90 per
cent of the certifiable
reasonable cost of the
renovations per unit, and it
exempts the unit for 12 years
from increased property taxes
resulting from the increased
value of renovations. Critics of
the program, which is said to
cost the city $100 million per
year in tax revenue, support
. keeping it. But they say it should
not be applied when it
subsidizes apartments in
upscale nieghborhoods that
would be renovated without
subsidy.
"Every time you raise the cap,
you are creating housing for an
increasing rent level," said
James D. Garst ofthe New York
State Tenant and Neighborhood
Coalition. "You are also
subtracting from the pool of
money available in the city
treasury to devote to low and
moderate income programs-
it's a kind of hemorrhage."
J-51 has been blamed for
contributing heavily to New
York's homeless problem,
particularly in the years before
the city limited conversions of
SRO hotels.
The program was due to
expire at the end of 1988, but
the real estate industry lobbied
for its renewal. Owners were
especially anxious because
some bonks were refusing to
make loans for rehabilitation.
Bonks have been concerned
that J-51 might be eliminated,
making it difficult for some
owners to repay
10ans.DJonathan Gill
NEW JERSEY KOs
TENANT LAWS
New Jersey tenants suffered
two major setbacks r e c e n ~ y in
their efforts to win greater
protection from evictions in
condominium conversions.
On one front, laws passed by
five Hudson County
municipalities that would
prohibit conversions at prices
not approved by the cities was
struck down by a Superior Court
judge in June.
On the state level, a bill that
would prohibit condominium or
cooperative conversions unless
50 percent of the building's
tenants buy their units was
bottled up in the state Assembly
when a Republican committee
chairman refused to call a vote
on the measure. The legislature
is in recess until September, and
with elections in November, it is
unlikely the bill will be voted on
until next year.
New Jersey tenants have far
less protection in conversion
cases than do New York City
tenants. For example, three
years after a conversion, all
non-buying tenants except the
low-income, elderly and
disabled face eviction. With the
number of conversions
skyrocketing to about 10,000
annually for the past two years,
the competition for reasonably
priced rental housing is
becoming fierce.
In response to.the state's new
housing crisis, tenant
organizations are springing up
throughout New Jersey,
especially in Hudson County,
which is just across the riverfrom
New York City and is where most
. of the conversions occur.
Pressure from these groups, led
by the New Jersey Tenant
Organization (NJTO), was
successful in bringing the five
municipalities and a number of
state legislators to intoduce the
bills aimed at curbing
conversions.
The municipal laws faced
tough legal opposition as a
landlords group, armed with a
war chest of well over $ 100,000,
vowed to fight them. Tenant
attorneys argued that
conversion protection is
necessary for cities to be able
to provide affordable housing,
as required by the state
Supreme Court's Mount Laurel
decisions. Those precedent-
setting cases established the
responsibility of municipalities to
provide low and moderate
income housing, but previous
cases have only tested its
application to suburban areas
and new construction, not urban
areas and the rehabilitation of
existing housing stock.
In his ruling against the
municipal laws, the judge said
that "Mount Laurel does not
range quite that far," and he
added that the defense's
argument was" creative" but "in
space."
The judge is "unaware that
Jersey City and North Bergen
have an obligation under
Mount Laurel," responded
NJTO attorney Joan Pransky.
In an interesting twist, a group
of New Jersey property owners
are supporting the laws
because they consider
high-pricetag converters to be
overly greedy. The Center for
Constitutional Rights has agreed
to enter the case on behalf of
these property owners because
Center lawyers believe the case
has a potentially broad impact.
The municipal laws, which are
nearly identical, would prohibit
conversions that are not
approved by a municipal
agency. They included a system
of price controls on the sales of
units.
In striking down the laws, the
Superior Court judge ruled that
the price controls would
represent an unconstitutional
confiscation of private property.
OJeffrey Hoff
BROOKLYN'S
AGENCY ALLIES
With the recent appointment
of Roger Bennett as chairman of
the Bureau of Standards and
Appeals, Brooklyn Borough
.President Howard Golden now
has allies in several key city
agencies. Golden's "Tinkers to
Evers to Chance" is the the
Department of City Planning,
the Department of
Environmental Protection and
the BSA - which means his
cronies lead the agencies that
pave the way for development
projects. With numerous
mega projects in the Brooklyn
pipeline, Golden, who is also
. Democratic county leader, is in
solid position to engineer
project approvals.
Golden. former executive
assistant is the current
commissioner of the
.-
Department of Environmental
Protection, which ruled on the
environmental impact statement
for the Metro Tech and Atlantic
Terminal proposals. Harvey
Schultz, known during his tenure
with Golden as "the little
borough president" because of
his behind-the-scenes power,
was appointed to DEP shortly
before he was to rule on a
project he is said to have pushed.
Residents near the Atlantic
Terminal site have filed suit
against what they believe is on
incomplete Environmental
Impact Statement. Metro Tech
opponents have also stated they
plan to file suit against that
project's EIS. Last fall federal
investigators seized papers
pertaining to DEP-approvals of
several projects, including some
in Brooklyn. Schultz also will be
ruling on the impact statements
ofthe other upcoming Brooklyn
projects.
Before his appointment to
BSA, Roger Bennett served as
the Brooklyn Planning Office
director in the Department of
City Planning, and prior to that
as Golden's senior civil engineer
in the Topographical Bureau. In
his role as BSA chair, he will lead
the city agency that grants all
variances to the zoning and
building codes.
Another powerful Golden
ally is City Planning Director and
Commission chair Sylvia
Deutsch, who served as the
chair of the BSA from 1983 to
1986 and as a City Planning
commissioner for the seven
years previous. Deutsch is
married to Brooklyn Family
Court Judge Leon Deutsch and
came out of the now-defunct
Madison Club in Brooklyn, the
same organization that
spawned Abe Beame and
Stanley Steingut. Deutsch, who
is in a position to introduce the
spot zoning changes that large
pro',ects like MetroTech require,
is a ong-time player in Brooklyn
politics.
Besides Metro Tech and
Atlantic Terminal, other big
projects leaping off Brooklyn
drawing boards include One
Pierpont Plaza, Renaissance
Plaza, Livingston Plaza, the
In honor of Ellen Lurie:
David Jane., left, general director of the Community Service Society,
"rerent. an award to Bernard Wohl, right, of Goddard-Riverside
Community Center. Wohl wo. among a number of community leade"
honored at a recent ceremony that commemorated the work of activi.t
Ellen Lurie. AI.o pictured i. CSS tru.tee Char/e. Wilron.
Morgan Stanley building, Fulton
Ferry Landing, Alexander Muss'
luxury complex in Brighton
Beach and Sheepshead Bay
waterfront redevelopment. The
empty piers along downtown
Brooklyn, waterfront also are
being eyed for
development.OJonathan
Gill
HOUSING
MONEY
The Koch administration hails
the city's Fiscal Year 1988
budget commitment to housing
programs, noting a tenfold
increase in allocations since
1986. It marks "the most
extraordinary expansion of any
city service in recent memory,"
the mayor observes, while City
Council Housing Committee
Chairman Archie Spigner calls it
"a tremendous improvement
over previous years ... and a
good response on the part of
the city toward the housing
crisis."
While the numbers are
significant, critics like Bonnie
Brower at the Association for
Neighborhood and Housing
Development point out that not
all of the programs designed to
produce low income housing
will live up to their promises.
''The budget is a step in the
right direction, but we are
concerned that most of the
money be targeted to those
who are most in need," says
Marcia Smith, a senior policy
analyst for Manhattan Borough
President David Dinkins. "We
don'tthink it's enough, and it will
not solve the housing crisis."
For the Department of
Housing Preservation and
Development, city capital funds
will triple from about $153
million in 1987 to $458 million
in 1988; executive budgetfunds
will more than double from
$150.9 million to $326 million.
Among its major housing
programs are the following:
Affordable Housing
Program, $25 million, to
construct 1,000 middle income
condominiums in the Bronx.
Critics note that the units will be
affordable only to those
earning at least $44,000;
Construction Manager
Program, $130 million, to hire
private contractors to
rehabilitate 1,800 in rem
apartments in Harlem and the
Bronx. The buildings will be
rented to a mix of low and
moderate income tenants and
to homeless families. Smith says
she is concerned because there
is no guarantee that the units will
remain affordable in the future.
Local Initiatives Support
Corporation, $25 million, will
contract with non-profits for the
reconstruction of 1,000 vacant
city-owned units for low income
families.
Vacant Building Program,
$68 million, to rehabilitate
3,400 units to be rented to low
and moderate income families.
''These will actually be
affordable to middle or upper
income families," Smith says.
While housing advocates and
administration officials debate
what levels constitute low and
moderate income, the HPD
capital budget reflects the
following increases in housing
production funds from 1987 to
1988: Low income - $57.9
million to $114.9 million;
moderate income - $4.8
million to $74 million; middle
income - $16. million to $44
million.
The budget also allocates
$179 million to finance the
mayor's plan to build 17
transitional shelters for the
homeless. A last-minute revision
provides that the funds can be
used to rehab city-owned
buildings for the homeless if the
shelters are voted down.
Other funds for the homeless
include $1.9 million for two test
programs, one to provide early
intervention for 750 potentially
homeless families, the other to
provide a housing specialist to
help find permanent housing for
residents of two hotels. Another
$1.3 million expands meal
programs, provides more public
health services and better .
security at homeless hotels and
shelters, and $1.2 million funds
three new homeless in-take
centers in Manhattan, Brooklyn
and the Bronx.
HPD's Community Consultant
Program, which helps fund 65
community graups that wark
with tenant organizing and
rehabilitation projects, was
maintained at its previous $2.4
million level, despite lobbying
efforts to increase it's budget by
$5 million. The program was
slashed by 25 percent in the
1986 budget
process.OPamela Ransom
Brooklyn
Winning Through Intimidation
In what may be an unprecedented
method to silence community objec-
tions to projects, Brooklyn develop-
ers Carmen Rende and Frank Es-
posito have slapped a $1.5 million
lawsuit against eight members of Citi-
zens for the Preservation of Windsor
Terrace for their role in delaying the
construction of a 13-story tower at
Prospect Park West and Park Circle
(See City Limits, June/July 1987).
The developers' action came after
the CPWT won an injunction to halt
work on the building's foundation
until an environmental impact state-
ment was completed. The injunction
would have stopped construction
while Windsor Terrace was being re-
zoned to keep high-rises away from
the park.
Rende and Esposito got the injunc-
tion overturned, then filed their own
suit against CPWT members, claim-
ing that the community's action was
frivolous, malicious and designed to
injure them.
Charging that CPWT's suit was
merely a delaying tactic while down-
zoning took place, Rende and Es-
posito attorney Steven Rathkopf said
the company should be allowed to
continue with the foundation,
"which can be used in any size build-
ing." Rathkopf said the injunction
"went beyond the claims that they
(CPWT members) made for the in-
junction," and added that he would
have liked to sue the judge because
he "infringed on the developers'
rights."
While CPWT openly admits it was
trying to delay construction, the or-
ganization's attorney, Jack Carroll,
points to the chilling effect the
counter suit can have on community
protest. "Should the developer pre-
vail, it will be used as a bludgeon by
developers to frighten community
groups. It IS a way to try to threaten
those who try to take action," he says.
"People are very concerned what
kind of threat this lawsuit will be.
They wonder if they are now sud-
denly libel for signing a petition or
organizing a demonstration," said
CPWT co-chair Monica Frizell at a
recent public meeting to discuss the
lawsuit.
Among those attending the meet-
ing were several public officials who
reported being the targets of similar
suits. Assemblyman Jim Brennan
said he and several Bay Ridge home-
owners have been named in a $10 mil-
lion lawsuit for their roles in protest-
ing a development at Fifth Avenue
and 64th Street in Brooklyn.
Fulton Landing developer David
Walentas is suing City Council
Member Ruth Messinger for $900 mil-
lion, charging that she libeled him in
a press release that opposed the grant-
ing of tax abatements for his project.
"It appears that the development cor-
porations have found a new method
of intimidation, " she says, adding,
"We will win these intimidation suits
and make it impractical for the de-
velopers. "ONora Fitzgerald
The Bronx
People's School
School District 10 in the northwest
Bronx has been plagued by poor read-
ing scores, severe overcrowding and
a school board allegedly hampered
by political patronage and payoffs.
But parents of local school children
are taking the initiative and fighting
for change.
For almost a year, the Ad Hoc Com-
mittee for an Alternative School has
been laying the groundwork for an
alternative school, and its efforts now
seem to be getting results. The com-
mittee made a presentation to the
local school board and will meet soon
with district superintendent Fred
Goldberg, according to Beverly Falk
Feigenberg, a committee member and
author of the proposal outling the al-
ternative school.
Feigenberg, an educator and
mother of two District 10 students,
says Manhattan's Central Park East
school is the group's model. The com-
mittee would like to see the school
operate under the educational
philosophy of John Dewey, who stres-
sed & hands-on approach to teaching.
"In that atmosphere, knowledge is in-
tegrated much more effectively," says
Feigenberg.
The group is quick to point out it
is not interested in creating a program
for "gifted" students. Nor does the
school require extraordinary financ-
ing. The proposed school would con-
sist of grades kindergarten through
six, with an enrollment of no more
than 250 students from a variety of
economic and ethnic backgrounds.
"We may have to use a combination
of first come, first served and a lottery
to enroll our first classes. We're not
sure. That's how a new alternative
school in Brooklyn will do it to begin
this September," says Feigenberg.
The Ad Hoc Committee also has
put together a list of possible spaces
for the alternative school, including
a mini-school structure, renting
space or using underutilized space in
an adjacent school district.
The Riverdale Press recently re-
ported that superintendent Goldberg
said the alternative school could be
operating by the 1989 school year. He
also plans to assign some of his staff
to work with the parents on the pro-
pos.al. In addition, some school board
members have already voiced their
support for the alternative school.
But the enthusiasm of the parents
probably will be the determining fac-
tor in getting the school off the
ground. "We want to see this work.
We want District 10 to let us make
the best of it. We are driven for our
children," remarks Feigenberg.oLois
Harr
Manhattan
Buying Justice
Two landlords found guilty of ex-
tortion, coercion and burglary in
their efforts to empty three Upper
West Side buildings have found a
unique way to buy their way out of
jail - provide homes for the home-
less.
But tenants in the buildings who
survived the siege are less than thril-
led by the arrangement. They com-
plain that their landlords received
only a slap on the wrist, that a counter
proposal that could have resulted in
tenant ownership was ignored and
that the relationship with their new
,;
landlord - the Coalition for the
Homeless - is off to a bad start.
Moreover, they are concerned
about who their new neighbors will
be. "If they are bringing in people off
the streets who are very unstable, if
they are alcoholic or not working,
that would be very unfair to those of
us who have survived so much," says
tenant leader Michael Pennacchia.
Problems in the buildings began in
1983, when Zenek Podolsky and
George Roitman sought to empty
their three SRO buildings on West
77th Street by hiring professional
thugs to "manage" the properties.
Members of the Lender-Lambert
gang, known by their two leaders,
created a "reign of terror" against the
30 tenants by opening the buildings
to drug dealers and prostitutes and
cutting .off essential services. A $600
bonus was paid when a tenant fled.
Ten elderly tenants were harassed out
of their apartments: one committed
suicide not long after and another
died of pneumonia after a winter
without heat. Gang members were
convicted and sentenced to Riker's Is-
land.
Landlords Podolsky and Roitman
were also found guilty for their
schemes, but didn' t like the idea of
going to jail. While the district attor-
ney's office pressed for jail terms, the
landlords' attorneys approached Su-
preme Court Judge Harold Rothwax
with a novel alternative. The land-
lords offered to exchange a building
to house the homeless in return for
their freedom. Judge Rothwax had
originally been presented the pro-
posal in 1986 under an alternative
sentencing program, which ap-
proached the Coalition for the Home-
less to receive the building.
Tenants who survived the harass-
ment reign initially agreed to the
plan, but later presented their own
proposal to the judge, which called
for jail for the landlords and an inde-
pendent administrator for the build-
ings, which could eventually revert
to tenant ownership, Pennacchia
says. While some tenants sought own-
ership, Pennacchia adds: "Myself, I
don't really want these buildings.
Most of us just want to pay rent and
get responsible management."
In a civil suit against the landlords,
the 13 remaining tenants won a $1.2
million settlement, he notes.
For its part, the Coalition is excited
by the prospect of operating the
buildings. "There's not a lot of
chances to set up decent permanent
housing for the homeless - this is an
opportunity," says Coalition counsel
Bob Hayes. He adds that the Coalition
never pushed the judge on sentenc-
ing. "We saw no reason to say that an
alternative to jail was appropriate. We
never sanctioned this as as good deal,
and we still don't," he says.
Hayes says that Podolsky and Roit-
man will have to renovate the build-
ings. Current tenants will be in-
cluded in the process of screening
homeless adult tenants for about 25
vacant units, most of which are single
rooms. First priority will go to previ-
ous tenants displaced from the build-
ing, with half the remaining for home-
less people who are employed ot in
school and the other half from the
streets.
Pennacchia claims that Podolsky
and Roitman continue to maintain
other properties with serious code
violations and are still benefiting
from their crimes. Pennacchia de-
scribes the punishment as typical of
"retail justice where landlords can
buy their way out and get tax write-
offs."
In a similar deal, Harry Macklowe
bought his way out of illegal demoli-
tions of midtown SROs, but has yet
to make good on the promise to pro-
vide apartments for the homeless.
The Coalition has led protests against
Macklowe at his luxury development
on 57th Street. OMary Breen
Queens
Renovation Ordeal
When public officials and commu-
nity leaders attended a recent house
tour in Woodside, Queens, they
missed the usual array of chic decor
and carefully restored homes. In-
stead, tenants from the Cosmopolitan
Houses displayed their vermin-in-
fested apartments in various states of
disrepair.
The tour was held to underscore
the dangerous and trying conditions
that tenants are enduring while work-
men demolish and reconstruct apart-
ments as part of a $7.5 million Partici-
pation Loan Program overhaul of the
10-building Cosmopolitan complex,
which contains more than 400 apart-
ments (See City Limits, June/July
1987). During the year-long project,
tenants have had to do with out hot
water, bathrooms and kitchens for
periods of time, have had their gas
disconnected, and have been sub-
jected to rats, roaches, exposed elec-
trical wiring and peeling lead paint
chips. In fact, the city's Department
of Health has reported 12 cases of
children with lead paint poisoning
from this complex.
"Not only do we have to live like
this for a year, but in the end we have
to pay for it all with a big rent in-
crease," says Mathilde Gloria Hol-
guin, president of the tenants associ-
ation. Under the city Department of
Housing Preservation and Develop-
ment program, landlords Jerome Re-
snick and Seymour Robinson, who
have a history of neglecting their
buildings, will not have to pay taxes
on the property for 18 years.
Meetings held with the tenants as-
sociation and the contractor did not
resolve problems, tenants report.
"They promised to give us more than
12 hours notice when work was being
scheduled in our apartments, they
promised to do a thorough building
extermination, and they promised
that they would close all holes in the
walls and floors ," says Holguin.
"They didn't hold up their end of the
bargin."
With renovation scheduled to be
completed soon, the next issue con-
cerns the timely delivery of Section
8 certificates to eligible tenants. Rents
are expected to increase by about
$100 per month, but in other build-
ings owned by Cosmopolitan, in-
creases have been imposed regardless
of whether the apartment passes Sec-
tion 8 inspection. This situation
leaves tenants in a bind when higher
rents are imposed because completed
work is approved by the Participation
Loan Program. But if Section 8 ad-
ministrators say the work does not
meet its standards, rent subsidies are
withheld until specifications are met.
The tenants association currently
is addressing this potential problem
in its negotiations with HPD, and it
plans to meet with the landlords soon
to discuss rents.O Carol Smolenski
and Cheryl Keshner.
PIPELINE
Fear of
NevvYork
BY DOUG TURETSKY
THE HOTEL BUSINESS IS BOOM-
ing in London, England, and it has
nothing to do with tourists flocking
to take in the sights. London's hotels
are bursting with a relatively new
clientele - the homeless.
Homeless families are being placed
in bed and breakfast accomodations
at a staggering pace. But these bed
and breakfast hotels share none of the
charms usually associated with this
type of lodgings. Squalid, over-
crowded rooms in facilities straight
out of Charles Dickens' novels are
what London's homeless associate
with bed and breakfast hotels. The
city's rapidly growing homeless
population is quickly learning the
similarities between its plight and
conditions in homeless hotels in New
York - a situation they previously
glimpsed only as flickering images on
a television screen.
The number of homeless in Lon-
don has swelled in recent years for
many of the same reasons homeless-
ness has grown in New York: severe
cutbacks in the construction of pub-
lic housing, rapid gentrification, and
the conversion of rental apartments
and single-room units to private own-
ership. The placement of homeless
families in hotels has increased
ninefold in less than seven years. In
1981, 890 families lived in hotels; six
years later, 7,792 families huddled in
cramped rooms with no cooking
facilities.
The number of people placed in
hotels tells just part of the story. Only
families with children, the elderly,
sick or disabled are guaranteed a
place to live. And rules left to in-
terpretation by local councils - the
governmental units within the
boroughs that comprise London-
mean that in some areas many home-
less are turned away. According to
figures compiled by the Bayswater
Hotel Homelessness Project, between
April and September 1986 42,124
homeless people went to a council
for help. Nearly 27,000 - close to 64
percent - were turned away.
Many London councils do want to
Bed and breakfast raw, Bayswat.r, Landan, England:
Neat and clean on the autside, dank and dangerous on the inside.
help, but find themselves constricted
by the government of Prime Minister
Margaret Thatcher, who is committed
to a policy of "privatization" of hous-
ing. Before the election of the
Thatcher government, London coun-
cils built and managed large numbers
of housing projects for low and mod-
erate income residents. Money to
build this housing was borrowed,
with the central government setting
the limits on the amount borrowed
from lenders.
The Thatcher government has put
the squeeze on the councils, cutting
the amount they can borrow for hous-
ing by some 75 percent. At the same
time, councils have been encouraged
to sell their housing stock, and some
90,000 units have been privatized
since Thatcher took office in 1979.
Claire, a homeless women whose
daughter was born in a bed and break-
fast hotel, sums up the situation:
"Thatcher doesn't want to admit
there's a homeless problem."
But many of the London councils
can't - or won't - turn their back on
the homeless. Ironically, these same
councils are the ones placing home-
less families in substandard hotels.
Faced with interminable waiting lists
for their existing housing and unable
to raise funds for new construction,
the councils have been forced to turn
to the hotels. In the past year the
amount spent by London councils to
house the homeless in hotels has dou-
bled, from roughly $48 million (US
dollars) in 1985/86 to $99.2 million
the following year.
Twice the Price
Despite recent government figures
showing that it is twice as expensive
to keep families in hotels than to pro-
vide a new council apartment, the
Thatcher administration remains
adamant. "It's of no concern to the
central government because it's not
their budget," explains Helen Crane,
a housing advice worker with the
Bayswater Project. Since councils
must foot the hotel bills from their
own budgets - raised by taxing local
property owners - c o u ? c i ~ s extend-
ing the most help to the homeless
may be treading the roughest political
waters.
But the political machination's of
Thatcher's Tory government, which
seems bent on bankrupting the most
progressive councils, is not the pri-
mary concern of those stuck inside
the bed and breakfast hotels. For
them, the struggle to survive amid the
squalor of the hotels remains
foremost.
"Fifty percent of those who become
homeless had been living with
families and friends until they were
chucked out," says Crane. Either di-
rectly or indirectly almost all the
homeless are casualties of London's
booming housing market. Even the
city's East End, London's "tradi-
tional" slum, is feeling the develop-
ment pinch. Claire says she had been
living with her father in an apartment
he'd occupied for 45 years on the East
End. But the owner decided to con-
vert the units to private ownership
and the working class family couldn't
afford the $150,000 price tag. Claire,
her daughter, and Claire's father all
found themselves homeless.
Even families with one partner
working cannot find afordable hous-
ing. Margaret says her husband works
full time installing security alarms
but doesn't earn enough to pay rent.
More and more working families are
finding themselves marginalized. "To
get into the market you need two good
incomes," says Crane.
No matter what leads to homeless-
ness, the conditions the families find
are equally deplorable. In a February
1987 report by the Bayswater Project,
"Speaking for Ourselves," the home-
less reveal the physical and
psychological toll of living in the bed
and breakfast hotels. Physical
hazards like broken windows,
dangerous stairwells and faulty wir-
ing, coupled with under-nourish-
ment, listlessness and depression,
make each day a struggle. Doctors and
health workers have become frus-
trated in their attempts to improve
conditions.
Claire sums up the situation suc-
cinctly: "I ain't got a future." But
clearly she won't give in to despair.
Claire, Margaret and many other
women bring their children to the
Bayswater Parents and Under Fives
group, which provides a daily respite
the hotels and gives the women
a chance to reinforce one another's
determination. "We're bloody
strong," declares Margaret. "We must
be."
Negative Image
Despite such strength, the home-
less have to fight an image of inadequa-
cy fueled by the Thatcher govern-
ment's emphasis on self-reliance.
Crane describes this as "the mar-
ginalization of those not winning on
the market." In real terms, this means
a growing homeless population
alongside rampant development . The
London skyline is dominated by scaf-
folding and construction cranes, yet
many of the homeless are told they'll
have to wait until 1991 for an apart-
ment.
To some Londoners, the hotels may
not seem like such a bad place to be
warehoused. Unlike New York's
homeless hotels, London's bed and
breakfasts maintain an air of respecta-
bility. Seen from the street the hotels
appear clean and well-kept. But once
beyond the reception desk, condi-
tions deteriorate rapidly. This serves
both hotel owners and the Tory gov-
ernment, neither of which wants to
see the plight of London's homeless
turn into a "popular" political issue.
While the hotel owners have so far
been able to secret the squalor behind
a proper British facade, news of the
immense profits in the homeless
hotel business may send a ripple
through public indifference. A study
recently released by the housing com-
mittee in the borough of Camden in-
dicated hotel prices in central Lon-
don have doubled in the past 18
months. It now costs local councils
an average of $560 a week to house a
family in a hotel. At this rate, owners
reap a profit of about 20 percent a
year, not including appreciation on
the property. Most of the owners run
just one hotel. Some of them, says
Crane, eventually take their profits,
evict the homeless and re-
novate the hotels for the tourist trade.
But the Camden report finds larger
owners are beginning to remortgage
their hotels in order to purchase new
ones. This process increases the value
of the hotels and jacks-up room
prices even further. With 1,000
families added to the hotel popula-
tion in a recent three-month period,
the local councils will undoubtedly
be footing larger and larger hotel bills.
The homeless themselves are well
aware that the economics of the
hotels are already out of hand. Know-
ing that council housing has fallen
out of favor with the central govern-
ment, the homeless worry what the
next step will be. "They're going to
put us on a ship in the Thames
[River]," says Claire, only partially in
jest. She and others fear that congre-
gate shelters or other forms of tempo-
rary housing will come next. Having
seen television reports on conditions
in New York shelters, the homeless
families are truly worried. As bad as
things are in London, they have a real
fear of New York. D
The aGySwater fIrOI8ct
When the Bayswater Hotel The Beyawater Project is ODe of
HOJ;D,eleBsness in . the (?nIy community Ql1I.ruatiOJlra
1981, there were 4oo":,omeless m0ad\l'Ocatmg for .. the. in
families living in Bays'!8ter bed ,.Lo n,' Staffed by
and breakfast hotels. LoCal health hou 8 advice workers,J
and social BeMCe workers. shocked ject 88 a COlI8CltlW
by conditions in the hotels. . decisions
founded the Bayswater"Project to thttmJl8l.''''
help and advise the homeless fam-
ilies. Because of the large number
of bed and breakfast hotels in the
c nity. the hOIelftll;pop'llla-
ti Bayswater at a
staggering pace. 1bday, 1,500
fauiHies retlde in Bayswater
- 20 pereent of the city's
nQJlle8t population.
LEGISLATION
Federal Fair Housing 8ill
Draws Mixed Reviews
BY PEG KAMENS
ELIZABETH CRUZ, AN ARTICU-
late and engaging physician's assis-
tant, was looking for an apartment in
Glendale, Queens. The landlord
warned her that the neighbors might
not like her Hispanic origin, but a-
greed to rent to her anyway. So she
hired a truck and, on the move-in
date, arrived with all her belongings.
At first, the landlord denied renting
to her. When she produced the lease,
the landlord said he'd changed his
mind, and he shoved her out the door.
Cruz's experience with housing
discrimination is far from unique.
What is unusual is that she was
awarded more than $18,000 by the
New York City Commission on
Human Rights, the largest award the
commission has ever made in such a
case. Proponents of new fair housing
legislation hope that such awards
will become commonplace.
Because it is clear that federal fair
housing laws have not fulfilled their
promise of fully integrated com-
munities and free housing choice for
minorities, Sen. Ted Kennedy (D-MA)
and Rep. Hamilton Fish (R-NY) have
introduced amendments to the 1968
fair housing laws that call for rededi-
cation to the fight for equal access to
housing. With bipartisan support,
the bill is set for quick action: House
and Senate hearings were completed
in May, and a vote is expected as early
as August. Broad support for the bill
has virtually assured its passage.
But fair housing advocates are
lukewarm to the new measures. "The
fair housing community is in a bind
on this bill," Janet Hansen, executive
director of Suffolk Housing Services,
said. the good guys put this bill
up with much fanfare, but a good deal
of the fair housing community is not
happy with it."
The new amendments are designed
to strengthen the 1968 Fair Housing
Act, which prohibits discrimination
in housing on the basis of race, na-
tional origin, gender and religion.
Current rules enable bias victims to
file a complaint at the federal Depart-
ment of Housing and Urban Develop-
ment. But HUD only has the power
to help reach a settlement - a result
in only 20 percent of the cases filed.
Another option under the 1968 law
is to bring complaints to local hous-
ing agencies receiving federal funds.
Such city and state agencies primar-
ily have been established in the north-
east, the midwest and California.
There is no rule that mandates the
existence of local agencies, and the
powers of the agencies that do exist
vary from locality to locality, since
federal law does not spell out what
the agency must provide to receive
funding.
New York City residents have two
local options - the city's Commis-
sion on Human Rights or the state's
Human Rights Division. Both agen-
cies have staff to investigate com-
plaints, and if probable discrimina-
tion is determined to have occurred,
an agency attorney brings the case be-
fore an administrative law judge.
Many fair housing advocates are
critical of the local fair housing agen-
cies. agencies are
slow and the remedies are archaic,"
observed Richard Bellman, a New
York attorney specializing in fair
housing.
Even if an administrative judge
rules in favor of the bias victim, the
cash awards are relatively small. This
angers fair housing advocates, who
point out that such awards are the
primary deterrent to discrimination.
Because of this, many attorneys
choose a third avenue for settling fair
housing federal court.
But this option can be very costly for
clients unless they win and can prove
indigence, in which case lawyers fees
are paid. Although the amount of
awards from the New York state and
city agencies has been creeping up,
it is still well below the $30,000 aver-
age in federal court. And federal
judges can also levy punitive dam-
ages against those guilty of discrimi-
nation.
After almost 20 years of this type
of fair housing enforcement, housing
discrimination is still alive and well.
HUD estimates that two million inci-
dents of housing discrimination
occur every year. A HUD-sponsored
survey of 40 metropolitan areas found
that black home buyers face a 48 per-
cent chance of encountering dis-
crimination and black renters a 72
percent chance. A recent New York
Times poll indicated that in New York
City 72 percent of whites and 60 per-
cent of blacks live in completely
segregated neighborhoods.
Many observers believe that the
persistence of housing discrimina-
tion and racial segregation fosters the
kind of racial attacks that have been
increasing in New York City recently.
"There's a nexus between racist vio-
lence and housing discrimination,"
said Gerald Horne, special counsel to
union local 1199 and a black commu-
nity activist. "When whites see
blacks in their community, they think
they don't belong there. To the extent
we can get around housing discrimi-
nation, we can avoid another Howard
Beach."
New Promises
The new bill attempts to improve
methods of fighting discrimination.
It expands the coverage of the 1968
act by adding handicapped persons
and families with children to the list
of protected classes. Those states
without a local fair housing agency
will have an administrative remedy
similar to that available in New York:
HUD will be given the power to inves-
tigate and adjudicate fair housing
complaints and will provide attor-
neys to bias victims. HUD will be able
to award punitive damages, as will
HUD-funded local agencies. Litigants
in both federal court and at HUD (and
presumably at HUD-funded agen-
cies) can get attorneys fees if they
win, regardless of ability to pay. And
the cap is removed from awards for
punitive damages, so penalites for
discrimination will be stiffer.
Some fair housing advocates see
the new law as a warning to potential
. discriminators. "If HUD is strength-
ened and Title VIII is amended, it will
send out a political message that
we're serious about fair housing,"
said Harvey Fisher, deputy director
of fair housing at the city's Commis-
sion on Human Rights.
For those localities without fair
housing agencies and extensive net-
works of fair housing experts, the new
laws should make a difference.
"Where there are no fair housing
agencies, victims have no one to turn
to," stated Martin Sloane, executive
vice president of the National Com-
mittee Against Discrimination in
Housing. "They have to go through a
fairly intimidating process of litiga-
tion without support. Now they'll
have an inexpensive alternative to
litigation. "
Sloane also believes that where
local agencies now exist, the quality
of their enforcement efforts will im-
prove. "Local agencies will have to
be brought into substantial com-
pliance with federal law, which
means they'll have to remove the limi-
tations most of them have on dam-
ages."
Unimpressed
But many fair housing advocates
believe that even with the new rules,
. federal court will remain the forum
of choice. For bias victims hoping to
win their right tl? the denied apart-
ment, HUD's cumbersome process for
keeping the apartment empty during
the hearing remains a bureaucratic
nightmare. Federal court, and even
some state agencies, offer bias com-
plainants a better shot at winning the
right to the housing unit they wanted.
What's more, some critics doubt
that HUD is the most sympathetic
agency to resolve fair housing com-
plaints and administer the fair hous-
ing laws. "I have no confidence in
HUD," said Larry Grossberg, as-
sociate professor at New York Law
School, who runs the school's fair
housing clinic. "I would only use it
in the absence of any other remedy."
Suspicions about HUD appear to
be well-grounded. The federal gov-
ernment could help the cause of inte-
gration through the example of its
own network of publicly-funded
housing. But according to a 1983 staff
report of the U.S. Civil Rights Com-
mission, HUD had undertaken no
concerted action to end segregation
in federally funded housing. Since
that date, in response to a federal suit
in Texas, HUD voluntarily set up re-
gional desegragation task forces to
examine public housing. But HUD
officials say the department will act
only where segregation is the result
of discrimination, and even in those
cases, it will not apply "race-con-
scious criteria" - read affirmative
action - to correct racial imba-
lances.
The Reagan Administration's insen-
sitivity to fair housing underscores
problems with timing on the bill.
Some legislative observers believe
Reagan may use the threat of veto to
water the bill down. The administra-
tion can also shape fair housing laws,
as it has in the past, by not enforcing
them. As Phyllis Spiro of the Open
Housing Center points out, the law
would be undermined by the appoint-
ment of unsympathetic judges at
HUD.
"If HUD isn't serious, lots of good
claims could be compromised. If
there's not enough investigation and
the agency is slanted in favor of land-
lords, then the agency will help and
encourage people to discriminate,"
warned Carl Callender, executive di-
rector of Bedford-Stuyvesant Legal
Services, which has filed several fair
housing cases in Brookyn.
Hansen agreed t h ~ t what's lacking
is real commitment by government to
ending discrimination. "Congress
shouldn't just pass a law, they should
put their money where their mouth
is and provide funds to enforce it.
They don't, and that's where the sys-
tem falls down," she said.
Hansen believes a priority should
be funding of the Fair Housing Initia-
tives Program, which has been sitting
in Congress for three years. The pro-
gram would allocate $5 million in
HUD funds for the testing and inves-
tigation of discriminatory practices.
But FHIP has been bogged down in
administrative encumbrances: HUD,
in concert with the National Associa-
tion of Realtors, has proposed testing
guidelines that would overturn well-
developed court precedent and se-
verely cripple testing efforts.
Fair housing is particularly
difficult when housing is unavaila-
ble. The shortage of apartments en-
courages landlords to pick and
choose among qualified applicants.
And the absence of affordable hous-
ing for low and moderate income
people means minorities, who are
disproportionately among these
groups, have little housing choice.
Hansen advocates an extensive, well-
funded federal housing program,
coupled with a law based on New Jer-
sey's Mt. Laurel decision, which re-
quires communities to provide hous-
ing for low and moderate income
people.
"Those who litigate under the act
have established a damn good body
of case law," noted Hansen. "We can
use it well and it works for us. It could
be better, but with the financial sup-
port for enforcement, we could take
an enormous step forward."
"If Congress would appropriate
lots of money for low income housing
and ensure that this would be used
in a manner to further fair housing,
the program would be fairly com-
plete, and we could go onto other
things than fighting racism in this so-
ciety."
Peg Kamens is an attorney and free-
lance writer. She worked at the city's
Commission on Human Rights for
four years, the last two as managing
attorney of the Fair Housing Unit.
FEATURE
Red Hook: Gloom
With a View
B
attered, then neglected, the Brooklyn
community of Red Hook now faces the
threat of real estate speculation spurred by
its magnificent harbor view.
BY MARY JO NEUBERGER
, , Y ou don't come through
Red Hook to go anywhere,
you go to Red Hook to go
to Red Hook," says artist Richard Gins
of Van Brunt Street. Surrounded on
three sides by water and cut off from
the rest of Brooklyn by the Brooklyn-
Queens Expressway, Red Hook is a
world unto itself. In the first half of
the century, it was a thriving
maritime community of Irish and Ita-
lian immigrants. But over the years,
the area was abandoned by the ship-
ping industry, victimized by poor city
planning and left to crumble.
Last summer Red Hook once again
became a destination. It's fantastic
view of New York Harbor made it an
ideal spot for watching the Statue of
Liberty festivities. But Red Hook resi-
dents couldn't get near the piers.
"It was crazy. I got a note saying I
couldn't keep my car on the street.
We were told we couldn't go within
a block of the piers," says Veronique
LeMelle, Van Brunt Street resident
and former director of Red Hook Arts,
the community's lone cultural organi-
zation.
The city and the Port Authority of
New York and New Jersey rented
many of the quays for corporate pri-
vate parties. Federal officials and
foreign dignitaries used the piers as
a departure point for the festivities in
the harbor. Secret Service agents and
network camera crews crawled the
area. "We had Sinatra take the ferry
to Governor's Island, we had license
plates from every state in the union,
but no Red Hook people were there,"
says Francis Twomey, head of the Red
Hook Civic Association. Community
residents were relegated to watching
the fireworks and tall ships from a
distant field.
Brooklyn Outback
Among the gentrified and reno-
vated communities of downtown
Brooklyn, Red Hook remains the
great outback. Its potholed streets are
lined with vacant warehouses and
abandoned storefronts, its waterfront
decimated by rotting piers and dilapi-
dated rowhouses. Red Hook's 11,000
residents are overwhelmingly poor-
63 percent of them earn less than
$10,000 per year - and mostly black
and Hispanic.
There is no subway stop in Red
Hook. The two bus lines that serve
the community run "when they
want," says one resident. There are
no hardware or variety stores, no
movie theaters and few social or cul-
tural activities. The most conspicu-
ous trade is drug dealing. But in the
evenings, after the heavy truck traffic
and noxious fumes of the day have
died down, residents still drag their
lawn chairs out to the sidewalks or
gather in front of the bodegas to talk
and catch a glimpse of the view of
the river. Red Hook's residents have
become accustomed to the area's iso-
lation and inconvenience.
In the early 1900s, Columbia and
Union streets overflowed with fish
stands, delicatessens and bakeries,
The effects of neglect:
Once viewed as a wasteland and dumping ground for the po
waterfront vistas are now a marketable commodity.
drawing customers from all over
Brooklyn. A once-thriving port,. Red
Hook tumbled when containeriza-
tion revolutionized the shipping in-
dustry. In 1964, Borough President
Abe Stark proposed a modern indus-
trial park that would cover 230 acres
from the piers to the highway. But the
plan stalled in the high echelons of
city and state bureaucracy, while
property owners, under the threat of
condemnation, let their buildings
decay. The facility finally opened in
1981, reduced from 230 acres to 30.
The Red Hook Interceptor Sewage
Project also took a heavy toll on the
neighborhood. In 1975, the city began
digging trenches along President and
Columbia streets for sewage lines to
help clean up the Gowanus Canal.
Sidewalks were torn up and 40-foot
pits were burrowed in the roadway.
But disaster struck when several
houses on President Street collapsed.
killing one man, and the city Build-
ings Department ordered 24 others
vacated. An investigation by then-
Brooklyn District Attorney Eugene
Gold, court battles between the city
and the contractor and New York's in-
ability to pay its 12.5 percent share
of the p r o j e ~ t brought work to a halt.
Now Red Hook suffers primarily
from years of neglect. "We are the
step-child or the child no one wants
to hear about ," says Twomey. "Road
work that takes a matter of weeks in
other areas takes months in Red
Hook. "
~ h e community's schools are dis-
mal. The Board of Education has
threatened to close P.S. 15, one of two
local elementary schools, unless
plummeting math and reading scores
improve by 1990. To get to I.S. 142,
Red Hook children have to cross the
BQE, and the nearest high school is
in Park Slope. "Maybe that's why our
kids down here drop out of school
after fifth grade at 50 percent," says
LeMelle.
Health services are another major
problem. "Red Hook has the highest
concentration of medically indigent
seniors in the city, a high rate of teen-
age pregnancy, venereal disease and,
more recently, AIDS," says Dr. Soc-
coro Vincente of the South Brooklyn
Health Center on Richards Street. The
center itself has a troubled history -
including embezzlement by a former
director - but it is the only clinic
in Red Hook. "We have a sliding scale
of $75 to $15. Most people pay $15,
but some can't afford to pay that," she
says.
Red Hook Prevention, a Catholic or-
ganization providing the only family
counseling in the area, cannot meet
the demand for help. "We are overex-
tended," says Aixa Beauchamp of the
Catholic Guardian Society. "Two
months ago we had a waiting list of
50 families . We refer people to organi-
zations outside the area, but a lot of
times we have to accompany them or
they won't go." ..
There's a reason they don't go.
"People can't leave," says LeMelle.
"It's a two-fare zone. When you have
three kids and you are on welfare -
you just can't leave."
Three-quarters of Red Hook's popu-
lation lives in Red Hook Houses, the
fourth largest and one of the oldest
housing authority projects in the city.
To the residents, 30 percent of whom
are on welfare and 40 percent of
whom are single parents, life in Red
Hook Houses can be a nightmare.
Trash litters the hallways and the
grounds. "The elevators are an experi-
ence and the smell alone would kill
you," says LeMelle. "But it's not the
residents, it's the drug dealers."
For working mothers like Priscilla
Stewart, coming home to Red Hook
Houses can be difficult. Each evening
when she returns from her job she is
greeted by dealers, who operate in the
projects' lobbies. When the police
come by, they hide the drugs in the
mailboxes, accordi ng to Stewart.
"They are catching 14- and 15-year-
olds on their way to I.S. 142. We have
girls who are afraid to walk to school
in the morning because the pushers
are trying to enlist them in a prostitu-
tion ring," says LeMelle. As was evi-
dent at a June 16 public safety meet-
ing-turned-shouting match, the drug
problem has many residents up in
arms. But according to Stewart, the
Red Hook Tenant Association has yet
to take action. "They talk and talk
about their apartments, but they
haven't touched drugs," says Stewart,
adding, "They are afraid someone
Since 1980, the Housing E..-gy Alliance for Tenants Cooperative Corp. (H.E.A.T. COOP) has provided low
cost home heating oil and energy use reduction services.
The H.E.A.T. Coop has targeted for services the largely minority low and middle income neighborhoods of the
Bronx, Brooklyn, Manhattan and Queens. H.E.A. T.'s general purpose is to provide assistance and services that lead
to neighborhood stability.
As a proponent of economic empowerment for revitalization of the City's communities, H.E.A. T. remains committed
to assisting newly emerging managers and owners of buildings with the reduction of energy costs (long recognized as
the single most expensive area of building management). H.E.A.T. has presented tangible opportunities for tenant
associations, housing coops, churches, community organizations, homeowners and small businesses to garner
substantial savings and lower the costs of building operation.
Through the primary service of providing low cost home heating oil, various heating plant services and
energy management services, H.E.A.T. members have collectively saved over 1.5 million dollars.
W:>rking collaboratively with other community service organizations with similar goals, and working to establish its
viability as a bUSiness entity, H.E.A.T. has committed its revenue generating capacity and potential to providing
services that work for and lead to stable, productive communities.
If you are interested in learning more about H.E.A.T. or if you are interested in becoming a H.E.A.T. member, call
or write the H.E.A.T. office.
Housing Energy Alliance for Tenants Coop Corp,
853 Broadway, Suite 414, New York. NY 10003, (212) 5050286
will point at them and say, 'What are
you doing? Your child sells drugs. '"
Decades of city indifference has
taken its toll on the spirits of the com-
munity. "Apathy - in some ways
that's what's wrong with Red Hook,"
opines LeMelle, "I've worked in Har-
lem and it's different, because at least
in other areas there's tension, and ten-
sion is energy you can funnel. Every-
body (here) knows they want to
change things, but there's not a lot of
energy to create change."
Even at the most local level of gov-
ernment, the community board, Red
Hook plays second fiddle. Red Hook
must compete for Community Board
6 attention with neighborhoods like
Park Slope. "We're underrepre-
sented," says Francis 1\vomey. "We
happen to be the most sought after in
terms of land, but on the land-use
committee, there's not one board
member from Red Hook. How can we
possibly have any influence?"
After years of having other people
make plans for them, there are signs
that some Red Hook residents are
ready to take charge of the communi-
ty's fate. The one active community
group, the three-year-old Red Hook
Civic Association, has until recently
represented the interests of the predo-
minantly white homeowners near
Van Brunt Street. But in November of
1986, Beatrice Byrd, a teacher at P.S.
27 and a long-time resident of Red
Hook Houses, joined the association
and was elected co-chair. She also
was appointed to a seat on CB 6, be-
coming one of four Red Hook resi-
dents on the 50-member board.
In March 1986, 100 residents
turned out at a public hearing to pro-
test plans by Majestic Properties Inc.
to place a shelter for the homeless in
the old YMCA building, only a few
yards from P.S. 15 and across the
street from Red Hook Houses.
The Port Authority will open a
fishport and fish processing center in
Red Hook's Erie Basin this fall. In the
past, that wouldn't have meant much
for Red Hook's unemployed. But the
fishport plan now includes a job train-
ing program for local residents.
District 15 's school board has cho-
sen Red Hook for its newest project.
In the 100-year-old building adjacent
to P.S. 27, a district-wide school offer-
ing an alternative curriculum will
open in September. "It'll be side-by-
side with a school that's in trouble,"
says Byrd. "Hopefully some of the ex-
citement will ~ p i l l over."
All this offical notice gives resi-
dents hope. But they are also acutely
aware that city attention often spells
more than just meeting the needs of
current residents.
Red Hook is hardly a gentrifiers'
paradise, but the local real estate mar-
ket is heating up. A recent auction of
a small city-owned lot started a bid-
ding war that escalated from $20,000
to $325,0000.
The change began with Columbia
Street - the area that had been most
devastated. In 1984, Columbia Ter-
race, a subsidized apartment com-
plex, intended for mixed income,
land have brought real estate agencies
and speculators in droves.
"Virgin Territory"
Jeanne Taylor's Liberty View Real
Estate Company on Van Brunt Street
was the first to headquarter in Red
Hook. "It's virgin territory," says
Taylor. "My clients come from all over
and include recent college graduates
working in Manhattan." The broker,
who angered area residents with her
plan to change the community's
name to Liberty View, contends Red
Hook is not a boom market. "Within
eight months, I got a homeowner
down from $148,000 to $102,000,"
she says. What Taylor neglects to men-
Francis Twomey, head of the Red Hook Civic Association:
He sayr Red Hook har little influence on the local community board.
opened. The first 51 units sold for
$57,000 to $63,000. By the time the
fifth phase, now under construction,
is complete, the apartments will go
for market rates. "Many of the build-
ings between Hicks and Columbia
have already been renovated," says
Brian Sullivan, senior planner at
Pratt Institute Center. "It's really
strange to drive down there and see
all these signs for co-ops."
"Nobody ever thought Red Hook
would be gentrified," says Richard
Gins, who bought and renovated a
three-story firehouse on Van Brunt
Street "for a song." "Four years ago it
was like a war zone, just vacant lots
and abandoned buildings," he says.
But the area's harbor views, proximity
to Manhattan and relatively cheap
tion is that five or six years ago, the
property might have sold for $15,000.
But this is still piecemeal develop-
ment - a slow transition rather than
a quick bulldozing of the community.
Part of the reason the condo craze
hasn't taken over is that much of Red
Hook is still zoned for industry. But
this, too, could change. Last year
Board 6 requested a land-use study
by the City Planning Commission. Al-
though CPC made its presentation to
the board's Land-Use Committee sev-
eral months ago, Bill Wood of the
commission's Brooklyn office says
the report is unavailable.
The feeling in Red Hook is that
given the right time and the right de-
veloper, the zoning will indeed
change to meet the needs of up-scale
"Apathy - in some ways, that's what's wrong with Red Hook.
.. Everybody knows they want to change things, but there's not
a lot of energy to create change," says Veronique LeMelle.
Red Hook teacher Beatrice Byrd:
A new alternative school spells hope for a community with a 50 percent dropout rate.
housing. The DeMatteis Organiza-
tion, the Long Island-based developer
that built U.N. Plaza Towers, Carnegie
Hill and Confucious Tower, could be
it. "We're looking at several sites there
right now, " acknowledges Anthony
Zaccarello, vice president for market-
ing. "We've always felt it was a good
market." Zaccarello says the firm en-
visions "narrow, tall buildings with
esplanades ... a controlled environ-
ment with the security it should
have."
New investment could mean
much-needed services for Red Hook,
but residents are skeptical as to who
will benefit. "We stuck it out here.
We've lived here all our lives. Now
we're the patient on the operating
table. I don't want to be a guinea pig
for a housing experiment," says
Twomey. While he's glad the commu-
nity is getting attention from the city,
he questions its motivations. "Why
was the area allowed to decay, and
all of a sudden everyone's interested.
Where was everybody all these
years?"
Veronique LeMelle doesn't like
what she sees down the road. ''All of
these people [who live in Red Hook]
were burned out of the South Bronx,
they were displaced from the Lower
East Side, from Harlem. I think the
city thought for a while - you put
them in Red Hook and they can't say
anything. Now Red Hook is being gen-
trified. And where are we going to
put them? In the water?"
Red Hook's future remains a series
of question marks, and for now city
officials say nothing. The local com-
munity board has pledged to keep a
watchful eye out for Red Hook's in-
terests. But history is an excellent
teacher, and the interests of Red Hook
residents have continually fallen prey
to outside forces. 0
Mary /0 Nueberger is a freelance
writer.
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PIPELINE
Historic
Preservation:
A Tool for
Stabilization?
BY JENNIFER STERN
THE SOUTH BRONX MAY SEEM AN
unlikely place for historic designa-
tion, which usually carries the conno-
tation of gentrification and ufscale
lifestyles. But residents 0 the
Longwood Historic District, which re-
ceived city historic designation in the
early '80s and was placed on the Na-
tional Register of Historic Places in
1983, say historic preservation has
meant stabilization for its low income
and elderly brownstone owners.
"The neighborhood was troubled,
like much of the South Bronx," says
Bob Beach, executive director of the
Longwood Historic District Commu-
nity Association. Designation has
had a positive effect on the area, he
continues, because it "has helped the
homeowners maintain their homes.
That would have been impossible if
the neighborhood wasn't a historic
district."
As more disadvantaged com-
munities turn to historic designation
as a tool for stabilization, a new hous-
ing assistance program that couples
production of low and moderate in-
come housing with historic preserva-
tion is making its debut in the New
York City area.
The City Ventures Fund, a joint pro-
gram of the National1fust for Historic
Preservation and the New York Land-
marks Conservancy, is a spin-off of
the National 1fust's five-year-old
Inner City Ventures Fund program
(ICVF), which has so far awarded $2.7
million in grants and loans to 44 pro-
jects - primarily for housing - in
24 U.S. cities. The program is de-
signed to help non-profit neighbor-
hood development organizations use
historic preservation for lower in-
come housing development and
neighborhood stabilization rather
than as a tool for gentrification and
displacement.
Not Just for the Elite
"There are some people who feel
Wallabout sHks historic designation:
Low income buyers ha.,e already been yriced out of tlti. neighborhood, but
re,ident and real estate agent Helen Grange be/ie.,es designation will lead
to stability.
historic preservation is only a con-
cern for the wealthy - that they're
the only ones who feel it's important
that a neighborhood have character,"
explains Lori Segal Zabar, who ad-
ministers the program for the Land-
marks Conservancy. "But we believe
low and moderate income people can
also appreciate neighborhood charac-
ter and that it can be a tool for stabili-
zation."
The initial round of awards in New
York City will bring a total of
$185,000 - half grant, half low-in-
terest loan - to three housing pro-
jects.
The first, sponsored by People's
Firehouse, will use homesteading to
convert an old convent building in
Williamsburg into housing. The sec-
ond, which will turn three aban-
doned row houses in East New York
into limited-equity co-ops, is spon-
sored by the Mutual Housing Associ-
ation. The third, by the Fordham-
Bedford Housing Corporation, will
convert a former nursing home into
transitional housing for homeless
families, complete with offices for so-
cial services. Funding, which is
through private sources, is provided
this year by the Commonwealth
Fund, the New York Community 1fust
and five major New York banks . .
The New York City program differs
from those in the rest of the country,
according to Zabar, because the
selected buildings need not have city
or national recognition as landmarks.
(None of the first three selected do.)
Instead, they can also qualify if the
selection committee deems that the
buildings have historical signifi-
cance.
In other cities, Inner-City Ventures
Fund awards have been used to lever-
age additional funds from govern-
ment and private agencies, as well as
to provide seed money for future pro-
jects. One ICVF project recently com-
pleted in north central Philadelphia
by the Spring Garden United Neigh-
bors Inc. turned a vacant elementary
school building into 27 apartments,
three of them equipped for the hand-
icapped. Spring Garden participated

in getting the building on the Na-
tional Register. Now organized as a
leasing cooperative, with ownership
by a syndicate, the building will, in
an estimated seven to 10 years, be-
come limited equity co-ops fully
owned by the residents.
A Fight Against Displacement
William Martinez of Spring Garden
estimates the total development cost
was around $2 million; financing in-
cluded a $45,000 loan and technical
support from ICVF. He says his or-
ganization is using projects like these
to develop a base for the Hispanic
community in an area where they are
being priced out. "We would have
been more successful in retaining
more of the community if we had
done more projects like this in the
past," he said. He called the National
Trust "an important participant in
helping a community facing gentrifi-
cation fight for its existence."
Another ICVF project recently com-
pleted is the 10-unit Niblock-
Yacovetta Terrace apartment building
in Denver, organized by the Del Norte
Neighborhood Development Corpora-
tion. The rental building also is
owned by a syndicate. Del Norte got
the building on the National Register
because it is typical of apartment
buildings that had been home to suc-
cessive Denver immigrant groups.
The half-million-dollar effort to reno-
v,ate the formerly vacant building was
aided by a $40,000 grant and match-
ing loan from ICVF. In addition to this
money, says Marvin Kelly, executive
director of Del Norte, federal tax cre-
dits for historic preservation were a
considerable motivation for pursuing
the historic presrvation route.
One year since the Niblock-
Yacovetta building is complete, Del
Norte has already nominated a simi-
lar building nearby for landmark de-
signation and is planning to use the
proceeds from syndicating the first
building to help renovate the second.
The New York Experience
While historic preservation in New
York City primarily has benefited real
estate agents and professionals who
own brownstones, more and more
low income neighborhoods are fol-
lowing Bedford-Stuyvesant's exam-
ple.
In that community, the 10-block
Stuyvesant Heights Historic District
was designated in the late 1970s. De-
signation, residents say, has been part
of a neighborhood renaissance that
brought the black middle class back
to Bedford-Stuyvesant. "In its own
way, it's helped to revitalize our com-
munity," says Doug Robinson, chair-
man of Brookyn Community Board
3's Landmarks Preservation Commit-
tee. "Too often when people think of
Bedford-Stuyvesant, they think of
poverty, blight and crime. But the his-
toric district has given people a sense
of pride in their community."
Robinson concedes that historic
preservation has resulted in some dis-
placement of poorer residents in the
community, particularly when
brownstones that had been turned
into rooming houses were recon-
verted into two- to four-family apart-
ment buildings. In addition, he says
that because of the desirability of the
landmarked and similar areas, it is
difficult for new families to find hous-
ing there. "People have complained
about displacement," he says. "But
there is overwhelming support-
especially from homeowners - for
people who are moving in and ren-
ovating deteriorated homes. "
The middle and upper class resi-
dents have also brought their buying
power into the community, he says,
and helped revitalize some of the
area's commercial strips.
Neighborhood Pride
Other areas -like Longwood in
the South Bronx - have found his-
toric district designation a protection
against housing deterioration. A
number of the lower-income neigh-
borhoods that have received historic-
district designation have not suffered
massive displacement of residents,
but rather have solidified their posi-
tions, resisting potential deteriora-
tion and instilling in residents a
strong sense of neighborhood pride.
In Longwood's case, designation
brought the neighborhood city, state
and foundation money to help keep
up its 110 brownstones. Assistance in-
cluded 17 grants of $10,000 each for
facade improvement from the Land-
marks Preservation Commission
under its program for homeowners in
Community Development money-
eligible areas. (For income-producing
buildings, historic preservation also
brings 20 percent federal tax credits
for rehabilitation done in accordance
with federal guidelines. The Land-
marks Conservancy maintains the
City Historic Properties Fund, which
offers below-market loans of from
$10,000 to $120,000.)
"The neighborhood is still a long
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way from being gentrified," says
Beach. "Our aim as an organization
is to do as much as possible to im-
prove the neighborhood and homes
without gentrifying, particularly to
help residents with the high costs of
maintaining historic buildings. " He
concedes, however, that historic-dis-
trict designation does nothing to pre-
vent gentrification. The neighbor-
hood is watching as real estate values
in the South Bronx continue to rise.
"If one of the residents decides to sell
their house and take the money,
there's nothing we can do about it,"
says Beach.
Gene Norman, chairman of the
LPC, points to Longwood as an exam-
ple of two neighborhoods that have
achieved stabilization through pre-
servation. The other is Stuyvesant
Heights. "The organization of the dis-
trict caused this collection of home-
owner buildings to become a core
nucleus for redevelopment activities
in a part of the South Bronx that had
been devestated, " he says.
Norman adds that "given a collec-
tion of historic buildings, identifica-
tion of them often leads to stabiliza-
tion." This process currently "can
only take place in the outer boroughs,
since real estate pressures in Manhat-
tan are raising property values in all
areas, " he observes.
Not everyone is optimistic about
preservation leading to stability in
low income communities. In such
neighborhoods, homeowners tend to
view historic designation as "a stan-
dard being applied that none of us
can afford," says Rebecca Reich, de-
velopment director of the Urban
Homesteading Assistance Board. Aes-
thetics is crucial to historic preserva-
tion, but "aesthetics usually is not a
priority to low income homeowners,"
she adds.
"If financial incentives are availa-
ble, I think people would grab at the
opportunity. But even with programs
like the Inner City Ventures Fund, the
kinds of buildings where really low
income people live aren't eligible, "
Reich continues. "Historic preserva-
tion and low income housing are not
incompatible, but they are really two
different universes , and I think pro-
duction of low income housing
should come first. "
. Stabilizing Wallabout
One low income neighborhood cur-
rently seeking designation is Wallab-
out , which is located north of Brook-
lyn's Fort Greene and Clinton Hill his-
toric districts. The area has many
wood frame and Gothic Revival
houses, and " we feel they should re-
main the way they are or be restored
to their original state," says Helen
Grange, one of a group of residents
behind the effort.
"We feel designation will help
RESPONDING TO AN RFP?
PLANNING TO CREATE LOW-INCOME HOUSING?
stabilize the neighborhood and give
residents a sense of pride," she con-
tinued. "Some people were afraid
landmarking would make prices go
up, but they have already, at an as-
tronomical rate."
In Bedford-Stuyvesant, the Land-
marks Preservation Commission is
considering expanding the current
historic district as well as establish-
ing new ones, the result of a three-
year effort. The staff, Robinson says,
is looking not only for properties that
are architecturally significant, but
also those that reflect the history of
the Beford-Stuyvesant and of the
black community in New York City.
"There are usually two types of con-
cerns," says Tony Wood, president of
the citywide Historic Districts Coun-
cil. "The first is that with designation,
changes to buildings have to be regu-
lated. Our experience has shown that
it's not the case this limits people's
ability to change their property .
"The second is gentrification. But
this is not, in my opinion, as much a
result of historic designation as it is
an economic fact in this city as far as
housing is concerned."
Nonetheless, historic designation
is often a signal to real estate interests
that a neighborhood is ripe for invest-
ment. There is a long way to go before
historic preservation can be univer-
sally hailed as a tool for producing
affordable housing.o
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CITY VIEWS
False Prolnises: Tax Abatelnents as
Business
Incentives
BY MEL RAVITZ AND
RICHARD ROBINSON
FROM COAST TO COAST, ACROSS
the United States, tax abatement pro-
grams are hailed as a vital business
incentive. This economic logic has
been taken to heart in Detroit, Michi-
gan, where efforts to retain and attract
businesses have resulted in a massive
economic giveaway. Over the past 11
years, Detroit has abated $56,278,815
in municipal, county and school
taxes. Well more than half of these
forgone revenues , over $32 million,
have not resulted in saving or creating
a single job - the ostensible purpose
of the abatement programs.
Like most cities, Detroit is losing
many of its manufacturing plants.
During the late 1970s and early 1980s,
Chrysler Corporation closed several
automobile manufacturing plants in
Detroit. Now General Motors is doing
the same, although Detroit made sub-
stantial investment in both com-
panies.
For General Motors' Poletown
(HamtramckiDetroit) assembly plant,
the city provided land and site prep-
aration including the razing of exist-
ing manufacturing, commercial and
housing structures, relocation be-
nefits to businesses and citizens, at-
torneys' fees, condemnation costs
and direct financial assistance in the
form of low interest Tax Increment
Finance Authority (TIFA) bonds and
tax abatements. The promise of 6,000
jobs was the lure for public officials.
But that promise has gone bad. Last
November GM announced that the
employment at its Poletown plant
would be cut to one shift of approxi-
mately 2,500 workers, and by April
the word was all workers would un-
dergo a temporary two-month layoff.
The city is currently involved in a
similar development project with
Chrysler, which also entails condem-
nation of housing and businesses and
associated costs. The Chrysler deal
includes direct financial support in
the form of a federal Urban Develop-
ment Action Grant and local tax
GM employees head inlo work:
Generous business incentives given to the company have not paid oH in prom-
ised jobs.
abatements. Even before breaking
ground for the plant, Chrysler offi-
cials indicated that projected employ-
ment would be reduced from 4,600
to a range from 2,900 to 3,500. This
lack of employment return for a pub-
lic investment is not unusual in De-
troit.
Under Michigan's 1974 Plant Re-
habilitation and Industrial Develop-
ment District Act, local governments
designate plant rehabilitation (re-
placement facilities) or industrial de-
velopment (new facilities) districts to
reduce the amount of tax that a busi-
ness must pay on its real and personal
property. City, county and local
school district property taxes are
abated. According to the enabling
legislation, jobs are the measurable
return from tax abatements. Exemp-
tions apply for up to 12 years, and
practically all tax abatements in De-
trait have been for the entire 12 years.
In Detroit, no tax abatement request
recommended by the city administra-
tion has ever been denied by the City
Council.
Detroit is no different from other
cities that offer tax abatements as a
cornerstone of their business incen-
tives. Providing tax relief to busines-
ses to stimulate investments has led
municipalities to depend on this
form of incentive. Unfortunately, de-
spite the expectation, tax abatements
do not forestall plant closing or relo-
cation to other areas or even attract
new industrial development. More
specifically, in interviews with busi-
ness executives, local and state taxes
were rated lower than most other fac-
tors in holding businesses in an area
or in attracting them to it. Factors
such as quality of education, avail-
ability of transportation systems,
proximity to suppliers or consumers,
wage levels and public safety protec-
tion were all rated as more important,
according to 1985 report by the
Chicago office of the Institute on Taxa-
tion and Economic Policy. Losers in
the tax abatement war are the indi-
vidual property taxpayers and non-
abated businesses that must pay in-
creased taxes, experience reduced
services or both as a result of provid-
ing tax abatements to businesses that
promised but failed to fulfill their em-
ployment retention/creation pledge.
No Public Benefit
Experience in Detroit reveals that
tax abatements for large companies
do not benefit the public. A study by
the authors' City Council office found
abatements have not stimulated busi-
ness investment - consequently an
increased tax base has not been
realized as a result of the abatements.
In fact, those companies that have re-
ceived abatements have reduced their
employment. For example, Chrysler
closed two manufacturing plants and
reduced employment by 14,558,
while GM, including the currently
projected reductions, will have
closed three plants and reduced its
employment by about 9,300.
Only 24 percent of large companies
that received abatements between
1974 and 1985 achieved their employ-
ment goals, according to the authors'
study. On the whole, 40,837 jobs were
lost while 3,983 jobs were created.
1ranslated into dollar terms,
$32,104,470 of foregone taxes have
yielded no return.
Tax Break Fever
After J.C. Penney and Mobil an-
nounced plans to move their cor-
porate headquarters out of New
York, the Koch administration
sought to quickly reinforce the no-
tion that the city offers a friendly
business climate. A new package
of tax abatements was produced -
a $500 per employee annual tax
credit and exemption from city
commercial rent tax - for com-
panies that relocate to the outer
boroughs or north of 96th Street in
Manhattan. This proposal came on
the heels of a previously an-
nounced plan to cut energy taxes
for businesses. These new tax
breaks would be added to existing
abatement programs like the In-
dustrial and Commerical Incentive
Program (ICIP) .
But many opponents argue that
such abatement programs do little
in the way of saving or creating
jobs, the goal of these business in-
centives. The ICIP and Industrial
Development Agency's tax-exempt
bonds have been criticized as huge
economic giveaways to corpora-
tions, with negligible returns to the
city in terms of jobs [see City
Limits, April 1986]. Says one city
economic development expert,
"We're not into creating and retain-
ing jobs, we're into changing the
perception of doing business in
New York."
AT&T provided one of the most
dramatic examples of abatements
gone awry when it announced
plans to move from its heavily sub-
sidized headquarters building in
midtown, a proposal that was
squelched only after threats from
the city.
Some worry that these abate-
ment programs are advanced with-
out a true sense of what they cost
the city in foregone revenues.
When the Koch administration an-
nounced the latest exemption
packages, no figures were available
on lost revenue. Says City Council
Memeber Ruth Messinger, "This is
neither the time nor the place to
be pushing an abatement program
when we don't know how much it
will cost."
Messinger also warns that such
exemption packages can be "anti-
competitive" for businesses not re-
ceiving exemptions. And every
company will want a piece of tax
break pie. With NBC being offered
a host of tax breaks to remain in
the city, Rupert Murdoch's News
America Holdings Inc. soon de-
manded "fair and equitable"
breaks.
Glenn von Nostitz, legislative
counsel to State Sen. Franz Leich-
ter, a frequent critic of abatement
programs, argues that tax breaks
are an "easy way out. They have to
In Detroit, much like New York and
other urban centers, tax abatements
are granted to almost all new develop-
ment projects. Over the past 12 years,
Detroit has given more than 200 tax
abatements to local industrial de-
velopment projects - but benefits
have been negligible. Companies
saved only 30,141 of the 70,978 jobs
projected to be retained on tax abated
projects. Likewise, less than 50 per-
cent of the promised new jobs were
ever created - 3,983 out of the 8,464
projected. This equals an overall suc-
cess rate of 43 percent.
Interestingly, smaller firms (fewer
than 200 employees) fare much bet-
ter; they retain 81 percent of jobs pro-
jected to be retained as compared to
the 39 percent of jobs retained by the
larger In job creation, too,
look like they're doing something.
The other things are a lot harder."
Those "things," according to von
Nostitz and others, include com-
prehensive job training programs,
good mass transportation and en-
suring a stock of affordable hous-
ing.
David Gallagher, senior staff as-
sociate for economic development
at Interface, says the city is only
doing half of its job. He believes
tax abatements essentially are city
investments in a company. The city
must make sure it gets the most
from its investment, according to
Gallagher, by coordinating school
and job training programs with the
employment needs of companies
receiving the tax benefits.
Questions still persist on how
important tax breaks really are in
convincing a company to remain
or relocate in the city. Richard
Recny, executive director of the the
East New York Local Development
Corporation, says "it was the tax
abatement that made the deal" in
bringing Faden Paper Co. to the
area. David Lebenstein, director of
industrial and commercial acquis-
itions for Time Equities, agrees that
tax breaks may be important in
"distressed" neighborhoods like
East New York. But he adds that in
most areas, "The deals ought to fly
on their own merits."on.T.
smaller firms have a 77 percent suc-
cess ratio, compared to the larger
firms' ratio of 36 percent.
With these disturbing results in De-
troit, why do local and state officials
continue to advocate vigorously for
the use of tax abatement for larger
companies? The answer is competi-
tion for business investment. Cur-
rently, each state is pitted against
other states and municipalities - not
to mention foreign countries - for
. business investments.
Public officials fear that without
significant reinvestments in the state
by its largest industry, Michigan
would face total economic collapse.
A recent example was the media
event associated with the selection of
the GM Saturn Division location.
That event got completely out of con-
trol with the ensuing incentive bid-
ding war between states and
municipalities. No public official
wanted to be accused of not doing
everything possible to attract the new
jobs to his jurisdiction.
Because this is a high stakes situa-
tion for the state and its citizens, pub-
lic officials are simply unwilling to
remove or restrict tax abatements,
even if it has only symbolic value.
They take their lead from some
economic development specialists
who state that even though tax abate-
August/Sept.mber 1987 CITY LIMITS 21
ments alone cannot reduce business
costs enough to affect an investment
decision, especially in large projects,
they still are important.
A Favorable Business Climate
These economic development ex-
perts point out that the actual role
tax abatements play is not simply to
reduce business costs but to be part
of an incentive package that creates
a "favorable business climate."
The political overlay that affects
the continued use of tax abatements
is twofold. One is the access that bus-
iness leaders have to elected officials.
Through this access, they are able to
emphasize the benefits of the public
investment through tax breaks and
downplay any possible negative as-
pects. Moreover, the influence of a
business is significant if it is one of
the largest in the world and the state's
largest private employer. Second, and
probably more important, is the fact
that no politician wants to be accused
of losing jobs for his community by
failing to use every possible
economic development tool to keep
up with its competition.
It is clear that there is a need to
develop a policy that modifies the un-
productive aspects of tax abatements
while encouraging their positive use.
In general , the remedy must in-
volve a recipient's agreement to a con-
tractual relationship with the city.
This contractual relationship would
facilitate accountability for public
funds by ensuring that when the city
grants property tax abatements to
qualified businesses, continuation of
these abatements would depend on
the businesses fulfilling their job re-
tention/creation pledge. The contract
would call for precise employment
and construction goals, monitoring
these goals, providing additional in-
centive assistance if appropriate, 90-
day notice of plant closing and a re-
fund and/or forfeit of future abate-
ments if goals are not met.
Without such a workable remedy
Detroit and other municipalities will
continue to give away their tax base
and receive nothing in return except
unfulfilled promises, empty dreams
and the diminished ability to service
their citizens.o
Mel Ravitz has been a Detroit city
council member for 17 years and is
a professor of sociology at Wayne
State University. Richard Robinson is
executive administrative assistant to
Council Memeber Ravitz and an an-
thropologist.
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BUILDING BLOCKS
Let There 8e Light - At Lovv Cost
IN THE PAST, ENERGY CONSERVA-
tion was synonymous with sacrifice,
but in the case of interior and exterior
lighting, that is no longer true.
Nevertheless, conservation remains
an important concern because, al-
though energy prices may currently
be relatively stable, no one knows
theirfuture direction - and some au-
thorities expect another energy
crunch in the 1990s.
Energy expenses related to lighting
represent a significant portion of the
total energy costs of operating a build-
ing. A problem facing managers is
minimizing these costs while main-
taining expected levels of security.
But there are ways to maintain effec-
tive lighting levels while decreasing
net electricity costs.
First, a few basic points: efficient
and effective lighting is dependent on
logical considerations, such as the lo-
cation of lighting fixtures and use of
available daylight, maintenance pro-
cedures, controls (switching), tenant
characteristics, bulb types and the
cost of electricity.
Lighting at building entrances dis-
courages crimes against people and
property. Other exterior lighting loca-
tions might include hidden corners,
tenant activity areas, building
perimeters, parking areas and load-
ing/utility areas. Interior lighting is
critical at stairways, in elevators,
along corridors, in basements and in
any other common space where dark-
ness could be dangerous.
A Source of Free Light
Some consideration might be given
to recognizing the effect of daylight
in the overall lighting plan. For exam-
ple, skylights and light shafts provide
light at virtually no cost. Effective
fixture placement considerations in-
clude installing fixtures high enough
to discourage vandalism, while low
enough to make the best use of the
available light and to facilitate regular
maintenance.
Maintenance procedures that in-
clude regular cleaning of light
fixtures and bulbs will promote light-
ing efficiency. Architects and lighting
manufacturers, expecting mainte-
nance to be neglected, design and
specify higher levels of lighting to
compensate for the decrease in light
that occurs as fixtures and bulbs be-
come soiled. Selecting fixtures from
a maintenance standpoint might in-
clude considering the difficulty with
which certain fixtures are cleaned, as
well' as selecting fixtures that are de-
signed with shields or baffles to help
keep bulbs and reflective surfaces
clean.
e
COOPERATIVE
EXTENSION
The means of turning lights on and
off also will determine efficiency.
Timers work in many instances, but
clock-operated timers are not able to
match actual hours of usable day-
light. A better alternative is a sensor
that senses available light, thus using
daylight as a free light source. Such
a sensor can turn on lighting
whenever a designated light level is
reached, regardless of the time. A per-
sonnel sensor, which can be installed
for less than $100 and which "reads"
infrared energy, can turn on addi-
tional lighting when the heat given
off by people is sensed.
Ages and physical abilities of ten-
ants will have some influence on ac-
ceptable levels of lighting. As hu-
mans age, visual and other abilities
decrease, so older people require
more light for normal tasks. If the typ-
ical tenant is over 60, there may be a
need to provide higher lighting
levels, especially at stairways, at
changes in floor level and at locations
where reading is required. Using
lighter colors on wall and ceiling sur-
faces, as well as keeping paved areas
clean, will permit more light to be
reflected and used.
Bulb Efficiency Varies
Lighting can be increased with a
decrease in the net cost of electriCity
because of the efficiency of bulbs
(called lamps in the trade) available
today. The three main types of lamps
are incandescent, fluorescent and
high-intensity discharge (HID). In-
candescent lamps are the least
efficient and have the shortest lives,
but produce a warm, soft light.
Fluorescents last four to 12 times as
long as incandescents and produce
four or more times the light, with an
acceptable color. HID lamps require
time to cycle on and off, vary in color
quality, but can operate four to 10
times more efficiently than the inc an-
descents . Not all incandescent lamps
can be replaced with HID lamps, but
selective replacement can result in
net energy savings. Although some of
these new lamps produce slightly ob-
jectionable colors of light, they can
operate longer and more efficiently
than incandescent types. When color
is not critical, such as outdoor sec-
urity lighting, the poor color charac-
teristics may be insignificant when
compared to the cost, quantity and
quality of light available from these
sources.
For a free fact sheet on light
fixtures, send a stamped, self- addres-
sed envelope to: HANDIVAN, Cornell
University Cooperative Extension,
280 Broadway, Room 701, New York,
New York 10007. Mention City Limits,
August/September 1987.D
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and
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Services:
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& Alteration
Roofing Work
Painting & Plastering
Call 212-473-0457
Hewitt Construction & Building
Services Corp.
212 Forsyth St.
New York, N.Y. 10002
WORKSHOP
MINORITY PLANNING FELLOWSHIPS. 2 yr. partial scholar-
ships and professional placement avail. for fall '87 semester in
city & regional planning grad. program, to qualified minority ap-
plicants interested in community eco. development. Call Michael
Zisser, chair, Pratt Inst. Dept. of City & Regional Planning, 718-
636-3414.
STAFF ATTORNEY. Activist community organization in Hell's
Kitchen seeks attorney with L& T expo and commitment to afford-
able housing. Position involves: representation of low income
tenants & tenant associations, conducting impact and affirmative
litigation, community education & organizing, some supervision
of other attorneys. Salary range: $17,740-$21,740. Good benefits.
Resumes: Miriam Nieves, 77710thAve., NY. NY10019. E.O.E.
STAFF ATTORNEY. The Community Development Legal Assist-
ance Center, a not-for-profit org. with 4 attorneys specializing in
assistance of community groups and low income tenant groups
with real estate and corporate matters, is seeking an attorney
with at least 2 yrs expo to handle projects & assist with reform
& educational efforts for relieving the homeless crisis. Real estate
expo helpful but not required. Spanish speaker preferred. Salary:
$25,000 + depending upon expo Will consider pit (25-30 hrs),
especially for person with real estate expo Resume: Debra
Bechtel, CDLAC, 99 Hudson St., 14th Fir., NY. NY 10013.
HOUSING SPECIALIST/PARALEGAL. Community Law Office
seeks paralegal for housing unit representing tenants associa-
tions in Harlem, E. Harlem & Washington Heights. Job includes
assistance to tenant managed buildings, accounting assit. to
tenant associations, litigation prep. Night meetings req, Spanish
helpful. Salary: $19,000; union benefits. Resume immediately:
Douglas Simmons, CLO, 230 E. 106th St., NY. NY 10029. No
phone calls.
YOUTH ORGANIZERS. NWBCCC Youth Organizing Program
seeks community-minded self starter with exc. communication
skills to org. groups of area teens Into a neighborhood-based,
youth-run, community-improvement org. Each organizer will use
org. techniques to bring youth together to develop alternatives
to delinquent behavior by forming community improvement, re-
creational and cultural orgs. Salary: $12,000. I:mpire Blue Crossl
Blue Shield Major Med, hospitalization & dental coverage. Re-
sume: NWBCCC YDp, 2721 Webster Ave, Bronx, NY 10458. Att:
William Neff, Prog. Dir.
INTERN. City Limits. Assist in all phases of mag. operation,
including research, some writing, office mgmt. No stipends but
great expo for journalism or urban affairs student. Resumes: City
Limits, 40 Prince St., NY. NY 10012.
You'll find incisive reportihg, thoughtful
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offering you a FREE copy of IN THESE
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WHEN THE
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YOU NEED CITY LIMITS

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August/September 1987 52.

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