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Gotham Gazette

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Citizens Union

Harnessing Change in Bed-Stuy


Bedford-Stuyvesant is back.

Or so it seems. With 34.5 percent of the population living in poverty, an unemployment rate nearly twice that of New York City and some of the highest foreclosure rates in Brooklyn, Bed-Stuy seems an unlikely candidate for gentrification. Yet the neighborhood, referred to by the Times of London in 2005 as "a horrible and inconvenient area of Brooklyn with some lovely buildings and a nasty crack habit" is being touted by some as Brooklyn’s next hot neighborhood.

Despite or perhaps because of this poverty, Bed-Stuy has had a strong community infrastructure. It is home to the nation’s first federally funded community development corporation, the Bedford-Stuyvesant Restoration Corporation, and has a long history of leadership, community organizing and providing services from within. Now years of public and private disinvestment are slowly giving way to market-driven development, and Bed-Stuy, following a path familiar to many of New York's lower income neighborhoods, is changing.

As this happens, residents and community members are drawing on their strong organizations and sense of community to shape the transformation from within. A handful of local initiatives are already in the works in the hopes that Bed-Stuy can maximize positive development without acquiescing to gentrification. Community leaders are hopeful, but all acknowledge the enormity of the challenge.

"Bed-Stuy has been discovered, like Columbus discovered America," City Councilmember Al Vann has warned, "The rush is on."

Community Visioning Made Real

With so much community capital in place, it is no surprise that Bed-Stuy is one of the communities in New York that has drawn up its own neighborhood land use plan under the city’s 197a process. By allowing neighborhood residents and not city planners to determine the physical future of a place, the plan empowers them to ensure that their concerns, such as increased affordable housing, are addressed.

Initiated by Community Board 3 just one year after the New York Times called Bed-Stuy "Brooklyn’s next investment region," the 197a helped those living in the community imagine strategies for dealing with market-driven change. Rudy Bryant, former director of the Pratt Center for Community Development warned that such a plan was necessary to guide the coming development. "If development goes unfettered, Bed-Stuy is going to be a prime target area," Bryant said,

This month, City Council voted to rezone a 206-block portion of Southern Bedford-Stuyvesant largely in accordance with the community plan. The expansive rezoning fits into the Bloomberg administration’s citywide effort to create new business districts in communities with good access to mass transit. The new zoning rules aims to increase density along Bed-Stuy’s key commercial corridors while preserving the residential character of the neighborhood's brownstone-lined streets.

The rezoning does not incorporate all aspects of the community plan. For example, the residents wanted increased incentives for affordable housing on several north/south corridors in the area, according to Mercedes Narciso, a planner at the Pratt Center. Overall, however, the rezoning speaks to what the Pratt Center found to be the greatest concerns of the community: increased commercial space to provide economic development and jobs, 400 new affordable apartments and preservation of the neighborhood’s residential character.

A BID for Fulton Street

The rezoning is not the only example of community driven processes. As the neighborhood gears up for more commercial space along Fulton Street, the Fulton-Nostrand United Merchants Association, comprised of more than 60 business owners, is pushing for a Business Improvement District or BID on Fulton Street.

Its supporters say the proposed BID would help diversify the mix of businesses, improve conditions for shoppers and maximize Fulton Street’s commercial potential. "The area has excellent access to the city and a great location, but things such as crime and the visual streetscape have kept it from achieving its potential," said Joel Dabu of merchants group. According to Dabu, the BID would address crime and work with entrepreneurs to create businesses that better serve customer needs, perhaps even attracting shoppers from outside Bedford-Stuyvesant.

With the recent rezoning allowing larger commercial spaces, Dabu hopes Fulton Street will be able to attract some national and regional chains such as the recently opened Applebee’s restaurant. He thinks larger stores would help smaller, local businesses by attracting more people to the area. Rudy Bryant agrees the area needs more commercial development but added a caveat. "The community would be interested in department stores as long as they’re not exploitative big box stores that are going to drive out smaller merchants," he said.

Joe Long, a longtime resident or the neighborhood and owner of Birdel’s Tapes and Records, shares Bryant’s concern. "We need to make sure minority businesses will still be in the community and be able to harvest the longevity of their time here. We can’t let the conglomerates move in on us," he told AM New York.

Dabu, though, sees some change as inevitable. "As Fulton Street gets more successful, of course rents will go up," he said.

Can Development Work for Bed-Stuy?

There are other community-based initiatives. The city’s Economic Development Corporation, for example, has launched a pilot program in Bed-Stuy to provide an alternative to traditional economic development. It focuses on comprehensive neighborhood economic development, using the existing community infrastructure to meet the needs for jobs, workers and facilities in the neighborhood.

Today, Bed-Stuy is dealing with issues that have confronted many parts of the city before it. The question is not whether change is desirable -- everyone seems convinced that it is -- but whether the community can shape this change. Can the active residents of this neighborhood promote a new model for development?

Many have concerns. Andrew Fils-Aime of the Pratt Area Community Council for one applauds increased commercial and residential diversity but worries that the new development will not meet the needs of low-income residents. For Fils-Aime, not enough has been done to organize, inform or prepare the existing residents for the changes about to take place in their midst.

But others remain optimistic. "The neighborhood is back," Brenda Fryson of Community Board 3 told New York Magazine in 2005, "and it’s not because white people have come here, but because of the tenacity of the people who have lived here all along."

 

Stated Meeting: Preserving Neighborhoods


Residents of two very different neighborhoods can look to the City Council this week with either appreciation or dismay after it approved a landmark designation for the private courts and row houses of Sunnyside Gardens and a rezoning for the brownstones of Bedford-Stuyvesant, Brooklyn.

At its stated meeting on Monday, the council unanimously approved both proposals in order to preserve the character, density and novelty of the two neighborhoods. The council also approved an expansion of the Fire Department's Pension Medical Board, which has faced an influx of applications following the World Trade Center attacks of September 11, 2001.

Sunnyside Gardens Preservation

Comprising 55 acres of row houses, apartments and co-ops all adjoined by private gardens, the Sunnyside Gardens housing development was constructed more than 80 years ago as one of the city's first planned communities. The landmark designation faced considerable community opposition and was approved by the council by a vote of 49 to 0. It requires that renovations or exterior home improvement projects be reviewed by the Landmarks Preservation Commission – from changes to the private gardens to work conducted on building facades.

Though some residents opposed the designation, contending the commission's review process would be time consuming and costly, a plethora of others lobbied the city to title Sunnyside Gardens a historic district, specifically the Sunnyside Gardens Preservation Alliance - a group of residents.

The area already has some protection. During the 1970s, the neighborhood was named as a Special Planned Community Preservation District, but that only protected the size of buildings and the character of the neighborhood's acclaimed open space. The historic district goes a step further.

City officials said the designation represents a growing trend to landmark neighborhoods outside of Manhattan – which had typically contained most of the city's historic districts.

" You don't have to have a mansion for it to be landmarked," said Councilmember Eric Gioia, who represents the neighborhood. "Middle class neighborhoods can be preserved as well. When you walk around Sunnyside Gardens what you see is a place where the middle class cannot only survive, but actually thrive."

Some Sunnyside Gardens residents fear the historic district will weed out the area's classically moderate-income population. City officials disagree, contending the district designation will protect its middle class occupants.

The development was constructed from 1924 through 1928 in response to a lack of affordable housing in the city following World War I. The area comprises about 16 blocks and 624 residential buildings. It is the largest historic district in Queens.

Bed-Stuy Rezoning

In response to growing development in Bedford-Stuyvesant, the City Council also approved a rezoning for 206 blocks in the southern portion of the neighborhood. The zoning revisions were approved by a vote of 49 to 0.

As more developers eye the brownstone blocks of Bed-Stuy, both residents and city officials called for a rezoning to preserve the character, density and height of the neighborhood. The new zoning will also preserve existing commercial uses and provide incentives to develop vacant lots.

Councilmember Al Vann, who represents part of the area, said the rezoning is meant to stifle the rush of unscrupulous developers in some areas and promote mid-rise apartment construction in others.

" As you all know Bed-Stuy has been discovered - you know like Columbus discovered America," said Vann. "The rush is on."

The rezoning area is bounded by Lafayette Avenue and Quincy Street to the north, Classon Avenue to the west, Saratoga Avenue and Broadway to the east and Atlantic Avenue to the south. It will also provide incentives to construct affordable housing, which city officials predict could reach 400 units.

Vann said this rezoning is only a first step. The city is now working on a plan to address development occurring in the northern section of the neighborhood.

Fire Department Disability

Since the September 11th attacks, an increasing number of firefighters are applying for disability retirement. Because the Fire Department's Pension Medical Board has a limited capacity to review applications, the City Council approved an expansion of the board by a vote of 49 to 0.

The board is currently comprised of three physicians. Under the bill (Intro 369-A), which was proposed at the request of Mayor Michael Bloomberg, the board, the commissioner of the Department of Health and Mental Hygiene and the commissioner of the Department of Citywide Administrative Services could each appoint an additional three alternate physicians, who could also review applications when needed.

" We wish there weren't so many disability applications coming forward from September 11th," said Council Speaker Christine Quinn. "But the reality is there has been a large number, and (with) the board in its present, more limited configuration, there are only a few people that can sit and review them."

Under the current system, city officials said, an application can take more than a year to process. Quinn could not estimate by how much the process would be expedited with the board's expansion. In 1999, only 404 applications were before the board. In 2003, that grew to 719 applications, and in the first four months of 2007 there were 240 applications. 

Paying the Price for Living in New York


It was another $52 worth of groceries for Vann Williams and another four days of food on the table in his East Village apartment. A born and bred New Yorker, Williams, 48, has become accustomed to dealing with ever-rising expenses.

"I have to watch every cent," he said with an armful of groceries outside of the Key Food near his home. "The cost of living has grown tremendously."

Over his nearly three decades in Manhattan, Williams, a gardener for the city's Department of Parks and Recreation, said he has seen his grocery costs nearly double, his utility rates climb and the cost of a subway ride quadruple.

This leaves Williams, like many other New Yorkers, facing tough choices: get a roommate, skip a night out, move to the outer boroughs or to the suburbs. After all, you can't fight inflation.

For many reasons, groceries, utilities and other necessities cost more in New York than elsewhere in the country. And the situation promises to get worse. Consolidated Edison has proposed a 17 percent rate hike for residential customers, the New York Water Board approved a nearly 12 percent water rate increase and is considering upping that another 18 percent, and in December the Metropolitan Transportation Authority is expected to vote on a revenue producing proposal, which almost certainly will mean another fare increase.

Wages Stall as Costs Climb

Some city dwellers, including Mayor Michael Bloomberg, contend New York is more expensive, because it is a better place to live. The earth shattering rents, skyrocketing electricity bills and $2 subway fare are all worth it for the culture, the diversity, the food and the excitement.

It is easy for a billionaire like Bloomberg to feel that way. For other New Yorkers, though, that outlook has become more and more difficult to keep.

While prices and rates continue to rise, some reports find, wages do not keep up. According to the Economic Policy Institute, a liberal policy and research group, median wages in New York State increased just 0.1 percent between 2000 and 2006. By comparison, median wages nationwide grew by 1.2 percent. As wages stall in the New York metropolitan area, prices for consumer goods have risen nearly 21 percent since 2000, according to an analysis by the Fiscal Policy Institute.

To put things into context, a lot of New Yorkers, particularly in Manhattan, have high salaries that buffer them against the steep cost of living. According to data released last week by the Bureau of Labor Statistics, New York County has the highest weekly wage of any large county in the country. (These figures do not factor in the unemployed, self employed, domestic workers and others). While the average national wage in the first quarter of 2007 was $885, Manhattan residents average $2,821 a week, nearly $1,000 more than citizens of the runner up area - Fairfield, Connecticut, with $1,979.

For the middle or low-income New Yorker, the rising cost of living may not be as easy to bear. For instance, the weekly wage was below the national average at $788 in Bronx County, where residents must grapple with the same citywide rate increases as their far more affluent counterparts in Manhattan.

According to a report released by the Fiscal Policy Institute last month, the wage for professional occupations and high-end earners increased steadily from 2000 through 2006 statewide, but those on the lower end of the salary totem pole have seen their earnings stagnate. While some who hold lucrative jobs on Wall Street hardly flinch at the possibility of an upcoming subway fare increase or Con Ed rate hike, for low income New Yorkers the slightest rise can mean added expenses that they just cannot afford.

"Even now, with the increase they're speaking of, it adds another $10 to $15," said Williams of Con Edison's recent rate proposal.

Gary La Barbera, president of the New York City Central Labor Council, said wages and benefits have not kept pace with the rising cost of living, despite low unemployment records. He calls the current situation "underemployment," as mothers and fathers work two or three jobs to make ends meet.

"Most workers have relatively little to show in wage and income gains," said La Barbera. "Rising costs are clobbering paychecks."

Comparing Urban Areas

The Consumer Price Index – a measure of how much the cost of a "basket" of items, from housing to food, has changed over time – has not shown steep monthly increases for the New York metropolitan area recently. A 20-year view, though shows that prices here often outpace those in the rest of the country.

Data released last week by the Bureau of Labor Statistics reveal the Consumer Price Index grew by 2.4 percent since September 2006 – an increase that shows "relatively little movement" in the past several months. Nationwide, the index increased 2.8 percent from September 2006, due to higher costs for housing, food and, of course, energy.

Since 1987, however, the consumer price index for New York has grown by 90.6 percent, according to the Bureau of Labor Statistics, an increase that is fueled mostly by the rising cost of housing. In other somewhat comparable areas, like Los Angeles, the index increased by 84.5 percent. In Cleveland, the index jumped only 71.8 percent in those two decades. From 2000 through 2006, New York metropolitan consumer prices have risen over 20 percent faster than U.S. costs, according to the Fiscal Policy Institute.

The increases here indicate that housing reigns supreme. Housing in the area jumped 106.4 percent since 1987, while in Chicago it increased 77.2 percent and in Boston 95.4 percent over the same time period.

"New York being a more expensive place to live has been true since Peter Stuyvesant got here," said Lawrence White, a professor at New York University's Leonard N. Stern School of Business. "The heart of what makes that so is that it's all about land. There is a limited amount of Manhattan and everybody wants to be there."

That cost can trickle into other increases for New York consumers. The high rent that businesses pay may translate into a more expensive hamburger or a pricier visit to your primary care physician.

Energy

Like housing, energy is a major factor in the city's cost of living. And, like housing, energy costs reverberate through myriad industries – consider heating your home, buying gas for your car and even the price of clothing.

Electricity prices here have increased 2.4 percent from a year ago, according to the Consumer Price Index. That is a measure of inflation and is unrelated to the rate increase proposed by Con Edison.

"Energy costs are going up across the country," said White. "That means that gasoline prices are going to be affected. That means electricity prices are going to be affected."

According to Con Edison Spokesman Michael Clendenin, the utility simply passes its own increases on to consumers. "You pay what we pay," said Clendenin of purchasing electricity. "The rate increases are not tied to inflation. Rate increases happen because we have to build more, invest more and put more infrastructure on the ground."

Con Edison's most recent rate increase proposal – the utility is seeking a 17 percent increase for residential customers and a 10.7 percent increase for commercial customers to take effect next year – is needed to meet the city's increasing demand as well as make much-needed infrastructure improvements, according to a press release. The average customer, who pays about $70 a month, would have to pay an extra $12. Already, according to some estimates, New Yorkers pay the highest rates in the country.

"You're dealing with infrastructure that is so old and obviously going to wear out soon," said David Blackshire, a musician on the Lower East Side, of the rate increase proposal. "But they really don't give people much back for their money."

Blackshire is not alone in this perception that the utility does not deserve a rate hike. City officials question the utility's ability to consistently provide quality service given its recent history, which includes this summer's steam pipe explosion and last summer's blackout.

State and local officials are gearing up to fight the hike over the next several weeks. Currently, the proposal is in public hearings before the state's utility regulator – the Public Service Commission. Just last week, the City Council decided to become an active party in the rate debate.

 

Economoist said there is a good reason that Con Edison charges more than many other utilities. Urban environments are subject to wear and tear at a faster rate than suburban areas, so infrastructure repairs are both more costly and more frequent.

"Our utilities are more expensive because Con Ed has greater expenses in dealing with an urban grid," said White. "Something goes wrong and its takes longer to maintain it and fix it."

 

Water Rates

When the New York Water Board, part of the city's Department of Environmental Protection, raised rates by 11.5 percent in May, it attributed the hike to increased energy costs and a backlog of unpaid water bills. That increase, the largest in 15 years, added approximately $72 to the average annual water bill – now estimated at nearly $700 for residential customers.

And now, the board is reportedly thinking about hiking rates again. Because so many corporations and residents have failed to pay their bills , the agency could be short $200 million by the end of this year. To make up for the loss, it is eyeing an additional 18 percent increase.

The water board, established in the 1980s, has long had a so-called delinquent billing system, critics say. Because it was seen as unfair to shut off residents' faucet when their landlord did not pay the water bill, the department continued to provide water without compensation. Although the department is now warning companies and residences that it could cut off service, according to some estimates, that may not be enough to avoid a budget shortfall. Several city officials, including Queens City Council members James Gennaro and David Weprin, are urging the department to fix its broken billing system and redirect its funding toward water and sewer projects.

The board is expected to monitor bills this month, and then meet in November to determine whether another hike is needed. Any increase could come as soon as January.

Subway Fares

In addition to water and electricity rate hikes, New Yorkers should also brace for an increase in public transportation fares. To address a looming budget deficit, the Metropolitan Transportation Authority is considering two proposals that would boost fares. One proposal boosts fares, while incorporating discounts for travel at off-peak hours. Both proposals consider a standard fare increase of 25 cents. New Yorkers who rely on the subway to get to and from work every day could see their monthly unlimited pass increase by 8 percent.

While any proposed fare hike attracts opposition, some economists argue that public transportation is relatively cheap in New York City.

"One thing that’s potentially cheaper is transportation," said Nicole Gelinas, a senior fellow at the Manhattan Institute. "The price for a subway ride has historically not kept up with inflation."

According to the Bureau of Labor Statistics, the New York metropolitan area's transportation costs have increased by 72 percent since 1987. Cleveland, for example, has seen an 81.4 percent increase.

Groceries and Restaurants

The cost of living is also on the rise, according to the Consumer Price Index, because of rising food costs. Nationwide, dairy prices have increased 13.1 percent in the last year. Prices for groceries have increased 4.7 percent in the past year, while food purchased in restaurants has gone up 4.1 percent.

The Bureau of Labor Statistics does not keep regional or area food costs. And while there could be slight variation from area to area, for the most part food prices in this area remain equivalent to those nationwide, according to Martin Kohli of the bureau's New York office.

This most recent increase, Kohli said, is due to a higher demand for corn and wheat products as a source of energy for ethanol as well as for food. Whether this trend will persist, he added, remains to be seen. Other food price increases could be attributed to higher trucking costs, which brings us back to the cost of energy, he said.

Economists agreed that the slight variation that can arise in food prices here compared to the rest of the country might also end up going back to the cost of housing.

"Clearly there is no conspiracy of American farmers to charge New Yorkers more," said Frank Braconi, chief economist at the city comptroller's office. "If you have food prices going faster, in all likelihood it's going to come back to real estate one way or another ... supermarkets competing for space."

For example, a loaf of white bread may cost you $2.17 in Manhattan, but it will cost you $1.74 in San Francisco and $1.68 in Queens, according to a cost of living index compiled by the Council for Community and Economic Research – a national economic research group.

A half-gallon carton of whole milk, however, is more expensive on the West Coast: It costs $2.06 in Manhattan, and just $1.70 in Queens versus $2.53 in San Francisco, according to the council. Kohli said dairy products, which are produced regionally, tend to have more variation in price.

Restaurants also see the effects of inflation. According to the National Restaurant Association, between July 2006 and July 2007, wholesale food prices increased 7.5 percent. If this trend continues, it will represent the highest food price increase in 27 years, the association said. That has translated into a 3.6 increase in menu prices over the year, according to the association.

East Village resident Jonathan Mclaughlin has seen the smaller, and cheaper restaurants in his neighborhood raise their menu prices recently. That all affects his ability to keep up with the cost of living in New York City.

"You go Mexican it would be $10," said Mclaughlinm who chose to buy Boca Burgers instead of eating out on a recent evening. "Now it's $15."

What Can Be Done

While city government is limited in what it can do to stave off rising costs for New Yorkers, economists and advocates point to several areas where it could help keep prices down.

Advocates like Tracy Shelton, a consumer attorney with the New York Public Interest Research Group, say better government regulation and oversight can reign in costs such as water and electricity rates. Overseeing utility companies should be a high priority, she added.

"They need to be looked at very, very carefully - if they are going to offer people life and death services - so the infrastructure doesn’t age out to the point where we have horrible blackouts in the middle of heat waves," said Shelton of utility service providers.

Gelinas of the Manhattan Institute said officials should not have a "knee-jerk" reaction to the construction of more power plants in the area, which would ultimately drive down costs and better supply the region. More regulations, she added, will not necessarily create lower costs.

Although some residents, including Williams, have considered leaving the city for more affordable pastures, the Big Apple will continue to draw people in, ironically, for the very reasons that make it an expensive place to live.

"If I do have to go," said Williams, "I'd hate to leave."

 

 

Cleaning Up New York's Buildings


When Mayor Michael Bloomberg visited London earlier this month to talk with Mayor Ken Livingstone about that city’s congestion plan, he slept in his own bed in the 3,500 square-foot apartment he owns in London’s exclusive Cadogan Square neighborhood. He told reporters that in New York he lives simply and efficiently – in a 7,500 square foot Upper East Side townhouse. “I get my haircut two doors away,” Bloomberg told a reporter from the International Herald Tribune. “I never have to leave the neighborhood.”

He can afford not to. But even staying home can take a toll on the environment – as the mayor’s own environmental plan makes clear.

The streams of traffic crashing against the city’s various choke points may be New York’s most iconic image of waste and pollution. But, in fact, the city’s buildings – its defining physical elements – account for the bulk of New York’s energy use and carbon emissions. The city’s 750,000 buildings – residential, commercial and government -- are responsible for nearly 80 percent, or 47 million metric tons, of New York City’s total carbon dioxide output. That’s the equivalent of 150 Empire State Buildings worth of greenhouse gas being pumped annually into the atmosphere – hanging heavily over its economy, landscape and environment.

Buildings in the city’s commercial sector, alone, which includes offices and retail space, kick out 25 percent of all emissions (transportation, by contrast, accounts for 23 percent).

Despite this, Bloomberg’s ambitious PlaNYC2030 is largely silent on reducing pollution from buildings other than those built or owned by the city. It says virtually nothing about commercial buildings. Can New York City expect to meet its goal of reducing overall emissions by 30 percent by 2030 if it does not move aggressively – like London – to encourage and, in certain cases, impose efficiency standards on commercial property, one of its largest polluting sectors? Or will the combination of market forces and moral responsibility prove powerful enough to bring the city’s business leaders in line with the city’s push for sustainability?

Polluting Buildings

Though the world’s largest cities account for 2 percent of land area, they generate 75 percent of the world’s carbon emissions. Despite that, New York already fares well on some measures of efficiency and sustainability. PlaNYC acknowledges as much. “Our density, apartment buildings and reliance on mass transit means we are one of the most carbon-efficient cities in the United States,” the plan states. “New Yorkers produce 71 percent less carbon dioxide per capita than the average American.” (Carbon dioxide emissions are the key cause of global warming.)

To take a page from Bloomberg’s playbook we can look at London and its sprawling metropolitan area with a mĂ©lange of aging and new buildings and a population of 7.5 million. There, buildings account for an almost identical proportion of energy use, according to a statement by London deputy mayor Nicky Gavron.

The two cities not only have similar demographics and man-made environments, they have recently begun reckoning with their obligation to make those built environments more sustainable. Two months before Bloomberg and his Office of Long Term Planning and Sustainability rolled out PlaNYC 2030, London’s Mayor Ken Livingstone released his own 148-page report called the Climate Change Action Plan. The two documents are strikingly similar in approach and have been applauded by environmental and business leaders alike. Each plan outlines key sources of energy use and carbon emissions and presents an array of policy proposals for each of the cities as they reckon with a future marked by increasing populations, rising costs of living and warming temperatures.

Yet there is at least one conspicuous – and significant – difference between the London and New York reports. The London plan devotes a full section to commercial and institutional buildings – analyzing in minute detail their energy use, recommending ways to improve efficiency and outlining various regulatory measures intended to force the commercial sector’s hand. New York City’s report, however, has no such section.

Bloomberg’s report does offer an exciting yet jarring portrait of New York City two decades from now: an influx of a million people, the creation of 750,000 new jobs, the construction of 265,000 new housing units and 60 million square feet (more than four former World Trade Centers) of new commercial space. Despite the new construction, existing buildings will account for 85 percent of the buildings standing in New York City in 2030, according to deputy mayor for economic development Dan Doctoroff.

Buildings pollute in a number of ways. Most building pollution, however, does not emanate from the residences and offices themselves but the smokestack of a power plant when a light switch, computer monitor or coffee maker is switched on. Various emissions are also generated on-site from natural gas and oil-burning boilers, gas stoves and hot water heaters and the gasses released in the breakdown of certain building materials such as paint and insulation.

To address this, plaNYC calls for making the buildings we already have more efficient. “If we’re concerned about energy efficiency and carbon we need to start with buildings that have the largest carbon footprints,” said Rohit Aggarwala, director of the city's Office of Long Term Planning and Sustainability. “As a city I’d like to see us prioritize those retrofits and projects that have the biggest bang for the buck.”

Improving What We Have

The Diversity Houses

Reducing energy use and carbon emissions is architect Chris Benedict’s goal as well. Benedict, who has headed her own firm since 1996 and teaches environmental technology at the Parsons School of Design, has a number of rehabilitation projects, including one at a residential building on West 126th Street in Harlem. Benedict says she is achieving energy savings in the range of 50 percent in her renovations and that her new buildings are achieving a rate of efficiency 80 percent greater than “average” buildings. And she says she’s doing it at no extra cost.

On a recent morning she is running a plastic cylinder into small boreholes made in the walls, extracting insulation and testing its density on a small digital scale. This lets her make sure that the amount of insulation blown into the walls is adequate for maximum efficiency – not the kind of work you typically find an architect engaged in, let alone early on a Saturday morning. But it’s the “magic” that makes efficiency happen, says Benedict.

Her prescriptions are elegantly simple – but require care in execution. Efficient buildings, she says, must be carefully designed to make sure air moves efficiently throughout. The key in this small apartment is making it airtight except in places where drafts are wanted – in this case, through trickle valves (small one-way vents activated by fans) installed in the high-performance windows. The fans push hot air out, allowing it to be replaced by cool air streaming in through the vents. In order for the system to work properly, a “bubble” must be established: All joints and cracks throughout the apartment must be meticulously sealed. The apartment’s efficient heating system relies on multiple thermostats that are able to regulate temperature room-by-room.

Other “simple” prescriptions include high efficiency appliances and green building materials such as recycled cellulose insulation and dimmers. Benedict says that for this reason it’s vital that work be carried out to the standards set forth in her plans. “We make the contractors working on our projects sign off that they will commit to following the plans exactly,” says Benedict. “If they don’t, none of this works.”

As reasonable as many of these improvements appear, the stark economics facing the city’s residents could limit the use of such improvements and make it difficult for the city to achieve further gains in residential efficiency. In 2004, more than 45 percent of renters – accounting for roughly a third of all households in the city – paid over 30 percent of their income toward housing. The price of real estate continues to gallop away from wages. While the average house price sits at $550,000 (in Manhattan, the average is $1.3 million) the average income hovers around $40,000. Such statistics paint a gloomy picture – one of strapped renters and homeowners with little free cash to invest in efficiency upgrades.

Projects such as the well-known luxury apartment building, the Solaire, which boasts photovoltaic cells and a green roof garden and where three-bedroom apartments are pushing $5,000 a month, inevitably raise the issue of whether efficiency can be affordable. Benedict says that there is no reason why it can't be.

And builders seem to be catching on. A number of efficient projects intended for low- and moderate-income families are popping up around the city. These include Via Verde in the South Bronx, the Ocean Hill-Brownsville Complex in Brooklyn and the Diversity Houses on East 2nd and 3rd Streets in Manhattan (another one of Benedict’s projects).

The administration hopes that projects such as these will encourage others. PlaNYC, though, does not set specific rules for increased efficiency in New York City’s homes and apartments.

Efficiency in Government

For its own buildings, though, the city has made some headway in promoting wide-scale building efficiency. With the recent passage of Green Buildings Act (in .pdf), the city’s code now sets more stringent efficiency guidelines for municipal buildings. For example, capital projects costing (with the exception of schools, which are held to less rigorous standards) $30 million or more must reduce energy consumption by at least 25 percent. According to Aggarwala, next summer the city will introduce even more energy efficient measures for city buildings. He also says the Department of Buildings has stepped up enforcement of the state energy code to ensure that developers do not cut corners during construction.

The Hearst Building

Aggarwala said, by 2015, he would like to see rules requiring all buildings over 100,000 square feet to have an energy audit. This would provide the city an overview on the performance of all its buildings, he says. But little has been done to force the commercial sector to adopt the stringent building codes embodied in the Green Buildings Act. “Our plan is less prescriptive than London’s. We don’t have the authority to regulate, say, what kinds of computers are used in the city,” he said.

 

The commercial sector has made some eye-popping gestures toward efficiency. New projects like the Hearst Tower, 1 Bryant Park and the new New York Times Building in Midtown jut skyward with massive dimensions – and promises. The 600-foot tall Hearst Tower boasts energy-saving measures such as high efficiency heating and cooling, motion sensors that regulate power usage and “Icefall,” a three-story waterfall driven by “harvested” rainwater, which helps humidify and cool the building’s open atrium. In all, its cutting edge features will reportedly make the building 22 percent more efficient than other office buildings.

Still, 22 percent is a far cry from Benedict’s 80 percent. Moreover, that figure does not factor in the energy costs of demolition, site clearing and rebuilding, which one Canadian study found required more than two and half times as much energy as rehabilitating an existing building.

Some developers have tried rehabilitating office space, though such projects are fairly unusual. In the 1990s, the National Audubon Society renovated the Schermerhorn Building in lower Broadway to create an energy efficient and generally environmentally friendly headquarters for the organization.

Audubon, of course, is a non-profit. For big corporations, new high-profile projects seem to be the preferred way to go – if they consider sustainability at all.

“There are some visionary, innovative and hopefully high performing commercial buildings going up here and there,” said Nancy Anderson, executive director of the Sallan Foundation, a non-profit that looks at urban sustainability. However, Anderson said a large number of buildings erected during New York City’s decade-long construction boom do not meet the highest efficiency standards. “We’re not going to where we have to go to in terms of our carbon dioxide reduction goals with a building here and there. We need to quickly achieve a scale – of many large numbers of buildings plus new buildings and renovations.”

Cheap Energy and Lots of It

Along with the many technical obstacles to increased efficiency in commercial buildings lies a more fundamental issue: economics. Even though energy is as costly as it has ever been, it is still cheap when compared with the other costs associated with building operations in New York City.

“ In our region, commercial building utility costs typically run at $3 to $5 a square foot. Overall operating costs in New York City run in the area of $30 to $50 a square foot. And rents in Midtown Manhattan are pushing $100 a square foot,” says Michael Bobker, a senior fellow at the CUNY Institute of Urban Systems. “So there you can see where energy fits into the overall economics of operating a building.”

Chris Benedict

Bobker, who is currently working with companies to develop environmentally friendly vision statements and integrated efficiency training programs, said, though, that there is reason to be optimistic. He sees movement for efficiency at the highest levels of the city’s commercial establishment. It is spurred, he said, more by ideology than money.

“ We’ve had price drivers for a long time and that hasn’t really driven the message the way we’re seeing it happening in the marketplace today,” says Bobker. “What’s different is that people are aware now that energy use is linked to climate change – and that’s what’s driving executives. It’s no longer just an economic issue. It’s an ethical issue.”

How far does that concern go? In business, the bottom line will always be ideology number one. Companies will balk at environmental regulations if they impose excessive construction costs, said Stephen Hammer, director of Columbia University’s Urban Energy Project. “Businesses say, New York City is already 25 percent more expensive than across the river and in Westchester. If you’re going to make us do all these extra things, construction costs are going to go up, and we’re going to leave.“

That kind of thinking is outmoded, said Hammer, because energy efficiency is vital to a firm’s long-term competitiveness in a global marketplace. What’s more, it can be profitable. London, Hammer said, shows us that environmental mandates can actually spur economic growth. In spite of Mayor Ken Livingstone’s uncompromising approach to efficiency mandates, London’s economy has grown steadily since his election in 2000. One prestigious magazine (albeit an English one), The Economist, has gone so far as to declare London the world’s new financial capital.

A tough love approach on efficiency, said Hammer, might be just what New York’s private sector needs to see the potential long-term savings of green building. “[London’s] businesses are finding that they can do this stuff without breaking the bank,” said Hammer. “In fact, they’re going beyond the mandates and finding that there’s economic reason to do it – that the return is good on efficiency.”

Jeremy Miller is a New Jersey-based freelance writer, who writes about people, science and the environment. His most recent work has appeared in The Boston Globe and The Boston Globe Sunday Magazine.  

Burial Ground Bears Witness to a Segregated City


After 16 years of planning, research, excavation and development, New Yorkers recently celebrated the opening of the African Burial Ground Memorial in lower Manhattan. Speakers including poet Maya Angelou and Mayor Michael Bloomberg recognized the significance of remembering the long-forgotten burial site where some 15,000 to 20,000 people were interred. Remains from the burial site were uncovered in 1991 during construction of the federal office building on Duane Street and Broadway. A portion of the site is now a National Historic Landmark and National Monument.

But while Bloomberg acknowledged that “for two centuries slavery was widespread in New York City,” the ceremony and the flurry of press reports about it seemed to treat the burial site only as a reminder of past injustice and not as an opportunity to understand and reflect on the powerful historical connections to the present. Put in its true context, the burial grounds serves as a reminder of the powerful role that real estate has always played in displacing African Americans.

How The Burial Grounds Were Created

During the period of Dutch and English settlement, New York City was one of the nation’s largest urban centers for the slave trade and served as a financial patron of the plantation economy in the South. The city also had a sizeable population of slaves and freed blacks in New York City. In the Dutch colony, as many as 40 percent of the population were slaves.

Slaves had no choice of residence and were themselves treated like a commodity, first displaced from their homes in Africa and then traded in a public marketplace at the foot of Wall Street. But even freed blacks found their options limited by official and unofficial discrimination and by changes in the city. When land values and rents went up in the more populated areas of lower Manhattan, blacks were forced to find housing uptown. They kept being pushed uptown in successive waves until the formation of black Harlem. Those who could afford to buy property were often forced to seek land outside Manhattan in settlements like Weeksville, Brooklyn. This constant displacement, experienced in different ways by all people of modest means including many immigrant groups, was especially onerous for black people because discrimination in the real estate market limited their choices.

The African Burial Grounds in lower Manhattan were a result of this displacement process and associated discrimination. At the end of the 17th century, Trinity Church formally banned blacks from its cemetery in lower Manhattan as land in the fortified city became scarce. This led to the creation of the African burial grounds outside the walls of the old city.

By the end of the 18th century, however, the city had expanded beyond the walls and the African burial ground became desirable real estate. It was filled and leveled and then sold by the property owners. Given the exclusion of blacks from government, the public sector was blind to the importance that African culture places on the remembrance of ancestors, including the places where they lived and are buried.

Black Displacement and the Segregated City

The official barriers to racial equality in the city were removed in stages, but “enlightened” New York wasn’t far ahead of the South. In 1827, slavery was abolished in New York State, but until 1854 blacks were banned from “whites-only” streetcars. The Draft Riots of 1863, and other white-led race riots in 1900, targeted black communities and contributed further to their displacement.

In the 20th century, the federal urban renewal program resulted in the destruction of many black and mixed communities, leading to its being dubbed “Negro removal.” At the same time, federal mortgage guarantees did not apply in black neighborhoods. Thus blacks who were forced to move would not have the many options available to other groups. And the neighborhoods, and burial grounds, they left behind were quickly swept away.

Now, displacement of black communities continues to be complicated by the limited choices available, resulting in constant resegregation. In studies of racial segregation, New York consistently comes out as among the most divided cities. While new immigrant communities tend to be more diverse, the black/white divide in New York remains prominent, as revealed in a recent study. Real estate agents steer blacks away from mixed neighborhoods in many subtle ways and whites away from neighborhoods where blacks are moving in (this is known as blockbusting). Gentrification of traditionally black neighborhoods prices people out of the areas they have worked for generations to improve. Are No Sites Sacred?

As blacks have been forced out of communities the neighborhoods, and burial grounds, they left behind were quickly swept away. New York’s African Burial Ground provides a vivid example of this.

The similarities and differences between the official responses to rebuilding the World Trade Center site and to the African Burial Ground provide some perspective on this. After 9/11, Governor George Pataki led the pack of officials calling for a rapid restoration of the 13 million square feet of office space at Ground Zero. There was ample support for this in the media and among the city’s powerful real estate community. The Real Estate Board of New York declared: “We know it is important that downtown remain and grow as a powerful engine of the city’s, region’s and nation’s economies. The best living memorial to those who perished in the World Trade Center attack is to make sure that lower Manhattan emerges from this tragedy as a spectacular center of the global economy.”

The survivors’ families did not agree. Their powerful, organized voices led the state to scrap its original plans to rebuild Ground Zero without a memorial. The families formed multiple organizations, and while some demanded (with support from former mayor Rudolph Giuliani) that the entire site remain open and dedicated as a memorial to 9/11, they all insisted that there had to be a significant memorial. The use of the footprints of the two World Trade Center towers for that purpose eventually became a part of the final plan.

The Ground Zero story may illustrate the powerful role of real estate interests to retain prime office space. But it also demonstrates how that role can be limited when people organize and find powerful patrons in government.

In the case of the African Burial Ground, African American groups faced initial resistance from the federal government. It took a good deal of active organizing by the groups to push for development of the memorial, and the process dragged on for 16 years. Most amazing, however, is the fairly limited size of the memorial footprint. The federal government never seriously considered canceling its office tower project for a more prominent memorial. Construction of the federal building was hardly delayed, and it now casts a long shadow over the moving “Ancestral Libation Chamber.” Despite the National Park Service’s quality programming for the site, it is easy to lose sight of this treasure among the shadows of downtown towers.

 

This seems to be part of a larger pattern. This city, which has always had a sizeable African American population, has a disproportionately small number of historic landmarks in African American communities. In part this is a result of the traditional emphasis in preservation circles on noble buildings by star architects (of European descent) and the resistance by traditional preservationists to preserving places as memorials to important historical events and cultural practices. (A good antidote to this thinking is Place Matters.) Beyond that, though, it appears that every memorial site in the Big Apple needs vocal advocates to balance the powerful pull of the real estate industry.

• • • • •

Land Use readers may be interested in the recently released community plan for the Vanderbilt Yards, an alternative to Forest City Ratner’s stalled megaproject. Go to www.unityplan.orgfor information and press reports.

Tom Angotti is Professor of Urban Affairs and Planning at Hunter College, City University of NY, editor of Progressive Planning Magazine, and a member of the Task Force on Community-based Planning. 

 

Along the Shore, A Turning Point


Nearly 400 years ago Henry Hudson sailed into New York Harbor. In the centuries that followed, the harbor and waterways of New York and New Jersey were the front door through which settlers and millions thereafter came and created our metropolitan area. Over time, however, the waterfront became our back door. Filled with commerce and industry, the water's edge was where we relegated our most noxious and undesirable land uses. Now, however, with changes in industry and a rediscovery of the commercial and recreational potential of our waterfront, the New York and New Jersey Harbor has become our front door one again.

There are over 700 miles of waterfront in the harbor estuary. Much of that waterfront is now "in play" and over the next generation will be transformed. This is a matter of land use, development and planning for the City of New York and for the towns and cities on the Jersey side. But more than that it is also a matter of equity for the 20 million citizens who live on the series of islands and peninsulas that comprise the New York metropolitan region. As reflected in the $1,200 per square foot waterfront condos and in the hundreds of millions of dollars that the city and state governments on both sides of the Hudson are investing in new parks, our waterfront has become a very valuable and precious resource.

Development decisions made today will affect how generations of New Yorkers and New Jersey residents relate and enjoy the water around them. We are living at a time when we will decide whether we to exchange highways, abandoned factories and fences for a sterile wall of condominiums that will effectively once again lock our waterfront away from the people or whether we will create an accessible waterfront.

A luxury condominium, 15 feet of walkway, a wrought iron fence and a bulkhead do not make for an inviting waterfront. Instead, a variety of uses and destinations will make a waterfront that New Yorkers will flock to. We can create town docks in waterfront neighborhoods such as those found on the North Shore of Long Island. We can build museums, theaters and restaurants like those that have revitalized the south side of the Thames in London. We can enjoy and connect our harbor and riverside parks as they have done in San Francisco with Golden Gate Park and the Presidio.

The creative and entrepreneurial spirit that is so central to the character of New York and New Jersey should be reflected on our waterfront. Our waterfront can be as diverse and the vital as the neighborhoods that borders it. The sterile "Esplanadia" that has been built on too much of our waterfront is the least we can do. The best way we can commemorate Hudson's arrival to these shores 400 years ago is to creatively imagine and implement much more.

The Waterfront Alliance has convened thinkers, practitioners and activists working in and around the waterfront to come up with an action agenda for change for our harbor and waterways. In the coming months Gotham Gazette will feature a series of articles from the alliance that will outline critical waterfront issues. Topics discussed will include creating swimmable and fishable waters, harbor education, waterfront recreation, water mass transit, strengthening the waterfront labor force and AquaTecture, waterfront and water design.

Stay tuned to Gotham Gazette in the months ahead for more in this series.

Roland Lewis is president and CEO of the Metropolitan Waterfront Alliance. Carter Craft, an urban planner, is program director of the Metropolitan Waterfront Alliance. 

Taking Stock of New York’s Housing


Every year, the Furman Center at NYU peruses 1,800 types of data from more than a dozen different sources to compile its report on the State of New York City Housing and Neighborhoods, filled with fascinating data about where we live and how we live in New York.

In the recently released report for 2006, the center focused on homeownership and found that only a third of all New Yorkers own their homes, compared with two thirds of all Americans.

The report also found an increase in the production of new housing—but not enough. The new homes, it said, still “fall short of what is necessary to keep up with the population growth of the 1990s.”

The Furman Center, like other researchers, also saw signs of the foreclosure crisis. While some parts of the city have escaped the rise in the number of foreclosures, its report found high rates of foreclosures in some areas.

Perhaps most ominously, the report saw a dramatic increase in sub-prime lending with these loans — made to people with problematic credit records and often charging very high interest -– accounting for more than a fifth of all mortgages issued in the city in 2005. Because of their often onerous terms, the report noted, these mortgages are far more vulnerable to foreclosure.”

Last week, two of the report’s authors sat down for an online chat, answering questions from Gotham Gazette staff and readers. Vicki Been is the director of the Furman Center and professor at the NYU School of Law. Ingrid Gould Ellen, co-director of the Furman Center, is an associate professor at NYU's Robert F. Wagner Graduate School of Public Service.

Gotham Gazette: To start, maybe you could briefly describe a few of the key trends you found in this year’s report.

Ingrid Gould Ellen: One: Dramatic declines in affordability of housing, both among owner-occupied and rental stock, due to combination of rising prices and rents on the one hand, and stagnant incomes on the other.

Two: The jump in the rate of sub-prime lending – from 6.5 percent in 2002 to 22.9 percent in 2005.

Three: The sharp racial and ethnic disparities in homeownership rates in New York City. We found the low homeownership rates among Hispanic New Yorkers the most striking. Only 16 percent of Hispanic New Yorkers owned their homes in 2005, as compared to 43.8 percent of non-Hispanic white New Yorkers.

Gotham Gazette: Your report describes a housing squeeze both for renters and for people buying their own homes. But there also is a lot of new construction. Can you describe what type of construction is taking place and what effects it is having on peoples’ ability to find and afford a place to live.

Vicki Been: Residential construction activity has risen dramatically in recent years. In 2005, new building permits were issued for 31,599 units. That is more than four times as many units as the average of 7,020 that were authorized by permits each year during the 1990s.

But even that level of construction has not been sufficient to erase the gap created by low levels of construction in the 1990s, and by the swelling population and demand for housing.

Ken Dircks: Do the goals of the city Department of Housing Preservation and Development’s Marketplace Plan align with the needs/trends you found?

Vicki Been: Mayor Michael Bloomberg’s ambitious affordable housing plan targets more than two thirds of the rental units to households earning $50,240 or less. It is certainly appropriate to target the lowest income groups, but also necessary to try to help keep New York City affordable for middle class families.

Dave Hanzel: With rising construction costs, lack of land suitable for building, and a flat capital budget, how will the mayor meet the production targets he set forth in the New Housing Marketplace plan?

Vicki Been: The mayor is going to have to "create" buildable land through rezonings, innovative programs to identify underused development capacity and pressure on government agencies to be more efficient in their own use of land. He'll also have to push the envelope in terms of creative financing options. It's a huge challenge to be sure, but we certainly hope the mayor will rise to the task!

Gotham Gazette: There has been a lot of talk about improvement in the Bronx. But the statistics still show that Bronx neighborhoods have the highest levels of poverty, unemployment and asthma, for example, and the lowest educational levels. What, if any, signs of progress do you see?

Vicki Been: The Bronx saw considerable improvements in at least the following areas:

Certificates of occupancy moved from 1,220 in 2002 to 1,755 in 2004 and 1,434 in 2005, and new building permits increased from 2,626 in 2002 to 4,937 in 2005.

The percent of students performing at grade level in reading increased from 28 percent to 39.6 percent between 2002 and 2005

The percent of students performing at grade level in math increased from 24 percent to 41.5 percent during that time.

Felony crime dropped from 32.8 per 1,000 residents in 2002 to 29.4 per 1,000 residents in 2005

Elevated lead blood levels fell from 11.6 per 1000 children tested to 8.3 during those three years.

Lauren Harrison: Luxury condos seem to be everywhere in Central Harlem. How does this affect the rates of rent in the areas? Do renters have a valid fear of being pushed out by $1.5 million 2 bedrooms?

Ingrid Gould Ellen: While dramatic changes are clearly taking place in Central Harlem, they seem to be mostly affecting the market for owner-occupied units. Rents still remain relatively low (the median monthly rent in 2005 was $600, one of the lowest in the city), and 70 percent of all the rental units in the neighborhood are rent-regulated.

Sara Stuart: Downtown Brooklyn is changing very rapidly as luxury apartments are being built opposite the jail and construction is rampant. How does this compare to other neighborhoods and other periods of time?

Ingrid Gould Ellen: There were more units authorized by new residential building permits in Brooklyn than in any other borough in 2005 and nearly double the number authorized in 2002. So there has been a dramatic increase in construction in the borough as a whole. In terms of downtown Brooklyn in particular, we didn't see that much construction activity being completed in 2005, but we expect we will see more in our data this year.

Gotham Gazette: Perhaps this is a question for would be real-estate speculators. Looking at the neighborhoods where housing prices have appreciated the most since 1994, do they share any characteristics? And does that provide any clue as to where the next ”hot” neighborhoods will be?

Ingrid Gould Ellen: This is a question we are interested in and currently researching. We're examining what characteristics of neighborhoods tend to be correlated with subsequent change, and we're most interested in learning how various public and private investments can shape a neighborhood's trajectory.

Carlos: Given the current less-than-favorable fiscal condition of the New York City Housing Authority and considering that the authority is an important segment of New York City's affordable housing market, this area of urban policy seems to be a timely opportunity for the scholarly community to inform policy. This might be best pursued by taking stock of comparable public housing strategies that are occurring nationally.

What is the academic/scholarly community doing to explore options for the city to enhance the viability and sustainability of this vital housing resource? What would such options include, such as public-private partnership opportunities, etc.

Ingrid Gould Ellen: Good question. Unfortunately, the academic community has not paid as much attention to the public housing program as one might like. Some researchers are now working to examine how the public housing program as a whole is structured and whether providing additional flexibility to local housing authorities -- including allowing them to refinance existing developments to get an infusion of equity for capital improvements -- would help them manage their housing more effectively.

Others have explored the efficacy of using federal HOPE VI funding to rehabilitate public housing developments and convert them to mixed income developments. One challenge with HOPE VI is ensuring that existing residents are all placed in alternative, affordable housing. Researchers have also found these efforts to be very expensive.

Jane: How will growing numbers of foreclosures among sub-prime mortgage holders affect the market for affordable housing in the city, including supply, demand and government support?

Ingrid Gould Ellen: We're not seeing as many foreclosed homes sitting vacant in New York as elsewhere in the country. There still seems to be substantial demand. It is also possible that the growing foreclosure crisis and the tightening of credit markets will push households to the rental market. But we are doing further research right now on the impact of foreclosures on local neighborhoods.

Harold Shultz: Do you think the sub-prime lending meltdown will have an impact on affordable/rent stabilized multifamily buildings? Will it lead to increased neighborhood deterioration or reduced availability of funding for rehabilitation?

Vicki Been: The sub-prime lending (and broader mortgage) meltdown may impact affordable/stabilized multifamily housing in several ways:

Evidence suggests that mortgage foreclosures have a negative effect on the surrounding properties and lead neighborhoods to decline. It's not clear that New York City will follow the same path as other cities because the evidence so far on the foreclosure effect comes from cities with weak housing market in which foreclosures lead to vacancies. Foreclosures may not result in vacancies here.

A tightening of credit may cause sales prices to drop because fewer buyers will be able to bid for the units. Also, a credit squeeze will reduce the ability of people to maintain their buildings and homes.

Real Estate Investment Trusts, or REITs, were buying up many of these buildings. To the extent that credit becomes tighter, and/or values drop, REITS may be less interested.

Gotham Gazette: At the beginning, your report has these lists of highest and lowest ranked neighborhoods by category. Some of them are fairly predictable. But a few are startling. One is the ranking for felony crime where the highest felony neighborhoods are high-end areas of Manhattan, along with Brooklyn Heights. What explains that?

Ingrid Gould Ellen: I think the high crime rates in some of these affluent neighborhoods are driven by the fact that they include commercial areas. The crime rate is based on the resident population; but clearly these neighborhoods have much larger daytime populations.

For more information:

Gotham Gazette’s Housing Topic

Feeling the Effects of a Housing Bust (September 2007)

The Real Foreclosure Crisis (Sept.10, 2006)

Will the Sub-prime Crisis Reach Manhattan? (Sept.10, 2006)

Housing in New York: Figuring Out the Big (and Little) Picture (Sept. 18, 2006)

 

Stated Meeting: Replacing Street Signs to Taking Recyclables


At its stated meeting on September 25, the City Council cracked down on the lax replacement of missing and damaged street signs as well as the unauthorized removal of curbside recycling.

Stopping the Abundance of Missing Street Signs

The council unanimously approved legislation (Intro 581-A), which requires the Department of Transportation to replace damaged or missing traffic signs within three business days. Currently the Department of Transportation aims to replace signs within nine days.

Signs that must be replaced within three days include stop signs, yield signs and do not enter signs. The legislation also mandates a stricter deadline for one-way signs. Because those signs are often installed on city streets in pairs, the council approved a seven-business day deadline for them.

" We are significantly cutting that back and I think sending an important message to New Yorkers that when you call 311 we take your call seriously," said City Council Speaker Christine Quinn. "When you say there is missing sign in your neighborhood we're going to respond to it as quickly as we possibly can to make sure we keep traffic as safe as we can in all five boroughs."

According to city estimates, 39 percent of all signs take longer than three business days to replace.

Introduced by Councilmember Joseph Addabbo, the legislation also requires the Department of Transportation to monitor and record when they receive a complaint and when the actual replacement is made. The record will allow the City Council to monitor the department's compliance with the legislation.

Protecting the City's Recyclables

To address a growing black market for the city's recyclables, the council unanimously approved legislation (Intro 582-A) that drastically increases fines for the unauthorized removal of curbside materials.

Introduced by Councilmember Michael McMahon, the bill boosts the Department of Sanitation's current maximum $25 fine to $2,000 for a first offense and $5,000 for a second offense. The fines would only apply to those who remove recyclable materials using a motor vehicle and thus not apply to the sporadic garbage pillager. If found in violation of the legislation, the vehicle used to take the recyclables would also be impounded.

Trash, whether recyclable or not, may not seem like a lucrative commodity. But according to McMahon, trucks not authorized by the Department of Transportation have been reaping the financial benefits of the city's recycling. According to city estimates, Manhattan alone has lost a minimum of 15,000 tons of paper worth $150,000 annually.

" Five years ago the administration was saying we should end recycling," said McMahon prior to the council vote. Now, he added, "There is gold in our containers."

Decaling Commuter Vans

In order to identify commuter vans, the council unanimously approved legislation (Intro 430-A) that requires the Taxi and Limousine Commission to issue them special decals.

Commuter vans carry at least nine passengers, but no more than 20 within a certain area. The service is prearranged, and the vans are not authorized to accept passengers who hail them from the street.

Introduced by Councilmember John Liu, the bill is intended to help both law enforcement and commuters who utilize the commuter vehicles. In Queens and Brooklyn especially, the use of unauthorized vans have grown.

The decals must be on the front, back and sides of the vehicle.

Rezoning the Upper West Side

The council also unanimously approved a rezoning on the Upper West Side between 97th and 110th streets and Riverside Drive and Central Park West. The rezoning is meant to preserve the character of the neighborhood, and reduce out of scale building that has recently increased.

The rezoning imposes numerous height restrictions, said Land Use Committee Chair Melinda Katz, capping buildings at 10 to 11 stories on the avenues, six to seven stories within mid-blocks and approximately 14 stories along Broadway. The rezoning will also preserve affordable housing and small businesses.  

Making Coney Island Green




Photo by: Herb Bar-David.

The city took a step toward sustaining historic Coney Island this summer when it put a roadblock in front of a $1.5 billion plan by Thor Equities to turn the legendary area into a resort enclave. As New Yorkers warmed up on Coney’s beaches, the administration threw cold water on the proposal to speed up the rides and bring in hotels and time-shares. Thor’s scaled-back plan, which included a glass-enclosed water park, three hotels and 400 time-share units, restaurants, movie theaters and high-tech arcades, was a bit much even for a city administration that likes to think big.

Now the question is whether the city can come up with an alternative that helps to sustain and build up what is left of the storied amusement area. Will they be able to do it without a mega-developer like Thor? And will the city continue to react to the schemes put forth by private developers rather than coming up with ideas of its own?

As incongruous as it might seem, Coney Island, with its honky-tonk image, could become a model of sustainable development. If the city wants that to happen, it could look to some key decisions already made at Coney.

Where’s the Plan?

New York City’s long-range sustainability plan, PlaNYC2030, says little about unique areas like Coney Island, which don’t fit in the category of residential neighborhood or an average business district. However, Coney Island redevelopment could play an important role in meeting the plan’s objectives of insuring that all New Yorkers live within a 10-minute walk of open space, cleaning up the city’s waterways, improving mass transit and air quality and reducing global warning.

If the past is any indication, the way to accomplish these objectives is through carefully thought-out small steps over a long period of time instead of giant commercial adventures and “big ideas.” For example, long before PlaNYC2030, the Metropolitan Transportation Authority renovated the Stillwell Avenue subway station, making it the greenest, most energy-efficient subway station in the city. Completed in 2006, the station has photovoltaic panels that provide solar energy and an open design that maximizes the use of natural sunlight. This example of smart design and public policy has given a small boost to the private amusement area and to many nearby public facilities.

Previously, the city preserved the Cyclone, Coney Island’s famed roller coaster that opened in 1927. It became a city landmark in 1988 and a federal landmark in 1991. This mostly wooden structure remains an icon of the amusement area, marking its identity as distinct from the kind of high-tech, high-priced theme parks epitomized by Six Flags.

The corporate amusement giants also cannot replicate the non-profit, Coney Island USA, a focal point for many unique cultural and civic groups that have helped keep the historic area alive. And in yet another small step, the city government and the Coney Island Development Corporationnow plan to develop Steeplechase Plaza, a public park that would feature a restored B&B Carousel.

So it may be smarter for the city to think smaller and move one step at a time. The popularity of the relatively tiny Nellie Bly Amusement Park, only a couple of miles from Coney Island near Bensonhurst’s waterfront, suggests that many small parks might work better than one big one.

Stadiums On The Island?

In an earlier effort to spark development at Coney Island, the city encouraged the building of Keyspan Park, where the Brooklyn Cyclones minor league baseball team plays. This was a questionable addition to Coney Island’s waterfront when it was built during the Giuliani administration. The minor league field broke the classical Coney Island model that combined amusement park, beach and boardwalk. Stadiums for professional teams and leagues are great for team owners and the health and welfare of the small number of athletes who play in the stadiums, but do little more than encourage the sedentary lifestyle and junk food binging that contribute to the city’s epidemics of obesity and diabetes.

Still, compared to the monster Shea and Yankee Stadiums, Keyspan Park has opened the door to a different kind of professional sports. Much smaller than the baseball behemoths, Keyspan is only a stone’s throw from the boardwalk, beach and the Abe Stark skating rink and within walking distance of the amusement park. With affordable ticket prices and easy access via mass transit, it attracts families with limited recreational options in their neighborhoods and works as part of a daily outing. On the other hand, Shea and Yankee stadiums function as enclosed enclaves, attracting a large fan base that drives to the games, and they funnel people in and out as quickly as possible.

And why not put the arena for the Nets basketball team in Coney Island, as planner Simon Bertrang proposes? Two previous studies recommended Coney Island as a location for a professional arena, and until recently that view was held by Brooklyn’s political establishment. Wouldn’t the 18,000 seat arena that the basketball team’s owner, Forest City Ratner, now proposes to cram in between the Prospect Heights and Fort Greene neighborhoods make more sense nested in Coney Island’s amusement area?

If this were to happen – the Nets could lose $35 million every year the Atlantic Yards projectis delayed -- a Coney Island arena should not go the way of the New York Aquarium, which is isolated from the amusement park. Nor should it be dropped in next to Keyspan Park, thereby creating a big enclave of professional facilities. But if properly designed, the home court for the Nets could be physically integrated with Coney Island’s recreational facilities.

The City’s Role

The heart of Coney’s surviving amusement area, Astroland Amusement Park, closed for the season on September 9. The owner of the land, Thor Equities, may very well decide not to renew Astroland’s lease for next year’s season, although a petition campaign is underway to prevent this from happening.

Lacking the kind of public or private commitment given to the Cyclone and B&B Carousel, no amusement park can survive and keep prices affordable to average New Yorkers. Thor wants public subsidies to support any amusements it puts on the site.

In light of this, it is hard to imagine any steps at Coney Island going forward until the administration takes a more direct role in development. Planes to rezone the area are simply not enough. Zoning leaves the door open for development but can’t make it happen, nor does it guarantee preservation.

For a number of reasons, Coney Island cries out for an active city role. If we look to the year 2030 and beyond, Coney Island will probably be one of the most vulnerable areas to rising sea levels. While Coney’s 60,000 residents may be willing to risk flooding and evacuation, it certainly makes no sense to encourage more permanent housing there. Millions of dollars in public subsidies already go to maintain Coney Island’s beach and protect it from erosion. When will the cost of such efforts exceed the public benefit?

Beyond this, a strong public role is imperative if Coney Island is to remain affordable to New Yorkers, both as a place to live and a place to play. Today the park and recreation areas are a boon for New Yorkers with limited incomes and for Brooklynites. Preserving affordability on what was once known as America’s playground is as important as saving the Cyclone and is consistent with PlaNYC2030’s aim of preserving affordable housing.

See: Coney Island’s Summer of Reckoning and With Pizza, Pinball and Panache, Boardwalk Vendors Face Changes

Tom Angotti is Professor of Urban Affairs and Planning at Hunter College, City University of NY, editor of Progressive Planning Magazine, and a member of the Task Force on Community-based Planning. 

Will the Sub-Prime Crisis Reach Manhattan?


The current crisis in the sub-prime mortgage market has pundits wondering what the effect of the turmoil in the financial markets could be. Will it result in a recession, a crisis in consumer confidence or the failure of a major financial institution? While the future is uncertain, effects will certainly appear within a few months. And one vulnerable spot is likely to be the real estate market, even in previously immune Manhattan.

The immediate problem has been created by homeowners taking out mortgages that were ill-suited for their needs. Many were adjustable with sweet interest rates for the first several years - designed to entice homebuyers with low rates - that adjust higher in the future. A number of the banks creating those mortgages sold them to Wall Street firms that packaged them as bonds and resold them to investors.

Since interest rates fell sharply in the early 2000s, the Federal Reserve has raised them. Investment bankers doing the packaging have reaped enormous rewards from all of the activity. Those rewards have benefited the economy in the major financial centers around the country, especially New York City.

Now, though, more and more homeowners cannot meet their higher monthly payments. Adding to the problem, many of those mortgages were awarded to individuals with less than decent credit. Compounding the misery, lenders doled out incentives not normally available to those with even good credit ratings. The result is what is currently called the sub-prime mortgage crisis – mortgages are going into arrears in record numbers with no end in sight. This has caused a glut of houses waiting to be sold and falling prices. But the problem extends beyond those with sub-prime mortgages.

The major danger in plummeting real estate prices is what economists refer to as "negative equity." A drop in prices means that the current market price of a home is less than the mortgaged amount, suggesting that the homeowner cannot pay off the mortgage even if the home is sold. This situation has occurred rarely, if ever, in the United States, but the current mortgage market crisis suggests that it is beginning now. The situation is ideal for the potential buyer willing to pay higher interest rates than those that prevailed over the last five years. It is, however, a potential disaster for many sellers.

New York’s Real Estate Boom….

The New York property market has remained aloof to troubles in the rest of the country. A limited amount of housing, especially in Manhattan, has kept prices stable while the boom on Wall Street has propelled the market forward in more desirable residential areas. But even a limited supply of housing does not explain the $1.5 million two-bedroom co-op or condo. Wall Street salaries and record bonuses have contributed to the dizzying levels witnessed over the last five years. The spillover has affected all levels of housing in the metropolitan area, most severely in Manhattan.

A similar effect has occurred in London, where the financial services industry has triggered a record boom, sending property values to levels that make Manhattan actually seem sensible. But the run-ups can only be sustained if Wall Street earnings continue to increase at record levels. The current market crisis suggests that the boom is over.

…and Bust?

Wall Street salaries and bonuses are only part of the story behind the giddy housing market. Many brokers and bankers benefit from generous mortgage packages provided by their employers. While those packages differ, they need to continue if the market is to remain robust. Without them, trouble will appear quickly.

And the spillover effect here should not be underestimated. Wall Street traditionally contributes about 20 to 25 percent of New York City’s economic output. (No wonder Mayor Michael Bloomberg worried about the U.S. markets losing business to London and other overseas markets.) Jobs are at stake, and less employment on Wall Street has consequences for the city.

The phenomenon has happened before. After the 1987 stock market rout, the market for one and two bedroom condos and co-ops in Manhattan was hard hit, with prices falling significantly. It took several years before they recovered and began an upward spiral fueled by low mortgage rates. Apartments of that size were frequently bought by younger traders and investment bankers - the first casualties of securities firms feeling the pinch of losses and lower revenues. That market problem also caused many securities firms to trim back their staffs, contributing to the recession that followed.

The problem lasted a few years and was felt across the board in the real estate market. The popular joke circulating at the time was that pigeons were leaving the only deposit on BMWs in Manhattan. Today the problem is a bit more complicated, just like the markets themselves.

So far, the major damage has been in the market for sub-prime mortgages and all of those who make a living from it - from investment bankers to securities lawyers and accountants. The junk bond market has also felt the pain as investors who once bought every new security in sight quickly readjust their risk tolerances. These bonds have been among the most profitable lines of business on Wall Street over the last five years. It is no coincidence that during the same period the amount of mortgage debt outstanding in the U.S. has exploded exponentially as well.

Recent government statistics show that Wall Street and Fairfield, Connecticut, have income levels 10 times the national average. A week or two's salary in those places can easily equal a year’s salary in other parts of the country where people do not work in the financial services industry. That multiple is about to fall due to the current crisis, and the real estate market undoubtedly will feel the pinch. Whether the higher end of the market is affected remains to be seen, because its values are attainable by only relatively few investment bankers, traders and hedge fund managers.

After the 1929 crash, a photo of a Wall Streeter trying to sell a car with a sign requesting $20 has become an enduring memory. Real estate brokers tend to be a bit subtler, but the fire sale prices will soon start appearing in Manhattan as the fall in prices whipsaws on many who helped create the problem in the first place.

Charles Geisst is a professor of finance at Manhattan College and an author of several books about Wall Street, including the New York Times Business Bestseller, "Wall Street: A History."

 

The Real Foreclosure Crisis


The idea that the sub-prime market “walloped Manhattan with a vengeance” this summer, as the New York Post put it, has lead to a kind of hysteria and confusion. To back up the reports of impending doom, the paper cites figures from Realty Trac, an industry group. In issuing such pronouncements, though, the reports conflate some very important, and different, issues and so provide a misleading picture.

First, take the discussion of foreclosures in general. The Post account does not differentiate between foreclosures on sub-prime loans, those made to risky borrowers, versus those on more conventional loans. A difference is strongly suggested, but never specified.

Borough by Borough

To illustrate, foreclosures in Manhattan changed by only a small amount from July 2006 to July 2007. They increased from 225 to 253, a difference of 28. It's true that the foreclosures rose by 12 percent but the number of foreclosures was small to begin with.

A huge amount of apartments have been bought and sold over the past year. Everyone would agree that the housing market has not slowed in Manhattan, and more transactions means more foreclosures. To find out if a growing problem exists, it would be useful to know the number of housing units bought and sold and the average foreclosure rate – the percentage of transactions that lead to a foreclosure – over time.

Staten Island actually recorded a decline in foreclosures of 5.7 percent for the year - dropping from 244 to 230 cases.

The number of foreclosures for Manhattan and Staten Island are nearly equal. However, since more homes are sold in Manhattan than in Staten Island, Staten Island actually has a higher foreclosure rate than Manhattan.

As for Queens: Foreclosures there have increased to 882 from 390. That is a huge change. The borough has seen a robust increase in housing sales, but foreclosures have increased by a far greater percentage.

This could be explained by a greater number of sub-prime borrowers in Queens than in Manhattan. The Queens changes are consistent with the changes in the sub-prime market. The sub-prime mortgage borrower has relatively poor credit, took out a loan of 90 percent or more of the purchase price of the property and has a "riskier" loan. This could be, for example, an 80/10/10, which involves a 10 percent down payment, a mortgage for 80 percent of the price and a 10 percent home equity loan for the rest. It could be an ARM (adjustable rate mortgage) that features lower interest rate payments at the beginning of loan. Some borrowers may find it difficult to make payments as monthly rates rise when the adjustable rate is reset to an annual percentage rate, based on the prime lending rate plus some additional payment.

The Queens case raises some interesting questions:

-- Were there a handful of "predatory" sub-prime lenders in the area, leading to concentration of foreclosures by certain lenders?

-- Are there concentrations of foreclosures by neighborhood?

-- Where will the people affected by the foreclosures go to live? Rental markets are tight, and the sub-prime population, the group most in need of credit, will be the least likely to have access to it.

Big Loans, Big Crunch

Lenders are tightening credit standards across the board. This is why: Typically the mortgage lender or bank has been able to make the loans to Joe Smith on Main Street then sell them to an intermediary. This provides the lender with more money to make more loans and also allows it to transfer the risk, meaning the bank no longer has the loans "on its books.” The intermediary then packages these loans to sell to the secondary market or Wall Street. But if Wall Street isn't buying, then the intermediary isn't buying, and if the intermediary isn't buying, then the loan originator (the bank) has less money to lend and less incentive to loan money to anyone - sub-prime or not.

This is especially true for the jumbo loans, that is, those greater than $417,000. Given current housing costs, people in Manhattan and parts of Queens and Brooklyn typically require such loans. Loans for less than this amount are secured by the government-sponsored entities, Fannie Mae and Freddie Mac. So, when the banks make loans of up to $417,000 they can sell them to Fannie Mae/Freddie Mac. In return, the bank receives money to make more loans. Meanwhile, Fannie Mae and Freddie Mac issue securities backed by this pool of loans and sell them to Wall Street.

Jumbo loans offer no such guarantee. The intermediaries purchasing these larger loans from the original lender are insurance companies, private equity firms, hedge funds and other banks. The intermediary buys these loans, divides them up according to risk profile (the likelihood that borrowers will pay back the loan) and then issues securities. As sub-prime borrowers default on their payments, Wall Street doesn’t want securities backed by sub-prime loans. And if Wall Street doesn’t want securities backed by sub-prime loans, then the intermediaries cannot sell their loans to Wall Street. If the intermediaries cannot sell their loans to Wall Street, then they cannot buy new loans. And if they cannot buy new loans, then loan originators will not be able to sell their loans to the intermediaries and receive funds to make new ones. Hence, the so-called credit crunch.

So even though it doesn't seem "rational" to decline to grant a loan to a person with a high income and decent credit score, it doesn't matter. The market may be acting "irrationally" but in doing so it is avoiding perceived housing/mortgage risk.

The Outlook

So far New York City has largely avoided the housing slump and will likely be hit later than other parts of the country and less severely. One factor driving the hearty housing market in New York City is the infamous Wall Street bonus. But that bonus is contingent on the performance of the stock market. If the stock market is down for an extended period of time, bonuses will go down. If bonuses are down, especially for a few years in a row, then people will likely sell and there may be less demand for housing. That could lead prices to decrease.

That said Manhattan could still have some level of protection. If sales slow in Manhattan and prices decline, the number of foreign purchasers of property could increase because of the weak dollar. Manhattan is still a "bargain" to those outside the U.S. Using London as an indication, a sizeable number of people from the Middle East and Asia will want property here.

So what’s the bottom line? In terms of a foreclosure crisis, Queens is the real story here. Manhattan is not.

Rebecca Jones is a credit risk analyst based in New York City. 



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