Images from FlAnc Novare

Promotional renderings of the Novare luxury condos, formerly Washington Square Methodist church.

In the very different Greenwich Village of the 1960s, Washington Square Methodist Church was so active in the anti-Vietnam War movement that it earned the moniker the "peace church." Forty years later the building remains, providing a place for New Yorkers to "come to be reborn."

Not in a religious sense, however. Now it serves as a "private refuge" offering original stained glass, Italian white marble countertops and quartz and slate floors for those who can afford to pay upward of $3 million for one of its eight apartments.

If the church's role in the 1960s was emblematic of the times, so, some might say, is its function today. Many city churches, particularly in Manhattan, no longer offer sermons, choirs or Sunday schools. Instead, they serve as places of profit, enjoyment and in some cases even sin, a shift that can have major effect on their communities.

The High Cost of Worship

The conversion of many houses of worship springs from two trends: a decline in religious membership in parts of the city and the value of property here.

Recent figures indicate that over 80 percent of New Yorkers consider themselves as affiliated with a faith. That does not mean, though, that they attended services.

Over the past century, attendance at religious services in the city has dropped, especially in Manhattan. Demographic shifts from neighborhood to neighborhood have affected attendance at churches, synagogues, mosques and temples. In response, Cardinal Edward Egan of the New York Archdiocese announced a "realignment" plan that has shut down or "merged" some of the city's Catholic parishes. The Catholic Church has some particular problems -- for one, its funds have been depleted to settle lawsuits brought by victims of sex abuse. But the Catholic Church is not alone in its downsizing.

Many church and synagogue goers have left Manhattan to move to the outer boroughs and the suburbs. The Catholic Churches plan, for example, sees a need for more churches and people far beyond the city limits in Orange, Rockland and Putnam counties, as well as northern Westchester and Duchess counties.

Meanwhile Manhattan has become home to young single professionals who have a tendency to drop out of their congregations over time, said one Upper East Side pastor, the Rev. Kazimierz A. Kowalski of the Church of our Lady of Good Counsel. "Often times when people get wealthy, people get lazy. In biblical history, when people get fat, they forget where they got the fat from," Kowalski said.

Religious properties in New York, like everything here, tend to be expensive to maintain, a particular burden for churches that may be seeing their membership -- and financial support -- decline. At the same time, the real estate boom has made the churches and their land increasingly valuable -- if the property can be used for something other than prayer.

From Peace to Posh

Vacant churches, along with seemingly every other available space in Manhattan, frequently often become luxury apartments. For landmarked churches, the outer structure is maintained and the inside is gutted then polished to perfection. (Some churches have been turned into low-income housing, but this occurs more often in the outer boroughs.)

This is the case with Washington Square Methodist. In its space, FLAnk Architecture created Novare, featuring eight spacious, luxuriously appointed $3 million to $6 million apartments, six of them with original stained glass.

Photo from 2056 Fifth Avenue Associates, LLC

2056 Fifth Avenue in East Harlem

"All different kinds of buyers have looked at it. The stained glass in this church was not iconographic in any way. But it is for a particular type of buyer who is comfortable being a trailblazer," said the vice president of the Corcoran Group, Brian Babst, who is in charge of sales for the building.

The real estate developers of Horsford Poteat are formulating plans to convert several Harlem churches into apartments, maintaining worship space on the ground floors and building condos above it. A project manager from the company who requested anonymity since the deals have not been finalized said, "The church leaders approached us about trying to bring some revenue back." She said that in Harlem, where some blocks have several churches, many no longer have enough members to survive.

AFC Realty has already converted the former Harlem Gospel Temple Church at 2056 Fifth Avenue into 22 condos priced at from $645,000 to $1.575 million. About half have been claimed so far.

Dancing in the Aisles

Many churches use music in their services-- but not the kind heard in some of these buildings today. In perhaps the most dramatic shift in purpose, a handful of one-time churches have been converted into places to dance, drink and hookup.

The most notorious church-turned-nightclub was Chelsea's Limelight, which was owned by Peter Gatien, the "Club King" of the 1980s and '90s. The Limelight building was constructed in 1846 as the Episcopal Church of the Holy Communion. After 130 years, it was closed in an Episcopalian church merger. But because it was a landmark the building survived -- though its mission certainly shifted.

Gatien's club opened inside the Gothic stone walls in 1983. Several years later, though, Limelight (as well as Gatien's other clubs, including The Palladium and Tunnel) was targeted with drug dealing lawsuits as part of Mayor Rudolph Giuliani's "quality of life" improvement campaign. The club was repeatedly raided and shut down by the New York Police Department from 1995 through 1997.

Gatien was convicted of tax evasion in 1999 but acquitted of the charges that he had been involved in selling the drugs taken in his clubs in 1998. When reporters asked how would celebrate his vindication, he responded, apparently without irony, "Right now I'm just grateful to God. I want to go to church."

A few years later, new owners opened another club -- Avalon -- in the church. Hunk-O-Mania, the male strip revue, hosted weekly parties where people once took communion. Avalon closed in 2007 and the space is now vacant, although there have been rumors that it will soon be turned into a mini-mall.

Eating in the Pews

There are also church restaurants. At Providence on West 57th Street, few traces of the Manhattan Baptist Church remain. A sound system has been implanted in the organ, and chandeliers now cover the arched wood ceiling. Neon light blinks from a dance floor in one part of the building, and a bar fills the altar space.

Manhattan Baptist Church was shut down for budgetary reasons in the 1960s. Throughout the 1970s and '80s, the building was used by Media Sound Studios and musicians like Jimi Hendrix, John Lennon, Aerosmith, Billy Joel and The Rolling Stones recorded albums there. The building then housed Le Bar Bat, a popular nightspot, before Providence took over.

Battles for Survival

Many New Yorkers would see the changes at these churches as virtually inevitable. As manufacturing has declined, developers have converted old factories to museums, high tech offices and the Chelsea Market. Similarly, as church attendance has dropped, new uses must be found for houses of worship.

Given the role of churches in the lives of their members and their communities, though, some New Yorkers want to preserve them. The conflict has pitted houses of worship against preservationists in neighborhoods across the city. The preservationists argue that many churches, synagogues and mosques are historic and cultural treasures that must be kept for future generations. On the other side, religious leaders and congregations contend that historic preservation can pose significant hardships, costing money that should go toward advancing a religious mission and for charity.

One such dispute concerned St. Brigid's on the east end of Tompkins Square Park in the East Village. In the late 1990s, St. Brigid's staff discovered that the east wall of the aging building was moving in the eastern direction about a quarter of an inch each year. Egan deemed the structure unsafe for parishioners, and the church was closed in 2001. The archdiocese was originally going to repair it, then later it decided to demolish the building and lease the land.

Photo from Save St. Brigid

St. Brigid Church near Tomkins Square Park

The church remained, though, partially through the effort of the "Save St. Brigid" campaign. Its supporters noted the rich history of an institution created in the 1840s to serve New York's growing Irish Catholic community. The church's architecture reflects its origins. The arched ceiled, for example, is fashioned as an upside-down boat and was built by Irish people who immigrated here to escape the potato famine in the 1840s and then found work in East

The campaign sufferd a number of setbakcs in courts and at the Landmark Preservation Commission. Then on May 21, the archdiocese announced that St. Brigid's would not be razed after all. An anonymous contributor had donated $20 million. Half of that will go to restore the church, $8 million will aid St. Brigid's school and $2 million will, according to a statement from the archdiocese, provide an endowment for the parish "so that it might best meet the religious and spiritual needs of the people."

"This incredible gift not only enables us to preserve the traditions and spirit of St. Brigid’s founders, it also allows us to protect the traditions of religious freedom, family and community that are the very fabric of this neighborhood and others throughout the city," said Edwin Torres, a former St. Brigid's parishioner and the current chairman of Save St. Brigid.

While St. Brigid's has apparently been saved, the issues presented by the dispute remain. "It's a problem of the cost of maintaining the church versus the profitability of the land," said Torres, earlier this month.

The Catholic Church rarely sells off a building or a plot of land. Egan generally prefers to hold on to the property to use it for parochial schools or charity offices, according to the spokesman for the archdiocese, Joseph Zwilling. However, exceptions do exist.

One is St. Ann's Church, several blocks away from St. Brigid's on East 12th Street. It had not been an active Catholic church for 30 years when the archdiocese put it on the market and sold it to the Hudson Companies developers who designed a dormitory for New York University. The builder knocked down all the church except for the facade (an effort to appease its neighbors), which stands in front of the 26-story brick building. This new structure is now the highest building in the East Village and has met with persistent protests in the community.

Divide and Save?

In their efforts to survive, many churches have made compromises, selling pieces of property to make money to fund other operations. The Cathedral Church of St. John the Divine in Morningside Heights is a prime example. The Episcopal cathedral had been in a financial crisis for most of its life, ever since its planning began in 1873. In the past few years, the cathedral has announced several "real estate initiatives," parceling off pieces of the 11.3 acres surrounding the church- to developers.

Photo from Morningside Heights Historic District Committee

Groundbreaking has begun on the AvalonBay luxury towers

After working with the city Landmarks Preservation Commission, the cathedral signed an deal with Columbia University that would enable Columbia to build an academic facility on the north side of the cathedral close. So far, no precise plans have been announced.

On the southeast side, the cathedral granted a 99-year lease to AvalonBay developers to build a modern, glassy 20-story apartment building. One fifth of the apartments will affordable housing that the cathedral will help fund.

"The real estate initiatives were designed to not only pay for the deferred maintenance of the building, but to support the cathedral's programs, which include a homeless shelter, an emergency food pantry, arts program that funds free concerts and performances, and day care and after school programs," Jonathan Korzen, the cathedral's communications manager said.

A Hole in the Social Fabric

Like St. John the Divine, many houses of worship provide an array of service in a community. Beyond their core function as places of worship, they offer social and educational programs and provide meeting spaces for community groups.

As churches close, "some of our meetings have had to change locations," said an Alcoholics Anonymous volunteer coordinator in the New York Intergroup office in Chelsea. "In this neighborhood, we are worried about St. Vincent de Paul closing especially because it has a homeless shelter underneath it." She also noted that many of the churches are raising the rents they charge groups that use their space and forcing them to buy liability insurance.

The Food Bank of New York City has lost one of its soup kitchens, which used to operate out of Mary Help of Christians in the East Village before it was shut down in the Catholic Church's realignment. It is uncertain at this point what will take the 110-year-old church's place.

"It's awful what's happening right now with the use of church property," said Edwin Torres. "Our heritage, our history, our past need to be considered and should be preserved."

To say nothing of all those basements with coffee urns and free food.

A decade ago, the Queens Supreme Court handled about 300 or 400 foreclosures a year. In 2007, that number soared to more than 7,500 foreclosures, and the court is on track to see 10,000 foreclosures before this year ends, according to an official.

In the next few years, one out of every 32 homeowners in New York state is projected to enter foreclosure, according to a report issued by the Pew Charitable Trusts.

In New York City, neighborhoods in Queens, Brooklyn, as well as parts of the Bronx and Staten Island, will be the hardest hit: In 2007, for example, foreclosures in Queens and Brooklyn accounted for 40 percent of the state's total. (Co-op foreclosures, which are governed by a different set of rules, are not processed by the court system and are not included in projected foreclosure totals.)

What media outlets call the mortgage meltdown is receiving more and more local and national attention, most of which is centered on the often tragic and personal financial consequences foreclosure presents for individual homeowners. It takes a trip to a foreclosure auction, held every Friday morning in Queens, to see another dimension of the problem: The properties aren't selling.

When the market was hot, eager speculators crowded the auctions looking for a bargain. Today, the overwhelming majority of properties are "bought" back by the bank that made the original loan. The bank must then try to recoup what it can by reselling the property, a dicey proposition in today's market. The result is a growing glut of vacant and unsold property.

The Costs of Foreclosure

The consequences of this foreclosure gridlock can be seen only a few short miles away from the courthouse in South Jamaica, Queens, where a reporter from the Daily News recently counted 32 foreclosed homes in a five-block area. None of them has fared well. A squatter moved into one abandoned property, smashed the front window and scattered trash in the yard. Another home became a crack house. "You see drugs, you see young kids coming through, adults passing through. It's a disaster," one South Jamaica resident told the reporter.

Situations like these have led some housing experts to make grim predictions about the years ahead. "Abandonment of the 1970s, where entire blocks are stripped ... is what this will look like" Sarah Gerecke of Neighborhood Housing Services told the Daily News.

No one benefits from housing foreclosure. For borrowers, it means, at minimum, a lost home and badly damaged credit. Foreclosure is also a losing proposition for lenders. According to the Pew report, the average cost of a foreclosure is $58,759 in foregone interest, court costs and other fees, or between 20 and 60 cents on the dollar.

Yet the highest costs of foreclosure may be borne by the public, in the form of falling property values, higher crime rates and other costs to government. Researcher Dan Immergluck of the Georgia Institute of Technology estimates that property values decline by 1 percent for every foreclosure within one eighth of a mile of a single-family home, meaning that even homeowners who pay their mortgages regularly are hurt by foreclosed house on nearby blocks.

Government takes a big hit as well, in the form of reduced tax receipts, including sale, transfer and property taxes. All told, the Pew report estimates that New York's property tax base will be reduced by $65 billion in the coming years as a result of what they call the "foreclosure effect". And the bill doesn't end there: Researchers at the Harvard Joint Center for Housing Studies identified 26 separate costs borne by government in "foreclosure related services," such as increased police patrols and trash removal, which cost $7,000 on average and as much as $34,199 per property.

The Challenge of Foreclosure Prevention

While these hefty costs mount up, there is some evidence that foreclosure prevention programs save money for everyone. According to the housing agency Freddie Mac, every dollar spent on a foreclosure prevention program based in the Twin Cities in the mid-1990s saved lenders $3 in direct costs, even though after two years only 224 of the 800 homeowners helped by the program remained in their homes.

Yet a number of obstacles stand in the way to preventing foreclosure. One is financial: Many home loans simply cannot be salvaged. A number of homeowners owe more money on their home than the property is worth or have monthly payments that exceed their income. It's difficult to imagine a scenario where these "bad" loans can be renegotiated, because they should have never been made in the first place.

As housing prices continue to fall, the problem could get much worse: One financial analyst told the International Herald Tribune that an additional 10 percent drop in home prices would lead to 20 million households nationwide that owe more on the mortgage than the value of their home. In that scenario, millions of homeowners could walk away from their homes.

Another obstacle relates to the nature of the loans themselves. About two thirds of mortgage funding is provided by institutional investors who buy mortgage backed securities, and contract out the task of foreclosure to third-party agents, known as "loss mitigators," who, in some cases, are barred from renegotiating with borrowers.

The result is paralysis. "In a healthy market, foreclosure would be rare, because it pays for a lender to forgive, say, 20 percent of a loan rather than booting the homeowner out and seeing 30 percent of the property value evaporate in the process of eviction," wrote Sebastian Mallaby in the Washington Post. "But because mortgages have been sliced up and distributed among far-flung investors, it's difficult to get their consent for partial forgiveness."

Still, there are signs that the foreclosure game is changing: In March, the Wall Street Journal reported that out-of-work mortgage lenders, fueled in part by $180 million in funding for mortgage counseling provided by Congress, are finding work counseling homeowners on ways to hold on to their homes.

The Role of the Courts

New York is one of 10 so-called judicial foreclosure states where courts manage the sad journey to foreclosure and so are struggling to catch up with the rising numbers. Along with Queens, the Bronx is experiencing caseload growth, albeit at a slower rate: 1,247 filings in 2007, compared to 881 in 2006. The increase has led to delays, as court officials are only now getting around to cases filed in December.

The court procedure has not been set up to prevent foreclosures. Officials say it's very rare to see a homeowner show up in court at any point during the process. Most never respond to the initial summons informing them of the court action.

Housing advocates believe that the judicial foreclosure process is fundamentally flawed. "People get overwhelmed when they get served papers, and there's no one they can turn to for help" said Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project. The result, according to Zinner, is a "pro forma foreclosure mill" where more than 90 percent of borrowers served with foreclosure notices default.

Ohio is one judicial foreclosure state that is trying to rewrite the rules of how courts respond. Hit by 85,000 foreclosures in 2007 --Ohio has 3 percent of all nationwide home loans, but 6 percent of foreclosures -- the state created an ambitious program, called "Save the Dream," that recruited 1,100 attorneys to provide voluntary legal counsel to homeowners facing foreclosure. Free legal assistance is available to anyone making less than $54,000 a year.

Judges also have the authority to order mediation in cases where they believe a settlement is possible. Summit County, which includes the city of Akron, has been aggressive about using mediation to settle foreclosure cases. In the first three months of 2008, mediators handled 37 foreclosure cases, which resulted in 26 settlements, according to Frank Motz, chief mediator of the Summit County Court of Common Pleas. In some cases, lenders agreed to sharply reduce interest rates on a loan; in others, they've added the unpaid balance and other fees to the end of a mortgage to help a borrower get back on track.

Mediation can even help in cases where loan modification is not an option. In what is known as a deed in lieu of foreclosure resolution, Servicers agree to forgive some debt if a homeowner agrees to an immediate transfer of the property. This has the effect of saving the servicer time and money, while letting homeowners walk away with their credit intact. Not incidentally, it also removes a burden on the court by taking a case off the books.

Motz expects the number of court-ordered mediations to triple in the months ahead. "Lenders are more and more interested in working out settlements," he said. Still, there are limits to this approach, as Motz freely admits. Even in a best-case scenario, according to Motz, more than half of all foreclosures would still proceed over the traditional court path.

What New York Can Do

Encouraging mediation is just part of what Ohio is doing to stem the foreclosure process. In early April, Gov. Ted Strickland announced a nonbinding agreement with nine large loan servicers to encourage modifications on a large scale, according to the Cleveland Plain-Dealer.

New York is experimenting with a variety of approaches. As Michelle Chen reported in Gotham Gazette, New York City recently launched the Center for New York City Neighborhoods to provide mortgage counseling and legal assistance to at-risk homeowners.

State government has also tried to address the problem, albeit with mixed results. In July 2007, New York committed $100 million to an emergency loan fund, with the goal of helping 500 to 700 families refinance at-risk loans. The program is aimed at converting interest only, adjustable rate mortgages into fixed rate 40-year mortgages. According to the Washington Post, however, only three families have signed up, leading to calls to expand eligibility criteria.

Most states can afford to help only a limited number of homeowners - and only if lenders are willing to take steep price cuts. "The numbers don't add up," said Sarah Gerecke of Neighborhood Housing Services of New York City. "The prices are too high and the conditions of the properties aren't good," she said.

A third, and more controversial, solution involves creating a one-year moratorium on foreclosures in New York. Such legislation already has 60 Assembly co-signers, according to the New York Times, and advocates believe the bill has a good chance of passing this summer. Although the Times reported that the moratorium would apply to all court-ordered foreclosures, the language of the bill seems to suggest that it would apply only to owner-occupied homes where the homeowner does not own any other property. Industry representatives have argued that, by making it harder to foreclose on a property, the moratorium would raise borrowing costs for all homeowners.

In New York, court-ordered foreclosure already takes 12 to 18 months to complete, which presumably gives borrowers time to work out a solution. And a moratorium alone is not a panacea, as officials in Philadelphia discovered after they introduced a one-month moratorium on foreclosures in March. "A moratorium just causes a freeze -- and then what," Judge Annette Rizzo told the Philadelphia Inquirer.

Many experts believe that, if anything, the foreclosure process is too long, particularly for homes that are not owner occupied. Ohio is considering creating a separate track for investor-owned properties that will allow foreclosure proceedings to occur more quickly, which, they hope will reduce the time that many properties stay vacant.

A More Comprehensive Approach

Advocates want the federal government to take a more comprehensive approach to the foreclosure problem. "[States] don't have the resources or the regulatory authority or leverage with the industry," Bill Faith, Executive director of the Coalition on Homelessness and Housing in Ohio, told the New York Times. "Much more serious progress is only going to be achieved if the feds take appropriate action."

The Senate and the House has each passed different measures to address the foreclosure crisis by providing money for pre-foreclosure counseling. The House bill includes $15 billion in loans and grants for local government and nonprofits to buy and renovate vacant foreclosed homes. The Senate bill has a $7,000 tax credit for purchasers of foreclosed homes, while the House version dedicates its tax credit to first-time homeowners.

Both the House and the Senate are considering creating a $300 billion to $400 billion loan fund to encourage the pre-foreclosure refinancing of 1 million at-risk home loans. The loans would be guaranteed by the federal government and would be rewritten by lenders at no more than 90 percent of their current value.

Competing proposals in Congress will set off a major political struggle, as Americans debate whether the fund amounts to an unfair bailout for troubled homeowners and lenders. For New Yorkers, it may represent the only means available to hold off a wave of foreclosures with negative effects for everyone.

Aubrey Fox is project director of Bronx Community Solutions, aimed at changing the Bronx court system's approach to low-level crime.  

Harlem's low-story buildings and epic institutions will now get a so-called facelift -- at least in the view of city officials and some developers -- as the City Council approved a rezoning plan for the neighborhood's busiest boulevard last week.

The council on Wednesday approved a rezoning plan reaching from the Hudson to the East River that would include an unprecedented mandate for affordable housing and height limits on 125th Street, where large developers are eyeing towering commercial centers and condos.

The plan was met by extensive community opposition when first proposed years ago. The rezoning passed by council was a compromise between the area's council members, the administration and community groups. Even so, community support is split -- evident from the dozens of vocal critics at the City Hall meeting.

The council also approved several other pieces of legislation last week, including one that makes the mayor's Office of Long Term Planning and Sustainability permanent.

Changes for Harlem

Though a raucous crowd in the council chamber's balcony was thrown out of the meeting, the council approved the "river to river" rezoning for Harlem by a vote of 47 to 2. Council members Tony Avella and Charles Barron voted against the rezoning.

Known as the center of black culture in New York City, possibly in the entire country, 125th Street in Harlem hosts historic and cultural landmarks, like the Apollo Theater. Because of its cultural and iconic role in the neighborhood and the city, the rezoning was highly sensitive throughout the neighborhood and sparked extreme community opposition.

On Wednesday, dozens of attendees were cleared from the council chamber after boos, hisses and cheers reverberated off the walls one too many times.

The agreement, which was negotiated by Harlem council members, particularly Inez Dickens, requires that 46 percent of all new apartments be affordable and sets height restrictions of 190 feet, or about 16 stories, on the north side of 125th Street and 160 feet, or about 13 stories on the south side. Before the rezoning, said Dickens, 125th Street had no such restrictions.

"When a law has no protection for the community, it must be changed," she said.

The rezoning also includes an arts bonus, which will ensure the cultural qualities of the neighborhood remain. For the first time, the city will require certain spaces be dedicated to arts groups, who will be reviewed by a local arts council whose members are selected by the local councilmember. The agreement also includes funding for capital improvements to Marcus Garvey Park.

Though the affordable housing and arts provisions are unprecedented for any city land use agreement, some members continued to oppose the rezoning, arguing it would fundamentally change the fabric of Harlem forever.

"Some people see this as a river to river success," said Barron. "Others see it as a river to river sell out."

Limiting Concrete Front Yards

Across the city, front yards are being cemented over to relieve the home's owners of a perpetual urban challenge: the search for a parking spot.

But while single property owners benefit, some residents and officials argue the neighborhood suffers as green space slowly dwindles away and street parking is lost. Currently, there are no zoning regulations that address the amount of pavement allowed on front yards.

Now, a zoning rule revision will prevent property owners from paving over their entire front yards and require they keep between 20 to 50 percent as green space. Homes that have already created their own driveways will not be affected. The council approved the change by a vote of 48 to 1 with Councilmember Simcha Felder dissenting.

Long Term Planning

The council unanimously approved a bill (Intro 395) permanently creating the mayor's Office of Long Term Sustainability and Planning, which was established as a part of Mayor Michael Bloomberg's PlaNYC 2030. Officials said making the office permanent would mean the city would always keep sustainability as a priority, regardless of who occupies City Hall.

Shared Sewers

At large-scale residential developments, common sewers are often placed deep below the property. But when problems occur, their location pose challenges.

Now, under legislation (Intro 657) introduced by Councilmember Maria del Carmen Arroyo and unanimously approved by the council, common sewers must be outside of the property's boundaries, so they can be accessed for repair.  

Gotham Gazette image by Ya-Hsuan Huang

Several high-profile construction projects are now up in the air.

In recent years, few issues have divided residents of downtown Brooklyn more than the $4 billion, 22-acre Atlantic Yards project being developed by New Jersey Nets' owner Bruce Ratner. Ratner's company, Forest City Ratner, reached a deal with the city and state to develop a high-rise commercial office tower, affordable housing units and a basketball stadium, the Barclays Center, in the heart of Downtown Brooklyn in just a few years.

Local community groups and residents, concerned that such a large-scale development in a partially residential area could harm their quality of life and change the neighborhood's character forever, have tried to stop the project through litigation, as well as seeking to influence public opinion and pressure decision-makers in City Hall and Albany to reconsider the project's risks.

While these concerted efforts have proved largely unsuccessful, key components of the development are now on hold -- not because of public outrage, but rather due to increasing construction costs, a slowing economy sliding toward recession and a tightening credit market.

To different degrees, the very same economic challenges facing Atlantic Yards confront real estate projects both big and small throughout the five boroughs. As the Metropolitan Transportation Authority faces a budget crisis, long-planned developments, such as the Fulton Street Transit Center, face delays and revisions. The original plans for Hudson Yards have been thrown into disarray, while individual apartment buildings in Queens and Brooklyn have been put on hold due to a lack of available financing.

As the economy turns toward recession, developers, community groups and city officials alike are questioning whether these projects will go through at all -- or at least in the way many had previously imagined.

Rising Costs, Slumping Funding

While much of Atlantic Yards project is sliding to the back burner, the $950 million arena is moving forward and slated for completion in 2010 for one main reason: The financing for it is already in place. Unlike the private financing needed for the commercial and residential buildings, Forest City Ratner already has secured $670 million in tax-free bonds to cover the costs of the arena's construction beyond the $200 million in subsidies already in place ($100 million from both the Empire State Development Corporation and the city). Additionally, unlike the commercial tower centerpiece known as Miss Brooklyn, the stadium already has its anchor tenant lined up (the Nets) and Barclays has ponied up a reported $400 million specifically for the stadium's naming rights.

But many projects, including other components of Atlnatic Yards, do not have such secure financing. The credit crunch facing financial institutions that typically lend money for real estate deals is making it extremely difficult for many developers to secure financing. There is unusual volatility in the financial markets,the result of banks havin taken on enormous amounts of debt and engaged in risky and complex financing activities. Economists are unsure when the situation will stabilize.

James Parrott of the Fiscal Policy Institute said, "There are significant financing challenges facing New York real estate developers including difficulty rolling over debt and manifesting in a general reluctance to lend money on projects, because of the necessity of conserving capital to cover losses from previous loans."

Additionally, the outlook remains gloomy for employment in the financial services sector where a recession scenario estimates job losses at 30,000 to 50,000, not including the massive layoffs already in effect from JPMorgan Chase's acquisition of Bear Sterns. The loss of these high paying jobs erodes tax revenues for the city and significantly lowers the demand for the expensive housing and commercial space.

At the same time, construction costs, including the price of concrete and oil, continue to rise -- a result of increasing global demand and decreasing supply . Turner Construction's Fourth Quarter 2007 Building Cost Index shows that costs rose 10.6 percent nationally in 2006 compared with the previous year. This is a significant increase for builders attempting to hammer out large projects, according to the city comptroller's chief economist Frank Braconi.

Increasing labor costs also could contribute to the possible demise of the city's major projects. Many of the relatively few unionized, talented workers with experience in building large-scale projects are already booked for the next few years. According to Harry Chernoff, a professor at New York University's Stern School of Business and a real estate developer, it is unlikely that we will see an increase in this labor supply in the near future because of the practical difficulties of bringing in workers from outside the city. "If you are a builder from another city or region, it is difficult to come here and do this type of work without having the prior experience of working in New York market," said Chernoff.

All of this has taken its toll on some of New York's high profile projects.

An Alternate Atlantic Yards

Such problems threaten the very aspects of Atlantic Yards -- affordable housing and expanded office space -- that were its chief selling points, according to a report in the New York Times.

Ratner has publicly stated that until he secure an anchor tenant for Miss Brooklyn, construction will remain on hold. The bond market is being blamed for slowing down the pace of the residential buildings.

New York City Councilmember Letitia James, who represents the area and is an outspoken opponent of the project, is concerned that affordable housing, which was integral to pitching the project, has taken a back seat. "What do I think about this arrangement?" she asked . "I think it is totally unacceptable." James said she, along with New York State Sen. Velmanette Montgomery, hoped to meet with Gov. David Paterson to encourage the state to take closer look at the project and possibly renegotiate the original contract.

Opponents to the project are also pushing for the U.S. Supreme Court to take up the case after several appeals lost in .

Fulton Street Transit Center

Another high-profile project affected by the precarious economy is the Fulton Street Transit Center. When plans for the transportation hub on Broadway between Fulton and John streets in Lower Manhattan were first announced in 2004 it was envisioned as a central element in the recovery of the area after of the Sept. 11, 2001, attacks.

The project, which the Metropolitan Transportation Authority now estimates will end up costing approximately $1.2 billion, had included a 110-story glass dome as well as a hub for several different subway lines and PATH trains to New Jersey. It was originally scheduled for completion last year. Now it's expected to be done by September 2010, and its price tag has swollen by more than $400 million from the original $700 million cost estimate projected back in 2004.

As part of the project, 148 businesses were razed or relocated under the city's use of eminent domain to build the hub.Now, though, the dome they had been forced to make room for had been deemed too expensive and was permanently scrapped back in January. Ironically, one reason blamed for the cost overrun was the expense of completing these relocations. The authority recently announced that it would indeed build some sort of structure above the subway connection, but details about its size, cost and usage have not been publicly revealed.

But the key challenge remains the MTA's capital budget. At $29.5 billion, it has t a projected $14 billion shortfall for this operating year. In addition, the city had planned to use $500 million in congestion tax fees to sell bonds to finance the capital budget. Because the congestion pricing plan failed, the estimated $4 billion to $5 billion these bonds would have raised for the capital budget for the next four or five years is lost, representing an even larger than expected hole in the agency's coffers.

Currently, the transit hub is undergoing a 30-day "review period." It is unknown how much— if any — additional money could be provided by the federal government and the Lower Manhattan Development Corp. and how much of a role public opinion and state leaders, such as Assembly Speaker Sheldon Silver, could end up playing. The idea of bringing in additional funds by turning the Fulton Street terminal into a public-private partnership is reportedly being floated.

Rising costs may also adversely affect other proposed transportation projects such as the Second Avenue subway line, the westward extension of the 7 train into the West Side and a Long Island Rail Road link to Grand Central Station in Midtown.

Javits Convention Center Expansion

The Jacob K. Javits Convention Center, located at 11th Avenue between 34th and 39th Streets, was supposed to expand to become one of the largest convention centers in the country. By November 2007 the plan had been scaled down. Now the focus has turned to renovating the convention center, which will cost about $800 million, compared to about $3.1 billion for the original plan.

At one point, former Gov. Eliot Spitzer had intended to sell off a parcel slated for the convention center's expansion, further jeopardizing the project. Spitzer put that plan on hold after a protests by city officials earlier this year. Now, under the Paterson administration, it is unclear what could occur.

Economic conditions are partly to blame for the uncerttainty. New York City simply unable to afford the original project, forcing the scaleback. The Empire State Development Corp. spent more than $30 million to determine whether the project was feasible under the current budget, with the state agency ruling after more than a year of study that it was not.

Also, local economic strains have created some friction between two of the center's largest revenue sources: exhibitors and hotel owners. Both groups are arguing over what redesign might produce the most revenues. With a slowing economy, there are concerns among observers that the Javits Center might be unable to hold on to its current slate of conventions, let alone pick up additional ones.

But the economy is not solely responsible for the Javits Center missteps. Poor oversight also is to blame. Directors of the center have complained the project was poorly planned and that they were asked to approve "millions of dollars" of expenses — after they had already been incurred. Further, the chairman of the center's board reportedly held most of its meetings behind closed doors.

Now, city planners are looking to a 61-acre site at Willits Field in Queens as a possible site for a satellite convention center for New York, but officials are not in agreement about this option or whether the possible Queens site would complement or replace the Javits Center. Last week that proposal started its formal Uniform Land Use Review Procedure, much to the chagrin of a majority of the City Council.

With Paterson now in Albany and a new head of the corporation to be named, it is unclear what the future holds for New York's convention center on the West Side.

Hudson Rail Yards

At the end of March, the MTA signed a tentative deal with real estate operator Tishman Speyer Properties to work on the Hudson Rail Yards, a 26-acre site on the Far West Side. The plans are to develop the former rail yards into a number of both residential and commercial buildings as well as some green spaces. But much remains uncertain

The deal is still tentative because an agreement must be worked out between the city and developer to ensure public access to parks and the Hudson River. According to a report by the New York Times, land-use and environmental studies are still forthcoming, and City Council will have to rezone half of the site.

Current plans call for construction to start at the beginning of 2009.

Moving Forward

While the stock market bobs and weaves, and city officials continue to warn of the recession's impact on the city's revenues, developers and potential commercial and residential real estate buyers are likely to move forward cautiously.

The fate of these monumental projects -- many of which were meant to be the signature accomplishments of the Bloomberg and Spitzer administrations -- will not only affect some political legacies, but our streetscapes for decades to come.

Steven Josselson is a New York City-based freelance journalist and a recent graduate of New York University's Robert F. Wagner Graduate School of Public Service.  

Photos (cc) Heather Rasley

Abandoned industrial land in Bushwick, one of 17 NYC neighborhoods
receiving Brownfield Opportunity Area funds

Some of New York's least friendly spaces -- its brownfields -- hold the key to achieving many of PlaNYC's goals for a greener, greater New York. To create more livable and sustainable communities for today's residents while accommodating one million new ones, the city must reclaim and redevelop many of its 7,600 acres of abandoned, under-utilized and sometimes contaminated industrial land.

PlaNYC offers a framework for reusing thousands of brownfields to provide affordable housing, generate jobs and offer usable open space. Redeveloping these lands would also promote the plan's goals of protecting wetlands, improving public health and cleaning up toxic waste. PlaNYC calls for state legislative action, and it also includes several important initiatives the city can implement without any approvals from Albany.

The city has taken some steps to advance the cleanup and re-use of brownfields, but there is much more the Bloomberg administration can do.

Releasing Community Redevelopment Grants

Mayor Michael Bloomberg achieved an important PlaNYC goal in early March when then-Gov. Eliot Spitzer, Senate Majority Leader Joseph Bruno and Assembly Speaker Sheldon Silver signed a legislative memorandum of understanding that included $2.7 million in State Brownfield Opportunity Area (BOA) grants for nine communities around the city.

This brings the number of New York City neighborhoods to 17 that will receive a total of $4.5 million in state Brownfield Opportunity Area planning funds, covering over 2,000 brownfield sites in Jamaica, West Brighton, Sherman Creek, Sunset Park, Red Hook, East Williamsburg, South Bronx Waterfront, East New York, Port Morris, Harlem River/Bronx, Broadway Triangle, Gowanus, Port Richmond, Eastchester, Newtown Creek, Bushwick and Harlem.

Another half dozen city communities are poised to take advantage of new Brownfield Opportunity Area funds that the state is making available this spring. These funds are being used to conduct environmental and economic studies, and to identify strategic sites and redevelopment uses that meet community needs, such as affordable housing.

Create a City Office for Brownfield Activities

The $4.5 million in state funds supporting these 17 community-based brownfield initiatives need a parallel commitment of city resources to ensure coordination of land use, planning and site specific actions. There is also a tremendous need for improved communications, training and technical assistance both for city agency staff and the communities involved in brownfield planning.

PlaNYC calls for the creation of a central city Office of Environmental Remediation to coordinate all the city's brownfield activities. Bloomberg budgeted $1 million for this office in 2008 and his fiscal plan includes $2 million annually in future years, but the office has not yet been created.

The city hired four new people with hazardous materials technical capacity at the Department of Environmental Protection, but no new personnel have been brought on board to conduct outreach, training and technical assistance. City Council legislation to make the Office of Environmental Remediation a permanent part of city government would help insure that this important function continues after Bloomberg leaves office.

Restructure the State's Brownfield Tax Credit

The mayor scored another partial victory in January when Spitzer proposed creating a 10 percent brownfield tax credit bonus for projects built according to a Brownfield Opportunity Area plan. That same bill would free up the state Department of Environmental Conservation to start accepting historic fill sites into the Brownfield Cleanup Program. (Historic fill is material brought into a site to raise the elevation of low lying areas to permit development and typically is used along New York City's waterfront.)

Because the filling occurred prior to any regulation, these materials contained contaminants, including metals and petroleum. To date, most city fill sites have been rejected from the state's cleanup program. Albany lawmakers, occupied with the budget, have not yet considered these thoughtful reforms.

Provide Financing and Insurance

PlaNYC provides $15 million for a remediation fund that would provide low-interest loans for testing and remediation and $10 million for environmental insurance. Both initiatives are desperately needed, particularly to advance affordable housing and other projects struggling to cover the additional costs involved in building on brownfields.

Unfortunately, the city's efforts to develop a remediation fund haven't moved, and this is at least partly due to the delay in establishing the Office of Environmental Remediation. The city should use a portion of the $15 million slated to finance brownfields for the Metro Brownfields Program, an innovative public-private brownfield remediation financing program whose progress has been stymied by the restrictions placed on the federal grant made available to credit enhance remediation loans. (Note: New Partners for Community Revitalization is a partner in the Metro Brownfields Program.)

The city's environmental insurance initiative calls for the creation of a policy that protects property owners before they test their site. This has not moved forward and whether there is a need for such insurance is unclear. There is, however, a need for environmental insurance policies that would protect against cost overruns associated with planned cleanups and provide liability protection. Policies that address cost overruns are difficult to secure on cleanups of less than $5 million, and the premiums are very high. If PlaNYC funds were used as a buffer – essentially to cover the first narrow layer of remediation cost overruns before the insurance coverage kicks in -- it would reduce the premium costs for the developer and increase the availability of policies. Separately, PlaNYC resources could be used to subsidize premiums, particularly on projects with narrow profit margins such as affordable housing.

Give the City Regulatory Authority

City Hall has said its top brownfield priority is to get authority from Albany for its own cleanup program. The fact that the Department of Environmental Conservation has practically shut down the state's Brownfield Cleanup Program in the aftermath of recent lawsuits makes the need for city autonomy that much more urgent. A bill in the State Senate would give the city this authority, but the Assembly has not introduced a companion bill, nor has the Paterson administration shown any interest in handing over authority to the city.

And, with a moratorium on new Brownfield Cleanup Program applications lasting through early July, it is unlikely that Albany leaders will consider such a change before the legislative session ends this summer.

Instead of waiting for the state, the city should advance those PlaNYC initiatives that do not rely on state action. The $4.5 million in Brownfield Opportunity Area funds that are advancing 2,000 brownfield sites in 17 communities should set the pace for accelerating achievement of the PlaNYC brownfield goals. However, continued progress is dependent on City Hall establishing the Office of Environmental Remediation and delivering the communications, technical assistance, training, financing and insurance assistance these communities need. The good news is that none of that depends on Albany.

Jody Kass and Mathy Stanislaus are co-directors of New Partners for Community Revitalization, Inc.

Back to the Sustainability Watch homepage

 

PlaNYC could benefit from more collaboration in the planning process.

Mayor Michael Bloomberg's unprecedented long-term sustainability plan for New York City, PlaNYC2030, is a year old. But the failure (at least for now) of what the mayor's office declared to be a keystone of the plan -- congestion pricing in Manhattan -- should lead to some serious reflection about how to create a workable long-term plan for the city.

Other Sustainability Watch articles this week:

Reinventing Buses
By Joan Byron

It's Time -- Finally -- for Greenways
By Dave Lutz

A Plan for the City's Parks
By Micaela Birmingham

Zero Mention of Zero Waste
By Maggie Clarke

Housing for a Sustainable City
By Tom Waters

As the State Assembly refused to even hold a vote on the plan to charge people a fee to drive in Manhattan, the mayor blamed elected officials in Albany. His opponents faulted the mayor's proposal and tactics.

Whatever the merits of congestion pricing, its defeat reveals a fundamental flaw in the mayor's approach to long-term planning that was obvious to many urban planners from the start. The plan was prepared by the mayor's staff and a team of outside consultants, and designed in such a way that civic, environmental and neighborhood groups could not truly engage with the administration in a two-way dialogue about the plan. In scores of public forums and focus groups, people from the mayor's office offered presentations showcasing the plan and asked people who attended to submit their comments. It was a one-way, top-down process. There was no conversation, and the decisions about what to put in the plan remained in City Hall. As a result, grassroots support for the plan, and congestion pricing, was limited to passive assent and a more enthusiastic core of environmental groups.

Why Process Matters

Why should it make any difference how the plan was developed? If it's a good plan, why not just line up and move on? Unfortunately, that was the message coming from City Hall about congestion pricing, and it didn't work. While many of the other 146 proposals in the mayor's plan are also good ones, they too will go nowhere fast unless top-down planning in City Hall can meet bottom-up planning in the city's neighborhoods on an equal footing. And many of the proposals in the plan would have been even stronger from the start if they had been enriched by lively public discussions and debates. That kind of debate improved the congestion pricing plan, making it simpler than when originally proposed and adding provisions for residential parking and help for lower income New Yorkers who drive into Manhattan. This indicates that even if discussions take much more time -- and the congestion pricing debate took almost a year -- they are a fundamental part of the planning process and should not be cut short.

With only 20 months left in the mayor's term, the big question now is what parts of the plan will survive into the next administration? Will term limits limit the dreams of long-term planning? The answer to these questions will depend on the large pool of civic, environmental and neighborhood groups that for a long time has proposed long-term solutions to the city's problems and so applauded the mayor's plan, but were left to play second fiddle in the new City Hall concert. Mayor Bloomberg can accomplish many things in 20 months just by using financial resources normally available to the executive branch, only to see the next mayor change priorities and divert resources.

Origins of PlaNYC

The problems with the planning process go back to the administration's first attempts at long-term planning. After challenges to many large-scale projects directed by then-Deputy Mayor Daniel Doctoroff (remember the Jets stadium), the city's Economic Development Corporation hired former City Planning Commissioner Alex Garvin to prepare a study of long-term growth opportunities and constraints in the city. This study, dated May 2006, assumed there would be a million new people by the year 2030, and found opportunities for new high-density neighborhoods along the city's industrial waterfront and on top of rail yards and roadways. Garvin's bold vision was accompanied by proposals to create new public spaces and improve mass transit to support new growth, obvious concerns of both real estate investors as well as current residents.

The Garvin plan was sketchy in many respects and if it had been put forth as a land use plan for the city it would surely have met with some harsh criticism by neighborhoods, particularly those already bearing the brunt of massive real estate speculation and megaprojects. Some of the opposition would have been knee-jerk not-in-my-backyard sentiment but some would have been rooted in serious skepticism about the ability of the city to provide adequate services, protect existing residents from displacement and deal with the long-term environmental consequences of growth. The Garvin plan was a growth plan and only suggested how environmental impacts could be addressed. It was commissioned without public input and, significantly, was done by the mayor's economic development office and not the City Planning Department or City Planning Commission.

Without public discussion, the Garvin plan became the foundation for PlaNYC2030. Months later, in September 2006, the mayor created an Office of Long Term Planning and Sustainability, placing it within his Office of Operations, and an advisory group. Seven months later, on Earth Day 2007, they unveiled PlaNYC2030.

City Planning Outsourced

The 2030 plan appears to have been largely prepared by a management consulting team under contract with the city's Economic Development Corporation. Calls to the corporation confirmed this, but we were told we could not obtain a copy of the contract without filing a Freedom of Information petition. The firm, McKinsey & Company, is one of the largest that serves global corporations, and Rohit Aggarwala, director of the mayor's Long-Term Planning and Sustainability Office, was hired directly from McKinsey.

The plan looks more like a strategic planning report for a big company anxious to save money on energy than a blueprint for city government. It was marketed like a corporate strategic plan, replete with full-color charts, a Web site, focus groups and "stakeholder" meetings throughout the city. The mayor's office and consultants locked up the planning process, and when they finished their work, it was taken around town for viewing.

While the mayor's office organized focus groups to test its ideas, the plan was never officially approved, as long-term plans are in other New York municipalities and just about everywhere in the nation. In New York City there is a clearly defined process for approving plans, outlined in Section 197-a of the City Charter, our constitution. Plans should be presented to the community boards (there are 59 in the city), borough presidents, City Planning Commission and City Council. At each step, there are required public hearings and votes. Borough presidents and City Council members are elected, and can speak for local constituencies not represented in a highly centralized government run by a single powerful mayor. Community boards are appointed but they are the only official form of neighborhood-level governance, in neighborhoods that average 135,000 people. None of these bodies was consulted. In addition, there are many community-based organizations, civic and advocacy groups that usually take part in the process and were not involved in any significant way.

Missing: Planning at the Neighborhood Level

In general, bottom-up, neighborhood level planning is alive and well in New York City. The Municipal Art Society's Atlas of Community-based Plans shows that there are over 80 community plans, many of them both visionary and inclusive. They were often developed when neighborhood activists felt city government was not responsive to their needs.

Some issues critical to communities are notably absent from PlaNYC: affordable housing preservation, waste management, industrial retention, living wages, noise, public health crises like obesity and HIV/AIDS, education, immigration, and discrimination. Critical issues like traffic and parking throughout the boroughs seem to have been submerged by congestion pricing for Manhattan and a far-off promise of bus rapid transit. And the plan never spells out the real-world impact on neighborhoods of its citywide initiatives.

In community-level planning, neighborhoods confront the ways that global issues play out in a very real and tangible way on the ground as they affect the daily lives of people. PlaNYC instead uses quantitative metrics that fail to resonate with the everyday lives of people in their communities. For example, PlaNYC sets a goal that every city resident should be within a 10-minute walk from a park. As New Yorkers for Parks has pointed out, however, the goal is so broad that it has little meaning for communities planning to make green space accessible for all. Many people need public space on the block where they live, and for some people even a 10-minute walk is too much. Many green spaces serve regional recreation needs but do little for people living next door.

PlaNYC's methodology is linear, dealing with simple cause-effect relations that may have little to do with complex neighborhood-based visions. For example, planting a million trees would reduce greenhouse gases by a quantifiable amount. Congestion pricing would reduce car trips by a predictable percentage. But as the congestion pricing debate proved, it is simply not enough to make one isolated change a city priority when its local impacts are not clear. This kind of "results-oriented" thinking ignores the complexity of life in the city and is especially unsuited to a multicultural city where many, perhaps even a majority of residents, find this approach to be alien. Within African, Asian and Native American thinking, for example, there are powerful holistic theories that integrate instead of disaggregate the human experience. And environmental justice advocates have long criticized how some measures touted as good for everyone in the city actually have different effects from neighborhood to neighborhood and reinforce inequalities.

Is the Honeymoon Over?

One year since the launching of PlaNYC2030, the time has come for supporters of sustainability and long-term planning to go beyond simply patting the Bloomberg administration on the back for all the good things in the mayor's plan and move on to serious discussions. While the city is the better for the unprecedented launching of a public discussion about sustainability in the policy arena, we should not forget that New York is decades behind other cities in Europe and the United States when it comes to long-term sustainability planning.

As we contemplate next steps some people might prefer to see PlaNYC2030 fade away in order to save long-term sustainability. Unfortunately, this could set back any future efforts to address long-term environmental and public health issues. Rather, the best antidote to this understandable frustration is to intensify the public discussion about sustainability in New York City, measuring the progress being made and giving both credit and criticism to the mayor and city agencies when due. Moving the debate beyond public relations and campaign rhetoric can, in turn, lead to a genuine top-down/bottom-up dialogue about how to construct a long-term plan for the city that is sustainable for generations to come. This is the objective of Sustainability Watch, a project of Gotham Gazette and Hunter College's Center for Community Planning & Development. May a thousand flowers bloom on Earth Day!

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. 

Photo (cc) Paul Goyette

Affordable housing is becoming harder to find across the board.

As New York City grows, it will need more affordable housing.

A city cannot be truly sustainable if people do not have safe, healthy, and affordable places to live in it, so any serious plan for the city's future must focus on providing homes for households at every income level - especially the 36 percent of New Yorkers with incomes of twice the federal poverty level or less. These are the people with the greatest unmet needs, and their needs can only be met through planning and government action, because the market on its own will always fall short.

Unfortunately, however, we are moving in the wrong direction. The supply of housing affordable to the city's low-income households is eroding rapidly, not only in a few gentrifying neighborhoods but everywhere.

Other Sustainability Watch articles this week:

Planning for the Long Term
By Tom Angotti

Reinventing Buses
By Joan Byron

It's Time -- Finally -- for Greenways
By Dave Lutz

A Plan for the City's Parks
By Micaela Birmingham

Zero Mention of Zero Waste
By Maggie Clarke

In the last five years alone, we have lost 15,949 Mitchell-Lama rental apartments and 2,686 project-based apartments in the Section 8 federal housing subsidy program. That is, admittedly, a little less than the number of new rental apartments created so far through Mayor Michael Bloomberg's New Housing Marketplace plan, but the lost Mitchell-Lama and Section 8 apartments were on the whole affordable to much lower income people than the newly created ones.

Even public housing is under threat. The New York City Housing Authority has a $195 million operating deficit due to severe underfunding by three levels of government - city, state, and federal.

Worst of all is the loss of affordable rent-controlled, rent-stabilized, and unregulated housing. The U.S. Census Bureau's New York City Housing and Vacancy Survey shows that we are now losing 30,000 rent-regulated apartments affordable to a family of four with a yearly income of twice the federal poverty guideline. And we are losing similar unregulated apartments at a rate of 28,000 per year. The New Housing Marketplace Plan is producing some new apartments at a comparable rent level (up to $968 a month in 2005), but not nearly fast enough.

The High Cost of Lost Housing

This loss of affordable housing is hitting low-income households hard. Even in economic good times, income gains are being outstripped by rent increases. And in bad times, disaster is right around the corner. The Housing and Vacancy Survey shows that poor households have persistently high rent burdens. In 1996, the median poor household in an unsubsidized apartment paid 63 percent of its income as rent. In 2005, that figure was 62 percent.

Meanwhile, near-poor households, with incomes from 101 to 200 percent of the federal poverty level, have been falling farther and farther behind. In 1996, the median household in this group paid 36 percent of its income as rent, but by 2005 that figure had risen to 42 percent. The sad truth is that these New Yorkers are rapidly falling into the dire situation of the poor. Two thirds of near-poor households and one third of poor ones are working, but high rents are consuming the benefits of work.

These rent burdens translate into real hardships for low-income people. For six years, the Community Service Society has been conducting an annual "Unheard Third" survey of low-income New Yorkers. The survey makes it possible to see the impact of the affordable housing shortage in terms of hardships like falling behind in rent, having utilities cut off, doubling up with another family or staying in homeless shelters.

The survey shows that in 2002 and 2003, 46 percent of poor households experienced at least one housing hardship. By 2006 and 2007, that figure had risen to 50 percent, despite the fact that the city's economy improved markedly during this time period.

The situation for near-poor households deteriorated much faster. In 2002 and 2003, 28 percent of them experienced at least one hardship, but by 2006 and 2007, 44 percent of them did- almost as high a rate of hardship as the poor households.

What's worse, the more severe hardships -- doubling up or staying in homeless shelters -- rose sharply for both groups: from 7 to 16 percent for the near poor and from 16 to 24 percent for the poor. This helps explain why a record number of families are in the city's homeless shelter system.

Ending the Erosion

Reversing this disastrous loss of affordable housing is the first order of business for housing policy. If the city's population is going to grow by a million by 2030, as city planners project, that probably will include some 125,000 more low-income families, unless there is an unanticipated change in the city's job mix as well as patterns of migration and demographic growth.

The bottom line is that we need to turn a loss of over 60,000 affordable apartments a year into an increase of 6,000 a year. This challenge will require an enormous increase of commitment beyond the New Housing Marketplace.

Solutions like inclusionary zoning and the creative use of government-owned land and existing subsidy streams can help. But real progress also will require a combination of stronger regulation and major new subsidies. That, in turn, will take a significant increase in political will.

For years, city and state office holders have been allowing the rent control and rent stabilization laws to weaken. Programs to create new housing have produced too few apartments, and too few of the apartments created have been targeted for poor and nearly poor households. Now we need stronger rent laws, and large new subsidies to serve low-income New Yorkers.

These are politically controversial, but if we aren't discussing them, then we aren't really planning for New York City's future.

Tom Waters is a housing policy analyst at the Community Service Society. 

Images from Adrienne Serra and timetrax23 via (cc).

Negotiations continue on a plan to create a city-wide, high-speed fiber optic network.

On April 15, after months of negotiations, Verizon announced it would file an application with the city's Department of Information Technology and Telecommunications to offer video service throughout the city. If that application is approved, it will be the company's cue to ramp up its installation of fiber optic cables to every home in New York and start offering its FiOS package of Internet, video, voice and even wireless for those customers who really love a one-stop-shop. Verizon says it could begin offering the video service by the end of the year.

I'm not trying to hype the service - Verizon's television advertising campaign can take care of that. But the widespread adoption of DSL and cable changed the Internet radically, making photo galleries and short videos commonplace; the next generation of connection speeds will likely yield a similar transformation. An uncompressed feature film will download in a half an hour over a fiber optic connection compared to almost 10 hours on DSL and practically never on dial-up.

Replacing the paired copper wires that make up the telephone network with new fiber optic wires is an expensive proposition. Verizon won't discuss the specific dollar figures involved for New York, but in the 16 states where it is rolling out FiOS, Verizon plans to spend nearly $23 billion between 2004 and 2010. The New York installation alone would run into the billions and extend past that timeline. An investment of this magnitude will be the most significant thing to happen to New York's telecommunications infrastructure since the initial installation of cable television.

"This is a market-changing deal," said Councilmember Gale Brewer, referring both to its financial size and to the impact of running fiber optic cables to every residence in the city.

Closing the Deal

As Juan Gonzalez reported in the Daily News last fall, the Bloomberg administration and Verizon have been conducting secret negotiations for months. Although the application must still clear a number of hurdles, Verizon's announcement seems to indicate that it and the city have made some progress in the talks.

Based on the statements by members of the City Council and the public interest community, there have been a number of key issues.

The first is buildout. If you live in the outer boroughs or a poor neighborhood, you want Verizon to offer service to the entire city as quickly as possible, say five years, rather than offering service just to wealthy neighborhoods. In its statement, Verizon said it would build the fiber optic network througout the entire city by 2014. The smattering of buildings that already have FiOS service are dispersed throughout all the boroughs, determined by their proximity to a Verizon connection point and the willingness of the building owner, according to Verizon. The company points to this as evidence that it would not discriminate against poor neighborhoods even over a longer timeline.

New York's architecture had posed a particular challenge. Fiber optic wires are made of glass or plastic and transmit light, so it was difficult to run them through the tight corners of old apartment buildings. But last year, Corning, the upstate New York glass company, invented a bendable fiber. Verizon is already using Corning's technology to bring fiber optic service to the 11,232 apartments in Stuyvesant Town and Peter Cooper Village.

Another issue centered arund whether Verizon would commit to funding centers like Manhattan Neighborhood Network and Brooklyn Community Access Television where people can go to use expensive television production equipment and broadcast their programming. Existing cable providers already do this. But the Internet is different. People can upload video content from their homes. Training and equipment access can happen at the neighborhood level. Verizon representatives visited the public access centers recently, andthe company probably is willing to match the incumbents' support in that realm, but might balk at going further. Is statement did not address this.

"Public access and citywide buildout are a given," Brewer said, "but Verizon also needs to support the social layer." That means all of the things in addition to access that people need to use the Internet, especially computers, training and relevant content. There are many groups in the city like Per Scholas in the Bronx and Computers For Youth that provide these kinds of services. Since the Bush administration cut community technology funding in his first term, these programs have relied almost exclusively on foundation support.

Faster than Your Average Internet

With the FiOS installation, residents of Stuyvesant Town and Peter Cooper Village are able to purchase Internet service at up to 50 mbps. (Mbps is million bits per second and is the standard measure of bandwidth.) That's 20 times faster than what most of us can get from cable or DSL and 750 times faster than a dial-up connection of 56 thousand bits per second.

These speed differentials represent a new kind of digital divide. The gulf between the online experiences of a person connecting at 20 mbps over a fiber optic connection and a person connecting at a fraction of that over copper wires is as dramatic as between the latter and someone who has no in-home connection at all. It's like going from standing to walking to driving.

The fiber optic service is also symmetrical, meaning the same speed for upload and download connection. Most Internet service is asymmetrical, meaning you can download (receive) faster than you can upload (send).

"I really think it does give people access to a whole other Internet," Ellen Yu, a spokesperson for Verizon, said.

But Not Fast Enough

While New York inches towards connections of 20 to 50 mbps, foreign cities like Hong Kong and Amsterdam are moving to 100 mbps. The challenge for New York City, then, is threefold. At the same time it works to cross the traditional online/offline divide, it needs to both close the gap between those with marginal access and those with speedy and convenient access and catch up to other world-class cities.

Some cities, like Seattle and San Francisco, have considered municipally backed fiber networks to solve this problem and bring internationally competitive Internet service speeds to their residents, but the cost and timeframe can be daunting. Entrepreneur Brewster Kahle recently paid to wire a San Francisco public housing complex directly into the local backbone, giving residents access at up to 1 gigabit, or 1000 mbps. Smaller cities like Burlington, Vermont, have built such networks and are providing the "triple play" of services - voice, video, and Internet - themselves and at lower prices than the incumbent cable company. From the looks of it, New York public officials are going to rely on the private sector, especially Verizon, to bring us the next generation of broadband.

Regulating Fiber Optics

Currently, the fiber optic service in Stuy Town and other select buildings around town carries just phone and Internet. It has the potential to provide video as well but is not currently doing so.

This is more a political issue than a technical one. The government regulates Internet service, phone service and television service differently - even though they can travel over the same wires. So Verizon can replace its copper wires with fiber optic lines and start selling Internet access over those lines, but it cannot sell TV service until it gets a franchise from the city.

The government also regulates the different wires differently, so Verizon is required to lease its copper wires to competitors, but that requirement does not apply to the new fiber optic lines. In some cases, the company has removed the old copper wires when they install FiOS, meaning you - or subsequent residents - can't go back to the cheaper DSL service once you upgrade. In general, though, Yu says Verizon's current practice in New York is to leave the copper in place unless the customer requests removal. Either way, the potential revenue from the video service is the primary motivation for Verizon to install FiOS throughout the entire city.

The entry of Verizon into the market would dramatically change the television system in New York. Currently, even though there are multiple cable operators in the city, a household only has one choice for cable TV because each franchise covers a specific area. Where customers have a choice of cable operators, subscribers usually see price reductions of 15 percent, according to Chuck Bell of Consumers Union.

If Verizon got a franchise to sell television service over its fiber optic network, that would provide New Yorkers with another choice -- along with cable and satellite -- for TV. The cable companies would probably cut rates to compete, though perhaps only in the neighborhoods where FiOS is available.

Meanwhile, these cable provider's ostensible monopolies have led to growing customer dissatisfaction. Time Warner and Cablevision are currently negotiating renewals of their 10-year franchises, so Consumers Union and New York Public Interest Research Group worked with Comptroller Bill Thompson to draft a "Cable Consumers Bill of Rights," which they announced on March 26. Among other things, it would seek to make the companies more accountable on service issues, provide more information about customer bills and charges, protect customers' privacy and give New Yorkers greater access to independently owned channels.

The comptroller is a member of the Franchise Concession and Review Committee, which also includes mayoral appointees and relevant borough presidents. The franchise committee would have to approve any deal involving television services reached between Verizon and the Department of Information Technology and Telecommunications. The deal would then need an OK from the state Public Service Commission.

Consumers Union's Bell urges vigilance: "So many issues are on the table during negotiations, there's always a chance that things will get dropped. We also have to think carefully how this changes over the life of the franchise. Technologies change. People's needs change." Most people didn't even have dial-up when the current franchises were first inked.

If you want to voice your opinion on the Verizon deal, the franchise committee is required to hold a public hearing on the franchise for television services, so stay tuned for that announcement.

 

Photo (cc) Mia on the wall

Despite all the turmoil in Albany in the past few weeks, housing advocates remain optimistic about their chances for success in the state capital. The news from Washington was far grimmer. There, a sudden and massive cut in funds for the federal Section 8 rent subsidy program could drastically affect the city's housing situation.

Appraising David Paterson

At a town hall meeting in Harlem to discuss housing issues, the topics on the agenda included the loss of Mitchell-Lama apartments to market rate housing and the expansion of Columbia University into Manhattanville, hot topics that have led many to despair. But the mood was buoyed by the realization that a Harlemite had become New York's governor.

"We can be cautiously optimistic," Nellie Bailey of the Harlem Tenants Council told the audience. "Governor Paterson will be better than Elliott Spitzer on our issues."

It's a refrain that many housing advocates have been repeating as the shock of former Gov. Eliot Spitzer's political demise subsides.

"Certainly from our point of view [Paterson] will be much, much better," said Michael McKee of Tenants PAC. "He's fundamentally pro-tenant whereas Spitzer wasn't. Spitzer was certainly better than (former Gov. George) Pataki, but I'm not sure how much Spitzer really believes in regulation of housing, for example."

Paterson has a commitment to tenant issues, McKee added, a comment other advocates echoed.

"Governor Paterson will be very good for tenants," said Jenny Laurie of the Metropolitan Council on Housing. "He's always supported tenant issues and he's very knowledgeable. And he's got all of the different types of housing in his district -- rent regulated apartments, Section 8 and Mitchell-Lama projects and New York City Housing Authority buildings."

On at least one major issue, the expansion of Columbia University into West Harlem, Paterson's views are encouraging to housing advocates, most of whom oppose the plan in its current form. In 2005, Paterson called on then-Governor Pataki to issues a six-month moratorium on the use of eminent domain to take private property for the university's use. But as the leader of the minority in the State Senate, Paterson did not have the power to get much done.

Just a month ago, Paterson headlined a fundraiser for McKee's group at a bowling alley in Harlem. "David's a friend," McKee said, adding, "I know from talking to him over the years that he is pro-tenant and pro-rent regulation.... I think he understands what ordinary people go through just to make a go of it."

Another advocate who asked to remain anonymous lest a comment affect political relationships said Paterson could prove a disappointment.

"In the past, he's been an over-committer," the advocate said.

The ascension of Paterson to the top spot in state government does not change the fact that the State Senate, if it remains under Republican Joe Bruno's leadership, still has the power to block progressive policy on housing issues, McKee said. So, Election Day remains the key date for housing advocates, he said.

"Everything is dependent on the senate changing in November," he said. "If Bruno holds on by one vote, we won't be able to change anything."

Bad News for Section 8

November also could be key to what happens in Washington. The Bush administration cut $2.4 billion from the federal Section 8 rent subsidy program in March, which effectively threatens 90,000 households in the city that rely on the subsidy to help pay their rents. The cut means that the Section 8 program can only meet its commitment to landlords through September 2008 -- as many as 500,000 Section 8 vouchers nationally would have to be cut to make up the shortfall.

The problem of funding has existed at least since last year when some Section 8 landlords did not receive payments owed them. At its root is a change in how the vouchers are funded. Contracts for low-income housing used to last for 20 to 30 years. In the 1990s, though, the Department of Housing and Urban Development began to switch to shorter term -- one to five year -- agreements. With funding tight and Congress cutting back, the department dipped into funds to cover shortfalls, leaving it without money to pay its obligations toward the end of the year, John Cox, the department's chief financial officer http://www.hud.gov/offices/cir/test071017.cfm told Congress last year.

This leaves landlords caught in the middle. When developers accepted tax breaks and other incentives to build affordable housing decades ago, they did so with the understanding that after 20 or 40 years they could opt out of the program. "It's another incentive to get out" of the Section 8 program," and so could s speed the loss of affordable Section 8 project apartments, said Patrick Coleman of Tenants & Neighbors. "Almost 10,000 families are living in buildings and now in danger of their owners saying 'forget it.'"

HUD thinks the problem can be solved, said spokesman Brian Sullivan. He conceded there had been a basis for concern. "There are people who are understandably nervous because you have landlords who, if they don't get paid, they don't want to play. In certain extreme situations, there were some suggestions that landlords would evict tenants because they weren't getting paid," Sullivan said. He added that he did not think anyone had been evicted because of the funding situation. Sullivan said the department believes the situation has been remedied. "We are confident that we have sufficient funding to meet our obligations in FY 2008 and we are seeking sufficient funding in 2009," he said.

Not everyone is so sure, though. On a rainy March night in Greenwich Village, about 150 people filled a church as three members of Congress from the city -- Yvette Clarke, Jerry Nadler and Nydia Velasquez -- decried the cuts. They signed a pledge to work to restore the funding.

Sullivan questioned the rally. "We believe [the funding shortfall problem] has been corrected and we don't think scare tactics are necessary (referring to the rally," he said.

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

Photo courtesy of AllWaysNY.com

In my East Side and midtown Manhattan district you will find giant cranes and new high-rise buildings on nearly a third of the densely populated blocks -- the same blocks that experienced the tragic crane accident last week that claimed seven lives and left scores injured and displaced from their homes. Since then, all of the questions from people in my community have been about how an accident of this nature could happen; what we need to do to protect workers and residents; and why the frequency of these incidents seem to be escalating. Of course, we have now learned that whatever technically caused the crane to topple, we cannot rely on the Department of Building's system of inspection. At least one of their inspectors admitted he didn't show up for the inspection.

The Problem

Our city's approach to construction approvals and safety has been fundamentally flawed since changes were enacted by the Giuliani administration. Because of a lack of enforcement by the Department of Buildings, along with an extremely hot real estate market, many developers and their contractors ignore safety requirements, disregard building codes and violate zoning laws.

For too many years, the city has under staffed agencies charged with oversight, has had an ineffective penalty and deterrence model, and has allowed the development and construction industry to police itself.

People complain that government is too often reactive, not proactive, and that only after crises are real solutions proposed. Fair enough. I say there have been too many of these types of accidents, and I don't accept the "freak accident" excuse.

Either our inspection and safety protocols are wrong or the people charged with carrying them out have failed at their jobs (as was clearly the case here!) -- or both. There must be changes from the top down, starting with the resignation of the Department of Buildings Commissioner Patricia Lancaster. The department does not have a centralized database for tracking or correlating information between stop work orders, violations and enforcement outcomes.

A 2003 city comptroller's audit found that 67 percent of sampled construction plans that were submitted to the department through self-certification had errors. By 2007, nearly 50 percent were in error. New York City's Department of Buildings initiated self-certification in 1995 to help ease a permit backlog. The practice allows architects and engineers to confirm that their plans comply applicable laws, rather than submit plans to department inspectors. It accounted for nearly half the 6,000 new building permits issued in 2006 and a similar number in 2007.

Some State Solutions

Since the city has been resistant to mandating stricter safety standards, and the department isn't moving forward on its own, there is a role for the state to play. Here are just some of the bills currently in the Senate and/or Assembly:

New legislation can provide more tools to our agencies. However, if laws are not enforced, they are not worth the paper we wrote them on. The city needs to enforce the laws that are on the books and provide the department with the resources it needs to conduct full inspections, prioritizing them by size of project and the risks involved.

Photo courtesy of Maycon Beal

Raising the City's Standards

Reports indicate that the cause of the crane collapse may be a damaged or frayed strap used to stabilize it, which could not bear the load. While building department records showed that the site, including the crane, had been inspected by the department shortly before the accident, we have since learned that at least some of those inspections did not take place.

This chain of events perfectly exemplifies the need for better enforcement and oversight by the Department of Buildings. City officials were called in to inspect complaints on the site. At least one inspector failed to show up, but submitted reports that indicated everything was fine. Assuming others did show up as required, did they know what to look for? Did they see the problems? Did they crosscheck resolution of the 14 outstanding safety violations at the site while they were there that day? As Robert Guskind of the website Gowanus Lounge says, even if the department "functioned like a well-oiled machine that rigorously enforced city regulations, its inspectors are still overwhelmed by the level of construction." I agree.

In many instances, the city's response to violations has been something like: "It's already done so there is nothing we can do." In the case of most violations issued, the developer goes before the Environmental Control Board. However, the board often won't hear complaints for months and the developer can easily get hearings postponed. When cases are finally heard, the fines are usually so small that they are considered "the cost of doing business."When scofflaws laugh about petty cash penalties, we know we have a problem. Fines need to be enforced in a timely way, and dramatically increased to adequately serve as a deterrent.

The Department's Role

In December, the Daily News reported that an architect of 32 sites received "an unusual stipulation, promising not to report the Ă«alleged misdeeds to any regulatory agency,' including one that could revoke his license," by the department commissioner. She should have stepped down from her position then. If the city is serious about addressing these concerns, step one would be for her to step down now.

In another instance, a Brooklyn developer was found to have 48 violations from one development -- the same development he certified at 100 percent compliance. The developer of the site of the crane accident had 14 violations. Though none were deemed extremely serious, there should be a clearly defined timeline during which developers must bring their sites up to code or be forced to stop their work. This must occur within hours, or at most days, not months or years.

New York should not accept a model of construction safety that relies on a neighbor seeing something wrong and reporting it. Though residents are encouraged to report problems, the role of the department should be to prevent problems beforehand. It must be on the scene even before complaints are reported, and when complaints do come in, it needs to take them seriously and address them fully. Despite the department's mission to "ensure the safe and lawful use of over 950,000 buildings and properties by enforcing the City's Building Code, Electrical Code, Zoning Resolution, New York State Labor Law and New York State Multiple Dwelling Law," the agency does not seem to fully understand its role in actually ensuring "safe and lawful" sites. And increased funding is not the silver bullet.

If the city is unable to provide more money for staffing, then the cost of permits must be raised accordingly to fund new inspectors and a faster penalty system. A study conducted by then-Assembly member (now borough president) Scott Stringer in 2002 revealed that the city could generate more than $10 million a year to hire additional inspectors by actually collecting the fines the Environmental Control Board issues each year.

The lack of enforcement, oversight and accountability within the Department of Buildings allows those developers and construction firms, who put profit before the safety of the public and their workers, to shirk city and state laws and codes.

Liz Krueger, a Democrat, is a state senator from Manhattan's East Side.