Gotham Gazette

The Place for New York Policy and politics

Topics

Are Higher Rent Increases Justified By Rising Costs


The Rent Guidelines Boardgave preliminary approval for the highest allowable increases for rent-stabilized leases since 1990. If approved in the final vote to be held on June 19, one-year leases will rise 5.5 percent, and two-year leases by 8.5 percent, beginning October 1, 2003.

The board’s justification for the large increases lies heavily in one of the reports they issue annually – the Price Index of Operating Costs(pdf format). That report looks at the costs for a market basket of goods and services needed to operate and maintain rent-stabilized apartments in New York City.

The 2003 price index jumped 16.9 percent, largely due to sharp increases in fuel costs, insurance premiums, utility prices, and taxes. Labor costs, contractor services, administrative costs, parts and supplies and replacement costs showed more modest increases. It was the second highest price index increase in the 35-year history of the report.

Landlord representatives argued that higher prices proved the need for higher than usual rent increases, while tenant advocates discounted the price index entirely.

The 2003 Price Index of Operating Costs

A handful of factors came together over the past year to cause the spike in the price index.

Fuel Costs – Up 66.9 percent

The price of heating oil (chart) began rising last November, just as cold weather set in. Those higher prices and a colder-than-usual winter combined for an unprecedented one-year increase in the cost of heating a typical rent-stabilized apartment.

The cold weather accounted for about 40 percent of the cost increase. The remainder came from the rising price of crude oil, which made itself known at gas stations and beyond, as it neared $40 per barrel.

Insurance Premiums – Up 40.5 percent

It wasn’t just the losses of 9/11 or the fears of more terrorist attacks that boosted insurance premiums for city landlords last year. Wall Street’s poor performance played a big role. Just like hopeful retirees across the country, insurance companies watched their reserves deplete as the stock market dropped and scrambled to refill them with higher premiums.

But 9/11 did cost insurers $ 40.2 billionand made them more reluctant to stay in the New York City market. And owners who increased the insured value of their properties, or added terrorism coverage faced premium increases of almost 50 percent.

Utility Prices – Up 21.7 percent

Natural gas and electricity costs rose by more than 40 percent over the past year. They both correlate to rising crude oil prices. Natural gas can be used as a substitute for heating oil, and high oil prices increased demand and price of natural gas. And both oil and natural gas are common feedstocks in the production of electricity.

While water and sewer costs rose minimally over the past year, the New York City Water Boardrecently passed a price increase of 5.5 percent, effective July 1, 2003.

Taxes – Up 14.8 percent

The strong housing market has meant that assessments of property value have gone up. Furthermore, the city’s 18.5 percent property tax increase was implemented in January. Property owners are now paying more and hoping to pass along the increase to renters.

While these numbers would seem to support the need for higher than usual rent increases, tenant advocates caution that they are not the whole story. First, they say, the price index only looks at changes in prices, not at actual landlord expenditures. Previous Rent Guidelines Board studies have noted a difference, since landlords find ways to economize when prices spike.

Secondly, “It only looks at one side of the profit equation and ignores income,” said Michael McKee, associate director of New York State Tenants & Neighbors, a statewide tenant organization. While the Rent Guidelines Board does consider income and expense studies(pdf format), they use data which is outdated by the time the board makes its annual decisions on rent increases. Landlords should be required to submit real-time income and expense reports for the Rent Guidelines Board to consider in its calculations, tenant advocates say.

“We reject the price index methodology entirely,” said McKee. “It is fundamentally one-sided.” In support of this notion, a bill was recently introduced in the City Council to bar the use of the price index in the determination of rent increases. For this year, however, “we are hoping we can persuade a majority of the [Rent Guidelines] Board to lower the number for the final vote,” said McKee.

Half a percentage point or a percentage point could make a big difference for tenants. Even the relatively modest 2 and 4 percent increases that were adopted last year resulted in a citywide rent increase of $174 million in the first year. “That’s a transfer from a million-plus tenants to 25,000 landlords who include some of the wealthiest people on the planet,” said McKee.

But landlord advocates are also hoping to persuade the board to alter the numbers before the final vote. They would like to see bigger increases than the current proposals.

“It’s totally inadequate, given the extraordinary increases in costs that owners have experienced in the last year,” said Frank Ricci, director of governmental affairs of the Rent Stabilization Association, the city’s largest residential landlord group.

Landlords have greater faith in the accuracy of the Price Index of Operating Costs, although, they point out, the numbers always lag a year behind rent increases. They had asked for rent increases of 9 and 15 percent for one and two-year leases respectively and were disappointed by the lower numbers the Board voted through.

“For a certain segment of property owners, it’s going to be extremely difficult,” said Ricci.

Rebecca Webber is a journalist who has covered housing issues for Gotham Gazette since July 2000.

Fixing Urban Irritants


 

   
Common New York irritations, why they persist and what average citizens can — or cannot — do about them:


Potholes


Bus Bunching


An Intersection in Need of a Stop Sign


Problems with Traffic Lights


Speed Bumps and Humps


Dark Streets

A pothole that rivals the Grand Canyon.

Buses that seem to never come and then arrive in a herd.

The residential street used as a drag strip.

Such irritations may not pose the same threat to the fabric of society as failing schools and homelessness but they cause sleepless nights, fray tempers and add to a general feeling that life in New York is tough, mean and even unsafe.

In March, the city unveiled its 311 hotline to make it easier for New Yorkers to complain about such nuisances. Rather than navigating a maze of phone numbers, a call to a single number — 311 — brings an answer from a real person who can, at the very least, tell the caller how to gripe constructively. Since its launch, an average of 8,385 calls have come in daily to the 24 hour a day hotline where they are fielded by 201 agents who can speak 170 languages.

Mayor Michael Bloomberg advises New Yorkers to take advantage of the hotline. "If you see a pothole, what do you do? 311. It's very easy," he said.

At a time when New York is suffering through what the Daily News has dubbed "the worst pothole crisis in history," many calls are indeed about road conditions.

In general, roads score high on the list of New Yorkers' urban frustrations. In a 2001 survey on how New Yorkers would rank city services, one third said road conditions rated a "poor." And 40 percent said they were bothered by dangerous traffic in the city. Noise also stands out as a persistent irritant.

But despite the mayor's enthusiasm for his hotline, 311 is not a magic bullet that will solve all of this. New Yorkers need dogged determination to get some problems fixed — filling out forms, conducting research and forming alliances. Even persistence, though, does not guarantee success.

City crews may be slow to respond to complaints. Government officials may find, justifiably or not, that the stoplight or traffic light is not needed. Or the solution to the problem may not fall in the city's jurisdiction, being instead the responsibility of Con Edison, say, or the state government. Other problems defy quick or easy fixes. Budget cuts almost guarantee that in some cases the city will be slower to respond — if it responds at all.

Of course, your City Council member and community board will also listen to complaints — and sometimes act upon them. Gotham Gazette's new Community Gazettes provide you with the opportunity to find out what needs to be fixed in your neighborhood — and to voice your own gripes.

Here is a selection of common New York irritations, why they persist and what average citizens can — or cannot — do about them:

• Potholes
• Bus Bunching
• An Intersection in Need of a Stop Sign
• Problems with Traffic Lights
• Speed Bumps and Humps
• Dark Streets




Dark Streets


Dark Streets At a recent party, residents of the Ditmas Park neighborhood in Brooklyn shared their strategies for walking home from the Cortelyou Road subway station after dark. Some simply get off at the next station on the line. Some take circuitous routes, going out of their way to avoid one block of Marlborough Road. And a teenage boy talks to his parents on his cell phone until he gets to another block, hoping to quickly alert them to any problem.

Marlborough Road between Cortelyou and Dorchester is not a hotbed of crime. But it is extremely dark.

The entire tree-lined block has only three street lights, compared to four on the next block. The block became more forbidding last year when a bar on the corner — whose feeble light spilled out a bit on the dim sidewalk — went out of business.

Most urban resident equate light streets with safer streets. Tourist guides and tips on how to live safely in the city advise people to avoid dark streets. Specific crimes, including the rape of the Central Park jogger, have been blamed on a lack of lighting.

Astronomers and sky gazing enthusiasts say that street lights make it difficult to see the night sky. They note that while in theory as many as 2,500 stars could be visible in a typical night sky, a person standing in midtown Manhattan is likely to see no more than 15. And lights can glare into apartments and homes, keeping people awake.

But the barriers to adequate lighting in New York are less likely to be concerns about light pollution than issues of cost, wiring and maintenance.

The Department of Transportation is responsible for installing and maintaining 325,000 New York City street lights. Its electric bill alone for the lights totals $50 million a year, according to department spokesperson Lisi de Bourbon.

The 311 city hot line handles complaints about broken street lights. A person can also file an on-line complaint form. The form lists more than 30 things that can go wrong with a street light from being burnt out to having exposed electric wires, shining in the wrong direction, or missing the door at the lamp post base.

People filing a complaint receive a work order number that enables them to check on the status of the job in the days ahead. The department says that its streetlight maintenance contractors must respond within 10 days of being notified of a problem. That does not mean, though, that the contractors have to repair the problem within that time. Instead, they can, for example, note that the job calls for a major repair — such reconstructions of the lamppost's concrete foundation — or refer the problem to Con Edison.

Complaints do get results. According to a recent article in the Bronx community newspaper the Norwood News students in a local middle school action club noticed that a number of street lights were out in the Williamsbridge Oval. "The lights are important because it keeps bad people out of the park," club member Chris Rambarran told the paper.

And so the club began a telephone campaign to get them fixed. It took eight rounds of calls to the transportation department but, the lights went back on and the club received a letter from the transportation department, lauding the role it played.

Getting a street light installed involves a different procedure. The transportation department web site provides no form for this and an operator at 311 had to look into the issue before advising a caller to send a letter to transportation commissioner Iris Weinshall.

But Terry Rodie, of Community Board 13 in Brooklyn, which includes the Cortelyou Road subway station, says improving lighting can be "an easy thing to take care of." Once the request is made to the transportation department, it brings in equipment to measure the light on the street in question and determine whether it is sufficient. Although Rodie said she was not familiar with the Marlborough Road block, she said foliage on trees can make a block seem darker. And she said light from any commercial establishment on the block is also taking account.

In deciding whether to grant the request, says de Bourbon, the department follows guidelines set out by the Illuminating Engineering Society of North America. "It's really more scientific than you think," she says.

The "real hang up" in improving lighting, says Rodie, is not the city but Con Ed. "They have a backlog with this kind of thing."

(Do you have dark streets or broken street lights in your neighborhood? Tell us about it by going to the Community Gazette for your area.)

-- Gail Robinson


Common New York irritations, why they persist and what average citizens can – or cannot – do about them:

• Potholes
• Bus Bunching
• An Intersection in Need of a Stop Sign
• Problems with Traffic Lights
• Speed Bumps and Humps
• Dark Streets

» Fixing Urban Irritants (Overview)

 




 

Filling In The Potholes


 

Michael Gilpin is an aspiring actor with a day job in Manhattan, a shared apartment in Astoria, and a car with a blown suspension system. In February, while driving home from a friend's house in Brooklyn, the front tire on Gilpin's silver Geo Prism fell into a fissure on the Van Wyck Expressway in Queens — a classic pothole notable primarily for its size, which he estimates at about 18 inches deep.

"I fell off a shelf into an abyss," Gilpin says. "I felt it in my throat. I was in flight." He pulled to the side of the road to investigate. "The tire was flattened. Pieces blown. I had a spare. I had a jack. I had my girlfriend watch for my life."

For city drivers like Gilpin, potholes are a fact of life. He and his friends refer to the pothole-riddled area around the entrance to the Queensboro Bridge as "Saigon."

"It's almost unmanageable," Gilpin said.

A winter such as the one that just ended wreaks havoc with pavement in the city. It spurred the Daily News to declare the current situation the worst pothole crisis in the history of New York, to run an ongoing feature entitled Pothole of the Day, and to feature fissures such as one on 78th Street in Middle Village and on Morrison Avenue and East 174th Street in the Soundview section of the Bronx.

According to Department of Transportation spokesperson Tom Cocola, from February to mid-April, the city repaired approximately 53,000 potholes — 18,640 in February alone. That is a 50 percent increase from 2002. After the Presidents Day snowstorm, the city launched what Mayor Michael Bloomberg called "a pothole blitzkrieg," filling approximately 1,600 potholes a day.

But with so many miles of streets and highways in the city, simply figuring out what to fill where presents a challenge. The transportation department counts on its 40,000 workers to look out for potholes. The department also relies on average New Yorkers and provides several resources for pothole victims to report a problem, vent their frustrations and even get reimbursed by the city for car damage caused by a street defect.

One of the fastest ways to report a problem is through the Department of Transportation web site.

The new 311 hotline for non-emergency complaints is supposed to make it easier to complain about potholes. From March 9 to April 21, 2003, the hotline received 3,526 pothole related phone calls, according to the New York Times.

After the mayor said he was "tired of people complaining" about potholes and directed them to phone 311, calls to the hotline about road defects jumped 400 percent, according to the Daily News.

But the transportation department wants details: the precise location of the problem, its size and depth, a description and so on. To help, its web site provides a detailed breakdown of the different kinds of street defects. Is your street plagued by a hummock — a bump resulting from the road being pushed up? Or is it the site of a cave-in, a jagged break in the pavement with a large void beneath? Photos of these problems, as well as of traditional potholes and protruding manhole covers, help readers understand what, exactly, popped their tire or loosened their chassis.

The department tries to repair each reported defect within 30 days. But it has not always succeeded. An audit released in November found it took an average of 57 days for the transportation department to repair potholes — 98 days for defects in the Bronx.

The city promised in late April that it would have about 35 crews of three to four people each working to repair potholes for 10 days. The Daily News followed one crew recently and found it spent little time working, preferring to shop, buy and eat food, and drive around aimlessly. The transportation department suspended the workers after the story appeared and said it would also take disciplinary actions against four supervisors.

The transportation department web site also offers a link to the city comptroller's office, where residents can report car damage sustained from a brush with a pothole and try to get reimbursed.

While the city blames the particularly harsh winter for the current pothole epidemic, budget cuts may make a bad situation worse as the Department of Transportation cuts back on street renovations that could prevent future potholes. "You never fix a pothole by just filling it," former transportation commissioner Lucius Riccio, who now teaches at Columbia University, has said. "You have to fix the street. A pothole is an indication that the street is failing."

The gloomy prognosis would not surprise Michael Gilpin who sees the pothole as being as much a part of driving in New York City as motorists who run red lights and summer weekend traffic jams on the Long Island Expressway in Queens. "It's an ongoing nightmare," says Gilpin. "I don't drive through Manhattan without expecting potholes."

(Do you have a pothole problem in your neighborhood? Tell us about it by going to the Community Gazette for your area.)

-- Anne Sachs


Common New York irritations, why they persist and what average citizens can – or cannot – do about them:

• Potholes
Bus Bunching
An Intersection in Need of a Stop Sign
Problems with Traffic Lights
Speed Bumps and Humps
Dark Streets

» Fixing Urban Irritants (Overview)

 




BAM And Its Cultural District


As a high profile institution that has managed to attract a great deal of public and private funding, the Brooklyn Academy of Music has for years been a lightning rod for community activists leery of the "high" culture -- such as ballet, symphonies and opera - that it is world-renowned for showcasing. Although situated on the borderline between commercial downtown Brooklyn and residential Fort Greene since 1908, BAM (as it is universally called) has recently come to represent the front line of the Manhattan-style development invasion that seems to be slowly rising out of the East River like an occupying army, threatening to subsume Brooklyn skylines and life-styles forever.

Perhaps nothing calls into question the role that large cultural institutions play in the development of neighborhoods more than BAM's $700 million plan to build a new 14 square block cultural district. The BAM Local Development Corporation has been working on the details and financing of this district for years, but things recently came to a head when community activists demanded to have their concerns included in the BAM Local Development Corporation's plans, causing public officials to threaten to pull the project's public funding.

The fear is that the BAM district will import new housing, businesses and cultural facilities and essentially re-engineer the cultural personality, not to mention residential and commercial real estate markets, of Fort Greene. Specifically, community activists are calling for the details of plans to be made public, and for those plans to reflect locally articulated economic development visions and needs.

The process BAM and community activists use to resolve this matter over the next few weeks -- BAM will begin meeting within the month with the Coalition of Concerned Citizens, a Fort Greene grassroots group, to try to work out an agreement -- will do more than determine if BAM can secure public funding. It will serve as a negotiation for Fort Greene's cultural soul. In this instance, the term "culture" is a fig leaf for issues we do not like to name explicitly -- particularly race and class.

In other words, we are faced with a question: Will BAM use its expansion as an opportunity to further engage and support the kind of culture Fort Greene is well known for -- a racially integrated, funky avant-garde flava -- or is BAM striving for a more homogenized, euro-centric kind of sensibility, consumer taste and artistic expression?

An eclectic colony of performing art events, restaurants, up-and-coming artists and students -- a pulsating, multi-income Mecca that attracts people from all over the world and incubates talent and creative energy from the surrounding area -- is an exciting vision. An enclave of overwhelmingly white, privileged residents, artists, merchants and their patrons on the order of the Upper West Side is not. A clue to which the folks at BAM might prefer is evident in a comment by Harvey Lichtenstein, the chairman of the BAM Local Development Corporation: "The life and activity around Lincoln Center make me slobber at the mouth."

David Vine, a PhD student in cultural anthropology who has written extensively on the nexus between cultural and economic development, suggests that BAM's plans are a Trojan horse hiding an economic and racial takeover of Fort Greene. "This is not unique," Vine says. "If you look at the history of neighborhood development and similar projects around the country you'll see that 'cultural development' is a precursor to the displacement of large numbers of low-income people." Vine goes on to say that because it's "hard to argue against and oppose the bringing of culture, this kind of development often masks other interests, particularly commercial ones".

Although BAM is better known for cultural events that require high priced tickets and playbills, to be fair, BAM's offerings also include less high brow poetry slams, world music concerts and Dance Africa, a week long celebration that also features an African-styled outdoor marketplace. Also, what complicates the argument against BAM is that some of its most outspoken community critics are solidly middle class, people who have, perhaps more quietly, already helped make Fort Greene a trendy, pricey neighborhood.

Yet, no matter what your income or race, if you live, work or even pass through Fort Greene it will be impossible not to be affected by what is being proposed. The BAM cultural district has the power to not only completely transform Fort Greene as we know it, but send ripples across Central Brooklyn. The latest fact sheet I've seen issued by BAM promises 1.56 million square feet of development including a visual and performing arts library, a 350 seat theater, 100 units of market rate housing, 250 units of subsidized units and a boutique hotel.

My experience in community development tells me that BAM's negotiations with community activists and elected officials will follow the typical patterns of appeasement, but ultimately the larger commercial interests will prevail. BAM, at least if it is savvy and/or cynical enough, will do just enough to make sure the "community" has a voice in the process, promise local people jobs and retail space, give safe harbor to some local artists and cultural institutions and allow some folks from the hood to shack up in some of the "affordable" housing slated to be built.

It is just a shame that cultural change -- whether it occurs on the West Bank or the Upper West Side -- is so often reduced to an equation of us versus them, light-skinned against dark-skinned people, the haves and the have mores. New York is capable of so much more nuance and possibility. There are very few neighborhoods in this city - yes, Fort Greene included - that couldn't stand to be more diverse in its makeup, more tolerant to change and less parochial in its thinking. It's now up to BAM to prove this is the kind of community it seeks to build.

Mark Winston Griffith, a writer whose work has appeared in the New York Times, Essence and Spin, is also founder of the non-profit Central Brooklyn Partnership, which organizes people to build economic power.

To read more about Fort Greene - and to contribute your own news and views, as well as reports of potholes - go to the Fort Greene Gazette, the first of our Community Gazettes.

Zoning To Protect Manufacturing


The city is putting together a vision of the future that involves making changes to zoning in order to transform many neighborhoods. This includes:

  • revitalizing the North Brooklyn waterfront with parks, housing and ferries
  • converting Manhattan’s far west side into a mix of new offices and apartment houses, sports and tourist destinations,
  • rejuvenating Lower Manhattan as a mixed residential, business and cultural community
  • creating a new central business district in Long Island City.

Unfortunately, many of these proposed zoning changes collide with some of the most dense concentrations of manufacturing jobs in New York, risking thousands of jobs and potentially reducing the diversity of the city’s economy.

For example, in Long Island City the number of industrial jobs is actually increasing, but Long Island City is nevertheless the target of rezoning, the second rezoning in two years. This subsequent rezoning will increase real estate speculation that has already pushed rents for industrial space through the roof and risk displacement of thousands of jobs. It also risks the factories that build the stage sets and sew the costumes for our cultural and entertainment sectors, the printers who support our financial services and media, and the food processors who help make New York the culinary capital that attracts tourists and feeds our office workers.

In North Brooklyn, one of the other areas targeted for re-zoning, more than 20 percent of the residents who work have manufacturing or other industrial jobs. This community will be profoundly impacted if these jobs disappear, even if replaced by jobs in other sectors that pay significantly less.

The plans to rezone the Far West Side of Manhattan to create a mix of offices, residences, a stadium and expanded convention center will impact dramatically on the Garment Center, portions of which are within or border the rezoning study area. The Garment Center is home to more then 39,000 apparel jobs. These apparel jobs, many of which are in design and marketing, anchor an industry that employs 110,000 people and that is spread city-wide.

The potential for displacement does not necessarily mean that the city should stop its zoning initiatives. The city needs to rezone some areas. However, at the same time that it encourages new development it also needs to put in place new zoning and economic development tools to minimize the risk of real estate speculation and the loss of jobs.

Whatever the conventional wisdom of a few years ago, the truth is, New York City needs its manufacturers. There is a growing disparity in income between the richest New Yorkers and the rest of the city’s population, and this is due in some great measure to an economy increasingly dependent on a narrow range of industries. These industries pay their most highly skilled workers very well but they produce relatively small numbers of decent middle- and moderate-income jobs. The loss of manufacturing jobs and the drop in unionization are part of this trend.

The average annual production wage is $28,250 -- $10,000 more than average wages in retailing, the sector that is often pointed to as an alternative source of employment. Manufacturing jobs are also more likely to offer health coverage and to be accessible to people who would have difficulty finding decent jobs in other sectors. For example, almost two thirds of the manufacturing workforce is immigrant.

The well-being of many local economies depends on a healthy manufacturing sector. Manufacturing is viable in New York City. Seven of the ten largest cities in the United States experienced an increase in manufacturing jobs during the 1990s. Inc. Magazine, in collaboration with the Initiative for a Competitive Inner City, recently listed its one hundred fastest growing inner city companies and almost one third were manufacturers.

New York City manufacturers have adapted to New York’s demanding environment. Most are small, entrepreneurial businesses that take advantage of New York’s incredible density, creating competitive advantages for businesses that need to be close to their markets, suppliers, design talent and skilled workers. They can even thrive in multi-storied, multi-tenanted buildings, which may be obsolete for the type of manufacturing more characteristic outside the city, because these dense buildings place the manufacturers at the center of their markets.

At present, New York City does not have the land use tools to promote diversity. One might think that having the least restrictive zoning which permits the greatest variety of uses would foster diversity. It is more likely, however, that it will lead to homogeneity as every property owner seeks the greatest economic return on his own property. For example, in an MX Zone, the type of zoning which is increasingly being used by the city, both housing and manufacturing are permitted without restriction, and over time housing will price out manufacturing. The manufacturing that gives the area its character, acts as a buffer against gentrification and gives employment to local residents, will be lost. Diversity, both of physical form, economic activity and even demographic group, may suffer.

The city needs to create new types of zoning that promote diversity. One new zoning tool should be stable mixed residential-manufacturing zoning. In such areas both uses might be legal and manufacturing could be converted to housing, but a critical mass of manufacturing might be preserved through a dedication mechanism. A possible model is the Garment Center, where someone who converts manufacturing space to other uses must dedicate an equal amount of space for manufacturing. This zoning has helped to preserve more then 8,000 production jobs in Midtown Manhattan.

The city also needs to create a new type of manufacturing district. In some sense, New York City doesn’t really have manufacturing zones. It has zones where many uses can locate, including manufacturing, waste transfer stations, pornography, homeless shelters and offices. The city has even tried to put superstores in manufacturing zones. In many instances, the result of this free-for-all is speculation that undermines business investment.

Planned manufacturing districts (or PMDs) would be limited to industrial uses, their ancillary office uses and the neighborhood retailing that supports a manufacturing area. Such districts promote growth by providing the stability that companies need to make investments. Having planned manufacturing districts would also allow the Department of City Planning to target new development to certain areas without setting off speculation in adjacent areas. These manufacturing districts do not prevent change or preserve companies that are no longer viable businesses. Within such a district competition continues between permitted uses. One area in downtown Chicago has experienced a five-fold increase in the number of jobs since it was designated as a planned manufacturing district.

When the city rezones an area or allows the conversion of manufacturing space to other uses, the value of the property can increase dramatically. The city should recapture a small portion of this windfall through a fee or special assessment that can be used to help stabilize businesses in the adjoining areas and help companies that are displaced. This can be done on a building by building basis, as was the case under the Industrial Retention and Relocation Program run by the Business Relocation Assistance Corporation, or it can be done on a district basis similar to an assessment for a business improvement district.

Finally, the city must build the capacity of not-for-profit organizations to engage in the development of industrial space. Such ownership can insulate tenants from real estate pressures to convert manufacturing space. Rents still increase in response to increases in costs, but not speculation.

The city has already begun to recognize the need to promote a more diverse economy. Manufacturing provides better quality jobs for less skilled workers than other sectors which have already gained greater public attention. Supportive land use policies are absolutely essential to achieve a more healthy economic mix that includes manufacturing.

Adam Friedman is the executive director of the New York Industrial Retention Network

 

 

 

Rent Regulation Awaits Its Fate


State and local officials are preparing to chart the future of rent regulation in New York City. Several forthcoming decisions and votes will determine large-scale changes, such as whether former Mitchell-Lama apartments will move into rent stabilization, and smaller ones, such as how much stabilized rents can increase this year.

First, the Rent Guidelines Board is ramping up to determine this year's allowable increases for leases on rent regulated apartments. The nine-member board, composed of a chairman, two landlord representatives, two tenant representatives, and four public members, will consider owners' operating costs, terms and availability of financing, cost of living indices, and testimony from landlords, tenants, experts, and elected officials.

They will use annual reportsgenerated by their own researchers such as the Price Index of Operating Costs, The Mortgage Survey, and the Housing Supply Report. They will also do their own calculations, get extra analysis of the numbers, and consider what landlords and tenants have to say at their public meetings. Then, they will distill all of the information down, and make a decision.

Last year, the board allowed two percent increases for one-year leases and four percent increases for two-year leases, even though landlords' costs had gone down from the previous year. This year, landlords are claiming that high fuel prices and increased property taxes warrant double digit increases. Tenants will fight to bring that number down, but some think the final compromise will be higher than tenants have seen in a long time. Increases over the past decade have averaged about three percent for one-year leases and five percent for two-year leases.

The board was expected to start its work in March, but some last minute changes postponed their first meeting. Mayor Michael Bloomberg decided to replace five board members, and the background checks of his new appointees took longer than expected. The current meeting schedulebegins in April and runs through mid-June, when board members will cast their final vote.

Meanwhile, the City Council has weighed in on rent regulation, in largely symbolic resolutions, since, under the current structure, state laws run the show. [See Gotham Gazette articles on rent regulation and the battle over rent regulation.] On March 12th, the council voted to renew the city's rent stabilization law though April 1, 2006. It also passed two resolutions that would try to influence the state legislature, as it reconsiders rent laws which will expire on June 15th.

One resolutionurges the state legislature to repeal the Urstadt Law, which was passed in 1971 and handed state legislators control over rent regulation by forbidding the city from making any rent laws that are stricter than the state's.

The Council resolution says, "the regulation of these rent stabilized and rent controlled dwelling units is more appropriately a matter of local concern and should be subject exclusively to decisions made by the Mayor and the City Council." It also says that the Urstadt law prevents the city from "exercising home rule over an issue of vital local importance."

The other resolutionsupports the State Assembly's passage of a bill that would renew rent regulation until 2008 and alter certain elements of the 1997 laws that regulation proponents dislike.

The bill would eliminate high rent vacancy decontrol, which has deregulated apartments that rent for $2000 or more upon vacancy. Critics have said that nearly 100,000 apartments have been deregulated under this provision, and it could eventually dismantle rent regulation as a whole. The bill would also drop the allowable increase in rent for vacant apartments from 20 percent to 10 percent, and extend rent stabilization to former Mitchell Lama developments and former Section 8 housing developments. Finally, it would stop landlords from abusing the provision of the law that allows apartments to be removed from rent regulation for personal use.

The Assembly passed the bill in early February, and the City Council called upon the State Senate and the governor to sign it into law. The bill has been introduced into the State Senate by a few Republican senators who represent districts in New York City. It now sits with the Senate committee on Housing, Construction, and Community Development. It is not likely to be supported by many other Senate Republicans, who have said they want to keep the rent regulation laws as is, and who comprise the majority in the Senate. And Majority Leader Joe Bruno has said he will not touch rent regulation until the legislature passes a budget.

More than one million households under rent regulation are awaiting the final decisions with no small amount of anxiety. And while tenant advocates see the current bills as a strong starting point for the inevitable negotiation among Assembly Speaker Sheldon Silver, Bruno, and Governor Pataki, they also know, from long experience, that anything could happen.

Rebecca Webber is a journalist who has covered housing issues for Gotham Gazette since July 2000.

 

 

 

 

 

 

 

 

 

 

 

 

Bringing Sand to the Brooklyn Beach


On a March day when the temperature touched 70 degrees in Brooklyn for the first time since last fall, the United States Army Corps of Engineers presented a new plan at a public meeting in Coney Island to bring sand to a beach. They showed aerial photographs of Coney Island beaches that appeared wide and full, while, just to the west, there was a severely depleted beach near the gated community of Seagate.

The corps, the federal agency responsible for maintaining the nation's shores and navigation channels, wants to restore the level of sand at the Seagate beach to the way it was 15 years ago, and shore up a large pile of rocks at West 37th Street, known as a "groin," that holds sand in place for Coney's Island public beaches. Groins can be many hundreds of feet long and several feet high. The corps proposal calls for the construction of four groins at the southwest tip of Coney Island near Seagate, which will then trap and hold sand along the Seagate beach. A wide sand buffer at Seagate is necessary, in the corps' view, to bolster and protect the 37th Street groin from a storm that could attack the site from the side ("flank") and undermine the effectiveness of that groin.

The corps is joined in this effort by the New York State Department of Environmental Conservation. Funding (65 percent federal, 24.5 percent state and 10.5 percent city) was secured through the efforts of Congressman Jerrold B. Nadler.

The army's engineers are not new to the Brooklyn beaches. Ironically, some critics say, the work the corps is proposing is intended to fix problems that the corps caused in the first place. Coney Island was a corps project in the 1920's, and they addressed the Seagate peninsula again in the late 1980's and early 1990's.

Residents living on Gravesend Bay, the north side of the Seagate area, contend that sand drifting around the peninsula, perhaps the result of the lengthy 37th Street groin and other corps construction projects, is damaging their community. One resident spoke of sand drifting into Kaiser Park, covering pathways and benches. Another bayside resident spoke of sand drifting into people's homes. A third resident, stated, "we now have 300 feet of beach we did not have twenty years ago." These residents asked the corps to use this "excess" sand to replenish south side beaches. The corps estimates that bayside sand could account for 30,000 of the 190,000 cubic yards it needs.

The corps' Edward Wrocenski, stated that "T-Groins are the best chance for the sand to stay in place" on the oceanside. He indicated that T-Groins have worked in New Jersey and elsewhere. Some people attending the public meeting did not agree..

Sand moves naturally by long shore ocean currents and storms. The corps is engaged in many locales around the country, building groins and jetties, and mining and moving sand. These methods are expensive. Where it is necessary to both build and replenish, it is even more expensive. And some corps opponents question the wisdom of long term beach projects that primarily benefit private property owners.

Environmentalists also raise concerns about the impact of corps projects that dump large volumes of crushed stone onto sensitive underwater inter-tidal habitat. The U.S. Fish and Wildlife Service fears disruption of the foraging behavior of the species they protect.

Still, the corps and the state contend that the $450,000 study and the $9 million project "are not about a beach for Seagate". The agencies say the project is about preserving the groin that holds the sand that makes the Coney Island public ocean beaches possible while keeping sand out of the homes of residents on the bay side. Some observers wonder if T-Groins will work.

Peter B. Fleischer, currently writing a book on the New York City waterfront, was formerly a transportation and environment policy advisor to New York City Mayors David Dinkins and Rudy Giuliani.

New York City's Big Planning Projects: Avoiding the Public?


Over the last year, city government and public agencies launched an unprecedented number of bold plans that could transform the face of New York City for decades to come. In the midst of the excitement and fascination with these plans in the local press, there is little recognition that most of these developments could bypass the process that was set up for public debate, discussion and decision making. Despite a more open environment at City Hall ushered in by the Bloomberg administration, some of the most important decisions about the future of the city are being made behind closed doors.

THE NEW PLANS

Mayor Michael Bloomberg has a new plan for lower Manhattan. Also planned downtown is the winning design by architect Daniel Libeskind for the World Trade Center site. There is the ambitious plan for the 2012 Olympics, which includes a new stadium on Manhattan's west side, an expanded Jacob Javits Convention Center, a 4,400-unit apartment complex in Hunters Point, Queens, and dozens of other projects in the five boroughs. The Olympics plan overlaps with the recently-announced plan for Midtown West, which would allow up to 40 million square feet of new office and residential space over the next 30 years and extend the #7 subway line from 42nd Street. All together these projects could cost upwards of $10 billion in public money.

THE PUBLIC APPROVAL PROCESS

The city has two procedures for approving major plans that are set out in the city charter. One is the Uniform Land Use Review Procedure (ULURP). This process involves public hearings and votes by community boards (there are 59 in the city), borough presidents, the City Planning Commission and the City Council. The mayor plays a powerful role because he appoints the majority of the members of the City Planning Commission and has veto power over City Council actions.

The second procedure, also established in the city charter, is for approving plans. It calls for a review process similar to ULURP, and follows planning guidelines set by the Department of City Planning. Since authority for these plans is to be found in Section 197-a of the city charter, they are often called "197-a plans." All official city plans, whether initiated by city planning or community boards, are 197-a plans.

ULURP was set up in the mid-1970s to give neighborhoods a voice in decision making. Before that, the city's neighborhoods had no way of systematically taking part in decisions that would affect their futures. In the 1960s, many neighborhoods rebelled against official top-down urban renewal plans that wiped out whole blocks and displaced thousands of people. They successfully fought giant projects like the Lower Manhattan Expressway through grassroots organizing and protest. And disenfranchised African American neighborhoods rose up to demand community control of neighborhood schools. Under ULURP, neighborhoods now get to review and vote on most major land use changes, including urban renewal plans, zoning changes, and the acquisition and sale of city-owned land.

Responding to neighborhood demands for a greater role in planning, the charter was revised in 1989 to give explicit authority to community boards to introduce their own plans. Community boards were also promised professional planning assistance, a charter principle that has yet to be put into practice.

EVADING THE PUBLIC PROCESS

Officials have a treasure chest full of legal devices for evading ULURP and the 197-a planning process should they choose to do so. One of these devices is the independent authority set up under state law. Authorities like the Empire State Development Corporation, and the Metropolitan Transportation Authority, for example, can override ULURP and local plans, and thereby ignore local zoning and development rules. The bi-state Port Authority of New York & New Jersey, which owns the World Trade Center site, has similar powers.

The Lower Manhattan Development Corporation (LMDC) is a subsidiary of the state's Empire State Development Corporation, and effectively operates outside local planning procedures. In the Midtown West and Olympics 2012 proposals, many of the major projects, including the stadium and transit expansion, could be accomplished through independent authorities. State government and the authorities, quite understandably, have never made a commitment to use ULURP or 197-a as instruments to gain local approval of their plans.

But neither has City Hall protested very much or demanded that planning follow the procedures set out in the city charter. Instead, the mayor's office seems to be satisfied by issuing its own plans and negotiating with the authorities behind closed doors. While the mayor has stated his desire to gain more local input in the planning of lower Manhattan, now controlled by the state-dominated Lower Manhattan Development Corporation, the new input would apparently be tightly controlled by the mayor. Thus, instead of launching a 197-a plan for lower Manhattan that would have to involve broad participation, the mayor chose to cook up his own plan.

As Jennifer Steinhauer noted recently in The New York Times, Mayor Bloomberg's background as a successful corporate chief executive officer has led to a style in City Hall favoring "private talks and public silence." Even when the proposals may have laudable qualities, and some of them certainly do, many people wonder whether they respond just to the interests of the insiders and leave out those for whom access to government has always been an issue.

The public participation process can be loud and messy, and produce unexpected results. But so can negotiating in the mayor's smoke-free rooms. And isn't an open and transparent political process what distinguishes democracy from autocracy? When the Civic Alliance, a coalition of 85 civic and community groups, organized Listening to the City, a gathering that brought over 4,000 people to the Javits Convention Center in July of last year, the participants gave a giant thumbs-down to the Lower Manhattan Development Corporation's proposals for Ground Zero. It is no wonder that the corporation, fearing another slap in the face by the public, turned down the Civic Alliance's proposal for a repeat performance to discuss the recent design competition. But why isn't the mayor proposing a 197-a planning process for lower Manhattan that would give all New Yorkers and interested parties a chance to contribute their ideas and energies to this strategic rebuilding effort?

There is another route used to evade ULURP and city planning. It is the Board of Standards and Appeals, a semi-administrative body that helps developers skirt zoning rules in a way that can transform entire neighborhoods without any recourse by the public. But that exercise in undermining democracy we will leave for a a future column.

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

The State Of NYC Housing, According To The Census Bureau


The mayor and the city Department of Housing Preservation and Development have released preliminary results (in pdf) from the 2002 New York City Housing and Vacancy Survey. The U.S. Census Bureau conducts this survey every three years, primarily to determine the rental housing vacancy rate, which must remain below five percent in order for rent regulation to continue.

The vacancy rate, measured between February and June 2002, was 2.94 percent. In the 1999 survey, the rate was 3.19 percent, although the 2002 data has not yet been weighted to allow accurate comparisons to data from previous years.

"We still face the problems of a serious housing shortage, affordability, and crowding because the city is a desirable place to live," said Mayor Bloomberg in a press release that accompanied the release of the data. He said he supported the rent regulation laws as they exist today. Those laws are set to expire this June, and a heated battle will surround their renewal.

Beyond the rental vacancy rate, the survey offers a vast array of information about housing. The preliminary information currently available (the full tables will be released in about a year,) includes some surprising and revealing things about the city's housing stock.

Just what those numbers reveal, however, might depend on who you ask.

RENT

The survey found that in 2002, the median monthly gross rent was $788 for all units. For non-regulated units, it was $850, an amount that appears incredibly low, even for a housing market that has softened in recent years.

Location is one explanation.

"Most New Yorkers don't live in Manhattan, said Joe Weisbord, staff director of Housing First!, a coalition that promotes solutions to the city's affordable housing crisis. "[The $850 median] probably reflects a lot of apartments in the outer boroughs."

As was reported in Gotham Gazette's Issue of the Week entitled "The Fight Over Rent Control", another understanding emerges from a recent study by the tenant group New York State Tenants & Neighbors. The study analyzes data from the 1999 Housing and Vacancy Survey and among other things, calculates the median rent, excluding buildings with fewer than six apartments and single-family homes.

"If you include small buildings that have never been regulated, and homeowner neighborhoods in Queens, that's a very different kettle of fish, in terms of their location, their desirability, and in terms of landlord-tenant relationships," said Michael McKee, associate director of New York State Tenants & Neighbors Coalition. "We compare regulated rents and unregulated rents in buildings with 6 or more units, because to be rent-stabilized you need to be in a building with six or more units."

For 1999, their study found that the median monthly rent for rent-regulated apartments was $640. For unregulated apartments, it was $1090. In Manhattan, the numbers were $766 per month for rent regulated apartments and $2000 per month for unregulated apartments.

VACANCY RATES

The 2002 Housing and Vacancy survey found that rental vacancy rates varied by borough. For 2002, Manhattan's rate was 3.86 percent, the highest of the five boroughs.

"Manhattan is really a unique animal, very different from the housing market in the rest of the city," said Jack Freund, executive vice president and chief economist of the Rent Stabilization Association, the city's largest landlord group. "What you are seeing here is that the highest rent levels are in Manhattan."

Costly apartments tend to be in Manhattan, and the survey found that vacancy rates increased with rent levels. The rate for units asking $1750 per month or more climbed to 9.25 percent. For units asking $2,000 per month or more, the vacancy rate increased to 10.05 percent.

The stumbling economy might have something to do with those increases, but there are other possible explanations.

"There are more of those units coming onto the market, probably because of new construction in high rent units and vacancy decontrol of high rent units," said Freund.

Tenant advocates suggested that vacancy rates also remain high for higher rent apartments because those owners are often willing to keep their units vacant longer in order to find a tenant who is willing and able to pay.

VACANT APARTMENTS

The survey found that 2002 had the highest number of vacant units not available for sale or for rent since 1965, when the first Housing and Vacancy Survey was conducted. About 32 percent were unavailable awaiting or undergoing renovation, the highest number since 1987.

"That's a consequence of owners putting money back into their building, which they are able to do if they get rent increases," said Freund of the landlord group.

But tenant advocates thought renovations were a way for landlords to remove apartments from rent regulation.

"Landlords are spending lots of money on renovating apartments because with vacancy decontrol in effect, if you can get the rent above $2000 a month, you can take it from rent regulations forever," said McKee, of Tenants and Neighbors.

Also, 43,000 apartments, the highest number since the survey started counting them in 1978, were unavailable because of occasional, seasonal, or recreational use. More than six in ten of those apartments were in Manhattan.

Some attributed this to corporations that keep such apartments for the use of occasional corporate guests. But others saw it differently.

"It points out another structural problem with rent regulation that causes people to hold onto apartments even if they don't need them as their prime residence," said Freund. "We know that is a phenomenon that happens with apartments because the rents are so far below markets so you hold onto them even if you don't use them with the result that apartments are less available for the general population."

RENT REGULATION

Almost 22 percent of rent-controlled apartments were occupied by tenants who moved in after 1971, most likely utilizing succession rights. That means that nearly 80 percent of rent-controlled tenants have lived in their apartments since 1971 or before. In most cases, those tenants are now aging or elderly.

The data disproves the popular misconception that many of today's tenants under rent-control are lucky beneficiaries of family members' apartments.

"The reality is you can't just pass on your rent-controlled apartment to your nephew in Arizona," said McKee. "To have the right of succession, the family member has to actually live there. People who try to manufacture a situation that doesn't exist don't get away with it."

However, some see a problem in the long-term habitation encouraged by rent control.

"I think it speaks to the essence of the negative effect of rent control on the market. It takes units out of the housing market and reduces the general availability of housing for the majority of New Yorkers," said Freund.

Tenants in rent-controlled apartments actually seem worse off than their non-regulated counterparts. Their median income was $20,120 in 2001, less than two-thirds the median of all renter households. This can probably be explained by the advanced age and fixed incomes of such tenants.

"In fact, rent control incomes have gone up simply because the really old tenants have died off," said McKee. "In 1970 there were 1.1 million. Today you have 60,000, so it's a program that is being phased out."

HOUSING AND LIVING CONDITIONS: GOOD NEWS AND BAD NEWS

In 2002, housing conditions in the city were the best since the Housing and Vacancy Survey started asking about them. Housing advocates are pleased, but not surprised, by this revelation.

"I think you are looking at a century long trend in terms of improved conditions," said Weisbord of Housing First! "Housing conditions are, in general, extremely good, though there are still pockets of very poor quality housing in NYC."

As an example, the survey found that crowding remained a serious problem in 2002 — 11.1 percent of all renter households were considered crowded - with more than one person per room.

All in all, there are differing conclusions to be drawn from the revelations in the preliminary data.

"I think what is interesting is that housing remains very affordable," said Freund of the Rent Stabilization Association. He noted that the median household paid about 28 percent of their income in rent.

Tenant advocates, instead, focused on the continuing descent of the overall rental vacancy rate. "It is reflective of this very serious shortage that we have and we need to produce a lot of new housing and housing that is affordable for a wide range of income levels," said Weisbord.

Rebecca Webber is a journalist who has covered housing issues for Gotham Gazette since July 2000.



Print Friendly and PDF

Editor's Choice


Gotham Gazette: New York Voters Approve $4.2 Billion Environmental Bond Act
New York Voters Approve $4.2 Billion Environmental Bond Act
Gotham Gazette: 
New York City Voters Approve Racial Justice Ballot Measures
New York City Voters Approve Racial Justice Ballot Measures
Gotham Gazette: 
Housing Development in New York City Slows to a Crawl as Officials Debate Tax Incentives
Housing Development in New York City Slows to a Crawl as Officials Debate Tax Incentives
Gotham Gazette: 
City Council Examines Low Voter Turnout, Moving Local Elections to Even Years City Council Examines Low Voter Turnout, Moving Local Elections to Even Years