Neighborhood Banking Is About To Change
Imagine this: You walk to the corner store with your paycheck loaded on an electric card and slip it into an ATM-like machine. You take out a short term, high interest loan, download $60 into a savings account, transfer 40 bucks to your checking account, pay your electric bill, send fifty dollars to your sister who lives overseas -- and, oh yes, purchase that George Forman grill you’ve been eyeing. Finally, the machine spits out $31.35, coins and all, in cash that you requested. You do all this with one swipe of the card.
What is so tellingly futuristic about this scene is not the technology – we’re pretty much already there. It’s the virtual walls you just crashed through which, for now at least, separate various forms of financial and commercial transactions.
No walls have arguably been more impenetrable than those between banks and check cashing stores, more politely known as financial service centers. Like the kind of neighborhoods they are associated with, check cashers have operated for years on the other side of the tracks from bank branches, kept apart by regulatory boundaries and divergent business cultures.
But lately, driven by new technologies and a growing appreciation for the enormous, untapped profit and market opportunities in low-income neighborhoods, maverick providers of traditional banking services and check cashers have been taking pages from each other's playbooks and, in some cases, even collaborating. This experimentation will not only shape the course of neighborhood banking in New York and nationwide, but also redefine who and what is considered part of the banking mainstream.
Different Worlds
Commercial banks, thrifts and even most credit unions have long looked down their noses on check cashing operations, and, by extension, the predominately low-income people who use them, concluding there was either too little profit to be gained, or too much respectability to lose, in this gritty business.
On the other hand, check cashing operations, which offer products and services like money orders, pre-paid debit cards, utility payments and remittances, dominate certain inner city turfs by deliberately shunning the alleged white collar elitism of the banking industry. The 660 check cashing centers in New York specialize in serving customers in search of a simple financial transaction, rather than the institutional relationship sought by retail bankers.
Despite their different worlds, a few banks, such as Chase and Banco Popular, have over the years attempted modest, fairly low-impact, forays into check cashing or have, on occasion, purchased check cashing operations. Yet none have brought non-traditional financial services into the core of their business or have used these so-called “fringe” services to link customers to banking products.
Outside New York, however, some banks have been testing check cashing services in their branch lobbies alongside traditional teller lines and are creating new financial service prototypes.
Pioneering In The Bronx
Taking careful note of developments in areas such as California and Ohio, the Checkspring Community Corporation, headquartered in the Bronx, currently has a bank charter application pending in New York State. If its charter is approved, Checkspring will be poised to introduce a more fully integrated bank/check casher business model, the likes of which the New York City market has never seen.
Some of this territory has already been traveled through a collaboration between RiteCheck, a prominent check cashing chain, and Bethex Federal Credit Union, both of which serve low-income populations in the Bronx. In 2001 they piloted a program in which members of Bethex accessed their accounts through RiteCheck storefronts and cashed their checks at RiteCheck for free or at a reduced fee (In PDF Format) . The program worked so well that RiteCheck is expanding it to include partnerships with several new credit unions.
As options for electronically transmitting cash increase, and use of the traditional check diminishes, check cashers are trying to find new ways to engage customers and add value to their lives. In May of this year the Financial Services Centers of America (FiSCA), the trade association for check cashing operations, announced the roll-out of a “revolutionary”, “All Access” Savings Program, which promises to provide “underserved Americans greater access to mainstream financial services” by giving check cashing customers the ability to make electronic deposits in federally insured, interest bearing, savings accounts.
7-Eleven and Wal-Mart In On The New Trend
While a few industry watchers I talked to in New York see these developments as more or less isolated events, Jennifer Tescher, the Director of the Chicago-based Center for Financial Services Innovation, views them as part of a certifiable industry trend and realignment. She insists that “the entire financial services industry is dramatically changing in ways that weren’t even possible five years ago”.
Tescher points to the rise of the non-bank sector in financial services as an indicator of how segmentations within the financial services universe are dissolving. In 2003 the nation’s largest convenience store chain, 7-Eleven, using their own “virtual commerce” technology, placed kiosks in a thousand of its convenience stores machinesthat enabled customers to conduct ATM transactions, cash checks to the penny, purchase money orders, send wire transfers and pay bills.
A year later Wal-Mart raised the bar. Wal-Mart offers check cashing, money orders and wire transfers while also providing banking services in “Wal-Mart Money Centers”. Some analysts believe Wal-Mart, which targets low-income customers and is the world’s biggest retailer, is trying to create a physical and psychological, environment for the customer in which banking, alternative financial services and shopping are collapsed into a single retail experience.
A Gold Rush In Low-Income Financial Services
The sudden “discovery” of the low-income financial services niche by retailers and mainstream bankers is propelled by the explosion in the alternative financial services industry. The lure of this market comes at a time when banks are finding intensified competition in middle class, suburban markets. Meanwhile, branch presence in low income areas has been steadily declining over the last thirty years. One quarter of Black and Latino families, as well as 25 percent of all American families making less than $20,000 per year, don’t have bank accounts.
The very idea of a “fringe” economy is somewhat misleading. About a quarter of the nation’s gross domestic product reflects unreported income and a study conducted by Social Compact, which promotes business investment in inner city communities, estimates that Harlem, a poster child for fringe financial services, has a $1 billion cash economy. And as low income families look for ways to move cash around, check cashers are there to serve them. The alternative financial services industry is racking up an estimated $200 billion in transactions annually.
Of course alternative financial services are widely viewed as exploitative of poor people, particularly in states where there is a lack of regulatory restraint. Customers have very little opportunity to save and build assets using alternative financial services, and whereas banks have some semblance of a mandate to give back to communities where they do business because of the Community Reinvestment Act, check cashing operations have no such obligation.
But in the end, financial service centers are so compelling to their customers because they provide convenience and a wide range of options, with few questions asked: Money orders function as checking accounts. Where banks place holds on checks, check cashing offers immediate liquidity. Pre-paid debit cards, otherwise known as stored value cards, can facilitate everything from long distance phone calling and credit card purchases, to bill paying and, now, even limited-service savings accounts. The fact that check cashers charge, some say, unreasonable fees, is in a way no different that what low-income people expect from a bank or any other kind of capitalist institution doing business in the â€hood.
The Filene Research Institute, which studies issues affecting the future of credit unions, believes so much in the future of alternative financial services that it has created a program that counsels credit unions on how to offer check cashing products. Citing what they see as the declining relevance of credit unions, thrifts and banks in certain areas, Filene issues a stern warning to depositories of all stripes: Begin adopting the ways of the check casher or perish.
Some banks have clearly seen the writing on the wall.
Union Bank of California (UBC) owns and operates over 50 hybrid financial service outlets, in which check cashing services are offered in banks and stores, and banking services are offered in check cashing locations.
KeyBank, just one of many enthusiastic UBC disciples across the country, has created “KeyBank Plus”, a separate product (and teller) line designed especially for low-income customers without bank accounts. Officials from KeyBank maintain that, once a customer enters a Plus branch, Key creates conditions that will prompt that customer to establish a long term - and higher profit margin – relationship.
“The banking industry has done an amazing job of sending messages of exclusion through its product design and minimum balances.” says Edna Sawady, chief operating officer for community development at KeyBank. “At banks many customers fear that they won’t qualify for something…In check cashing lines you don’t run the risk of being rejected”.
Rising Challenges and Criticisms
Regulatory agencies will be challenged to catch up to, much less stay ahead of, these changes because the fundamental elements that help us make distinctions between financial services industries -- the deposit, the check, the branch, credit -- are themselves moving, morphing targets.
Pre-paid debit cards, for example, are exploding in popularity and operate in a virtually unregulated environment. As pre-paid debit cards are used to perform traditional banking functions, like checking, what classifications and regulatory jurisdictions will be applied to monitor and standardize their use?
Financial service entrepreneur Joe Coleman of RiteCheck, a co-engineer of the RiteCheck/Bethex collaboration, is leery of banks encroaching on his territory. He thinks RiteCheck and credit unions like Bethex, whose products are designed for low-income people, have a future together because “we have the same customers”
New York poses its own particular restrictions for check cashers. One notorious service that is popular throughout the country, pay day lending, a type of short term, very high interest loan, is illegal in New York. More importantly New York requires that licensed financial service centers cannot operate within 3/10 of a mile from one another and cannot charge a check cashing fee exceeding 1.5 percent of the check’s face value.
But ultimately, it is the low profit margin on fringe financial services (Coleman calls it “1 million people with a dollar”) that is most daunting to institutions who don’t measure success by the number of live bodies in their lobby. Even Joy Cousminer, president of Bethex and Joe Coleman’s collaborator, acknowledges this tension. “Check cashers lose less money on a bad check than on a slow line. With us, it’s exactly the opposite.”
Cousminer also doubts that banks are actually interested in building relationships with poor people and believes banks are in fact keeping their check cashing and banking customers distinct and separate.
Whether banks using integrated bank-check cashing services are making money on the check cashing side, or through the “migration” of customers to the bank side, or both, is unclear. At least one of the bank representatives I spoke to refused to disclose that information. What is clear is if Checkspring, or any other New York bank, faithfully follows the UBC and KeyBank strategy, and doesn’t mind masses of poor people in its lobby, it stands a fighting chance of turning a profit after a few years. UBC has been at it for thirteen years and Keybank is preparing to expand its program dramatically. Once one bank pulls it off in New York, others might follow.
Not everyone thinks this a good thing. Sarah Ludwig, executive director of the Neighborhood Economic Development Advocacy Projectfears that banks will, in trying to turn a profit, give shorter shrift to the goal of building a bridge between the underserved and asset-building opportunities. “We’ve got this massive problem of low-income people needing essential financial services,” says Ludwig, “but now banks are starting to provide services that not comparable to the services that are provided” in middle class areas.
For Ludwig, and many other advocates who are highly critical of the check cashing industry, alternative financial services are a symptom of the problem, not a solution. “The fringe products that banks offer will look cleaner and meet regulatory standards, but the bottom line is they are still inferior products…There is an unequal, two-tiered financial services industry…We shouldn’t try to serve the low-income market in a way that perpetuates this segmentation.”
Coleman shrugs off this criticism. “In banks there is a middle class prejudice. They want to sign you up. They think everybody wants to be like them...I know we are helping people. We are helping them build their lives.”
Mark Winston Griffith, a founder of the non-profit Central Brooklyn Partnership and a fellow at the Drum Major Institute for Public Policy, has been in charge of the community development topic page since its inception in 2003.Â
Restoration on Eldridge Street
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Forty years ago, New York reacted to the loss of old Pennsylvania Station by passing a law to protect city landmarks. In this series, in partnership with Open House New York, New Yorkers with a stake in the physical city will argue the consequences of the law, the merits and drawbacks of the preservation movement, and what the future might bring. |
When Gerard Wolfe, then a professor at New York University, first entered the main sanctuary of the Eldridge Street synagogue in the mid 1970s, he found a time capsule. The 19th century Lower East Side building still served as a synagogue but, over the years, as the size of the congregation dwindled, the worshippers had moved downstairs and shuttered the doors to the main area.
Wolfe, who was writing a book about the synagogues of the Lower East Side, discovered a space both spectral and spectacular. Cobwebs extended between the building’s hand-painted pillars. Old prayer books were scattered among the pews. Decades-old prayer shawls remained hidden in special compartments of the benches intended for the tallisim. Newspapers, from the 1940s, opened to the sports pages, lay on seats, a clear reminder of the people who attended services and would perhaps sneak a look during the rabbi’s sermon.
And yet the grandeur of the sanctuary remained intact. The sanctuary’s exquisite (if deteriorated) stained-glass windows, hand-painted murals, and Victorian fixtures signaling the importance of the structure for its Jewish immigrant founders.
Wolfe’s discovery marked the beginning of a restoration project, still going on 30 years later, that serves as a model for other historical houses of worship in New York City and throughout the country.
SYNAGOGUE AND STATE
Under the leadership of leading preservationists and community activists, including Roberta Brandes Gratz, an urban critic and journalist, the Eldridge Street Project was founded. This group wanted to save the building. They also wanted to open this historic treasure to the public in the immediate community and beyond.
They faced daunting challenges. Unlike many other historic sites around the city, the synagogue was not about to be torn down and had not been vandalized. But it was in danger of falling down. The roof leaked, threatening the interior. The cellar had filled in, and a stair tower collapsed.
The city of New York does not give money to houses of worship for fear of violating the constitutional restrictions on state aid to religious institutions. Some foundations are also reluctant to aid religious groups. And so, it was very important to establish an educational and cultural center serving a diverse constituency. Today, the congregation -- officially called Congregation K’hal Adath Jeshurun with Anshe Lubz -- owns the building. The congregation is several dozen strong, a stalwart group committed to the continued spiritual life of the building.
The restoration is the responsibility of the Eldridge Street Project, the non-profit non-sectarian group formed in 1986. Under a memorandum of understanding, the congregation controls all the religious aspects of the synagogue, while the project oversees the restoration – included related fundraising – and the cultural life of the building. The project runs educational and cultural programs, as well as tours, for some 20,000 visitors a year.
Whenever a church or synagogue asks us for advice about how to restore their site, we tell them the first step is to create a separate 501-C3 (tax exempt) organization to make a clear distinction between the religious life of the building and the historical or educational functions. While few, if any, groups are identical to us, some are similar. The Cathedral of St. John the Divine is one. In some parts of the country, particularly the South, where the Jewish community is fast disappearing, not-for-profit organizations have taken over synagogues and restored them as museums or for other projects. In these cases, though, there is no congregation anymore.
In recognition of our public service, the city provided first program support and more recently capital support for the restoration of our landmark building. There was little resistance to public money coming to us. Norman Siegel, then executive director of New York Civil Liberties Union, called the funding “constitutionally suspect,” but that was about it. The city funds served as a rallying point for us to get other support.
The city was largely responsible for the most recent phase in our restoration -- the creation of a new cellar. Much of the area was filled with dirt, so workers had to excavate it while, at the same time, supporting the building -- an engineering feat. The city money, matched by private donations, was particularly welcome because private donors often do not want to pay for plumbing or mechanical systems. Now we can turn our attention to the most beautiful aesthetic parts of the restoration.
Another interesting example of the sensitivity of a sacred site receiving public funds arose in connection with funds received from the Landmarks Preservation Commission. Commission rules bar it from supporting a capital project that includes religious iconography. Several years ago, we approached them for funding for our roof project. This turned out to be tricky as the finials mounting the roof feature elegant Stars of David. Eventually, we found a clear stretch of work without the stars and received a $25,000 grant from the commission.
Being designated a city and national landmark has also propelled us forward The city landmark recognizes the architecture, while the National Historic Landmark designation is both about the architecture and the building’s significance as being representative of immigrant religious structures. Receiving national designation is a real challenge, as you must explain in detail why your site is either the only one of its kind or a platonic ideal of a phenomenon. Much of our fundraising has been through national direct-mail appeals – many to people who have a tie to the neighborhood or see this site as a kind of portal to their ancestors’ Jewish experience. To these people, designation as a National Historic Landmark has been very meaningful. It serves as a kind of vetting.
A LOWER EAST SIDE STORY
Certainly, this building has been enormously significant both in this neighborhood and to the East European Jewish experience in America. In 1886, when construction began on the building, most synagogues on the Lower East Side were shtetla, small storefront synagogues for people from a single city. But Eldridge Street was unique -- a cosmopolitan congregation of people from all over Eastern Europe.
It was the first grand structure in the neighborhood, taking 10 months and about $100,000 to build. The members constructed a building that dominated the block. This was the first time they could worship openly as Jews so they put Stars of David on the façade. And because many of them worked in factories and lived in dark tenements, they placed windows on every side of the building to beautifully illuminate their synagogue.
Some of the Eldridge Street synagogue founders had been in America for a while already. They had arrived in the 1850s -- before the major wave of East European Jewish immigration in the 1880s and 1890s – and had established themselves.
As many as 1,000 families belonged. They ranged from very wealthy members to people who could not afford the dues. We know from minute books that some people paid $2 for their seat, and some paid $200. It is and was an Orthodox house of worship so the men and the women sit separately.
Until the 1920s, this was a very vibrant congregation. Then, the immigration laws changed, so the immigrants stopped arriving. At the same time, everyone who lived on the Lower East Side wanted to get out. The Jews left for the Bronx, Brooklyn and even the Upper East Side. With no new Jewish immigrants arriving to replace them, this and other congregations got smaller and smaller.
Some of our visitors are disappointed the area is not still Jewish. But this is a story of immigrant success. The East European Jews wanted to leave the neighborhood, and they were able to.
REDISCOVERING THE SYNAGOGUE
Despite the changes, a congregation always remained at Eldridge Street. But it could not maintain the building’s grand main sanctuary and so, at some point, probably in the 1950s, the members closed the doors and stopped coming upstairs to the main synagogue.
Today, the building boasts a new slate roof. The cellar has been dug out. Air conditioning and ventilation systems have been installed, while the crumbling stair tower, now rebuilt, will house an elevator. But the synagogue’s striking architectural details, including rose windows, 70-foot ceilings and a velvet-lined ark, remain. So far, the project has raised about $8 million of the estimated $12 million need for the renovation. At time progress has been slow-going, but the restoration is currently moving ahead, and we anticipate completion by early 2007.
And the building is once again open. Children, adults, and families come to learn about Jewish history, the immigration experience and architecture and historic preservation. They represent all cultural backgrounds (For a schedule of tours, click here)
BOTH EGG ROLLS AND EGG CREAMS
Many people visit because of nostalgia or because the Lower East Side was the gateway place for their families. Others come to see the space and learn about the American immigrant experience, particularly the East European Jewish experience.
Amid all the educational programs the Eldridge Street Project offers – some focusing on architecture, others on the East European Jews in the United States – we also work to reach out to the synagogue’s neighbors, many of whom are first generation Chinese immigrants. The Eldridge Street Project’s relationship with these residents testifies to the continuing immigrant experience in New York.
A few weeks ago, our annual egg roll and egg cream festival showcased the two communities – Chinese and East European Jewish -- that have lived or live today on this block. More than 1,500 people joined us for klezmer music, Chinese opera, and Jewish and Chinese folk music performances; Hebrew and Chinese scribal art, Yiddish and Chinese games, and, of course, kosher egg creams and egg rolls.
Last year, we presented a video installation featuring a 12-minute film projected at night through the synagogue windows. It included a 12-minute history of the synagogue and its neighborhood and images that explained what is happening today.
Eldridge Street encapsulates a piece of our history that is important to preserve. It is an architectural landmark, a place of historic importance in the city, a beautiful place. But, as the festival and the video project have demonstrated, what is even more amazing about the building is the new life it has taken on as a place where people can come together and learn about the past.
Amy Milford is director of public and community relations for the Eldridge Street Project.Â
NASCAR, The Largest Proposed NYC Sports Stadium Of All
Despite all the press about proposed new sports stadiums, many New Yorkers know surprisingly little about the largest one. Which one would have the biggest field, the most spectator seats, feature the biggest new retail mall, and sit on the largest redevelopment site?
Not the West Side Stadium, even if it hadn’t gone down to defeat through a mix of community organizing, Cablevision cash, and political pique. Not the Nets Arena at Forest City Ratner’s proposed Brooklyn Atlantic Yards (which received something of coronation recently from The New York Times, as if to reassure the public that this is still a developer’s town), even though the project’s 21 acres could wind up having as many as 6,000 units of housing and 200,000 square feet of retail space. Not the new Yankee Stadium, with its new lucrative luxury sky boxes, to be built on the site of Macombs Dam Park in the South Bronx.
The largest sports facility proposed for NYC right now is a NASCAR track on Staten Island. The track would seat 80,000 fans, watching cars race around a track three-quarters of a mile long, near a new 620,000 square foot big-box retail mall on a 675-acre site. The site, the former BATX oil tank farm located off the West Shore Expressway, south of the Goethals Bridge in Bloomfield, S.I., is the largest vacant industrial property in New York City (and the site of a gas tank explosion in 1973 that killed 40 workers).
Who Among Us Does Not Love NASCAR?
Blue-state, subway-riding New Yorkers -- who don’t feel the pressure that John Kerry did to be loved by American stock-car racing fans -- might be forgiven for knowing little about the fastest growing sport in the United States. NASCAR – the National Association for Stock Car Auto Racing -- was founded in 1948 by Bill France, Sr. Several years later, he founded the International Speedway Corporation, which owns the racetracks. Stock car racing remained a largely Southern sport, with a limited audience, until the 1970s, when the R.J. Reynolds tobacco company became a lead sponsor, and the Daytona 500 became the first nationally televised stock car race. Still a family-owned business, NASCAR has annual revenues in the billions and is regularly cited as the fastest growing spectator sport in the United States.
The International Speedway Corporation, also owned by the France family, owns 12 of the NASCAR racetracks around the country (they recently opened tracks near Kansas City and Chicago). The ISC has been actively looking to expand into the northeast for a while. After deciding that an available site in the Meadowlands was too small, they set their sites on Staten Island. In December, the ISC and the Related Corporation (one of NYC’s largest real estate developers, whose recent projects include the AOL Time Warner Center and the Gateway Center mall in East New York) teamed up to buy the property for $110 million.
Traffic, Environmental, and Fiscal Lessons from the Gas Guzzlers
Since purchasing the site, the International Speedway Corporation has been hard at work to pre-empt local concerns about environmental issues and especially traffic. They have put forward an innovative traffic plan for the three races that would take place each year. There will be only 8,400 parking spaces for the 80,000 fans, and Staten Islanders will have priority for these. Everyone else will have to come by ferry (NASCAR says they’ll rent just about every available ferry in the region on race weekends), bus (from parking lots in New Jersey and elsewhere), and perhaps even a new light rail line. And fans shouldn’t count on driving anyway and parking on local streets. Every ticket will be tied to a means of transportation, and you won’t be allowed into the race any other way. NASCAR also promises to pay to widen the Goethals Bridge toll plaza and add new ramps to their site from the West Side Expressway.
In addition, the International Speedway Corporation says they will preserve 245 acres of the site as wetlands (the site features heron and ibises). The new ferry docks on the site could be used by commuters during the work week. Local schools and not-for-profits will be able to use the track on the 300+ days per year when there is not race activity, and they are allowed to solicit in the stands on race weekends.
When lined up against NYC’s other mega-projects, Aaron Naparstek has written, “the Nascar track is in many ways the most innovative, thoughtful and urban-friendly … So, what does it say about the state of New York City urban planning and development that the toothless, beer-bellied rubes of Nascar are doing a better job of caring for our city than we are?”
One other feature distinguishes the NASCAR proposal from the Jets and the Nets: The International Speedway Corporation is seeking no public subsidies for their $550 million track, and it is likely they would even pay some real estate taxes – although it is still possible that the Related Companies will seek subsidies or city money for infrastructure for the mall.
Local Opposition Growing
Despite these innovative features, local sentiment has not been favorable. Last week, 40 Staten Island activists, including ministers and the leaders of civic organizations, gathered to form a united group to oppose NASCAR. They are hoping to form a broader umbrella group of civic organizations opposed to the project.
As a result of growing civic pressure, several elected officials have become more critical of the project. Republican South Shore Councilmember Andrew Lanza was quoted in the New York Times in May, 2004 as saying, “It’s an intriguing idea that we would like to explore further. At first you are concerned about the additional traffic and noise, but then you take a closer look at it, and you are only talking about a couple of events a year and you have a great facility that can be put to other uses.” By this March, however, Lanza said he was gearing up to intensify his opposition to the track. Democratic North Shore Councilmember Michael McMahon mused in December that with community benefits like a new high school and an indoor track & field complex, the project might be made to work for the community. But more recently he has been critical of NASCAR’s traffic assessment. And Republican Mid Island Councilmember James Oddo, who represents the area, has consistently expressed skepticism. Their opinions will matter -- since (also unlike the Jets and Nets) the project is not sponsored by the Empire State Development Corporation and will therefore have to go through the Uniform Land Use Review Procedure (ULURP) which includes a vote by the City Council.
Residents and elected officials are concerned that while the track will start with 8,400 parking spaces, the ISC will find it unworkable and try to expand to more. NASCAR fans often come for the entire weekend (a good many in Winnebagos – current plans call for 635 RV parking spaces on site), so how will they get around while they are here? Others are concerned that even if race weekend traffic is managed, the proposed retail mall would cause more consistent problems on the West Shore and Staten Island Expressways, and on the Goethals Bridge.
In addition, because there are only three races per year, the track could be of limited benefit to the local economy. There will be construction jobs, and it will surely be good for Lois and Richard Nicotra, who have recently built a surprisingly successful hotel complex nearby. However, because the traffic plan will prevent people from driving, it is unlikely there will be much spillover to many area businesses. The big box retail stores are likely to be national chains, which won’t help local businesses, and which generally create lower-wage jobs.
But NASCAR suggests that other uses for the site could be even less desirable. The site is contaminated, and will require more than four million cubic feet of silt to raise the ground to a level that won’t be underwater in heavy rains. As a result, it is unclear if it would be appropriate for residential use. Staten Island residents have recently protested against what they see as overdevelopment, so many might frown on new housing there anyway. Some have called for a movie studio, but with the new Steiner Studios in Brooklyn already competing with Silvercup and Kaufman in Queens while the film industry is increasingly leaving the U.S. altogether, it is hard to see how a studio here would compete.
Whether Staten Island and New York City will be willing to go for the ''noise and speed and glory and death'' that is NASCAR (32 drivers have died in crashes) – as described in Jeff MacGregor’s new book, Sunday Money: Speed! Lust! Madness! Death! A Hot Lap Around America with Nascar – remains to be seen. One thing is certain, though. If the track is built, New York politicians running for national office will have less distance to travel to show their solidarity with American race car fans … so long as they don’t forget their ferry ticket.
Brad Lander is the director of the Pratt Institute Center for Community and Environmental Development Â
The Mayoral Candidates On Housing
The following is an edited transcript of a forum on housing issues with five mayoral candidates, conducted on April 4th by three of the major housing advocacy organizations in the city: Tenants and Neighbors, Met Council on Housing and Coalition for the Homeless. Michael Bloomberg declined an invitation to attend.
Almost 700 people listened to the candidates answer eight questions on housing issues ranging from the unfulfilled promise to use Battery Park Authority funds to build affordable housing to an expansion of the Senior Citizens Rent Increase Exemption, which pays rent increases for income-eligible senior citizens.
Since some of the candidates arrived after the beginning, the transcript below has been somewhat rearranged to make it easier to read:
- OPENING STATEMENTS
- BATTERY PARK MONEY FOR AFFORDABLE HOUSING
- REPEALING THE URSTADT LAW
- EMERGENCY SHELTER
- RENT GUIDELINES BOARD AND ONE-YEAR RENT FREEZE
- SUPPORTIVE HOUSING
- INCLUSIONARY ZONING
- PRESERVING GOVERNMENT-SUBSIDIZED AFFORDABLE HOUSING
- EXPANDING RENT INCREASE EXEMPTIONS TO THE DISABLED
OPENING STATEMENTS
Fernando Ferrer: There is a crisis of affordability in New York. New Yorkers are getting priced out of their own town. You may remember I said this four years ago. It hasn’t gotten any better in the last four years. One of the reasons why is because we have a mayor who thinks it’s more important to subsidize major league football stadiums on the West Side than to get serious about affordable housing, than to get serious about schools, than to get serious about good jobs with health care. Well, I think it’s time to get serious about those things.
Over the course of my public life, there isn’t a whole lot of doubt about where I’ve stood on the issue of affordable housing, presiding over the biggest revival of affordable housing in the Bronx at any one time anywhere in America. But now, in private life I’m still chairman of a not-for-profit housing group in the South Bronx that was rescued from decline.
We see first hand the failure of this administration in fighting for enough Section 8 vouchers, the failure of this administration in keeping costs low, like water, like real estate taxes, that reflect themselves in everybody’s monthly rent. This administration has been a failure in affordable housing preferring to spend a whole lot more time on where the javelin throw event will be staged than how many people can live affordably in their own town. That’s why I’m running for mayor.
Steve Shaw: I think that most candidates in this election all want the same thing. We want to have strong neighborhoods, we want to have people live in those neighborhoods without spending an arm and a leg for it. But the question is is how do you achieve it?
I believe you achieve it in a much different manner than which Mr. Ferrer and which the Democrats and Mr. Bloomberg believe you do it. I believe that the way that you achieve affordable housing is through home ownership. That’s the way you do it. That’s the way that the majority of Americans build wealth. That’s the way that you make your housing cost consistent for the rest of your life.
I know I’m not going to be popular for saying this, but if you look at the impact that rent regulation has on homeownership it kills it. If you look at the cities that have high rent regulation, cities like New York, Santa Monica, homeownership is 30 percent. Look at other cities, such as Philadelphia, Seattle, homeownership in those cities – no rent control, no rent regulation – homeownership of 50 to 60 percent.
We have to address rent regulation. We have to cut taxes so we put money back in the hands and people’s pockets so that they can make decisions for themselves. So they can save for a down payment on a home. And lastly we need to create jobs. Because the only way that people are going to afford housing is if they have jobs in order to pay for it. Under Mayor Bloomberg job creation has been nothing; over the last two and a half years, the city has lost about 30,000 private sector jobs. We need pro-growth policies, we need to create jobs. That’s the way you create affordable housing and make this city better.
C. Virginia Fields The number one issue that is facing all New Yorkers is the need for affordable housing... As I look at my time in elected office, someone recently reminded me that one of the reasons I first ran for office in 1989 as a member to the City Council was because of housing -- to turn housing conditions around in the district that I represented, primarily central Harlem and East Harlem, to make sure that we were able to keep housing available for people who had lived there during the years when the community was not where it is now as well as to continue to build and grow a community so that others who were moving to New York right out of college, wanted to have a good start, could also stay there. I am pleased to say that housing was my top priority then, housing has continued to be my top priority, and it continues to be that today.
I will as mayor use the office to develop a real comprehensive plan to create affordable housing. And one way we do that is number one by investing in it, putting dollars in it. When we look in the past in terms of how we have been able to create affordable housing, it is when we had a plan, we had dollars in it, and we leveraged those dollars and we were able to see results so that it is one place we start. I’m passionate about affordable housing. So, I will continue my work that I have started as a community board member, a City Council member, a borough president and as your mayor, to make that a number one priority.
Gifford Miller I’m here to ask you for your support for my candidacy for mayor...Everywhere I go I talk to people who are hanging on by their fingernails either trying to find housing that they can afford or hold on desperately to the housing that they have.
Unfortunately we have a mayor who is making the wrong choices for this city. He’s making the wrong choices for us. Choosing to spend more than a billion and a half dollars worth of taxpayer subsidy – because that’s what it is when you add it all up – in a football stadium? Instead of building the housing and the schools that we need here in this city. And you know, amazingly, he has said – it isn’t just that we want to say no to a stadium, we want to say yes to housing – and this mayor has said if we build housing on that site there will be too much housing in Manhattan. No honestly he said it. I don’t know how much more graphically he can show he’s out of touch with the needs.
He’s also made the wrong choice though on protecting tenants rights, vetoing the strong lead paint legislation that I worked with all of you to enact, to protect children in this city from lead paint poisoning. He’s made the wrong choices.
Now what are the right choices? It’s not enough to say he’s made the wrong choices. What are the right choices? First of all we have to protect tenants. And that’s what that lead paint legislation and other things I’ve done as Speaker have tried to lead the way on. Secondly we have to preserve our housing. And that means repealing the Urstadt Law and protecting Mitchell-Lama units and keeping them in the system and not letting them leave. Third we have to put more resources toward affordable housing. And as Speaker of the Council, I’ve put tens of millions of dollars into the budget to build more affordable units and to make what units we’re creating more affordable. And finally we have to use innovative techniques, like inclusionary zoning, things that won’t require money. And I’m proud of the fact that we’ve just passed the Clinton-Hell’s Kitchen rezoning and created 3,400 units of permanent affordable housing. Those are the right choices. That’s the kind of city that we can be. I look forward to doing it with all of you.
Anthony Weiner: I have a fundamentally different view of the city than the mayor does. Maybe it comes from the fact that I went to public schools, I grew up in Brooklyn, I live in Queens. It’s been awhile since we had a mayor from Brooklyn, huh? You know, I fundamentally believe that when Mayor Bloomberg says, “Ah, it doesn’t really matter that I’m a Republican and I give money to Republicans and endorse Republicans and give a fancy party for Republicans and stand up at a convention for Republicans and say that we should vote for the Republican George Bush,” that’s not what makes him a Republican. What makes him a Republican is fundamentally he has a level of contempt for rooms like this. He has this notion that it is not necessary to talk to other officials of government, it’s not necessary to talk to advocates about how to solve problems, it’s not necessary even to have a vote on something like the allocation of nearly $2 billion of city subsidies for a stadium on the West Side of Manhattan. He doesn’t believe that those processes are necessary.
Well, I argue that democratic ideas, with a capital and a small “d,” not only are the right ones because they give people their say, but you wind up getting better policies. And if he truly had his ear and cared about what the people of the City of New York had to say about these things, and gave us a chance to talk to him about them in a way that is not condescending, then he would find out that there are a lot of good ideas out there, a lot of good ideas from the men and women on this stage about ways to govern this city differently. And he’s going to find them out. He’s going to find them out on the first Tuesday in November when we let him know that he’s going to be a one-term mayor.
BATTERY PARK MONEY FOR AFFORDABLE HOUSING
Question:As mayor what will you do to ensure that the promise of Battery Park City is kept and revenues are spent on the production and preservation of affordable housing?
Fernando Ferrer: Proceeds from Battery Park City, the excess proceeds, were more than twice promised to the people of this city to create and sustain affordable housing. And twice that promise was violated...I want to restore that promise.
But we’re going to need, by the way, not only the proceeds from Battery Park City but so much more city investment in developing affordable housing. There are two important approaches to it: the intelligent use of public land, inclusionary zoning, and the intelligent use of public resources. Not only to develop affordable housing but to keep housing affordable. Now let’s be clear. I’ve got nothing against home ownership. Mr. Shaw made a very interesting point. We need to give people an affordable ownership opportunity. Small homes, co-ops, but we got to remember that this city is a city of renters for a whole host of reasons. And they need not to be priced out of their own town. I’ll keep the promise of Battery Park City.
Virginia Fields: I have repeatedly called for reinstatement of the funds that were established to build affordable housing through the Battery Park City funds, most recently in my state of the borough [address]... When we look at the amount of excess revenue over the next decade we could be looking at close to one billion dollars in terms of the dollars that could be used to leverage private investment in building affordable housing. So, as mayor, I will certainly reinstate that in the way that it was initially intended when Mayor Koch and Governor Cuomo worked to put it in place. In addition to that, I think it is important too to look at the inventory of city-owned land and to make sure that we are not selling that at market-rate prices as it is being done today as another way to look at addressing dollars to be able to build affordable housing.
Steve Shaw: It is true that in 1989 there was a commitment to make $600 million investment in affordable housing from funds by the BPCA. And it’s reasonable to ask for that commitment. But subsequent to that, promises that weren’t even made back then have been made and have been executed. Billions and billions of dollars in subsidies have been given out – billions and billions of dollars. But ladies and gentlemen, more subsidies is not the answer. It is true there is an area for public subsidies, in areas such as supportive housing, which I totally support. There is an area for that for helping the disabled, helping the elderly. But enough’s enough. Where I believe the money should be spent is on our mass transit system. Mass transit system is what really builds this city, it’s what makes this city, apart from the people, makes this city what it is. But the mass transit system is crumbling today. Instead this administration, rather than focusing on the existing mass transit infrastructure, wants to spend over a billion dollars so people could be ferried back to the stadium. That’s not how mass transit money should be spent. So with regards to this, I would not fight for the reinstatement of the $600 million. I would instead allocate that money to the city’s mass transit system.
REPEALING THE URSTADT LAW
Question:Do you support repeal of the Urstadt Law? If you are elected mayor what specific steps will you take to win repeal of the Urstadt Law, and restore full home rule power over its rent laws to the city of New York? How you will overcome the opposition of the governor and senate majority leader to repeal this law?
C. Virginia Fields: I think it is important to repeal this law to give the right to NYC to make decisions around rent stabilization. It’s amazing every time we go to Albany to fight in order to keep these laws in place, we’re talking to people who do not live in NYC, who do not support our concerns nor care about the impact of what is happening here.
Secondly as mayor the specific steps I would take is to go to Albany and not give lip service to it at the time that rent stabilization laws are being discussed, but on a regular basis working with not only our delegation from NYC but working with others, we believe we can turn their opinions around.
This is not something that just the mayor cares about, but many constituencies throughout the city care about this issue. So I would certainly work with other constituencies.
The way we overcome this is to do what the Democratic leader in the State Senate recently said and that is to get a majority in the Senate as we now have in the Assembly. We are close to it. We cannot believe that it cannot happen. So we have to keep working so that we have a majority of Democrats in the Senate working with the majority in the Assembly working with a Democratic mayor leading the way. In '06 having a Democratic governor. And then hold all of us accountable for the things that we say when we’re running for office to make sure that they’re the same things we do when we’re in office. And that’s how we get it done.
Steve Shaw: Typically, I believe that government closest to the people should be in charge of making the policies. I know my mass transit idea didn’t go over too well but I believe that, I believe it should be NYC that controls its mass transit rather than the MTA.
As I mentioned before I am in support of limiting regulation on housing and as a result I would not fight for the repeal of the Urstadt Law. Instead, I would focus my political capital on the ways that I believe will help New Yorkers build better lives for themselves. Work with the state legislature, work with the governor to limit the tax burden on New Yorkers, work with them to create a pro-growth, jobs-friendly environment for New Yorkers, that’s what I would focus on, that’s how I would spend my political capital.
I think it’s important for everybody to realize that when I say I’m against rent regulation people think you got to be pro-landlord. Well, if you look at my campaign contributions, granted there aren’t many of them, I’ve taken about $50 from landlords. So, I’m not in the pocket of the landlords. What I want is I want the market to be just like it is in other cities. For instance, if you go to another city, if you go to Chicago, if you go to Philadelphia, if you go to Seattle and you start looking for an apartment you’ll see a wide array of prices, prices at every price point. The reason why it is that way is because they don’t have rent regulation. That’s why it is. But in New York City, one million units are out of the market. And as a result of that, as a result of that when you go and you look for an apartment the only ones that are available for rent are ones which are thousands of dollars. That’s not acceptable. We get rid of rent regulation, we’ll make significant steps in this area.
Fernando Ferrer: In case anyone hasn’t noticed, there’s a housing shortage in this city. And in spite of the fact that there are a million non-controlled units, we have seen record high homeless rates not seen since the Depression. The two are related. People are getting priced out of their own town and it’s not right. We need rent regulation in this city.
We also need to have home rule. I’ve believed that for all of my public life. And I agree with Borough President Fields. The way to achieve that right now -- it’s achievable, it’s realizable -- is to get the Republican majority out of Albany. The way to achieve that is to elect a Democratic governor and to get George Pataki or any of his surrogates out of Albany. And the way to achieve that is to have a Democratic mayor who won’t [support] the bad and failed policies of George Pataki, Joe Bruno and George Bush.
You know this mayor’s getting ready to go to Albany to fight for the state’s $300 million for Jets Stadium. I haven’t seen much fight for Section 8 vouchers, I haven’t seen much fight for affordable rents. Oh yes, oh yes, some get a $400 rebate check from Mayor Bloomberg. But the bill you know actually never has his name on it. Did you ever notice that?
Gifford Miller: Absolutely I’ll support repealing the Urstadt Law and you don’t have to guess what I’ll do as mayor – you know what I’ve done as Speaker. As Speaker of the New York City Council, I led the Council in for the first time ever passing a resolution calling upon the state to repeal the Urstadt Law and as mayor I will fight again to make sure that happens.
There is no reason, no reason, that we should have to go up to Albany and bargain with some upstate senator for our homes. It is wrong. And I as mayor will change that, partly -- absolutely I agree with my colleagues -- by making sure that we get a Democratic Senate who will care about the needs of New York City and put New Yorkers first and just give us an opportunity to take care of our own, because we’re not asking for anything other than to be able to take care of our own. We’re not asking them for anything.
I will also get you involved in repealing the Urstadt Law. You know I took an enormous amount of heat because last year I took buses and brought working New Yorkers -– tenants -– up to Albany to lobby to make a difference. You would have thought that the walls would come tumbling down. You know, it’s supposed to be only lobbyists who have the money to be able to go to Albany and be able to lobby Albany. Well I’ll tell you, if I’m elected mayor, I will bring all of you back to Albany and we will make a statement again that we will not accept having Albany making decisions for us, we deserve to be able to make our own decisions for ourselves.
EMERGENCY SHELTER
Question:As mayor, will you promise to guarantee the right to emergency shelter for all homeless adults and children?
Gifford Miller: Absolutely. People have a right to shelter in this city. And it’s a sensible thing to do. We can’t be the city that we want to be unless we’re making sure that everyone in the city has shelter. There’s nothing more fundamental. Basic shelter.
Audience member: What do you mean by shelter?
Gifford Miller: Well, the question was about the right to shelter...We absolutely should have a right to shelter and I’m proud of the fact that not only am I saying that but as Speaker of the Council I have fought for that. Amazingly, when this administration took office they were requiring people who were domestic violence victims to show police reports before they got access to the shelter system. These are our people who are literally mothers and children on the run for their lives and the administration was saying come back when you’ve got a fully completed police report. I passed legislation in the City Council to make sure that those victims weren’t re-victimized by our system. That’s the kind of principles that we ought to be bringing to our system. As mayor I definitely will continue that.
Steve Shaw: As we examine this issue, the right to shelter, I believe there is a distinction to be made between the word “right” and the word “privilege.” I believe that when you call something a privilege that it comes with certain responsibilities. That’s what I believe comes with providing shelter, there are certain responsibilities that come with it.
Audience member: Shelter’s not a privilege!
Steve Shaw: You have to behave. If you’re having problems with drugs, you have to get counseling. If you’re having problems with domestic violence, you need to address those issues...You have the same issue that you have with school discipline. You have one or two bad kids and they mess up the situation for everyone. And as a result fewer people are willing to go to a shelter, they say, “you know what, this shelter is going to be extremely violent, its going to be very difficult to sleep there, I’m going to stay on the street.” But if instead, we make those shelters safe and we make people have responsibility, then more people will go into the shelters. And that’s what we’ve been seeing.
Virginia Fields: Yes, I certainly do support the right to provide shelter, emergency shelter as well as other housing for the homeless. And I will continue that as mayor.
But what I want to say up front is I think we’ve got to give more emphasis to prevention. We must look at creation of jobs so that people do not become homeless. We must invest in jobs at every level. I think there was an article in one of the newspapers today, people were talking about manhole covers being made somewhere in India. Why can’t we make them right here in New York City and put people to work? So, on the position side, we must look to put New Yorkers to work so that the issue of homelessness is addressed on that end.
Secondly, we must also invest in programs and services for people who might need them, whether they are alcoholism, drug programs, and supportive housing for the mentally ill because these people need other kinds of support And to the extent that we make those distinctions then we are reducing the number who end up for emergency housing overall.
So yes to providing housing for people who need it on an emergency basis and people who are homeless. It is our obligation, it is our right to do that for them. But working on the other end also.
Anthony Weiner: When the mayor gave his state of the city address he had this tone and he even had a bunting behind him that talked about how great things were in the city. And he talked about how unemployment was down and things were going so well. In fact, the truth of the matter is that last year in the City of New York, in this great city in the year 2004, over 500,000 children showed up at a soup kitchen or a church basement or went to HRA for food to eat.
Let us not be so sanguine in the success that we might have because the property values have gone through the roof to say that we don’t have challenges for those of us to face. And the fundamental difference between Mayor Bloomberg and all of us, is we, in all the disagreements we may have -- and some of them are greater than others -- in all the disagreements that we have, we are fundamentally united by one idea: that we are grateful to live in such a great city, but we are constantly dissatisfied that things aren’t better.
Mike Bloomberg gets up every morning and dislocates his shoulder patting himself on the back because when he sits down for dinner, he sits at a table full of well-to-do developers who say “Oh, aren’t you great.” Well, here’s what I’m going to do: when I get up in the morning, I’m always going to be thinking about the fact that there are people in New York City who are not getting up in a home, who are in the street or in a shelter, I’m always going to get up in the morning knowing that tonight in this city, nearly 15,000 children are going to be without a place to sleep. We can never be satisfied with that.
And that also means that standing up – and I will do this – standing up when it’s Governor Spitzer and saying, “Listen, I don’t care if you are a member of my party, I’m going to fight you every step of the way to make sure the basic needs and the basic dignity of all New Yorkers is protected.”
And that means finding a place for them to live, a job that gives them dignity, education that lets them live up to their greatest potential. And I will never, ever be satisfied unless those things are delivered to my constituents.
RENT GUIDELINES BOARD AND ONE-YEAR RENT FREEZE
Question:Will you support a one-year rent freeze by the Rent Guidelines Board this year? If you are elected mayor, what qualities will you look for in the public members you will appoint to the Rent Guidelines Board? Will you support amending the Rent Stabilization Law to allow for the City Council to vote on your appointments to the Rent Guidelines Board?
Anthony Weiner: I would support a freeze. Part of my concern is that we have started to measure too much about our success as a city by whether or not property values are rising a lot. You hear the mayor talk about this all the time. There is something that must be very nice when you see in the newspaper that wow, this apartment just like the one I own is going up in value a great deal.
But let’s look at what it’s doing. First of all, it’s forcing more and more apartments off the market because more and more people are taking rental units and converting them in to co-ops and condos. That makes it harder to find a rental apartment.
Secondly, it’s driving more and more small businesses clear out of New York. You know, when I led the fight to stop Wal-Mart from coming to Queens -– and I’m doing it now to stop Wal-Mart from coming to Staten Island –- part of it was because I believe what it winds up doing is big corporations like that drive out the small businesses that employ the young people in our community and provide people like all of us our first job.
The real concern I have is that developers in this city, the big guys, have too much access right now. Now we have a city that is driven by access to City Hall that is dominated by the big developers in our city and I’m going to change that.
Quickly on point two, I look for someone who understands every day the plight of New York renters, understands New York City, understands where to go. And as far as 3, no, I wouldn’t give the City Council that vote, I want as much authority as I can because I have big dreams for this city.
Virginia Fields:For the past two years, I have supported non-increase of rent and I would continue to do that as mayor. When I spoke before the Rent Guidelines Board last year, I made it clear that I did not support the rent freeze by the Rent Guidelines Board because we have one of the most serious housing crises in our city today. And rents continue to go up without any information or support in terms of the impact that that is having. So, yes, to that question.
The second question, if elected the type of person I would look for, is clearly someone, people like you, who are in this room -- people who are knowledgeable, people who understand these issues, people who are willing to give the time, people who really do care about this and are not going to be pressured one way or the other but will do what is the right thing to do.
And they will relate to you and hold audiences with you. I think one of the complaints that I have gotten about some of the members on the board is that they won’t meet with advocates, they won't meet with tenants. Well you don’t have that choice. You will meet with people because you are a public representative.
I’m going to agree with my colleague over there from Congress on the last one. I would not look to give this right to the City Council in terms of making the appointment or advising on it. My view on this issue -- someone who has been actively involved in this movement now for a long time, one who has invested in the building of affordable housing, one who has established a Mitchell-Lama task force to make sure we protect all of those rights -- I know that...consulting with you, talking with you, as well as the City Council, I would be able to make that appointment in your best interest, too.
Gifford Miller: First of all, the first question to me is really who are you going to appoint to this board. This board is not some abstract board. This is a board that makes decisions about people’s lives, about whether they are going to be able to stay in their homes, about whether their housing is going to remain affordable. So I think it is one of the most important appointments that a mayor can make. And I would agree with my colleagues that the kind of a person that I’m going to be appointing to that is the sort of person who understands what they’re doing. Who understands that there’s a real difference between four percent and a freeze in people’s lives.
At a time when fare hikes are going up, CUNY tuition is going up, the cost of milk going up, this is a huge decision in people’s lives. And I would want to make sure that whoever is making this decision is somebody who is a fair person, an honest person and who understands the impact of the decisions they’re making.
And absolutely I would expect that person to be the sort of a person to understand that it is time for a freeze. Why should there be a freeze? Because the way that they make this decision is skewed. They never take into account the fact that the returns the landlords are getting on their properties have been going up and up and up and up and up and up. They don’t take that into account, and they ought to.
I would support giving the City Council the right... even if I was mayor. Because if I appointed somebody who couldn’t get through the City Council, I shouldn’t be appointing that person in the first place. And so, I have no problem if I’m the mayor of the City of New York in submitting my appointments to another body for approval. I’m not going to give them the appointment power, because I believe I’m going to make the right decision for the people of the City of New York, but I have no problem having a certain level of public review for it.
Steve Shaw: I don’t believe it’s really up to the government to determine how much money a landlord makes.
Audience member: Who’s it up to?
Steve Shaw: Well, it’s up to how well the landlord operates the property, that’s who it’s up to. A landlord has every right to operate his business as he sees fit. While it’s true that not all landlords are necessarily reputable people, they have the right to operate their business and make a profit.
While I will not support a zero percent increase, what I will do is I will do every thing that I can to cut the tax burden of New Yorkers because in fact that is the largest operating expense of landlords, real estate tax. So, if you want to look at a way that you would be able to lower that, that’s the way that you do it.
Now, in terms of how I would reform the Board, what I would do is as follows. I don’t like when decisions are made with a stacked deck. Just like the MTA approved that the stadium that was going to be there. It’s a stacked deck. It’s appointed by Pataki, some cronies of his, and Bloomberg, some cronies of his. That’s not how it should be made. What I propose is as follows: the mayor has to make five appointments. What I would do is have the mayor nominate five people, have the City Council nominate five people, have public hearings, and then after all those hearings have the mayor select three and the City Council select two. This is too important of an issue to have just one person make. It needs to be made in conjunction with the entire City Council and that is what my solution would do.
SUPPORTIVE HOUSING
Question:What will you do as Mayor to ensure that additional supportive housing is provided for New Yorkers living with mental illnesses?
Virginia Fields: I know the value of supporting supportive housing, as a Council member working to increase the number of supportive housing...It worked. And it provided a safe environment for people who had tremendous needs. So one of the first things that I would do is work with our New York delegation in Congress in an effort to get federal legislation changed to allow subsidies for permanent supportive housing. That would go a long way in terms of making this more of a permanent solution.
That is related to an overall reform or initiative that I would take with respect to our budgets. I would immediately work with our state legislators and our people in Washington to advocate for the things that we need in New York City, including more money for permanent supportive housing. Leading the charge because when we involve our legislators in both areas –- Albany and Washington -– we’re taking care of the business of New York City. Because you know what? The people the mayor represents are the same people Congress people represent, the same people Senate and Assembly people represent. So I would...include them in addressing these issues. And I cannot think of a more important one than to work for federal legislation to change and provide... funding for supportive housing.
Gifford Miller: Absolutely. I’ve long supported moving toward a supportive housing approach from the current scatter site housing and shelter approach. And there’s two reasons: First of all, it’s cost effective. Supportive housing saves money. Because when you can put somebody in an environment where they are going to succeed, give them an opportunity to really hold on to their home and to participate in society with the array of services that they need in order to be able to hold their own, you save money, not just in terms of the shelter system but in terms of the additional costs from entrance into prisons or so many other of the enormous costs that come when we force people to make desperate decisions. So supportive housing is a good investment for the city.
But much more importantly it’s the right thing to do. What we’re here to talk about is how we can help people live in their own homes and provide for themselves. And there’s a lot of New Yorkers that need some support in doing that. So I strongly support supportive housing...
In the Council, I and some of my colleagues have pushed hard for the administration to adopt this...approach, and in the last year they’ve made some progress. You know it’s good to come up here and criticize and say everything that they’ve been doing wrong, but in the last year they started to make some progress towards investing more in supportive housing and moving away from the scatter site housing and that’s the right thing to do. And I as mayor would continue to do it.
Steve Shaw: I believe that supportive housing is a good use of public funds...It attacks the problem at the root, before it becomes a much worse problem. And that’s where public money should be used –- to solve these problems before they become huge issues. What I will say, however, is that using the word “permanent” is very dangerous. Government only has a finite amount of funds. So, if you say that everyone is going to get permanent, then what that’s going to do in the end is it’s going to limit the funding that you can provide for the people on the front end, which is where I think it needs to be focused. So, while I support supportive housing, it cannot be permanent in all cases.
Anthony Weiner: You know this is kind of like shooting fish in a barrel, but I disagree with Mr. Shaw. But...I give Mr. Shaw a great deal of credit. I think if Mike Bloomberg were here, we’d all be a lot better off.
As a Democrat I have no fear talking about...housing services to the disabled, housing services to those with mental illness as not just being something we leave to the whim of the capitalist market. We have to recognize one of the reasons that government exists is because we’re not in this as individuals. We’re not in this as disjointed from society. All of us benefit when those who need care get care. We’re a more civilized place and the economy as Speaker Miller points out winds up benefiting when we care for one another. I don’t believe in the Mike Bloomberg Republican model that says, “You know what? If the free market doesn’t give it out, we’re not going to give it out.”
We have to recognize that programs the federal government has come up with –- like the Section 202 program that provides housing for seniors so that they get out of their market rate apartment (that maybe has two or three or four bedrooms but no services), free[ing] that up for a working family... The government says, “Look, if you find a sponsor and you find a piece of land, we will underwrite virtually all of the construction, if you agree to have these services available for seniors and the disabled.” It’s a model that worked; therefore, George Bush has done away with it. And we have to recognize that there’s value to bringing those programs back.
New York City and New York State entered into a rather progressive agreement, something called the New York New York agreement, in which they said, “You know what? The city and state are in this together, to provide housing for those who need these services.” Naturally, Governor Pataki and the state have walked away from it. Wouldn’t it be remarkable if at the Republican Convention Mike Bloomberg stood up and says, says this to his Republican brothers and sisters, says, “I am here to welcome you to New York and to express my outrage at the 70 percent cut in housing.” It would have elevated that issue to the front pages of the New York Times and finally gotten a national debate. That’s why it’s going to be different with Mayor Anthony Weiner than it was with Mayor Mike Bloomberg.
INCLUSIONARY ZONING
Question: Do you support a mandatory approach to inclusionary zoning, requiring developers to produce a percentage of affordable housing? If so, what percentage do you believe is appropriate? Do you believe that the units developed as affordable should be permanently affordable – or be permitted to convert to market-rate prices after a set period?
Gifford Miller: I absolutely support inclusionary zoning. In fact, I haven’t just said I support it, I’ve forced inclusionary zoning into our zoning amendments that the City Council has been making over the last three years.
When I took office, the administration said, “No way, no how, there’s no way.” But look if we’re going to give property owners the enormous value that comes from upzoning their properties, we ought to take some of that value back for the public.
We have to be realistic. The federal government is not going to come in and bail us out on affordable housing. Because they’re in the process, as the congressman said, of cutting support for housing. The state is not going to come in and bail us out on housing. Cause they’re under court order to meet our schools’ needs and they’re not even doing that. So what do we have as an opportunity? What we have is tools like inclusionary zoning, which says, “You know if we’re going to let you build this high, you can build a little bit higher but you got to use a significant portion of that for affordable housing.”
Not only have I said that I’m for this, I forced this into our plans, as I’ve said. Just recently with the Hell’s Kitchen-Clinton rezoning that we did, I set a new standard for what is going to be acceptable in terms of rezonings: 28 percent of that housing is going to be created affordable housing and yes I believe it should be permanent. Because we’re giving these benefits permanently to property owners, we ought to make the housing we’re creating permanent. It’s the right thing to do.
I’m very proud of the work that I’ve already done on inclusionary zoning, and as mayor I would continue that not just in Manhattan but all over this city in order to create more affordable housing opportunities for all New Yorkers.
Steve Shaw: The issues that I have with inclusionary zoning are as follows. The first is, what it does is it’s putting investment in parts of the city which are of less need than much others. For instance, many of the inclusionary zoning programs are in Manhattan, excellent neighborhoods in Manhattan. They’re in parts of Williamsburg, Brooklyn, which is an amazing neighborhood. I’m from Brooklyn. Congressman Weiner’s from there, I actually live there right now. Manhattan – and those areas – is not really where we need the investment. It needs to be done in the outer boroughs, in parts, Brownsville, Brooklyn, East New York, Brooklyn, parts of Queens, et cetera, et cetera. That’s where it needs to happen. But if all the incentives are toward areas which are already prime neighborhoods it doesn’t make a lot of sense...
The second issue is this: part of inclusionary zoning is upzoning. So, we’re going to let more units be built. Has anyone been to Staten Island recently? Has anybody read the Staten Island Advance? The one issue which they talk about time and time again is over-development. What over-development does is that it taxes the roads, it taxes mass transit, it taxes the schools. It overpopulates those areas. So, it’s not a solution.
In addition, one of the parts of inclusionary zoning is this subsidy called 421-a, where I believe developers get about a 10-year tax abatement. There are all sorts of abatements if you are going to build a ritzy new building which is part of this, but how about the tax policy for the small business owner, the person who really needs it? The person who is being driven out of New York City? That’s what tax policy needs to be focused on and that’s what I’ll do as mayor.
Anthony Weiner: I support inclusionary zoning, but I have to tell you I think we need to take it to the next generation. It is not enough merely to have inclusionary zoning that says 80 percent at market and 20 percent for low-income people. We need to create a third category of housing for middle class New Yorkers. We have to recognize something that, with that meteoric rise in property values, I think that the number that is more appropriate is 60-20-20, [rather] than 80-20.
I think we should have programs that protect housing for middle class New Yorkers, as well, and I’ll tell you why. I think it’s important for the soul of New York, for the culture of New York, to have diverse communities. I think we should not create situations like we’ve increasingly done with public housing that we create very poor pockets of our community. When public housing was at its most successful, is when there was a healthy mix of working New Yorkers mixed in among those who were in most dire need. That created stability and also it created a sense of a ladder out of public housing into market rate housing. So, I would do that.
And I would say to someone, “Look, we have to realize” – and this is where again I disagree with the mayor’s perspective and I disagree with my Republican brothers and sisters – “you’ve got to realize that land in New York city is our asset.” What winds up being developed through the zoning law is something we are in control of. For those of you – well, probably no one in here read it – but for those of you read the New York Post, probably not a popular newspaper in this - , you know there was an excoriating op-ed written by someone criticizing me because I had the audacity to suggest that our zoning should reflect our values. That is exactly what our zoning text should reflect. It should reflect how we parcel out the...scarcest of resource we have in New York, and that is our housing. Just the same way they’re careful with oil in Texas we should be very careful with our housing and real estate here in New York.
The only question I haven't answered...
Audience member: Should it be mandatory?
Anthony Weiner:No I like to work it solo there brother. The only thing I hadn’t answered is the one my friend shouted out and yes, I believe it should be mandatory and it should be permanent. Certainly, the asset that they’re going to get with that skyscraper is going to permanently go up as we’ve seen. Certainly, we should keep the permanence to the affordable units as well.
Virginia Fields: Absolutely, I do support inclusionary zoning as permanent housing. Over the last major ULURP and land use applications, whether it is the rezoning of the West Side or the rezoning of Chelsea-Hell’s Kitchen, you will see the recommendations there from the borough president’s office, advocating, mandating that we do this.
Now, it’s about will. And as a mayor, I will have the political will to live up to that commitment and to continue my advocacy and support. And the reason why is again: We are having a serious, serious housing crisis. And we need to be able to build housing that can be afforded by people at...the many different economic levels. And as developers continue to receive needed and important incentives, they too have an obligation to give back in ways that we can address our housing crisis.
I also think that it is important that we look at inclusionary zoning along with other incentives, such as 421-a and others, so that a combination of these incentives would enable developers to even develop more affordable housing. It is doable. And when we have tested these PILOTS [payment in lieu of taxes] out in several areas, we have seen a difference. So because tax dollars are going to developers to develop these large projects, let’s make inclusionary zoning mandatory, let’s make it permanent, let’s have a mayor who has the will to stand there with us and make it happen.
PRESERVING GOVERNMENT-SUBSIDIZED AFFORDABLE HOUSING
Question: What will you do as mayor to preserve the supply of government-subsidized affordable housing? Will you make city funds available to preserve this housing? What legislation or policies will you support to slow or halt the loss of this housing supply?
Steve Shaw: President Clinton once said...that welfare should be...a second chance, not a way of life. I believe that the same principle needs to apply to public housing.
We cannot have permanent public housing. Right now, the average stay in public housing is about 18 years. Some people stay in public housing their entire lives. That’s not what government programs are meant to do. What government programs are meant to do, is to give people the help that they need, to get them back on their feet and get them back off government programs. That’s what they’re there for.
One of the things that I support is a program that Mayor Bloomberg has put together, believe it or not. It’s called Housing Stability Plus. And the reason why I think it is a good program is this: There is a finite period of time in which you will get the help. The most help is concentrated in the beginning and then it tapers off at the end. That’s how it should be.
When it comes to things such as Mitchell-Lama housing, those were things that were done years and years ago. There was a 20 year period which you knew that it was going to sunset. 20 years! That is plenty of time, more than enough time. So, I oppose any extension of Mitchell-Lama and I oppose what Mayor Bloomberg did with that regard.
The way that government works in this area, it’s all about expectations. If you don’t expect anything and you just say, “Oh you know the people will never be able to afford their own homes, they’ll never be able to afford a rent increase, they’ll never be able to get out of public housing,” well guess what? That’s exactly what’s going to happen. If you keep telling people that they’re never going to do it, then they never will. You’ve got to empower people and that’s exactly what I’m gonna do as mayor.
Anthony Weiner: Hearing a Republican complain that people stay in public housing too long reminds me of the story of the kid who kills his parents and then throws himself on the mercy of the court because he’s an orphan. The reason that you have people staying in public housing for a generation at a time is we have slashed funding to the other housing that they should be graduating to. The Nehemiah program slashed, almost completely eliminated, the Section 8 program, almost completely eliminated, to the point that there are waiting lists of more than 10 years, the Section 202 program almost completely eliminated.
And the federal government has also said about our public housing stock, that you the localities -- the cities and the states -- you have to take care of something that has always been a federal responsibility.
When I was in the City Council for 7 years, and I had a chance to choose what committee I wanted to be the chairman of, I chose the subcommittee on public housing -- not because I had a lot of public housing in my district (I had some), but because I recognized a population of people that was underserved, they’re doubled and tripled up, they’re more likely to be people of color, they’re more likely to be low-income people, and they were being mistreated.
We deserve some credit in the City of New York for investing in our public housing, more than other localities have, but one thing I will commit to is that I will do that investment. I will make sure of something else. Unlike this administration, every single dime of eligible public housing I would try to get and not leave it on the sidelines simply because of ideology. As far as whether I would make the funds available, I certainly would and the legislative priorities that I’d pursue are these, while we definitely need the federal and state help to make these programs work, that doesn’t stop us in the City of New York from doing innovative things ourselves, like helping to clean up brownfields, taking some of the legal liability off of developers if they agree to build low and moderate income housing. We can’t simply sit on the sidelines and say, it’s enough that we create another giant glass market-rate building and ignore public housing and the stepping-stone housing programs that help people take themselves out of public housing and get them into their own homes. But we have to make sure those homes are available.
Virginia Fields:As mayor I would certainly invest in government-subsidized housing to preserve it...I don’t only think about government-subsidized housing as it relates to [the New York City Housing Authority], but I also think about Mitchell-Lama. Because we are losing so much of our Mitchell-Lama base and that is our stable, middle-class working population.
So, what I have done, over the past three or four years, and some of you are of course members of our task force, and through that task force we have worked with our state legislators to introduce legislation and every year we go to Albany to advocate, again.
But this is about people in Albany not understanding what our housing needs are and therefore not supporting it. So, I would continue to invest in the capital improvements and renovations of our NYCHA developments so that we can maintain decent living housing for the people who live there. I would support continued legislation with respect to Mitchell-Lama in an effort to at least try to get some of that stabilized under the Rent Stabilization Law so that people can be further protected there. I would continue to advocate in Albany and make it known the importance of making sure that we support these initiatives because without it, quite frankly, so many of our people are threatened with the possibility of losing their housing and perhaps their lives too.
Lastly, with respect to NYCHA, I certainly am opposed to a lot of the laws, congressman, in Congress as it relates to forcing people to do community service just to be able to continue to work there. So we will fight against those issues and try to keep people in their homes.
Gifford Miller: I am an extraordinarily strong supporter of supporting the supply of subsidized affordable housing. Why? ...[S]pending a little bit of money to preserve existing affordable housing is so much less expensive than the alternatives -- either people losing their homes and entering the shelter system or having to build more affordable housing which is much more expensive than preserving what we got. So I absolutely strongly support this and I think here’s an area where you don’t have to guess what I’ll do as mayor because you know what I have done already as Speaker. I have put millions of dollars into the budget to deal with and address the needs of distressed Section 8 housing, and on Mitchell-Lama, I have passed legislation to extend the tax credits for Mitchell-Lama housing so that it makes for people to stay in the program. And I’m sponsoring legislation to make sure that every Mitchell-Lama tenant has the right, if their owner tries to take the project out of the program, every Mitchell-Lama tenant should have the right to buy their own home right then. I’ve sponsored that legislation with many of the groups that are involved here, we’re working hard and I expect to pass that before this session is out. So, you don’t have to wait to know what I’m going to do if I get elected mayor. You can check what I’ve been doing as Speaker of the City Council right now, today, to support these programs.
I will make the money available, I will support policies to slow down the reduction of housing supply and absolutely as mayor I will continue those policies.
EXPANDING RENT INCREASE EXEMPTIONS TO THE DISABLED
Question:Will you fight for State legislation allowing for the expansion of SCRIE (Senior Citizens Rent Increase Exemption) to assist tenants living with disabilities? What steps will you take to ensure that this expansion of SCRIE occurs in New York City?
Anthony Weiner: I think that SCRIE should be extended to make people with disabilities...eligible. Plus, I think we need to raise the income level to make it so that middle class seniors can be eligible as well. It’s not enough simply to say that we’re going to lift up a small fraction of seniors as needy as they might be. So many seniors are being pushed into poverty by the rent that they are paying. They’re not eligible when they fill out the form, by the time they’re done paying the rent, they’re pushed down into Medicaid poverty.
And the way I would fight for it is the way I’m going fight for every issue when I’m mayor of the city of New York. There is not going to be any issue, and maybe it’s from my upbringing, there’s not going be any issue that I’m going to say, “Ah, it’s not my job.” I’m not going to pursue this job the way Mike Bloomberg has said, “I’m only going to advocate when I think it’s something that I care about.” I’m going to fight if it affects you, if it affects my neighbors in the city of New York, I am going to go up to Albany every day if necessary advocating.
Virginia Fields: As borough president I’m pleased to have been a leader in fighting for changes in the state legislation not only to expand SCRIE in terms of income levels for seniors but making sure that we got the language added to address people with disabilities. We still have work to do, but we have been a leader on that issue, we have been able to get our colleagues in Albany to present legislation and we will continue to advocate for that: An increase in the income level for seniors as well as for people with disabilities.
As the mayor, ensuring that we are able to do this here in New York City, the efforts to lobby Albany, to work with our legislators, again for the purpose of ensuring that we all understand, I as mayor represent the same people they do, and they as legislators represent the same people I do, working as a team, inclusion, making sure that the priorities that affect our daily lives in New York City are the agenda that all of us are carrying forward and I would be a tireless advocate and a leader and a partner with my colleagues who have the responsibility in Albany for addressing this particular issue.
So it is about partnership, it is about inclusion, but it is about a mayor who cares about all of the priorities we have been talking about here tonight. And it is about real leadership...[T]hat is the kind of commitment I made as borough president, as City Council member, and I certainly will not stop as your mayor.
Gifford Miller: This is another example of a question where you don’t have to wonder what I will do as mayor, you can already examine what I’ve done as Speaker. I passed legislation in the New York City Council calling upon the state to give us the power to expand SCRIE to tenants living with disabilities, and if I’m mayor I will fight once again in order to get that done.
This is the moral responsibility of a mayor – to stand up and fight for those who need our help the most. And tenants who are living with disabilities, struggling to try to afford rent, it doesn’t make sense to be making it more difficult for them to stay in their homes. Because if they lose their homes, it’s going to cost all of us in financial terms, but more than that, it’s going to cost us something moral, something deep about the kind of city we are.
And what steps will I take? I have been a leader who has brought together, repeatedly, the most diverse legislature in the country behind great goals that people said couldn’t be accomplished and then gotten them done even during the most difficult times our city’s ever faced. I passed the first earned income tax credit this city has ever seen, lifting 700,000 people from poverty toward prosperity. People said it couldn’t be done. I passed the first living wage law this city’s ever really had, helping 50,000 families provide for themselves and their children with jobs that are created by government dollars. People said that couldn’t be done. And with your help, I passed the first real lead paint legislation in this country to protect children all over New York from the scourge of lead paint without driving the cost of housing through the roof. Something everyone said couldn’t be done except the people in this room.
I know how to bring together great diverse coalitions behind great causes like this and the other ones we’ve been talking about. And I know we can be a more just city, I know we can. With your help, I’ll get that opportunity to lead this city.
Steve Shaw: I believe that expanding SCRIE to people with disabilities makes sense. I believe it’s a good use of public resources. Because the way that I look at problems, the way that I look at the role of government is, where does it make sense? And here is where it makes sense. Government, as I mentioned before, has so much in money. So the question is this, do you focus it on things such as inclusionary housing, which are by and large focused on already excellent neighborhoods in New York City, or do you focus it on the people who really need it, such as people with disabilities? That’s where I think the focus needs to be.
In closing, the way that I look at government and the way that I look at housing policies is as follows. Above all, I believe in you. I believe that you, if you’re left in control of your own destiny, will build a better life for yourself. That’s what it has to be, it has to be up to personal responsibility. Not everything can be relied on the government. And I’ll do everything that I can to empower you, do everything I can to make your life in New York as good as it possibly can be.
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Discrimination In Housing Is Rampant
Americans are so used to discrimination that many people rationalize it away these days, saying “Well, Latinos want to live with other Latinos and Blacks want to live with Blacks.”
“We’ve lived with it for so long, we don’t even think it’s wrong anymore,” said Andrew Cuomo. “We have to start to say we’re not going to take it anymore.”
Cuomo, the former secretary of the U.S. Department of Housing and Urban Development, is the founder of HELP USA(Housing Enterprise for the Less Privileged), which in April started the Fair Housing Justice Center to address housing discrimination. He was one of the speakers at a recent symposium on fair housing.
It doesn’t take a symposium to make clear that housing discrimination is rife throughout the United States. And despite its reputation as the progressive center of the country, New York City abounds in examples: An apartment ad on the popular Craig’s List web site stated that families with childrenneed not apply. The city has more than two million units of housing inaccessible to people with disabilities, according to a city study.
Those looking for the scarce good news when it comes to housing discrimination can point to the city’s human rights law, which affords protection against discrimination to more classes of people than the state or federal governments. But, out of earshot of their bosses, some workers at the agency primarily charged with enforcing that law, the city’s Commission on Human Rights, readily admit that the complaint-driven enforcement mechanism is ineffective. Most people simply do not complain about discrimination, and there is no aggressive testing to root out violators.
“New York City is more segregated in 2000 than it was in 1910,” said Craig Gurian, the executive director of the Anti-Discrimination Center of Metro New York. An interactive mapshowing racial concentration in the city over the years proved his point. “Racial segregation just keeps growing and growing. We have to admit that we haven’t been very successful in fighting this problem.”
At the symposium on fair housing, a variety of speakers addressed four specific areas where discrimination in housing is particularly glaring:
- predatory lending schemes that target Latinos, African Americans and other people of color
- women who are victims of domestic violence denied housing because of the potential for violence in their households
- immigrants denied housing for, among other things, complaining about conditions in their apartments
- and, persons with disabilities effectively denied housing when landlords refuse to make reasonable accommodations.
Despite the severity of the problem, few agencies are doing much about it. Though HELP’s Fair Housing Justice Center opened recently, with financial support from HUD, this comes two years after the closing of the Open Housing Center, a focused and citywide independent effort to enforce city, state and federal human rights laws.
The city’s efforts amount to little more than telling people that discrimination is against the law. Even that it does not do very well, unless you consider pretty posters effective.
Predatory Lending Schemes
There is a new, almost pathological twist on the traditional discrimination against African Americans and other people of color. Once unable to obtain loans to buy houses or “redlined” out of certain areas by banks and other loan-making institutions, people of color are now actually targeted by such institutions for lending, called predatory lending because of how its practitioners prey upon vulnerable people.
“The vast majority of people being targeted for predatory lending are people of color,” said Josh Zinner, founder and coordinator of the Foreclosure Prevention Project at South Brooklyn Legal Services. “This is very much a racial issue.”
A map Zinner provided made the point convincingly. When sites of predatory lending were overlaid on a demographic map of the city, it was painfully obvious that predatory lenders are targeting people in neighborhoods where people of color predominantly live.
Predatory lending occurs in three general categories, Zinner explained: When people refinance loans on homes they already own; when people purchase homes or “flip” property – buy it and sell it quickly; and, when people are in foreclosure proceedings and lending institutions show up to “save” them by refinancing their mortgages.
In some cases, the victims of these practices end up taking on loans that are completely unaffordable and wind up losing their homes; in others, they sign over the deed to their homes and lose them.
“It’s such an emergency situation that there are bills in Albany to address it,” Zinner said. But he urged people to oppose a bill in Congress, the Responsible Lending Act, also known as the Predatory Lending Protection Act, which would eliminate protections for consumers considering mortgages. That law would supercede state laws for institutions with federal charters.
Victims Of Domestic Violence
Domestic violence is a major cause of homelessness, according to statistics from the Women’s Rights Project of the American Civil Liberties Union. In New York City, as many as a quarter of all homeless parents were homeless as a direct result of domestic violence in 2002, according to a study by the Institute for Children and Poverty.
“Landlords are holding the tenants responsible for the violence in their apartments,” said Emily Martin, the project’s staff attorney “In public housing, if the police come to the home, it’s seen as a disturbance that the tenant caused.” In other cases, she said, domestic violence victims’ applications for apartments are rejected because of the potential for future violence.
One answer is litigation, Martin said, and she pointed to a case in Vermont where her team successfully used the federal Fair Housing Act to compel a landlord to drop an eviction proceeding against a woman who had been battered. The landlord’s claim that the woman was partly responsible for the violence reflected a gender stereotype of domestic violence victims, and the law holds that such stereotypes are discriminatory.
The Disabled
The discrimination that disabled people face in housing varies depending on their disability. The city’s human rights law has been effectively put to use to force landlords to make apartments accessible for people with disabilities. While the federal Fair Housing Act says tenants have a right to accessible housing, it places the burden of paying for accommodations on tenants. The city’s law, on the other hand, places that burden on landlords, as long as this does not create an “undue hardship.”
“Ignorance around disability laws is amazing,” said Ted Finkelstein of the Commission on Human Rights and coordinator of its Project Equal Access. The project educates people on the law and makes landlords make reasonable accommodations for people with disabilities: install ramps, free up parking spaces, and install lighter windows, for example.
Convincing landlords to make those improvements is rarely easy, he said.
“Owners go through a litany of reasons for why they cannot make reasonable accommodations.”
Immigrants
The discrimination immigrants face is probably significantly under-reported, or rather, even more under-reported than other types of discrimination. I have written previously about the problems immigrants face. At the symposium, Alfred Placeres, an attorney who specializes in immigration law, highlighted some consequences -- overcrowding and illegal sublets -- while emphasizing that helping people resolving their immigration issues was an important way to help them.
Landlords can refuse to rent to illegal immigrants and avoid a discrimination complaint by saying that they did so because the immigrants have no verifiable income, no credit history, no tax returns and no social security numbers, he said.
Joe Lamport is the assistant director of the City-Wide Task Force on Housing Court, a coalition of community housing organizations. Â
Real Estate
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For all the talk of a real estate boom, Park Slope real estate broker Annie Rose says it is still possible to find a condo in Brooklyn for $55,000; of course, she explains, this is just for your car. Rose's firm began selling spots in its "condo parking garage" after most regular parking garages in the area were closed down and converted into apartments to capitalize on the hot market. The car condos, she says, "are selling like hotcakes."
Actual places to live, on the other hand, are selling far better than hotcakes, which have never been as popular in New York as real estate. People should expect to spend $250,000, Rose says, for a studio apartment that five years ago would have cost only $70,000.
Across the city, real estate prices are breaking records. Late last year an apartment in Brooklyn Heights sold for $8.5 million, becoming the most expensive home in the borough; several months later, a house on the same block went on the market for $20 million, after the couple who own it claimed to have been offered $10 million for it, in cash. Just last week, Donald Trump -- who for better or worse has become the human embodiment of the city's real estate obsession -- signed a tentative deal to sell a plot of land with three apartment buildings on it for $1.8 billion. It will be the largest residential real estate deal in the city's history, and Trump and his partners are set to receive 18 times what they paid for the land a decade ago.
The enthusiasm that some New Yorkers feel for the real estate market is matched only by the anxiety that others feel about its impending bust. New York Magazine recently printed the word "CRASH" across its cover in huge red letters, then spent 13 pages trying to prove the coming of an apocalyptic collapse. Recent worrying comments by officials and industry groups have bolstered the arguments of those sharing this view.
It is not only tycoons with a stake; the city itself ties its fortunes to the business of buying, selling and owning its scarce land. The current market, where more and more properties are being sold at higher and higher prices, has filled the city's coffers: Mayor Michael Bloomberg recently presented a budget with a huge surplus, thanks largely to a spike in real estate-related tax revenues.
But soon, the mayor warned, the city will be forced to face the unpleasant reality that the good times can't last forever. "This is one of the things that should concern us," he said of a downturn in the real estate market. "And there's not much we can do about it."
All of this is only the latest expression of New York's long fixation on real estate. For many, real estate is the main show in the city. Doubtless, the real estate market looms large in the city's culture and its collective psychology. But how does the real estate market affect the way New Yorkers actually live? How much does the city rely on it economically? And what will happen here if the real estate market does crash?
NEW YORK’S REAL ESTATE OBSESSION
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New York’s fascination with the real estate deal goes back as far as what could be described as the city’s creation myth, when European settlers purchased the island of Manhattan for $24 from its Native American inhabitants – then proceeded to push them out in the first of the city’s many waves of gentrification. (Of course, Mike Wallace and Edwin Burrows point out in their book Gotham that had the Native Americans invested that money at 6 percent interest for 300 years they would now have about $62 billion, so the sale may not have been as lopsided as generally believed.)
Since then, enormous fortunes to be made in New York City real estate have continued to be the stuff of city lore. “Could I begin life again, knowing what I now know and had money to invest, I would buy every foot of land on the island of Manhattan” said John Jacob Astor, the city’s original real estate mogul, after using the Manhattan real estate investments he did make to become the country’s richest man, America's first millionaire.
But the business of real estate in New York is more than just business; in many ways it dictates city politics and defines its culture -- a result, many believe, of the desire to do so much on what is relatively little land. From the proposed basketball arena in Brooklyn to the proposed football stadium on the West Side to the ever-shifting proposals for Ground Zero, many of the hot button political issues of the day revolve around plans to use big chunks of the city’s scarce real estate.
The city regularly gives multimillion-dollar subsidies and tax breaks to encourage real estate development. Critics see these deals as accomplishing little more than demonstrating the power that developers have at City Hall. According to one study, property tax exemptions cost the city almost $8 billion last year.
“Taking on the real estate industry in New York is like taking on oil in Texas,” said Bettina Damiani of Good Jobs New York, a group which tracks city subsidies to corporations and says it is common for them to end up in the hands of companies who had no plans to develop elsewhere anyway.
To many New Yorkers, the difficulties average people face trying to survive in such an absurd market are taken as points of pride. In 2003 for example, Time Out New York printed a checklist of behaviors distinct to New Yorkers. An entire section was devoted to the city resident’s obsession with real estate:
- Seriously consider renting an apartment whose bathtub is in the kitchen
- Be forced to live with your ex after the breakup because neither of you can afford to move out
- Peruse the local real-estate ads [when you’re out of town] just to see what kind of mansion your NYC rent could get you in that podunk town.
Much more than in other places, New York residents define themselves by their location, said Steven Gaines, author of recently-published book The Sky’s the Limit about the culture of high end real estate in Manhattan.
“One avenue in either direction can change who you are,” he said in a recent interview from his home in the Hamptons. “New York is a very status conscious place, and real estate is the most public representation of yourself.”
REAL ESTATE AND NEW YORK CITY’S ECONOMY
The city itself has good reason to be interested in the real estate market. Revenue from real estate taxes were so large in this year's city budget that they accounted for much of its unexpected $3.3 billion budget surplus. But both the city and independent budget monitors say that this revenue is going to drop off sharply next year, as the number of real estate transactions are expected to decline.
The Independent Budget Office predicts (in pdf format) that revenues from the real estate transfer taxes will decrease by 30 percent; largely because of this the city expects a deficit in fiscal year 2007 (which begins in July, 2006) of $4.5 billion.
Shifts in the real estate market are likely to affect the city’s tax revenues in other ways as well, most notably in income tax receipts. If the incomes of the 116,000 people working directly in the real estate industry -– and those in various other related industries like construction –- were to drop, so would the city's coffers.
But, even though almost 40 percent of the city’s tax revenue comes from property taxes, budget experts say this is the one tax that is relatively immune from fluctuations in the real estate market, since the city has caps on how much property tax can increase on small buildings from year to year, and, for larger buildings, calculates the tax based on the average of their assessed value over the previous five years. In other words,the property taxes are insulated from any short-term ups and downs of the market.
“Even if you had a total collapse –- which we’re not expecting -– it takes several years to work through the system,” said George Sweeting, deputy director of the Independent Budget Office.
While taxes like the real estate transfer tax may be more volatile, Sweeting says that the city has prepared itself well for such swings. All in all, experts agree that New York is less reliant on real estate for tax revenues than are many other jurisdictions.
But even a strong real estate market can cause problems. Yes, such a market encourages development, and makes the city seem desirable for both businesses and residents, according to James Parrott of the Fiscal Policy Institute. “On the other hand, it squeezes a lot of people out, forces them to pay more, and probably prevents a lot of small business formation; they just get priced out of New York City.”
Nowhere is the blessing as mixed as in residential real estate.
GETTING PRICED OUT OF THE CITY
A Boom or a Bubble?High home pricesnationwide have led many to say that there is a speculative bubble in real estate. A bubble is formed by a growing demand for a seemingly good investment, pushing prices up without a corresponding increase in intrinsic value. People buy at inflated prices, believing they’ll be able to sell even higher. This eventually leads to a "price correction," or, in layman's terms, a crash. Throughout history, people have created such bubbles by getting worked into a frenzy and then growing tired of just about everything from Florida swampland to tulips to, recently, technology stocks. Experts who see a real estate bubble cite the disparity between real estate prices and rents and between real estate prices and average income, both particularly pronounced in New York. But others contend that New York’s market is safer because there is less speculation here; it is just too expensive to gamble here. And if it's not a speculative frenzy that is driving up prices, they say, then it must be a combination of nationwide factors such as low interest rates, and local factors such as low crime rates. Jonathan Miller of real estate firm Miller Samuel says that the city’s market is in much better shape by almost every measure than it was during the last boom -– which ended in a serious crash. One big difference, he says, is that in the late 1980s a glut of new luxury housing flooded the market, through new construction and condominium conversions. While the current construction boom does promise to add significantly to the city's housing supply, people in the industry say it will not have the profound effect it did the last time around. "If we have some sort of correction,” said Miller, ”then I think it will be a very soft landing."
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For those who own property, increased values come with many benefits, including the ability to borrow more money and the option of selling a home at a much higher price than you purchased it. For those who do not own the place they live, however, the real estate boom has been painful.
Nationwide, the conventional wisdom is that the current boom is great for the so-called average American. Because homeownership rates are high -- 70 percent of Americans now own their homes -- many people are benefiting. But it is a different story in New York, where only one third of residents own the places in which they live.
The demand on housing has pushed vacancy levels down and, consequently, pushed rents up. In a recent New York Times poll, about half of New Yorkers said they paid as much as they could for housing, while about a third said they were paying more than they could afford. Forty percent of renters said they paid too much for housing, about double the percentage of homeowners who felt the same way.
The increase in rents is nowhere near as sharp as the increase in home prices. However, as property values increase, owners of apartment buildings have more incentive to renovate their buildings and more money to do so. Both of these trends have led to an increasing number of apartments being taken off the rent regulation rolls, say housing advocates. Landlord groups dispute this, but the Rent Guidelines Board recently reported that there was a net loss of 4,700 rent regulated apartments last year.
Michael Clarke’s Prospect Heights apartment was one of those; his monthly rent has gone up $75 since his landlord renovated the building, pricing it out of the program.
Clarke, a 32-year old PhD student and a native New Yorker, is now looking to buy an apartment. “I’m getting older, I’m going to be making more money,” he said. “I don’t want to keep pouring money into an apartment.”
In the eight months he has looked to buy an apartment, Clarke has been shocked by how little he can actually afford. For the $200,000 that gets him a studio apartment in New York, he says, he can get a house with a yard in Atlanta, which he says is full of ex-New Yorkers anyway. He’s planning to move once he graduates.
ARE WE IN A BUBBLE THAT WILL BURST?
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Clarke says that he can’t imagine that the real estate market will become affordable in time for him to change his mind.
It does look like the momentum is only pushing the market up further. Miller Samuel, a real estate appraisal firm that does a quarterly survey of Manhattan co-ops and condos, found in its most recent report that records were broken in every category (in pdf format). The average condominium in Manhattan is now worth $1.2 million, more than double the average price from five years ago. While the absolute numbers are not as extreme in other boroughs, the trends are headed in the same direction.
But in New York and across the country, there is increasing talk of a real estate bubble, a market where what Alan Greenspan once referred to as “irrational exuberance” drives up prices. Once formed, such bubbles are prone to pop, sending prices plummeting.
New York’s market is especially prone to soaring and diving, which economists say is a result of little developable land and significant political barriers to building. The last time the market crashed, in the late 1980s, median co-op and condominium values in Manhattan dropped by 47 percent over seven years, leaving an unmistakable mark on the city.
"Construction stopped, people lost bunches of money, values went way down, and mayors didn't get reelected,” said Brendan O’Flaherty, a professor at Columbia University’s business school.
Economists debate whether the current market is a bubble, or what it would look like if it did burst [see sidebar for more on this debate]. On both a national and a local level, the effects of a true crash in the housing market would be severe.
“If there is a residential real estate bubble that bursts, that creates problems for a lot of individuals," said Parrott of the Fiscal Policy Institute. However, he said, if the market didn't burst but just... slowed down, "that would be a good thing."
FOR MORE INFORMATION
Real Estate and City Finances
May 2005 Executive Budget, Fiscal Year 2006 (New York City Office of Management and Budget
Analysis of Mayor's Executive Budget for 2006 (Independent Budget Office)
Frequently Unasked Questions about the Budget (Gotham Gazette)
State of Distress: How New York State's Property Tax Exemptions Are Starving New York City's Treasury(City Project)
The Real Estate Boom -- Or is it a Bubble?
America's House Party: Record home prices are inflaming passions and pocketbooks as never before. Inside our raucous obsession with real estate (Time Magazine)
Nationwide Market Overview, April 2005 (National Association of Realtors)
Manhattan Market Overview, First Quarter of 2005 (Miller Samuel Real Estate Appraisers and Consultants)
A Nationwide Housing Bubble (New York Times)
Is Your House Overvalued? (New York Times)
A Real Estate Bubble? (Business360)
Has Falling Crime Driven New York City's Real Estate Boom? (Fannie Mae Foundation's Journal of Housing Research)
What a Real Estate Crash Would do to the Nation's Economy(New York Times)
Real Estate Web Sites
Curbed
New York Times Real Estate
New York Magazine's Real Estate Section
The Real Deal
Slatin Report
Triple Mint
Property Shark
Â
Preserving Social History on Roosevelt Island
 Forty years ago, New York reacted to the loss of old Pennsylvania Station by passing a law to protect city landmarks. In this series, in partnership with Open House New York, New Yorkers with a stake in the physical city will argue the consequences of the law, the merits and drawbacks of the preservation movement, and what the future might bring. |
In April 1975, 2,000 new apartments opened on Roosevelt Island -- a tram ride away from the East Side of Manhattan. And so this April 25 marked the 30th anniversary of the current Roosevelt Island community.
But while many New Yorkers think of Roosevelt Island as a new community, for much of the 19th and early 20th century it played an important role in the life of the city. Much of this history was lost in the 1960s and 1970s, when the city was only beginning to recognize the value of preserving its history – and its old buildings. As attitudes and policies changed – with, for example, the enactment of the Landmarks Law that created the city Landmarks Preservation Commission – a handful of buildings were saved. Now, with the real estate market putting new pressures on the island, it is more vital than ever to preserve the history of this 147-acre piece of land in the East River.
For decades, Roosevelt Island, Blackwells Island, or Welfare Island -- whichever name you want to use -- was home to a penitentiary, workhouse, lunatic asylum, Metropolitan Hospital, City Hospital, and various almshouses. Goldwater Hospital, for victims of polio and other chronic diseases opened in 1939.
And so Roosevelt Island was key to our corrections history, our medical history, our social service history. It is the history of how people were treated and of what people thought.
Over the years, much of this has been forgotten because, as someone once said to me, these were not the golden years. The institutions on Roosevelt Island were not the kinds of places you glow about, but they did provide desperately needed services. In the 1940s, 10,000 people lived on the island, mostly in institutions. We should not forget them.
 Designed by James Renwick, the lighthouse at the northern tip of Roosevelt Island helped ships navigate their way through treacherous waters. |
Roosevelt Island is also part of our architectural history. The works of Frederick Clark Withers, James Renwick, and Alexander Jackson Davis -- three very prominent architects -- are still visible on the island.
If the island had been developed 10 or 20 years later, the builders probably would have saved more of the structures. But in the 1960s and 1970s, many beautiful buildings were just bulldozed. The development corporation had the attitude, "when in doubt, throw it out." Their theory was that it is cheaper to build new.
And so we lost the city hospital, a large Versailles-looking building at the southern end of the island. The administration tore it down, in the early 1990s, but it could have been restored into a beautiful chateau-like building.
The Central Nurses Residence, a massive yellow brick dormitory built for nursing students and staff in the 1930s, was a perfectly good building that could have been converted to a different use, but the island administration decided to abandon it, because it interfered with vehicular traffic flow. And some beautiful houses at the northern end of the island could have been rebuilt.
Our landmarks are technically owned by the state of New York, meaning the city has little control over them. The other dilemma is that the government exempts themselves from any penalties and protection of abandoned landmarks. Thus, the Smallpox Hospital, a government building, has never been rescued by a municipal agency.
We are lucky that the developers saved at least the six historic buildings we have today. Without our 40 years of landmark legislation, these structures would almost certainly have vanished as well, But today all are on the National Register of Historic Places and on the state register and are designated New York City landmarks.
If you start from the southern tip of the island, you see the smallpox hospital designed by James Renwick in the 1860s. Back in the 19th century, this was about the only hospital where rich people went. Usually, poor people went to hospitals and died, while rich people were treated at home. But because smallpox was so communicable, even rich people who contracted it had to go to the hospital.
 The Octagon once served as the entrance to the country's first municipal lunatic asylum but will soon link two wings of an apartment building. |
The building later became Riverside Hospital and then a school of nursing -- the third one in the United States -- until it was abandoned in the 1950s. For more than 20 years, the site remained closed to the public.
But some New Yorkers remembered the building, perhaps noticing it lit up at night when they drove along the FDR Drive. And so in 2003, when Open House New York featured it as one of its sites to visit, 400 people came on a single day to this landmark at the island's southern tip. In 2004m more than 700 people again visited the site in two days of Open House New York.
They saw a building in terrible condition. In winter, as water freezes and melts, cornice stones fall from the facade. But the building's grandeur shows through the flaws.
Imaging and computer work indicates that the hospital would need millions of dollars in repairs to stabilize it. No one has come up with an economically feasible plan to restore the building. Most likely, it will become a kind of stabilized ruin.
A kinder fate has befallen Strecker Memorial Laboratory, a charming Withers and Dickson Romanesque structure. Built in the 1890s, this medical research facility sat fallow for almost 50 years. Then the Metropolitan Transportation Authority decided to use the building for a power conversion substation for the train lines that run beneath the island. electricity station. The agency restored the building's exterior and installed equipment inside. It opened five years ago and remains in beautiful condition, an example of how creative thinking can save an old building.
As you go up Main Street, you see Blackwell House, a gray wooden farmhouse built in 1796 by the Blackwell family when they owned the island. In the 1970s, when the island was developed, architect Giorgio Cavaglieri completely restored the building. Unfortunately, the people who ran the island in the 1990s leased Blackwell House to tenants who did not take care of it. Now, we are in the final steps of obtaining the long promised state funds to do repairs and hope to reopen the house as a community building and preserve this building for the future.
The next landmark is the Chapel of the Good Shepherd, an 1889 brick and brownstone chapel designed by Frederick Clarke Withers, who also designed Jefferson Market Courthouse. Originally, the chapel served the residents of the city home or almshouse, which at one time, was home to between 2,000 and 3,000 poor and homeless people. Restored, also by Cavaglieri, in 1975, the church is used by both the Episcopal Church and the Catholic Church. It is also our largest community meeting space.
The Octagon offers a more complicated story. Built in the 1840s, it served as the first municipal lunatic asylum in the country until 1895 when it became Metropolitan Hospital. As a young writer, in 1843, Charles Dickens visited the asylum and wrote about the listless, mad people cowering in the hallways. As a reporter for Joseph Pulitzer's New York World, Nellie Bly, whose real name was Elizabeth Cochrane, had herself committed to the asylum for 10 days in 1887. She then wrote a scathing expose on the horrible conditions, which did succeed in improving it a little.
During this period, the Octagon functioned as the entrance to the asylum, with two wings coming off of it, creating an L-shaped building. Now the wings are gone, but the octagonal entrance is being completely restored. Two fairly modern-looking new wings will hold about 500 apartments. They have already added four floors adjacent to the Octagon -- the landmark Octagon. And some people do not see the merit of saving any of it. Recently, I was at the Octagon building and the construction site manager said to me, "Why didn't they just tear that down a few years ago?"
 The Metropolitan Transportation Authority saved Strecker Memorial Laboratory when it renovated the 1890s building for as a power conversion substation. |
Putting modern wings on a landmark building is not an ideal solution. But at least a small piece of the original building, including a recreation of the beautiful interior staircase in the dome, remains. The exterior will be an exact copy of the original, since it is a landmark structure.
And in some sense, visiting the Octagon to get a sense of its history resembles going to Rome. When you go to the Coliseum, you don't see lions or people being slaughtered. You have to use your imagination. Sometimes, small fragments make people think about what was in a place and what went on there.
And last but not least we have the lighthouse, also designed by Renwick, which has been repaired and restored. Only 53 feet tall, it was built in 1876 to light the way at the tip of the island because the river's swirling currents are very treacherous.
While we celebrate these buildings, challenges remain. Raising money for the projects is always a problem. And today's real estate market could also affect the island, home now to some 10,000 people. About 1,200 people will move into the new wings of the Octagon. The Southtown development is supposed to include nine buildings. Plans to put affordable housing there now are in doubt. The landlords would like to see resident of 2,000 original affordable apartments lose their subsidy and rent the building at market rates. It has become a gold rush.
If you come to the island on a summer late afternoon or evening, parents and kids are sitting in the park outside the chapel. We have beautiful little cul-de-sacs and little grassy areas. They are empty because people like to be in public spaces. They like to be on the street. Developers and urban planners often do not seem to understand that. And people like our old buildings. They like to sit outside of Blackwell House and the little park next to it. The lighthouse park also is very popular. These landmark structures are somehow more comfortable than the concrete of our 1970s design.
I love Roosevelt Island. It's a small town, people caring about each other, people knowing each other, sitting around and schmoozing. It's almost like the old days. And our six historic buildings contribute to that feeling. They tell us about our past and they add character.
Judith Berdy is president and historian of the Roosevelt Island Historical Society
Zoning Instead of Planning in Williamsburg and Greenpoint
Once again, the city is zoning without a plan.
About five years ago, after hundreds of meetings and more than a decade of work, community groups in the Brooklyn waterfront neighborhoods of Greenpoint and Williamsburg reached consensus on plans to revitalize their decrepit industrial waterfront. The Greenpoint and Willliamsburg 197-A Plans (after Section 197-a of the City Charter that allows communities to submit plans for official approval) proposed a mix of low- to mid-rise housing more or less like the three and four story buildings in the neighborhood, so it would be affordable to tenants in this working class neighborhood. This kind of contextual development became more critical as the neighborhood began to face intense development pressures. The 197-a plans proposed that the mix of industry and housing be brought down to the waterfront, but without the noxious industries like waste transfer stations that have concentrated in the area in recent years. And they wanted public access to the waterfront. The Department of City Planning studied the community plans, made a lot of changes, and then the plans were approved by the City Planning Commission and City Council.
The massive rezoning of Greenpoint and Williamsburg that the City Council just approved bears little resemblance to the community plans. Ever since the City Council voted for the Greenpoint and Williamsburg plans in 2001, they have failed to lift a finger to implement them. City agencies went into hiding. There were no budget requests to create public access on the waterfront, no initiatives to preserve industry, and no new housing. Instead, the city turned the other way as developers illegally converted industrial properties to unaffordable lofts, and did little to stop the legal conversions.
Now the City Planning Commission and City Council have approved a sweeping rezoning of the industrial waterfront that opens the way for 10,000 units of high-rise housing, conversion of industrial properties to residential use, and a 54-acre waterfront park. The final rezoning does have some elements that meet plan objectives, but they are in there because community activists fought a long, hard battle with the city from the first day the proposal was launched to get some affordable housing, lower the towers on the waterfront, protect industries, and guarantee public access to the waterfront.
But community activists aren’t uncorking the champagne. The distance between the rezoning and the community plans is still gaping. Brooklyn’s Community Board One and the Brooklyn Borough President voted against the rezoning, and Public Advocate Betsy Gotbaum opposed it. In the end, the city made a few concessions that help relieve the pain: thirteen mostly industrial blocks were taken out of the rezoning to protect the industries, five more acres of park were thrown in, and future developers got more incentives to create affordable housing units. But while the end result may be applauded by Manhattan Mike Bloomberg, it’s left many disappointed souls on the other side of the East River.
Rezoning Without A Plan
The Greenpoint-Williamsburg rezoning follows the city’s well-established policy of using zoning instead of planning to govern land use policy. In many cities and towns across the country, it’s just the opposite. The legal basis for zoning is usually some kind of reasonable plan: government develops a plan and shapes the zoning to fit the plan. This is elementary land use planning. In New York City, ever since the City Planning Commission refused to approve the city’s first and only master plan in 1970, planning itself has become an idle pastime -- at both city-wide and neighborhood levels. The bulk of the officially-sanctioned (197-a) plans, and scores of other community plans, have been produced by community planners with little help from the city. To the extent that the city produces plans at all, they are usually studies aimed at justifying zoning changes, not comprehensive proposals that look at all city policies that affect the economic and social livelihood of communities.
Mixed Use and Industry
According to Mayor Bloomberg, the rezoning “protects the fabric of inland neighborhoods, preserving their mixed-use character, preventing noxious, heavy industrial uses and further out-of-scale development.” This is done mostly by establishing mixed-use zones where housing and industries can coexist. The problem is that the city’s “MX” zones are set up in a way that individual landowners make the decision about whether housing or industry will prevail. Now, if you owned a plot of land in a rapidly gentrifying neighborhood like Williamsburg and you have a choice of getting rent from residential tenants that is five times the amount you could get from industrial tenants, which way would you go? The end result of this “mixed use” zoning will be de facto conversion of viable industrial properties for use as housing. The MX zones in Greenpoint-Williamsburg actually replace the Northside Special Mixed Use District and Franklin Special Mixed Use District, which did a pretty good job since the 1970s of stabilizing this classical mixed-use neighborhood because they limited the options of residential developers.
While the city eventually removed 13 industrial blocks from the rezoning, according to Adam Friedman, director of the New York Industrial Retention Network, “these 13 blocks were pretty important but there are around 40 blocks that have significant job clusters.” Friedman praised the creation by the city of a $20 million fund to support non-profit business creation (which he attributes to the work of City Council members David Yassky and Diane Reyna, with the help of Speaker Gifford Miller), and the establishment of a 22-block Industrial Business Zone. However, he feels that there should have been “a more balanced mixed use policy.”
These concessions, while important, are probably not going to be enough to stem the decline of industrial jobs prompted by real estate speculation. One of the great advantages for small industries in this neighborhood is the linkages they form with each other because of their proximity. The rezoning will balkanize industry into shrinking enclaves. And since over 80 percent of local industries hire local residents, they will now have more trouble finding local help among the tide of yuppies. While the mayor touts “the creation of 11,000 construction jobs and over 600 permanent jobs over the next 10 years,” the construction jobs are obviously short-term and tend to benefit disproportionately skilled workers living outside the city. In fact, it has now become a common scene to watch the hard hats demonstrate at the mayor’s mega-project ceremonies before they get in their SUVs and drive home to the suburbs.
Finally, in a tacit admission that they didn’t plan before rezoning, the City Planning Department now agrees they will go back and study the industrial areas in the neighborhood to see how zoning can help them! Also on the list of things the city agrees to do is to help relocate businesses to the Brooklyn Navy Yard enclave -- not an encouraging note for the community that wants to maintain its mix of industry and housing.
Affordable Housing
Community coalitions fought the rezoning hard with the goal of mandating that 40 percent of all new housing units be affordable to low- and moderate-income households. What they got was a voluntary program driven by bonuses to developers that might make one-third of all units affordable. While this is better than the 23 percent the city originally proposed, to become a reality it all depends on a number of future events that may not happen. Meanwhile, the small group of waterfront landowners, and the much larger group of upland owners, are free to go ahead with development plans and tenants in the neighborhood will continue to face daily pressures to move.
“While we’re celebrating certain victories,” says Cathy Herman, director of Planning and Development for Los Sures, a local non-profit community development corporation, “we’re not completely content. Further market-rate development is a threat to the local low-income population.”
The new affordable housing depends entirely on whether or not developers will take advantage of the zoning incentives to build. Since the high density (R8) residential zoning that now goes into effect will give developers enough floor area to build profitable high-rise market-rate condos with precious waterfront views of the Manhattan skyline, there is good reason to doubt that much affordable housing will get built. Voluntary inclusionary zoning incentives have been in effect for decades in parts of Manhattan and have produced very few affordable units. Overlooked were proposals by the North Brooklyn Alliance, a coalition of some 40 groups, to make the affordability requirement mandatory, as it is in hundreds of other municipalities where it’s been successful. And no one in government ever raised the most fundamental question: Since the most dire housing need is among working people with modest incomes who make up the majority of Brooklyn households, shouldn’t the city’s goal be that the majority of the new units be affordable?
Over a third of the affordable units projected by the city would be on sites owned or controlled by the city and non-profit institutions. But these could be built without rezoning the rest of the neighborhood. While a few private owners of waterfront property make the big bucks, the public sector still takes up a big part of the burden.
There are some clear victories, however, for community advocates. The city lowered the base as-of-right floor area ratio (FAR) from 4.3 to 3.7; this means that developers won’t be able to build as much unless they take advantage of the inclusionary provisions. The city administration promised to support legislation in Albany that would make tax incentives available to local developers only if they provide affordable housing.
In yet another tacit admission that they didn’t do the job right the first time, the city now says it will go back and study how they can use contextual zoning to protect some residential areas. They also say they will now rezone the gigantic Domino Sugar Property (located on the Williamsburg waterfront). If they did planning in the first place, they wouldn’t have to keep zoning things piecemeal.
Perhaps the most blatant admission that the city is playing its usual catch-up game with development is the administration’s promise to monitor the needs for community facilities and services only after 25 percent of the expected development has already occurred. In other words, they don’t plan so the services are in place when people need them.
Waterfront Access and Open Space
The rezoning includes a Waterfront Access Plan that mandates public access along the water’s edge. In New York City, developers are only required to provide waterfront access in residential and commercial zones, not industrial zones, an unfortunate policy that only gives policy makers more of an incentive to push industry out.
In Greenpoint-Williamsburg, where 30 or 40-story towers will be going up along the waterfront, the problem is that the new housing will create a wall between the waterfront and the three or four-story walkups that dominate on the interior blocks.
The city believes that turning the required waterfront esplanade over to Parks Department’s jurisdiction will help prevent this privatization from occurring. But even though Parks maintains the space, it can still function more as a back yard for luxury high rises than an amenity available to the whole neighborhood. And many developers will be just delighted to have the city pick up the tab for liability, even though they will have to contribute to a fund to pay for the maintenance.
The Future Without A Plan
In sum, in exchange for a zoning bonanza that developers can cash in on now, the city is giving vague promises, not real plans with teeth in them, to Greenpoint-Williamsburg businesses and residents. A hand-picked Community Advisory Board involving city agencies and some community representatives is supposed to monitor progress. The city will go back to do more studies and more rezoning. The administration is committed to putting money in future budgets. But we’re now in an election year and term limits guarantees a new cast of characters after another four years. Ten years from now, with a whole new administration and City Council, and no legally binding mandates, will anyone remember the fine rhetoric, capital budget commitments, and pledges of concern? The fate of public waterfront access, affordable housing and industrial retention in Brooklyn may wither as all the local diners become espresso bars.
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.Â
Pushing For A Rent Freeze
Recently, Mayor Michael Bloomberg told the New York Times that housing issues were now a priority for his administration. The issue, he said, was crowded out of the top of the list when he first took office because the city was facing a huge budget deficit and reeling from the terrorist attacks of September 11.
The cost of housing and homelessness are linked and the mayor’s new sense of urgency was reflected in a flurry of recent announcements on housing. In about a week’s span in April he announced a pledge, with City Comptroller William Thompson, to put $130 million of Battery Park City Authority revenues in a trust fund for affordable housing and announced plans to spend $472 million on supportive housing, $27 million on a renovation and rehabilitation project in the Bronx, and two initiatives to redevelop land in Brooklyn.
With all the focus on housing issues, however, he somehow missed one that is making headlines in all of the newspapers: The Rent Guidelines Board, which is deliberating on whether and how much to raise rents on close to a million apartments in the city. Advocates see it as a curious omission.
“The mayor has to take a position on this,” said Michael McKee of Tenants and Neighbors. “How long can he fail to utter the words â€rent stabilization’?”
At a press briefing after the board held its first vote on a rent increase – setting a range for increases on one- and two-year leases – the mayor again sought to distance himself from the board’s deliberations, staking out middle ground between tenants and landlords.
“Any raises will obviously be too much for tenants,” Bloomberg said. “Any raises will obviously be too little for landlords.”
The board voted 5-4 on the ranges: 2 to 4.5 percent increases for one-year leases and 4 to 7 percent on two-year leases. But it was the preliminary vote. Now, tenants will try to convince the public members to vote for lower rents and landlords will try to convince them to go for higher rents.
“It has nothing to do with the numbers and anybody who thinks it does, does not understand the Rent Guidelines Board,” McKee said. “It’s all about politics.”
McKee was referring to the board staff’s reportsthat reported increases in landlords’ costs at about six percent. While landlords’ costs have gone up, though, the economic situation for most New Yorkers has not markedly improved and, in fact, for many it has gotten worse. More people are spending more of their income on rent, real wages have fallen, homelessness is at record highs, and the number of people on public assistance has increased for the first time since 1993.
The mayor could and should act to prevent another increase in rents, advocates said, because of the affordability problems New Yorkers are facing. At a mayoral candidates’ forum in April, all of his Democratic opponents said they supported a rent freeze.
But Bloomberg apparently is not openly going to pressure the board.
“Well I didn’t tell them how to vote,” he said at the press briefing.
Marvin Markus, the chairman of the Rent Guidelines Board, said he did, however, consult with City Hall on the board’s deliberations.
“They’re interested in the economic impact,” Markus said after the preliminary vote. “I talk to them. I don’t talk directly to the mayor, but I talk to his people, yes.”
The board’s deliberations were considerably more heated than last year –- one man was arrested at the meeting for the preliminary vote and the start of the meeting itself was delayed for 30 minutes by frenzied protests. And tenant advocates are convinced that after more than three decades of rent increases, a rent freeze is a real possibility, even after the 5-4 vote for the range of increases.
“Additional public members have started to understand that affordability is an issue,” McKee said. But, he said, tenants have to make their voices heard at the board’s hearings in June before its final vote on June 21 to achieve a rent freeze.
Joe Lamport is the assistant director of the City-Wide Task Force on Housing Court, a coalition of community housing organizations.
Football Stadiums
FOOTBALL STADIUMS
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| Location: |
West Side, Manhattan
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Seattle, Washington | Atlanta, Georgia | St. Louis, Missouri |
| Opening Date: | Fall 2009 (projected) |
1992 | 1995 | |
| Uses: | New York Jets football games, 2012 Olympic Games, large convention gatherings, 2010 Super Bowl, concerts, and other events. | Atlanta Falcons football games, 1996 Summer Olympics, NCAA Final Four, Super Bowls, concerts, conventions, religious events. | St. Louis Rams football team, conventions, concerts, monster truck rallies, and the 1999 Mass led by Pope John Paul II. | |
| Size: | Seats 75,000 people | Seats 71,228 people | Seats 60,600 people | |
| Cost: | $1.7 billion | $210 million | $280 million | |
| Public Cost: | $600 million ($300 million each from the city and the state) | The state donated the land. A hotel tax pays the 30 percent of the total cost covered by public funds. | $60 million from city and state, plus $6 million in year in city funds for debt payments. | |
| Private Financing: | $800 million from New York Jets. An additional $1.9 billion is needed to extend the No. 7 train, which developers plan to pay for with tax revenue from neighboring development. |
Construction of the Georgia Dome was financed through tax-exempt industrial revenue bonds issued by the Georgia World Congress Center Authority. It was also subsidized by the sale of luxury boxes, which ranged from $20,000 to $120,000. | Financed by private investors, including TWA Airlines, which relinquished its role in 2001. Edward Jones purchased the naming rights in January 2002 for $2.65 million a year. | |
| Voter Referendum? |
No |
No. | No | |
| At Issue: | The proposed West Side stadium is the most expensive in the nation and calls for $600 million in public subsidies. The 2012 Olympics is not a guarantee. Some argue that the financing for the stadium circumvents the city’s budget process. Many economists doubt that the convention business will pay off as promised because other costs (like hotel room rates, transportation, etc) make New York less competitive than other locations. Local residents are concerned about traffic, parking, and noise. The MTA is projecting billions of dollars in deficits for years to come and has not made the extension of the No. 7 line a priority. | Discussions about a new football stadium began in 1984 when the Atlanta Falcons wanted a new facility that they would not have to share with the Braves baseball team. In 1989, approval came from the state, the Atlanta City Council, and Fulton County Commission to build a dome stadium only if it was connected to the convention center and supported by the hotel tax. The plan gained considerable momentum after Atlanta was awarded the 1996 Olympics. Atlanta built numerous other sports venues for the Olympics and a new baseball stadium for the Atlanta Braves baseball team. | A few years before the stadium was built, St. Louis approved new taxes to pay for $150 million expansion of the convention center. In 1999, after the stadium failed to increase convention center business, officials agreed to build a new 1,000-room hotel next to the center to help generate business. The plan was subsidized with $98 million in federal funds, $80 million in city aid, and $21 million in state tax credits. The hotel still only operates at 55 percent occupancy. | |
| Benefits Promised: | The New York Sports and Convention Center would serve as the home of the New York Jets football team and the Olympic Stadium if New York wins the 2012 Olympic bid. It features a retractable roof and a changeable floor plan so that the stadium can be converted into a large event space for the Jacob Javits Convention Center. The plan would give New York City the fifth largest convention center in the nation. Mayor Michael Bloomberg says the stadium will create 18,000 construction jobs and 6,900 permanent jobs. He promises the plan to expand the convention center will increase tourism, boost the hotel industry, and provide development for the west side of Manhattan. | A main objective was to keep the professional football team in Atlanta. Combined with the World Congress Convention Center, officials promise that the dome would help draw big sporting events and increased convention business. | The city said that the expanded stadium/convention center would triple convention center business and generate $12 million a year in new tax revenues. They also predicted an increase in hotel business. | |
| Benefits Delivered: | The Georgia Dome has been a popular sports venue hosting two Super Bowls, NCCA Final Four basketball games, and college football games. Atlanta’s convention center drew record attendance through much of the 1990s. However, despite expanding convention space by an additional 1.4 million square feet in 2002, convention attendance is now half of what it was in 1995. | According to a study by the Brookings Institution, the plan has not generated the expected tax revenue or convention business. Convention attendance dropped in recent years from 156,000 to 115,300 between 2000 and 2004. Although organizers promised 50 major conventions a year, in 2004, it only had 23. |
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Baseball Stadium
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BASEBALL STADIUMS
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| Location: |
South Bronx next to current ballpark
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Toronto, Canada | San Francisco, California | Pittsburgh, Pennsylvania |
| Date: | Spring 2009 (projected) | 1989 | 2000 | 2001 |
| Uses: | New York Yankee baseball games | Toronto Blue Jays baseball games, Canadian football games, concerts and other events. | San Francisco Giants baseball games, concerts, other events. | Pittsburgh Pirates baseball games, concerts, job fairs, and other events. |
| Size: | Seats 50,900 people | Seats 50,516 | Seats 41,503 people | Seats 38,496 people |
| Projected Cost: | $800 million | $600 million (Canadian) | $319 million | $262 million |
| Public Cost: | $300 million from New York City for a new Metro-North station. The city will also have to build parkland along the waterfront and better parking facilities around the stadium. | $262 million (Canadian) | Public land donated. Also $15 million in tax increment financing by the city, which the Giants must pay back to the city with interest. | $219 million ($143 million from city; $75 million from state). |
| Private Financing: | $800 million for stadium paid for by Yankees | 30 different corporations paid $5 million each and Canada’s three major breweries also contributed $5 million each. | $70 million for naming rights, advertising partnerships and other sources, another $70 million from the sale of charter seat licenses, and a $155 million loan to the Giants from Chase Securities. | $44 million from the Pittsburgh Pirates. Also $30 million over 20 years from PNC Bank for naming rights. |
| Voter Referendum? | No | No | Yes | Yes. With 70 percent of the vote, citizens rejected a taxpayer-financed stadium. |
| At Issue: | For years, the Yankees have tried in the past to build a new stadium, either on the west side of Manhattan or at the location for the proposed stadium at 161st Street. In the past, the Yankees have demanded large public subsidies, but now say they will pay for the stadium themselves. However, the team is still asking the city and state to pay $300 million for surrounding infrastructure. The Yankees and city officials say they will announce an agreement and more details in early May 2005. | By the time the stadium was completed, it costs significantly more than predicted and the Ontario government was left responsible for the debt. | The main issue in San Francisco was who should pay for the new stadium. In four referendums, voters rejected public financing for the ballpark. A fifth referendum in 1996 approved the Giants’ use of public land in China Basin to build the stadium with private financing. The Pacific Telesis Group paid $53 million in 1996 to name the ballpark Pacific Bell Park through 2019. SBC Communications bought the company and in 1997 changed the name of to SBC Park. | In November 1997, voters in 11 counties rejected a plan to raise taxes to build a new stadium. City and state officials ignored the voters and built it with mostly with public funds. The city of Pittsburgh funded its $143 million share through a sales tax. Three-term Mayor Tom Murphy recently announced that he would not be seeking another term after 11 years of fights on the budget, stadiums, and economic development. |
| Benefits Promised: |
The Yankees promise that the new stadium will also help create parkland, retail shops, and restaurants, and parkland for the South Bronx. |
City planners said they had learned their lesson after building Montreal’s Olympic Stadium, which has been called “Canada’s monument to mismanagement,” and promised to build a ballpark that would turn a profit. | Developers promised to build a privately financed stadium that would be accessible by public transit and help spur housing, retail, and restaurant development in the surrounding area. | One of the main objectives of the new ballpark was to keep the Pirates from fleeing to another city. It is also part of plan to revitalize downtown Pittsburgh; in addition to games, it hosts a variety of events and is surrounded by retail stores and restaurants. |
| Benefits Delivered: | The stadium has had financial difficulties in recent years. The ownership filed for bankruptcy protection in November 1998 and Sportsco International LP bought the stadium out of bankruptcy for $85 million CDN. In February 2005, Rogers Communications, the owner of the Blue Jays, bought the stadium for $25 million. The Toronto Argonauts, a Canadian football team, is now in negotiations to relocate to an outdoor stadium at York University in 2007. | San Francisco’s ballpark is often hailed as the first privately funded ballpark built for Major League Baseball since Dodger Stadium opened in 1962. The stadium is accessible by numerous forms of public transit, including buses, streetcars, light rail, the Bay Area Rapid Transit System and ferry service. City officials boast of 6,000 apartments that have been created as a result. | The Pirates stayed in Pittsburgh. The downtown area has seen some revitalization, but the city continues to struggle financially, raising taxes and laying off city workers. |
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