Gotham Gazette

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Development

Opportunity Zones: An Empty OZ


You may have missed it, but tucked discreetly into President George W. Bush's acceptance speech at the Republican Convention was a freshly minted community development proposal to strengthen local distressed economies throughout the country. Upon Bush announcing the creation of "Opportunity Zones" in his September 2nd address, the White House subsequently revealed in a two page press releasethat 40 urban and rural areas would soon be eligible for a range of tax incentives for small businesses and be "moved to the front of the line for certain assistance programs". The stated goals of these zones are "to assist America's transitioning neighborhoods" and extend "economic prosperity‚to every corner of our country".

For New Yorkers, this talk of stimulating economic development in designated urban "zones" might sound familiar. "Enterprise" Zones were originally introduced to the American scene in the late 1970's by former New York State congressmen Jack Kemp and Robert Garcia. Kemp, who was later named head of the U.S Department of Housing and Urban Development (HUD) in the 1980's, tried unsuccessfully to launch Enterprise Zones under the George H.W. Bush administration. But it wasn't until Bill Clinton took office and Harlem Congressman Charlie Rangel championed the cause that the idea of using tax incentives as catalysts for private investment in poor neighborhoods was fully realized - and significantly expanded - in the form of the newly fashioned "Empowerment" Zone (EZ).

Rangel ensured that New York City, specifically Harlem, Inwood, Washington Heights and the South Bronx, would be included in America's first round of EZ funding in 1994. As a result, Upper Manhattan and the South Bronx received $250 million in Federal tax credits and $100 million in Federal funding for commercial development, job creation, social services, health care and cultural development. This investment pool was matched by an additional $200 million in total commitments from New York City and State.

At that time a total of 72 urban areas and 33 rural areas nationwide were named Empowerment Zones or Enterprise Communities (which cover smaller or less-densely populated areas) and received a total of $1.5 billion in performance grants and more than $2.5 billion in tax incentives. The Taxpayer Relief Act of 1997 authorized a second round of EZ designations and in 1999 an additional 15 distressed urban communities and 5 rural areas became eligible for an additional $3.8 billion in federal grants and tax-exempt bonding authority.

High Hopes, Few Details

Given this legacy, the Opportunity Zone (or "OZ", in the spirit of HUD shorthand) seemed to promise a credible federal effort to spur job growth through small business development. More importantly, the commitment to the OZ program seemed to reinforce the "Ownership Society" Bush so frequently invokes.

Although quite light-handed in its own promotion of the OZ program, the Bush Administration has certainly encouraged high expectations. As with any big ticket government program, OZ aspirants will have to run a bureaucratic gauntlet by submitting an application and a plan "which sets concrete, measurable goals for reducing local regulatory and tax barriers to construction, residential development and business creation." Of course, if approved as an OZ, considerable reporting will be required by the organization representing the designated area.

Once selected, an OZ community would presumably become a veritable hothouse of enterprise and social development. According to the White House press statement, an OZ represents a "comprehensive, results-based approach, expanding the focus of assistance beyond economic activity to encompass education, job training, affordable housing, and other activities critical for a vibrant community." A HUD official described Opportunity Zones as a holistic, inter-agency effort which would involve, in addition to HUD, the Department of Labor, the Treasury Department, the Small Business Administration, the Commerce Department, the Department of Education and potentially other federal agencies.

But perhaps the greatest enthusiasm was expressed by the Zone granddaddy himself, Jack Kemp, when he wrote effusively of how he saw the OZ's place in history. When bundled with Bush's proposed Social Security reform and tax reform, Kemp declared, Opportunity Zones represent "perhaps the boldest domestic policy vision since FDR's ‘New Deal' or LBJ's ‘Great Society'." "[B}ut unlike FDR and LBJ", Kemp continued, "Bush's vision is consistent with individual liberty, free markets and entrepreneurial capitalism."

Given the fact that Opportunity Zones were offered up barely 60 days before the election, maybe it's unfair to take such flourishes too seriously. But, for the record, let's just say that if you peek behind the curtain of the great and wonderful OZ, you may find the view less than breath-taking.

First of all, it's hard to find details on the Opportunity Zone, a supposedly historic presidential initiative that has somehow managed to fly far below many a radar screen. An official I spoke to at HUD, the agency that would most likely coordinate the administration of the OZ program, confessed that he hadn't actually heard the phrase Opportunity Zone until it left the President's lips on national TV. All he knew was what was already outlined in the press release.

When I pressed another HUD spokesman for more information – proposed costs, timetable, additional literature, etc. - he affirmed, with no detectable sense of irony, that "the devil is in the details" and suggested I call the White House advisory body, the Domestic Policy Council. My phone calls to the White House did not yield any more information, not even a proposed rough dollar amount of the program, much less a person willing to go on the record about it.

Community Inspiration

Ken Knuckles, the President and CEO of the largest and arguably most successful EZ in the country, the Upper Manhattan Empowerment Zone, was wholly unfamiliar with the OZ until I shared the press release with him. Logic dictates that Knuckles would be an interested party, since one of the two ways a community can qualify to be an Opportunity Zone is by already having designation as an Empowerment Zone, Enterprise Community or Renewal Community (a second tier zone created by the Bush administration).

The other way for an area to qualify as an OZ is by receiving a newly proposed, largely yet undefined, designation as a "community in transition". This is described only as an area that has "suffered from a significant decline in the economic base, including a decline in manufacturing and retail establishments", and is "transitioning to a ‚21st century economy."

"Upper Manhattan was not the inspiration" for Opportunity Zones, Knuckles concluded after reading the OZ release. In fact, as Bush criss-crosses the country on the campaign trail, offering to deliver an OZ to a neighborhood near you, he is unabashedly and explicitly seeking to woo swing state voters still seething over the alleged export of American manufacturing jobs oversees. While conspicuously short on other details, the release goes as far as listing examples of communities that might qualify for Opportunity Zone designation, including election battleground territories like "Cuyahoga County, Ohio" and "Erie County, Pennsylvania".

Community Development Record

Knuckles harbors serious doubts that OZ's could ever prove to be effective in densely populated, non manufacturing-dependent, areas like New York, in large part because tax incentives are offered by Opportunity Zones to the exclusion of any other economic development tool or stimuli . This is a signature feature of the Bush administration; the Empowerment Zones introduced by the Bush Administration in a third round authorization in 2002 were stripped of all federal grants, investment dollars and leveraging opportunities originally provided under the Clinton administration, leaving tax incentives alone to do the job of "empowerment".

Knuckles expressed no interest in relinquishing Upper Manhattan's hard-fought-for EZ status, a consequence, apparently, if Upper Manhattan or any EZ were to, for some reason, seek OZ designation. In his opinion, this would represent a trading down. "Low-interest, patient capital", which is something the first round of Empowerment Zones were set up to provide, is what is needed in Harlem, Knuckles insisted, "over and beyond tax incentives".

Dawn Rivers Baker, who, as Editor-in-Chief of the MicroEnterprise Journal, tracks and comments on federal policy as it relates to the micro- and small business community, dismisses the OZ proposal as an empty campaign gesture. She maintains the Bush administration has consistently tried to dismantle small business support mechanisms that have traditionally been provided by the federal government.

To illustrate her point Baker compiled a laundry list of small business programs the Bush administration has tried to cut or eliminate by budgetary means since January 2001, including the New Markets program for low-income entrepreneurs, the Small Business Development Center program and the Small Business Administrationitself. If not for the intervention of Congress, Baker insists, these programs and others like it would have been gutted. Other critics point to the fact that the Bush Administration has attempted to weaken a wide range of community development programs and safeguards like the Section 8 subsidized housing program, the Community Development Financial Institution program and the Community Reinvestment Act. Bush even cut the Empowerment Zone from his 2004 budget, only to have it restored, again, by Congress.

This is especially unsettling considering that the OZ model seems to be lifted directly from the tax relief section of the EZ playbook. Opportunity Zones do include some added perks, like lower income tax rates for businesses and the ability for businesses to "expense" an additional $100,000 for the purchase of tools and equipment under new tax policies. But, according to Michael Barr, who as a Treasury Department official from 1995 to 2001 helped design and implement Empowerment Zones, all the other OZ features – investment incentives, priority designation when applying for existing Federal programs; incentives to hire new workers; regulatory relief – already exist under the Empowerment Zone program.

"It's quite disappointing", Barr lamented. "What you have here is a lot of hype without substance or content; right now it looks like there's a lot of work for communities to go through [to receive OZ designation], without a whole lot of added benefit."

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Governors Island Plan: Last Chance to Get It Right?


I was tipped off to a major public meeting to chart the future of Governors Island that was being held in the middle of the summer.

Not surprisingly, given the timing, no more than a couple of hundred people wound up hearing preliminary ideas from the team of consultants working on the plan for the island. Still, the discussion was lively and there were lots of great ideas. And a number of speakers echoed the gnawing questions from my inner Brooklyn self about whether the planning process would serve the diverse populations of this city of eight million people.

Can The City Plan an Island?

This could be the city's last chance to get planning right for a major chunk of city land accessible to the entire metropolitan region. When the five boroughs were consolidated in 1898 only a small portion of Manhattan was densely developed. It was an historic opportunity to plan the future metropolis. It didn't happen. Instead the city let developers do pretty much what they wanted. Zoning outside of lower Manhattan was fairly liberal. Developers even took the lead in planning the subway lines, the main determinant of new growth. The result is a concrete and asphalt city with one of the lowest ratios of open space per person in the country. The last island that the city planned, Roosevelt Island, turned out to be another dense cluster that mimicked the overdeveloped East Side of Manhattan, albeit with greater sensitivity to good design. The city also missed the opportunity to plan for Staten Island, which got eaten up by unplanned sprawl after the South Richmond Plan was rejected in the 1970s.

The United States Coast Guard moved out of the 172-acre Governors Island in 1997 and last year it was turned over to the City and State of New York. It soon became clear that it was going to be hard to get the public investment required to turn it into another apartment complex like Roosevelt Island, nor the political support needed to give it to hotel and casino operators. So the federal, state and local governments agreed to deed restrictions that required it be redeveloped for recreation, education and limited commercial activities. At least forty acres must be for parks, at least 20 acres for educational uses, and 30 acres for "public benefit uses." That leaves over one-third of the land above water for other, possibly commercial, uses.

The body in charge of planning is the Governors Island Preservation and Education Corporation(GIPEC), a subsidiary of the Empire State Development Corporation. GIPEC's board is appointed by the Mayor and Governor.

A Model Island?

Governors Island may actually fill in some of the city's missing green space. We can all breathe a little easier knowing that one of the basic principles for planning the island is that it will be virtually car-free. Actually the island can be a giant demonstration project, an environmental oasis in a city with an epidemic of asthma and respiratory diseases and a horrible record of non-compliance with federal clean air regulations. It could have the city's best network of bicycle and pedestrian paths, with stunning views from waterfront promenades. At the planning meeting there seemed to be widespread approval of a car-free island, but some people also wanted to see it become a regional hub for maritime activity, which could conflict with the vision of the island as a bucolic paradise.

A seed planted by the planning consultants was the idea that the island could become a model of environmental and economic sustainability. Concretely, this could mean that it would produce its own energy and food for consumption in restaurants and dining rooms. And waste could be reduced, recycled and composted instead of being exported as it is in the rest of the city. This could be a "zero waste" island.

The consultants didn't go this far, but clearly Governors Island could become a model in many ways for the city's neighborhoods, generating valuable lessons in environmental management and sustainability. Without a permanent residential population, however, it would never match the conditions of most neighborhoods.

Enclave for the Elite?

But at the July meeting, many of the invited guests were troubled by the possibility that Governors Island would become an exclusive enclave. Indeed, this was probably the main question on everyone's mind. "We want to make sure this is not just an elite island," affirmed one speaker. Aside from worrying that those present at the meeting didn't reflect the full diversity of the city's neighborhoods, people were concerned that the "limited" commercial development being talked about -- the consultants mentioned an executive conference center, restaurants, a boutique hotel, a spa -- could chase away island visitors without deep pockets.

Some people worried how accessible the open space would be. Will the island have recreational facilities for everyone or only those who belong to organized teams? Will people with big families have places to romp, picnic and barbecue, or will it be a pristine place only for the genteel class or Manhattan's singles scene? One person cautioned that public access to the island's waterfront wasn't enough. "You can have public access in a private enclave, like Battery Park City," where the waterfront is technically open to the public but is designed in such a way that it's not inviting to the broader public.

Which gets us to Brooklyn. According to Craig Hammerman, the district manager of Community Board 6 in Brooklyn (the man who had tipped me off to the meeting), "Brooklyn seems to have been an afterthought." Through an accident of history, Governors Island wound up under the jurisdiction of Manhattan and belongs to Manhattan's Community Board One. Yet it's actually closer to Brooklyn than Manhattan. His community board asked the mayor to take a look at the community board boundaries, but to no avail. "The planning process appears to have been already determined," says Hammerman. Indeed, boutique hotels, pristine promenades and nature preserves may remake Governors Island in the image of Battery Park and leave no room for the people of Red Hook and Sunset Park. The next planning meeting will be scheduled for this fall. It should be in Brooklyn, there should be more outreach to neighborhoods, and it shouldn't be held when few New Yorkers are around.

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Helping Pay The Rent: Section 8 Saved; Emergency Rent Coalition Created


With the lack of affordable housing a seemingly permanent crisis (See "Affordable Housing 2004"), paying the rent seems to be getting more difficult for more and more people. Of some 370,000 cases filed in Housing Court in 2003, roughly 90 percent were against tenants for non-payment of the rent. Last month, an annual survey completed by the United States Census Bureau revealed what few doubt: More people are spending more of their income on rent. The percentage of New Yorkers spending more than 35 percent of their income on rent rose, the survey found, from 38 percent to 42.5 percent.

There are two main avenues of help for those unable to pay their rent: ongoing help from government sources and emergency help from government sources and private sources, like charities and religious institutions. The Section 8 government subsidy for the chronically poor is the most important source of help people can get paying the rent that continues based on their need. A coalition of charitable agencies that helps individuals in an emergency situation is increasingly becoming an important source of assistance, filling in, more or less, for the government. There have been recent developments in both.

SECTION 8 SAVED

The city's main weapon to fight homelessness and make housing affordable - the federal rent subsidy known as Section 8 - was saved at the end of August when the U.S. Department of Housing and Urban Development restored about $55 million in the program's funding for New York City, in response to an appeal by the New York City Housing Authority. Originally, HUD had proposed cutting $125 million.

But Section 8, whose share of HUD's budget has increased by 27 percent over the last three years, will still face significant cuts next year, advocates fear, particularly if President George W. Bush is reelected.

A housing authority spokesperson said if the agency faces a shortfall due to cuts, it will not cut the subsidy payments it makes to landlords nor ask tenants to pay more but instead look for savings in administration of the program.

Section 8 subsidies help pay the rent on apartments for 220,000 people in New York City. Any new vouchers are reserved for those facing serious housing emergencies: homeless families, victims of domestic violence, children in the care of the Administration of Child Services and intimidated witnesses to crimes.

Hundreds of thousands more people not in these categories technically qualify to receive Section 8 but are unlikely to get it - the waiting list has been closed for almost a decade. The assistance comes in two forms: 1. vouchers allow individuals to pay just 30 percent of their income to a private landlord, the landlord being paid the difference by the subsidy program. 2. Individuals can also reside in Section 8 housing projects.

As I have written before ("Section 8 and the Single Landlord") many of the nearly 30,000 private landlords who participate in Section 8 in the city are opting out of the program because, they say, it imposes too many rules and does not pay the rent in a timely fashion.

EMERGENCY RENT COALITION

Later this month, a new non-profit organization, the Emergency Rent Coalition, will elect its first board of directors. It is a group of about 20 agencies that separately offer a critical service to New Yorkers on a daily basis - rent arrears assistance. But by all accounts they never come close to meeting the need.

"We just felt there was such a need to come together to talk about some of the issues and concerns and try to create a system that worked," recalled Judy Milone, a co-founder of the coalition and assistant director of client services at the Federation of Protestant Welfare Agencies. "The need is so great."

The Emergency Rent Coalition started about four years ago with little more than a dozen people from various agencies trying to establish order in providing rental arrears assistance, a subcategory of the chaotic world of financial help available in New York City. It includes major charities like Catholic Charities and the Metropolitan Council on Jewish Poverty and smaller outfits like Lenox Hill Neighborhood House.

No one can say exactly how much money goes to help people pay their rent or how many people actually get help. But advocates conservatively estimate that tens of thousands of New Yorkers get help that adds up to tens of millions of dollars every year.

The assistance can come from a variety of sources, public and private. The city uses federal, state and city money to provide assistance through grants and loans to people facing a housing emergency. Charities, religious institutions and community-based organizations of all stripes use federal and private money to provide similar emergency assistance.

The private agencies often cooperate to help a person who owes rent by each chipping in one month's rent when the need is great. The coalition formed because few agencies do it in quite the same way. More confusing for the person seeking help is that, until about three years ago, he or she had to call each agency separately. The coalition's efforts are hoping to change that, but that change will not come quickly, Milone said.

"Clients are still given lists by all sorts of places that are very outdated, with tons of agencies and wrong phone numbers and wrong workers' names," she said. "And they're told to go find a few thousand dollars and that's just ridiculously hard."

Centralizing the list of agencies with money available was one of the group's first goals. The United Way of New York City funds the hotline for rental arrears assistance today at the agency I work for, the City-Wide Task Force on Housing Court. With just one number to call, the thinking goes, people in crisis can avoid even greater frustration that comes from hearing 'No' many times over.

Rent arrears assistance from charities has become an even more critical service because the city and state have cut their programs significantly, advocates said. It is no secret among the workers at charities that welfare caseworkers actively discourage people from applying for "one-shot deals" - grants and loans that are earmarked to help people pay back rent. Even when they are not discouraged, though, the process is rarely simple or easy.

"The best way I can describe it is that the one-shot deal is very inconsistently applied," Milone said. "Many of our clients tell us that they have been turned away on grounds that don't really sound legal and before a full assessment has been done."

Members of the Emergency Rent Coalition save thousands of people from eviction with timely financial assistance, but the need is enormous.

As opposed to ongoing rental assistance through Section 8 or shelter subsidies paid by state and federal welfare programs, public and private agencies offer emergency assistance on a one-time basis when a person meets certain criteria.

First, the person's need for the assistance should stem from a legitimate emergency, like a medical illness, a death in the family, loss of employment or a reduction in work hours. Second, the person needs to demonstrate that he or she can pay the future rent - that the arrears accrued due to the emergency but that ongoing assistance is not necessary. Finally, the person should not have a chronic issue paying the rent - if they are repeatedly seeking assistance, they will have a tougher time getting it.

These criteria are not etched in stone, but thanks to the coalition's meetings they are more and more becoming the norm at the many agencies administering assistance.

At the city's welfare offices, known also as "job centers," case workers for the Human Resources Administration offer emergency assistance as grants and loans called "one-shot deals." These are targeted to households on social security and families facing eviction and the working poor. For people receiving public assistance, separate grants are available to cover arrears.

When people are denied one-shot deals, they are often told to call the charities for assistance. And the coalition's efforts are aimed at making that easier for tenants facing a court case for non-payment of rent.

"I think we've really made the field more accessible," Milone said. "But I think we have a long way to go. I would not want to be a client. These people must be dizzy."

Joe Lamport is the assistant director of the City-Wide Task Force on Housing Court, a coalition of commp://y housing organizations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Anti-Tenant Suits By The Housing Authority


An attorney at the Legal Aid Society was aghast recently when the New York City Housing Authority filed a case against a woman to evict her because she did not have window guards installed in her apartment. The guards prevent small children from falling out of windows. The attorney was aghast because the guards had been installed almost a year earlier.

Still, even when housing authority attorneys were shown pictures proving that the window guards were in place, they still pressed for the tenant to accept probation as punishment.

"I don't get it," said Judith Goldiner of the Legal Aid Society, the attorney who had helped the woman. "They are bringing really frivolous cases."

More than 550,000 people live in public housing in New York City, making the housing authority the city's largest landlord. In 2003, the most recent year's statistics available, the housing authority filed 116,761 cases against tenants, according to the deputy chief clerk of the Civil Court. The agency has about 100 attorneys in its legal department, although not all of them are engaged in landlord-tenant issues.

At the same time that it is the city's largest, many advocates believe the housing authority is also the city's worst landlord.

The housing authority's "mandate to assist poor people and do all that they can to help them with their housing are very low on their list of priorities," said Sandy Russo of Legal Services for New York. "They don't do any of it. It's gotten a lot worse. They are much more aggressive in getting people out."

"Their policies and practices run from cruel to benign neglect and don't take into consideration the needs of their population," she said.

In an email discussion group recently, attorneys who practice in Housing Court have been sharing similar stories of the housing authority's penchant for filing cases that seem to stand reason on its head. The cases range from the absurd to the hostile to the unethical.

Cases the housing authority files seem aimed at harassing tenants more than anything else. Yet, because people's homes are being put at risk, any case filed is very serious..

In one, for example, an argument between two former friends that involved little more than raised voices in the hallway led to a proceeding to terminate a tenancy. In another, a tenant's failure to pay for delivered Chinese food led to a proceeding.

In some cases, the allegations the housing authority bases its cases on are demonstrably false and should never have led to a case in the first place, attorneys said. David Bryan, director of the Comprehensive Rights Unit at Brooklyn Legal Services Corporation "A," said the housing authority's attorneys are not fulfilling their professional obligation to review and verify the grounds for cases before actually filing them.

A special part in each of the city's housing courts handles housing authority cases and on any given day, Bryan said, dozens of the cases the agency brings are quietly discontinued when the authority's attorneys discover that the allegations being made are false.

"As attorneys, (professional rules) require that an attorney do a reasonable investigation before actually bringing a case," he said. "My contention is that the housing authority does not do that."

Attorneys said they were unsure why the housing authority files cases they consider frivolous. Some suggested the agency has a quota, but a spokesperson for the housing authority flatly denied that.

The main reason for the frivolous cases is contempt for the poor, Bryan said, a view echoed by advocates who assist public housing tenants.

"It's just a job to them," said Maria Muentes, a housing advocate at University Settlement Society of New York. "They think they're cleaning up (housing authority complexes)?€?. Even as they are trying to evict some senior, disabled woman, they think they're doing a good thing."

Howard Marder, a spokesperson for the housing authority, defended the agency's legal department against the allegations. He said he would not comment on specific cases and that attorneys in the agency's legal department were unavailable to discuss its work.

"Everyone is afforded the full protection of the law," Marder said. "There is a long process to give residents as much of an advantage and due process as possible. Way before they get to court, they are asked if they need an attorney, informed of their rights and given a list of attorneys."

As for complaints about attorneys, Marder said advocates or attorneys should file formal complaints, which "we would investigate fully." He said he was unsure how many such complaints have been filed against the agency's attorneys and that administrators' reviews of the legal department's performance were not available.

"They resist anything reasonable at all," said Bryan from Brooklyn Legal Services. "They bluff and scare the tenants. They'll tell the tenants, 'I'll give you six months to move.' The scope of what goes on is outlandish."

Joe Lamport is the assistant director of the City-Wide Task Force on Housing Court, a coalition of community housing organizations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bush Housing Policies Lack


We hear the words "family values" a lot from politicians, particularly during election season. Conservatives often use this term to define a nuclear family consisting of a mother, father and kids, living in a home suitable for raising children. The truth is that a growing number of working families, including many that fit this model, need help from the government to pay for decent, affordable housing. But the Bush administration is not holding up its end of the bargain to promote its definition of "family values," and low-income families are paying the price.

A change recently made by the administration -- if not addressed -- will force New York City to face a shortfall of at least $55.5 million in federal housing subsidies this year. But beyond the numbers, there is a human face to the administration's catastrophic decision -- the low-income families who need and depend on Section 8 Housing vouchers to help them pay for their homes. This program is supposed to help low-income families find and pay for housing. The family pays no more than 30 percent of its income for rent, and the government makes up the difference between that amount and what the landlord charges.

In April, the Department of Housing and Urban Development issued a notice that it would alter the Section 8 Housing voucher funding formula by basing it on August 2003 housing costs instead of relying on the actual current costs of housing. Failing to fund the vouchers to keep up with current costs is disastrous for cities like New York, where housing and utility prices have increased and tenant incomes have not kept up with inflation.

Unless the administration's decision is reversed, it will create a dramatic funding shortfall that will force the New York City Housing Authority to either increase the percentage of their incomes that families must spend on rent or to reduce the number of families assisted by Section 8 vouchers. Either choice could force some families out of their homes. Since the government already does not provide vouchers to all the families that need them, the administration's change will only make an already difficult situation worse.

This change in policy is being implemented despite the success of the Section 8 Housing voucher program, which was created to ensure that a continuous supply of affordable housing would be available to low-income families. Only 15 percent of people receiving Section 8 vouchers live in high poverty areas, as compared to approximately 54 percent of public housing residents. Indeed, Section 8 vouchers have effectively addressed one of the most serious shortcomings of traditional, project-based housing -- the concentration of low-income housing in poor neighborhoods.

Despite the fact that the Section 8 Housing voucher program has a proven track record of helping low-income families, federal funding of the vouchers has been in sharp decline. In fiscal year 2001, 79,000 new vouchers were funded. In fiscal year 2002, the number dropped to 18,000, and Fiscal Year 2003 no new vouchers at all were funded.

New York City voucher recipients have been the primary victims of this rampant disregard of the voucher program. When the Bush administration changed the Section 8 voucher funding formula, more than 130,000 families were on the city housing authority's Section 8 waiting list -- an eight-year wait. Of these families, more than 24,000 are 62 years of age or older.

Tired of seeing families who rely on these vouchers suffer, I successfully added $150 million last year to the Section 8 program for fiscal year 2004, which translates into approximately 22,000 new vouchers based on current costs. My legislation to increase the number of housing vouchers was approved by a majority of Congress, and it seemed that efforts to derail the program were temporarily defeated. Yet the Bush administration forged ahead with its decision to change the funding formula.

To urge the administration to reverse its harmful change in Section 8 funding, I wrote to Housing and Urban Development Secretary Alphonso Jackson. In my letter, I reminded him that it is HUD's responsibility to honor the commitment made to the people who receive Section 8 vouchers and who rely on them in order to remain in their homes. It is imperative that we preserve the stability of families in the Section 8 program and safeguard the integrity of the governmental promise made to them.

The Bush administration continues to implement policies that hurt working families. By failing to fund fully the Section 8 housing voucher program, low-income families may be forced out of their homes. It is time for the president and the Republicans in Congress to realize that family values go well beyond Republican ideals of church and marriage, and that creating policies that harm low-income families is mean-spirited. Low-income housing options are essential for families that want and deserve to provide a safe environment for their children to live and grow.

Jerrold Nadler, a Democrat, is the U.S. representative from Eighth Congressional District in Manhattan and Brooklyn.

 

Urban Issues: Housing


 

URBAN ISSUES - HOUSING

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George W. Bush

In 2003, Bush signed the American Dream Down Payment Act that will help 40,000 families a year with down payments and closing costs on new homes. In addition to helping low-income families with funding, the program puts pressure on mortgage companies and the real estate industry to provide opportunities for minorities to purchase affordable housing. Bush set a goal to increase the number of minority homeowners by at least 5.5 million by the end of the decade. The White House claims there have been over 1.53 million new minority-housing owners since 2002.
(Learn more)

However, the Bush administration is increasing requirements in order to qualify for federal housing subsidies. Beginning January 2004, a new regulation requires 8 hours of community service for approximately 60,000 people who live in public housing in New York City. If they do not abide by the regulations, they can be evicted. At the same time in recent years, federal subsidies for low-income housing in New York City have decreased. Between 1999 and 2003, the federal subsidy for the housing authority decreased by $58 million, or 6 percent.

John Kerry

Kerry would support measures to create more affordable housing, similar to initiatives he has sponsored in the past. As a member of the Senate, Kerry proposed the National Affordable Housing Trust Fund Act, that would create 1.5 million rental apartments over ten years and support long term affordable housing. He also proposed the Community Development Tax Credit Act that would encourage the construction and rehabilitation of 500,000 homes over ten years for low and middle-income families. Neither of the bills passed.

Kerry opposes Bush’s cuts in programs that support affordable housing, and will work to ensure the survival of those programs. (Learn more)

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Back to Urban Issues Main Page
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GOTHAM GAZETTE’S RELATED ARTICLES


Urban Agenda: Housing
• Federal Housing Policy and New York City
• Public Housing
• Section 8 Housing

 

A Ministry For Affordable Housing


Having done almost no promotion aside from a note in church bulletins, Father Jim O'Shea did not expect a large crowd to attend a session offering to help would-be tenants fill out applications for an affordable housing project in Bushwick. But though only 75 apartments were being built, 1,000 people showed up.

"We were overwhelmingly under-prepared," O'Shea said. "The need is so great."

If people want to see for themselves whether there is a crisis in affordable housing in the city - At last month's Rent Guidelines Board hearings, Marvin Markus, the chair of the board, said there was not - they could start by going to churches, synagogues and mosques around the city.

In nearly every neighborhood now, religious communities are getting involved in advocating for affordable housing. It's not that seminaries or theology departments are turning young men and women into advocates; parishioners and congregants are. Pastors, rabbis and imams simply cannot ignore the issue.

"Housing is essential to preserving someone's human dignity," said Rev. Marc Hallinan, an assistant for Social Ministries for Jesuits in New York. "So it's a part of our mission."

The advocacy efforts of religious institutions have grown naturally out of their efforts to provide services to those affected by the lack of affordable housing - mainly, the homeless.

"A lot of people are ready to move beyond the services," said Mark Greenberg, executive director of the Interfaith Assembly on Homelessness and Housing, a coalition of dozens of houses of worship across the city and housing advocates. "It's not that they don't want to help. They want to do more. They don't have compassion fatigue, they have compassion frustration," he said. "People are still compassionate, but their compassionate acts are not changing policy."

So, their acts are changing. In addition to offering shelter beds and food, religious leaders are helping their congregants organize meetings to discuss affordable housing among themselves and with political leaders and city officials. In O'Shea's Williamsburg parish, Churches United for Fair Housing, now just eight months old, has already had an impact, he said.

The group is pushing for all housing developments that benefit from tax breaks or other government incentives to have at least 40 percent of the apartments set aside as affordable housing. Inclusionary zoning, which allows for higher density developments that create affordable housing, is also on the group's agenda. One notable victory: A community board turned down a zoning variance because affordable housing was not included in the plan.

"I think the religious community is more ready now than it has been in a long time" to act on affordable housing and homelessness, Greenberg said. "The religious leadership is ready to move on this."

In contacts with political leaders, religious leaders are asking that the city take the issue more seriously, Greenberg said, mainly by putting money into resolving the crisis. They are advocating a holistic approach, seeking action to increase the minimum wage, adopt inclusionary zoning and encourage the use of food stamps, millions of dollars of which go unused because the city does not raise awareness of their availability, Greenberg said.

"If a faith-based institution believes in a particular issue they are not only prepared to commit their financial resources but their voting resources, too," said Don Matthew, general manager and chief executive of Brooklyn Ecumenical Cooperative (BEC) New Communities. "That's a force you cannot deny."

Religious leaders have "considerable influence at City Hall," Matthew said. "They pastor to a flock, to people that vote. And they have influence on these people. If pastors are doing what they're supposed to be doing - pointing out where government is falling short - that will have an effect."

The religious institutions' involvement in affordable housing is crucial, said Brooklyn Councilmember Diana Reyna, who has worked with Churches United for Fair Housing. "It gives (the issue) weight and leverage, it gives it a face. It gives the people an opportunity to come to the table."

Religious institutions have a long history of social advocacy in the city and many of the advocacy organizations across the city actually grew out of their efforts, said John Mulhern, executive director of South Side Community Mission in Williamsburg.

"When we were working in the1960s we were trying to stop buildings from being burned down," he said. "That's a big difference from now... It was a lot easier then."

While the religious groups and housing advocacy organizations may differ in what tactics to use, they are "natural allies," many said, because they share the same vision on addressing affordable housing and homelessness.

"Some of the community based organizations have lost their bases" over the years, he said. "They became agencies. That was the missing piece: the mobilization of the masses."

For the congregants to whom Hallinan ministers on the Upper East Side, the religious-secular collaboration was instrumental. A worker at a local community organization, the Lenox Hill Neighborhood House, served as a catalyst, he said, and congregants of several churches, once they saw the bigger picture, wanted to get involved.

"We're very pleased that the congregations are interested and willing to work on these issues."

Joe Lamport is the assistant director of the City-Wide Task Force on Housing Court, a coalition of community housing organizations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rethinking Environmental Impact Statements


"Shouldn't they have to look at what it's doing to the environment?" That is a frequent question from people concerned about new development proposals in the city, from the Hudson Yards to downtown Brooklyn.

Many people are surprised that the answer is "yes." Prompted by the growing environmental movement, laws on the federal, state and city level were enacted in the 1970s that required developers to conduct an environmental review of major new developments. In the reviews, developers must disclose potential negative environmental impacts and propose measures that address them. Here in New York, any proposed land use changes that come before the City Planning Commission and City Council must first undergo an environmental review, and if they are considered to have a potential negative impact, the developer must prepare a detailed Environmental Impact Statement (EIS).

But most people never see the impact statement, much less understand it. The statement has become a boon for consultants who churn them out according to formulas as if they were SUVs on an assembly line. The environmental impact statement report for major projects like the Hudson Yards Plan is about as understandable to the lay person as a doctoral dissertation on civil engineering. Read on and you'll wonder whether the loss of trees to produce all that paper is worth the environmental benefit of the report. Many people who deal with the environmental impact statement - including community activists, planners and developers - recognize that after three decades it is time to review environmental review.

Fear of Litigation

Contrary to common belief, the environmental impact statement doesn't stop anyone from doing something that damages the environment. It only forces them to publicly declare it. From the start the environmental review process was skillfully designed to get around potential legal challenges by environmentalists who charged that the impact on the environment wasn't considered, and from developers who would undermine environmental laws saying they interfere with their property rights. In any case, the cost of doing an impact statement is minimal for big developers when compared to the litigation costs they could face. Neighborhood and environmental groups rarely have the time, money and expertise to challenge the impact statement, and courts are unwilling to second-guess the technical expertise brought before them when they themselves may not have it.

Once the developer discloses potential negative impacts in the statement, they have to outline ways they (or others, like local government) will "mitigate" those impacts - that is, deal with them in a way that will lessen the environmental damage. These mitigations, however, are voluntary. After the project is approved, it may take close oversight by local government (which is never guaranteed), and sometimes a lawsuit, to insure that the mitigation was carried out.

The mitigations that developers often propose can have a very limited effect. And they can even cause more environmental damage! For example, years ago a massive environmental impact statement was prepared by the city to look at the potential impacts of major new downtown Brooklyn developments. Mitigations included widening streets and moving traffic through downtown. This may have reduced the effect of some pollution-causing bottlenecks, but ultimately it will encourage more traffic, not less. A few minor improvements to mass transit were not enough to offset the environmental damage caused by the relatively small number of commuters who continue to use their cars to get to and through downtown. More effective mitigations might have included putting tolls on the East River bridges, restoring trolley service, widening sidewalks, and installing first class bicycle lanes and bike parking.

Often mitigations protect the owners and tenants of new development projects but have a negative impact on the surrounding neighborhood. For example, the developer of a new building complex may propose a ventilation system and windows that reduce the exposure of tenants to noise and air pollution, but the ventilation system itself can create more noise and pollution in the neighborhood.

Though it must be prepared according to official guidelines, the environmental impact statement is usually paid for by the developer. The city's mayoral agencies that oversee the process are traditionally boosters of development - real estate is perceived, wrongly, as the city's major industry -- and reluctant to make a fuss. In other words, the foxes are watching the chicken coop.

Local Impacts

People in the city's neighborhoods are usually among the first to raise questions about environmental impacts. Their questions are direct: Is a project going to pollute the air or create more noise? Will it affect our health? What will be the long-run effects on future generations?

The environmental impact statement doesn't really help answer these questions. The city's 59 community boards manage the land use review process but don't have the professional staff to thumb through thousands of pages of technical jargon, charts and tables to figure out what they're saying or pick out errors or omissions. The 60 days each board has to review the proposal, hold public hearings, discuss and vote on a project fly by faster than you can get through the first chapter. Community boards can sit in on the initial meeting that lays out the scope of work for the impact statement, but have no real power to set the agenda so that it focuses on their concerns rather than run thousands of numbers through formulas.

The environmental impact statement can't answer the most important questions because its methodology is flawed. It looks at environmental impacts as a series of simple short term cause-effect relations, not as a complex of interrelated factors. It doesn't deal with the cumulative impacts of many similar developments over a long period of time - spanning generations, not years. It looks at the effect of individual pollutants discharged in the environment, and doesn't consider what happens when pollutants interact with one another. It doesn't consider the impact of pollution on public health - i.e., how many more cases of asthma are likely to be generated by the added traffic? It doesn't consider the potential for creating more "sick buildings" that use materials and are managed in ways that produce health hazards for the people that live and work there. It doesn't consider the extent to which the environmental impacts fall disproportionately on one or another group - for example, people with low incomes. It doesn't look at the secondary effects of displacement set in motion by new development. It doesn't address environmental racism, the systematic foisting of environmental hazards on communities of color. It doesn't consider the extent to which the project will create new demands for energy that are unsustainable in the long run. It doesn't look at the effect on the level and quality of public services, which are very much a part of the quality of the urban environment. And it doesn't consider long-term multi-generational, non-local impacts such as global warming.

Yet another problem is that many large-scale projects evade the environmental impact statement entirely because they are "as-of-right" - that is, they require no zoning change or other official land use action. An as-of-right 500-unit apartment building in Manhattan can result in more traffic and noise in a neighborhood that's already overburdened, and there will be no environmental review. Considering that many millions of square feet can be built in the city right now as-of-right, it would be foolish to rely on the environmental impact statement alone.

Overhaul of the environmental review system is long overdue. Even more importantly, city government needs to develop a broad environmental planning framework that looks at long-term multi-generational indicators of environmental quality -- such as Seattle's Agenda 21. Right now, New York City jumps from one project to the next without a clear strategic plan. Every mayor seems to have a development plan made up of their pet projects. But we have never had an environmental mayor with a serious strategy for reducing energy use, waste, and pollution, or solving the city's chronic public health epidemics.

In my experience, community residents and businesses are better able to think about their environment in a holistic way than consultants and agency bureaucrats, whose mandates are narrow and short-term. Community boards and community-based organizations need to have the resources to plan for their futures and propose sustainable development strategies that reduce environmental hazards and make for healthy neighborhoods. The environmental impact statement alone, even a good one, will never do that.

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Fight Over Manhattan's Last Frontier



Proposed Stadium at Hudson Yards

Citizens Union Foundation's
Civic Conversation on
West Side Development,
June 24, 2004:

* Forum opening statements

* Excerpts from question and answer session

The Bloomberg administration’s plan to redevelop the Far West Side of Manhattan by decking over the Hudson rail yards, expanding the Javits convention center and building a new stadium for the Jets, has won a ringing endorsement from an array of celebrities, including Donald Trump and actor Michael Douglas, in a new newspaper ad campaign.

But Sheldon Silver, speaker of the state assembly, earlier this month proposed legislation that would expand the Javits Center but that did not include the plans for the new football stadium.

And, late last month, the Independent Budget Office, issued a report disputing projects by the Jets of many jobs and how much revenue the stadium would produce. Even under an optimistic scenario, the office said, the stadium would create about 3,586 jobs, half the number predicted by the Jets. The Bloomberg administration has relied heavily on the Jets study in advocating the project.

The office agrees with the administration that tax revenue from new convention business generated by the project could cover the city’s share of the costs of the construction. But, it cautioned, “if the convention business projections prove too optimistic, the city could be left with insufficient funds to cover its entire investment.”

Such recent events have fueled what New York Times reporter Joyce Purnick has likened to the rancorous debate over Westway in the 1980s.

Purnick’s comment came at a June 24 discussion of the project, sponsored by Citizens Union Foundation, the publisher of Gotham Gazette, on June 24. To start off the discussion, Deputy Mayor Daniel Doctoroff, an architect of the plan, said that, like Central Park in the 19th century, the project offered New York the opportunity to take bold action that could change the city. In his opening statement, former Metropolitan Transportation Richard Ravitch opposed the project -- taking what he said was his first public stand on a major municipal issue since he left government. (For excerpts from the opening statements by Doctoroff; City Councilmember Christine Quinn; Adam Barsky, deputy secretary to the Governor for Finance & Housing; James Parrott, deputy director and chief economist of the Fiscal Policy Institute; and Ravitch, click here.)

Following the statements, members of the audience questioned the panelists. While most seemed to endorse expansion of the Javits Center, many challenged Doctoroff’s support for the stadium. Panelists debated the process that will determine the fate of the project, as well as financing details and possible alternatives to the plan. (For excerpt from this discussion, click here.)

The discussion was the first in a series of Civic Conversations to be sponsored by Citizens Union Foundation.

Community-Based Cooperatives


Omar Freilla is unusual. A person of color under 30 years old, Friella is attempting to start a worker cooperative in New York at a time when community-based cooperatives have been nostalgically relegated to the dustbin of counter-culture experimentation from years gone by.

Freilla's project, for which he recently received a grant from the Open Society Institute, is called the Green Worker Cooperatives and is dedicated to creating worker owned and environmentally friendly manufacturing businesses in the South Bronx. In a worker cooperative, the employees are the owners and receive an equal share of all profits. With its neighborhood base, Green Worker Cooperatives seeks to create local manufacturing jobs through the reselling of salvaged construction materials. Freilla has recently completed a feasibility study and is working on a business plan while searching for warehouse space.

Community development strategies over the past decade have been largely distinguished by their individual-based approach to fighting poverty. The prominence of programs like the Earned Income Tax Credit (a federal income tax credit for low-income people) and the growing popularity of tools like Individual Development Accounts (programs that help people acquire assets using savings accounts and financial incentives) and school vouchers(programs designed to allow students from poor families to attend schools outside their public school system) reflect a social welfare vision in which low-income people are seen more as isolated, entrepreneurial contenders for the American Dream rather than inter-dependent participants in a community-wide, social improvement effort.

Of course, there is no reason for these visions to remain mutually exclusive. But formal, neighborhood-based, cooperative economic development, which is a powerful way for us as New Yorkers to interrupt our respective rat races and find common ground with our neighbors, is hard to find in New York, even in our day-to-day language. These days, when most of us hear the term "co-op" in New York we have visions of yuppie-owned units of real estate. Rarely do we talk or think of co-op or "cooperative" as a social value or a model for how we seek to live and interact with our neighbors.

Service, Not Profit

Cooperatives are first and foremost businesses that are owned and democratically controlled by either the employees or the customers who use the services of that business, as opposed to outside investors. Cooperatives are created to provide a quality, affordable service or product, rather than reap huge profits. In most cases, surplus revenue is returned to the members in proportion to their use of the cooperative, not proportionate to their "investment" or ownership share, according to the National Cooperative Business Association. All community-based cooperatives are driven by a local need to provide access to certain services or generate certain economic activity, although the location of cooperatives in New York often says as much about the left-leaning agenda of the organizers as it does about the income level of the community.

Other than organizations like Cooperative Home Care Associates, a worker-owned home health care agency that currently employs over 700 Black and Latino people (most of whom are formerly public assistance recipients), there were few models of community-based cooperatives in New York that provided Freilla with inspiration.

New Yorkers are probably most familiar with consumer cooperatives such as community development credit unions which provide low-cost financial services and credit to under-banked New Yorkers. If you are fortunate to live in the right neighborhood, you may have also encountered a food coop, like the Park Slope and Flatbush Avenue Food Co-ops in Brooklyn, or the 4th Avenue Food Co-op in Manhattan. Community Supported Agricultureprojects, which are sprinkled sparingly throughout the city, serve as small, more informal associations in which local people come together to buy mostly organic fruits and vegetables from local farmers.

And yes, there are housing cooperatives that actually live up to their names. Housing Development Fund Corporations - or limited-equity coops - offer low-income tenants the ability to come together and execute control over their living conditions.

Challenges

According to Freilla, the Green Worker Cooperatives is an organic outgrowth of the economic conditions in the South Bronx. "Everybody wants a job where they can receive some dignity and exert more responsibility", says Freilla. Not only will local people be assured a living wage at the Green Worker Cooperatives, but training will be "front loaded" so that the skill based attained at Green Worker Cooperative is transferable.

Just the same, it will be important for Freilla to be aware of the challenges he will undoubtedly encounter. Ironically, the biggest hurdle that urban American Coop organizers face is the one feature that makes coops such effective alternatives. Any cooperative operating in New York has to contend with the fact that the sharing of profits, decision making and corporate responsibility is almost antithetical to the way we are used to shopping, consuming and working.

For example, I sometimes hear complaints from members of the Park Slope Food Coop - the longest running food coop in New York City and the largest wholly member-owned and operated food coop in the country - about the work hours that each member is required to contribute. And yet, the strict enforcement of these voluntary work hours is arguably the single most important reason why the Park Slope Food Coop has thrived since 1973. The collective investment of time is the sweat equity that enables the members to enjoy reduced prices on quality, otherwise high-priced, food items and even enjoy perks like free, while-you-shop, daycare.

Many members, no matter how strong their politics, find participation in cooperative institutions akin to walking up a crowded "down" staircase. When I was chairman of the board of the now defunct Central Brooklyn Federal Credit Union, most of my fellow 5000 members were fiercely proud of this Black-run institution, almost nationalistically so. But despite the cultural force that the credit union represented, members often couldn't resist thinking of it as a glorified bank (it didn't help that we were located in a former bank branch and adopted all the visual trappings of a bank). Consequently members often acted like traditional, non-shareholding, bank customers. They didn't realize that when they didn't pay their credit union loan, for instance, they were actually stiffing their neighbors and depriving themselves of financial dividends in the long run. In cooperatives, perhaps more so than any other kind of business, what goes around, comes around.

Democracy and non-hierarchical, collective decision-making can also prove challenging for many corporate-trained principals of cooperative ventures. Different kinds of cooperatives observe widely divergent forms of membership-led government, but universally speaking, when your mind is trained on providing a service it is tempting to make unilateral decisions and rationalize it as efficient business practice.

Freilla has already had to confront the ways in which cooperatives don't fit neatly into our popular imagination. A worker cooperative is neither an advocacy nor traditional service-oriented not-for-profit and while approaching foundations for grants during his start-up phase Freilla discovered that his project confounds program officers using standard funding guidelines. The fact that the Green Worker Cooperative includes training programs and represents a little-understood industry -- sustainable waste management and resale -- makes it that much more difficult to categorize.

One day in the future, when different political and economic conditions hold sway, maybe neighborhood-based cooperatives will be closer to the rule than the exception. Until that day comes, you might want to consider joining or even starting a coop, even if it's a small, informal venture between you and your friends. It may not only offer a more humane way to shop or work, but perhaps a better way to live.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rent Guidelines Board: Will It Hike The Rents?


 Every year, the Rent Guidelines Boarddecides how much to increase rents on rent stabilized apartments, affecting millions of New Yorkers where it matters most: in their wallets. On June 17, the board will make its final decision, after several highly charged public meetings. Nearly half of the people in the city stand to be directly affected by the ultimate decision.

The board's staff prepares detailed studies of landlords' income and expenses, of the mortgage market, of tenants' incomes and affordability of housing.

The final outcome is a reflection of what numbers the board's members thought were most compelling. The nine members include two who represent tenants, two who represent landlords and five who represent the public at large. The public members constitute the swing votes. They include an investment banker, an attorney, a real estate developer, a consultant to non-profit organizations and an architect.

Political intrigue is common. This year, the Rent Stabilization Association, which represents landlords across the city, submitted to the board estimates of costs that tenant groups say are greatly exaggerated.

"There's no economic justification for a rent increase this year," said Michael McKee, associate director of New York State Tenants and Neighbors. "All the data show that landlords are doing extremely well and tenants are suffering. The data don't lie."

The "net operating income" for landlords - that is, their profit - rose by 18 percent from 1989 to 2002. From 2001 to 2002, however, profits declined slightly -- by 0.1 percent. Tenant advocates like to point out that in that same two-year period people's real wages declined, and that New York City has lost almost 200,000 jobs since 2001. The advocates argue that landlords are making decent profits on rent stabilized buildings, while tenants are being squeezed: Slightly less than a quarter of tenants have "severe rent burdens" -- that is, they're spending half or more of their income on rent.

The landlords sees it differently from the tenants.

"The range of guidelines that are proposed just barely touch on what is needed for property owners to stay afloat," said Jack Freund, executive vice president of the Rent Stabilization Association. "People can afford a reasonable rent increase. If you don't provide what owners need to maintain their buildings, you're going to hurt the people you're trying to protect."

Freund dismissed the reported increase in net operating income as well as talk of an affordable housing crisis. "To the extent that there is an affordability issue in the city, that is a government issue," Freund said.

The board's meetings put landlords and tenants within arm's length in the same room. Even if they were at a cocktail party, that would be provocative. But when the subject is money, it is going to become contentious, as was clear at a recent board meeting, where there were hisses, boos, chants and shouts. The chairman of the board, Marvin Markus, lost his gavel trying to pound the meeting back to order. "Calm down, Mr. Chairman!" someone shouted. He threatened to have some people removed, but did not ask police at the doors to carry out the threat.

The already passionate landlord and tenant relationship - the second most important relationship after marriage, some say - is on view at these meetings.

At its May meeting, board members rejected proposals from tenant members for no increase and from owner members for significant increases. For the first time, they set a range for increases on one- and two-year leases of 3 to 5 percent and 4.5 to 7.5 percent respectively. The vote was 5 to 4.

In a recent interview, the board's chairman, Marvin Markus, an investment banker, said the housing situation in New York City was not bleak. He also dismissed the exaggerated numbers submitted by the Rent Stabilization Association.

"Last year, the increases (passed by the board) were not anywhere near what the numbers show," Markus said, referring to the increases in costs that landlords faced.

"I can tell you if it's left to Markus the final will be as high as possible," McKee said. "We don't call him Marvin Mark-up for nothing."

McKee said tenants need to come out if they want to show Mayor Michael Bloomberg, who appoints all of the board's members, that the board's decision could cause him political problems.

"It's not an economic decision - it's a political decision," McKee said. "And there's one person responsible, and that's Mayor Bloomberg."

Joe Lamport is the assistant director of the City-Wide Task Force on Housing Court, a coalition of community housing organizations.



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