To: (distribution list)
From: Norman Bauman
Subject: Manhattan apartments, $468/month
Date: 9 October 2000

P. 1 of today's Wall Street Journal had a story about the low-cost apartments that Manhattan developers set aside for low-income tenants.

("West Side Story: for better and worse, affluence surrounds a housing project; as Trump and Tishman build towers, poor neighbors get a chance to move up; diswashers for a lucky few," by Paul M. Barrett, WSJ, 9 October 2000, p. 1)

A typical rent was $468 a month, for a woman earning $21,000 a year, in the West End Towers, where the WSJ reporter lives himself--and pays 6 times as much.

The odds are long--in one development, 5,500 people applied for 104 apartments. But 1 chance in 50 for a $500/month Manhattan apartment sounds pretty good. Of course, if you apply to 2 developments, that's 1 chance in 25 ...

Many NYC-area writers are looking for housing. Many low-paid freelance writers would meet the income eligibility requirements.

I live on W. 54 St., which is the neighborhood the WSJ was discussing. A writer down the street from me applied for one of these apartments and got in, and she paid about $600 a month. I applied to some of these developments myself, and I was offered an apartment on W. 56 St., 2 blocks uptown, but I stayed in my own apartment because it had a better layout and because it was even cheaper (my rent, about 5 years ago, was $480, and the new apartment was about $560). So I know it's legit. But I have heard that these apartments are not as available as they used to be.

The main rationale behind the program is that the local community activist organizations were criticizing the developers for driving poor, working-class people out, destroying the old neighborhoods, and creating high-rent buildings that the old neighborhood residents couldn't afford (see Robert Caro, The Power Broker). So developers like Zeckendorff decided to cut a deal by giving some low-income people a slice of the pie. (You can thank Ruth Messinger for a lot of this.)

I don't need this, because I already have a rent-stabilized apartment ($530 a month). But I know a lot of writers who do need housing. And I'm writing this for the benefit of all those people who ask me, "How do you manage to live in Manhattan at those rents?" (I know there are people out there who would kill for my apartment, and I would feel safer if they had an alternative.)

And how can a reporter resist a story as good as "Manhattan apartments, $468/month"?

Getting these apartments takes a bit of work. You have to find out where they are, which involves calling the local community boards, Borough President's office, City Council offices, housing activist organizations, newspaper reporters, etc. It's like writing a story. Then you apply, and wait. And wait. And forget about it. 2 years later, 5 years later, after you've forgotten all about it, the application comes in. You might have to wait for the next dip in the real estate cycle. Some of the apartments are good, some not so good. Some of them are in slum neighborhoods. Some are the proverbial great New York City apartment deals.

A few years ago I got on the list for Amsterdam Houses itself, the low-income development in the WSJ story that people are trying to get out of. The benefit of Amsterdam is that rents are scaled to income, so you'll never be evicted if you can't work. My number came up, so I checked it out. I walked around. It's a city of poor people (average household income $16,000). They sell illegal guns in the hallways. Everyone in sight was black. (After I heard Martin Luther King speak in 1963, I expected to be living in a color-blind society by now. Major league disappointment.) I walked around and it looked pretty dingy. I decided I didn't want to live there. I passed by the garbage area and there was refuse strewn around. On the ground I saw an empty box from a chemistry set. Somewhere in that dirty project, a kid was playing with a chemistry set.

You could apply yourself, but (as an anarchist), I would note that it would be much easier to do it as a collective effort. It seems to me that the best way would be for all those writers who want to do it to start a group and an email list. If anyone wants to do it, I will offer to collect the names and send them on to anyone who volunteers to run the list. Just be sure to keep the same subject header, "Re: Manhattan apartments, $468/month" in case I get 10,000 replies.

(Yes, this does sound like a chain letter. But look at today's WSJ.)

Of course there are hundreds of thousands of people in New York who need low-cost housing, and there aren't enough units for everyone. In one sense, you're competing with each other. But (as an anarchist) I would point out that if instead of thousands of people competing for scarce resources, we had thousands of people demanding affordable housing from their elected officials, we'd get cheap apartments again like we had in the 60s. So instead of competing with each other, we'd be working together.


Wall Street Journal

October 9, 2000

Page One Feature
For Better and Worse, Wealth Surrounds a Housing Project

Staff Reporter of

NEW YORK -- Raynell France longed for a real home. She was 26 years old, pregnant and had just split bitterly from the father of her eight-year-old son. She shuttled between a tiny apartment in Harlem and her grandmother's place in the public-housing project where she grew up.

Her grim situation seemed reflected by the very walls around her. Hallways at the Amsterdam Houses project were dark and dirty. The elevator to her grandmother's seventh-floor apartment often stank of urine.

But something was changing in the neighborhood of her childhood. The housing project, located on Manhattan's West Side, had become an island of poverty in a surging sea of prosperity. Rising on all sides were massive new apartment buildings, and more would soon follow, boasting some of the glitziest names in real estate. To the northwest: Donald Trump's mega-development, projected to have 16 luxury towers. To the southwest: Daniel Brodsky's triad of skyscrapers. To the west: Tishman Speyer Properties Inc.'s glassy 506-unit colossus where once there had been a vacant lot.

"Maybe there's some way I can get in there," Ms. France mused. The gleaming spires loom just across the street, but to most Amsterdam Houses tenants, they might as well be in the Emerald City. Rents on two-bedroom apartments are advertised at as much as $6,500 a month -- more than a third of the average Amsterdam household's annual income of $16,000. In the past few years, however, the new buildings have come to have a profound impact on the lives of Ms. France and some of her neighbors.

Across the country, an unprecedented real-estate boom is bringing riches and renewal to long-abandoned urban cores. But what's going on in this unusual section of New York's West Side isn't classic gentrification. Developers and yuppies are moving in, but they aren't pushing out the poor. Amsterdam residents mostly are staying where they are, in one of the city's oldest public-housing projects. Only now they're in the shadows of some of the most expensive new buildings in America.

The development has brought with it both promise and disappointment to the 2,700 mostly black and Hispanic residents of Amsterdam Houses. For a handful of them, the soaring new buildings mean direct economic benefit: One building in the Trump Place compound has hired three maintenance men from Amsterdam Houses. The Western Beef supermarket on the bottom floor of Mr. Brodsky's West End Towers has employed about a dozen workers from the project.

For others, the glassy edifices suggest opportunities denied. "I just don't see where those buildings get us," says Shirley Jones, a 59-year-old Amsterdam tenant and retired school aide who sells beauty products on the sidewalk near the project. "The new people are doing fine. Things here are bad and worse."

An Unimagined Chance

Perhaps most strikingly, for some Amsterdam tenants the new development offers something none had ever imagined: a chance to move up simply by crossing the street. In exchange for tax benefits and other government-sponsored financing perks, Mr. Trump and the other developers have offered hundreds of apartments to low-income renters throughout the city at huge discounts.

Such programs have gained popularity across the country, as the federal government has turned away from subsidizing new public housing. The results on the booming West Side are especially dramatic: A one-bedroom unit in the new Tishman Speyer building that would normally rent for $2,800 a month, for example, is available at just $465.

When the first of the new buildings began to open about five years ago, developers distributed fliers about the program through the local community board and took out ads in city newspapers. The program quickly became the talk of Amsterdam's macadam courtyards.

Many residents leapt to apply for the bargain-rate apartments. Others, like Marcus Young, balked. A 46-year-old office-lobby receptionist, he says he considered applying to the Tishman Speyer building but dropped the idea when he learned the tenants would be chosen by lottery from thousands of applications. "It's like the fix is in," he says.

Amsterdam Houses is one of the few reminders of a historically poor and neglected neighborhood. The area inspired Leonard Bernstein's musical "West Side Story," and the 1961 film was shot a few blocks from Amsterdam Houses. In the late 1950s, as part of an urban-renewal campaign, city officials knocked down acres of shabby West Side tenements to clear the way for the Lincoln Center theater complex. Residents of Amsterdam Houses immediately sensed a bitter symbolism even in the architecture itself: Their view of the gleaming white-marble center across the street was of its garage and rear wall.

More recently, as the neighborhood's fortunes gradually rose, local businesses banded together to form a privately financed street-cleanup and security committee -- but they defined its borders to stop just outside the Amsterdam project.

Still, when Ms. France spotted an advertising poster on the side of Mr. Brodsky's just-completed West End Towers five years ago, she wrote down the phone number and called for an application to the reduced-rent program. When a detailed questionnaire arrived at her grandmother's apartment a few months later, Ms. France jumped on it.

The odds of hitting the jackpot are long, with dozens of applicants from all over the city typically angling for each "affordable housing" unit that goes on the market. In the case of West End Towers, Mr. Brodsky had allocated 20% of its 1,000 units, or 200 apartments, scattered widely, but not including the most desirable units.

A Prayer Answered

Ms. France's application was rejected. But she decided to walk across the street from the project and try again. She told a secretary at the rental office about her dreams of providing a better home for her young son and the baby she was carrying. The secretary gave her a tour of the building.

Ms. France was bowled over by the contrast. Amsterdam's 14 red-brick buildings, most of which date to the 1940s, show the dark stains of age. At West End Towers, doormen stand guard 24 hours a day, and the elegant wood-paneled lobby gets swabbed and dusted daily. The elevators sparkle. There's central air-conditioning. Best of all, the model apartment she saw had a dishwasher. "I had prayed for a nice place with a dishwasher," she says. "I believe in God." The rental-office secretary encouraged Ms. France to appeal the rejection.

A few months later, she got good news: Her initial attempt had failed because she had mistakenly counted her grandmother's government benefits in her income calculation. Her own pay from part-time jobs as a hospital patient-services representative and cleaning-service worker came well within the program's $21,000 annual-income cap.

In mid-1995, Ms. France moved into a two-bedroom apartment with panoramic views of the Hudson River -- for $468 a month. That's about one-sixth of what the place would normally cost. Rents at Amsterdam Houses range from almost nothing to more than $500, depending on a family's circumstances. At West End Towers, Ms. France's rent increases by 2% a year, and she is guaranteed the apartment for 30 years, even if her income rises. (This reporter lives in the West End Towers building adjacent to Ms. France's.)

A Juggling Act

The front door of the 14th-floor apartment where she lives with her two sons is hung with a large cardboard sign listing vocabulary words that five-year-old Jayvon must learn. Ms. France now works full-time at her hospital job and attends community-college classes several nights a week, in hopes of moving up in medical administration. Staying close to Amsterdam Houses has been critical to her maintaining the work-and-school juggling act. When she is at night classes, Jayvon and 13-year-old Clyde stay with her grandmother, who still lives at the project.

While she never had doubts about moving, Ms. France says there were repercussions. Some former Amsterdam neighbors gossiped that she must have bribed or slept her way into the building -- a falsehood, she says, but one that embarrassed her grandmother.

She is, in fact, well known at Amsterdam Houses. At mention of her name, some residents murmur with evident pride about how well they hear she's doing. Others have a more ambivalent reaction. "It's nice for her, sure," says Ms. Jones. "Not too many others, though." Ms. Jones says she herself applied unsuccessfully to a Trump tower.

In her new building, Ms. France, who is black, says some of her white neighbors seemed to keep their distance -- not that unusual in New York, regardless of race. But in the lobby one day, Ms. France says, she heard a white woman whisper loudly to a companion: "I see they are moving up in the world." Ms. France says, "It made me feel bad, but I just walked by."

More recently, while riding the building's free shuttle bus to the subway, she says she surprised another white neighbor when conversation turned to their upbringings. The neighbor "couldn't believe I grew up in the projects," Ms. France says.

Clyde, who sometimes wears an apple-shaped rhinestone earring and likes to write short stories on basketball themes, attends a public junior-high school that requires students to take a competitive entrance exam. Ms. France sends Jayvon not to the nearby elementary school, which is dominated by children from Amsterdam, but to kindergarten at a better-performing school many blocks to the south. Like countless enterprising New York parents in a system that allows some children to go to school in other neighborhoods, she pulled strings: An appreciative patient from her hospital job is married to a school-system administrator.

"I feel kind of badly about it, because I went to [the neighborhood school], and this is my community," says Ms. France. "But moving out was an opportunity, and I have to push for every opportunity for my son."

She still worries a lot. For a visitor's benefit, she prods Clyde to say that his best friends are from school. He responds that, no, his best friends live across the street, at the project. "That's where he hangs out," his mother acknowledges with a sigh.

Ms. France wasn't the only one whose dreams of moving away from Amsterdam Houses were fed by hopes of a new apartment across the street. This summer, Minette Thomas had a falling out with her mother, in whose Amsterdam apartment Minette and her three daughters had been living. "We're like oil and water -- eventually we separate," explains Ms. Thomas, who is 36 and single.

It Doesn't Add Up

She badly wanted to stay in the neighborhood. She grew up in the Amsterdam Houses project. Her younger girls go to school nearby. But Ms. Thomas earns $1,600 a month as a customer-service representative for a cable-TV company, and the entire sum wouldn't pay the rent for a one-bedroom apartment on the West Side. "I'd need two or three jobs," she says.

Ms. Thomas graduated from high school while pregnant with her oldest daughter, Shaniqua, now 17. She dreams of one day moving to Virginia, where she has visited, and of owning her own house and hairstyling business. Today, the only tangible link to those goals is her skillful arrangement of her own delicate, gold-highlighted braids.

Her middle daughter, Raushida, a poised 10-year-old who says she would like to be a lawyer because she is good at settling fights, doesn't go to the school associated with Amsterdam Houses. She attends the more-integrated and better-regarded Public School 199, five blocks north of the project.

Hope and Frustration

"A child should see the differences in life," Ms. Thomas says. She herself recalls receiving opera tickets as a child from a family friend who sang at Lincoln Center. "I loved imitating the opera, I guess because I'm a loud-speaking person," Ms. Thomas says, laughing at the memory.

One hope for staying in the neighborhood was the tan brick-and-glass twin-tower building going up on West End Avenue and 64th Street. The developer, Tishman Speyer, announced last fall that 104 of the 506 units would be discounted. Ms. Thomas, eager to get out from under her mother's roof, says she submitted a written application. But she never heard anything back. That silence, she says, prompted her to wonder, "Is this application for real, or do they know who they want?"

Her skepticism is common among project residents. And indeed, the affordable-housing application process is complicated and a bit cryptic.

About 5,500 people applied for discounted apartments in the Tishman Speyer building. Settlement Housing Fund Inc., the nonprofit group that the developer hired to screen applicants, says it randomly assigns a number to each application and then begins reviewing them in order, starting with No. 1. There is no guarantee that every application will be reviewed, and applicants who pull high numbers may not hear anything for as long as a year, which breeds confusion.

Ms. Thomas also applied to get her own apartment in a public-housing project, requesting Amsterdam or another site in Manhattan. But so far, the housing authority, which oversees 181,000 units that have an average vacancy rate of only one-half of one percent, has offered her apartments in the Bronx -- a long subway or bus ride away. Ms. Thomas turned them down.

Disheartened by her failure to find a low-rent apartment in her neighborhood, Ms. Thomas ended up moving in late August with her daughters to an aging one-bedroom place at the northern tip of Manhattan, near the Bronx. She pays $725 a month, or 40% more than Ms. France does for her two-bedroom with the river view.

Ms. Thomas says her daughters miss the new attractions in the neighborhood surrounding Amsterdam Houses. Five-year-old Diamond remembers splashing in the sprinklers in the small park that is part of the West End Towers development. "I'm like a fish," explains the slender little girl with large brown eyes. There aren't any similar facilities near the family's present apartment, so Diamond and her sister have spent most weekends indoors, watching "Brady Bunch" videos and tending to their pet turtle, Simba.

Soon after the Thomases moved into their new apartment, a stove-pipe gas leak sickened Diamond, who was treated at a hospital for carbon-monoxide exposure. The leak has been fixed and the stove replaced, but Ms. Thomas, fearing a recurrence, now cooks with a borrowed two-burner electric hot plate.

The bathroom ceiling is crumbling into the bathtub. Raushida says she has trouble concentrating on her homework because of the noise and rattle of the elevated subway line that runs directly in front of their building. "I miss where we used to be," she says.

Ms. Thomas sets out by subway at 6 a.m. each weekday to deliver the two younger girls to school on the West Side, before going on to work. Shaniqua, the oldest, has moved back to her grandmother's apartment at the project.

Ms. Thomas is far from alone in her dissatisfaction. Deborah McDonald received a form letter in June from Settlement Housing, informing her that her gross income exceeded the $18,690 limit for the low-price one-bedroom in the Tishman Speyer building. The limit, derived from government regulations requiring that beneficiaries demonstrate "continuing need" for housing assistance, is 50% of New York-area median income for a single person.

'Best Deal in Town'

"I was very frustrated," says Ms. McDonald, who is 49 and wants to move out of her mother's apartment at Amsterdam. Her $24,000 official salary as a municipal clerk on paper made her ineligible. But diabetes and other health problems have limited her actual wage-earning hours. She has W-2 forms from 1998 and 1999 indicating gross salary within the affordable-housing guidelines. She didn't appeal, she says. "I just got disgusted."

Susan Cole, associate director at Settlement Housing, makes no apologies. "This is the best deal in town," she says, "and we want tenants who fit the criteria" for income, credit history and other factors. Mr. Brodsky's West End Towers and the Tishman Speyer building each have at least three former Amsterdam families, Ms. Cole says. Charles Reiss, a senior aide to Mr. Trump, says he doesn't know of any ex-Amsterdam tenants living in the sole Trump Place building so far offering rentals and "seriously doubt[s]" if any do.

'Mayor' Ryan's Dilemma

For Patricia Ryan, the self-described "mayor of 65th Street," the housing lottery presented a difficult choice.

Ms. Ryan's actual title is president of the tenant association of the 27-story Amsterdam Addition, which was built in the mid-1970s. A native of the project, she grew up there in the 1960s, moved to the Bronx and then returned to Amsterdam in the late 1980s, mostly for the relative peace and quiet.

In the Bronx, says Ms. Ryan, 48, "we went to sleep by the gunfire music." She rests easier now and says she supports herself on disability insurance from an ankle injury suffered years ago as a hotel worker.

In the Addition, as her building is known, Ms. Ryan wields heavy influence. She helps organize everything from street festivals to the tenant patrol. On a warm summer evening, she presides over a group discussion in the tenant-association common room, telling stories to a group of friends and handing out flavored ices to small children who scamper in and out. The developers, Ms. Ryan tells the group, aren't all bad. Her audience is skeptical.

Later, she explains that her 30-year-old daughter, Marie Torres, lives in a reduced-rent apartment at One Columbus Place, a Brodsky tower just southeast of the project. Ms. Ryan herself had thrown in an application for the Tishman Speyer building and got lucky. Her finances passed muster, and Settlement Housing sent her a letter inviting her to an interview to discuss a one-bedroom apartment, she says.

But this presented a dilemma. She already had a two-bedroom apartment at Amsterdam that was larger. The rent would be comparable -- in the $500 range. But across West End Avenue, she wouldn't be the mayor of anything.

A Welcome Burden

The elevators in the Amsterdam Addition sometimes are balky, Ms. Ryan says. When plumbing breaks down, the housing-authority maintenance workers don't always show up promptly. These and myriad other problems end up on her doorstep. People count on her to get things done, even if most of them are small things.

"Pat is a pain because she has to be," says Muriel Cartier, another veteran resident of the Addition. "We love her for it."

In either place, Ms. Ryan says, she would have easy access to the neighborhood's amenities -- the museums, the free performances at Lincoln Center. Then again, she adds, she rarely gets to those attractions because she prefers "meetings, tenant business and so forth." Most days, she visits or speaks to her mother, Ellareet, who also lives in the project.

Ms. Ryan enjoys representing her constituents, such as Minette Thomas's daughter, Shaniqua. Ms. Ryan recently helped negotiate an after-school job for the high-school senior at the new upscale Food Emporium that has opened at 64th Street. The store asked the teenager to fill an opening in a different branch, on the East Side. Ms. Ryan thought that was a good idea. "This way," she says, Shaniqua's "little friends from the neighborhood won't come in and get her in trouble."

Had she moved across the street to the fancy new building, Ms. Ryan says, she would lose this intermediary's role. So she decided she wouldn't even respond to the invitation to interview for the new apartment.

Looking around the cracked concrete courtyard over which she presides, Ms. Ryan says, "I like it here better."

Write to Paul Barrett at


To: (distribution list)
From: Norman Bauman
Subject: Manhattan apartments, $468/month
Date: 25 December 2000

The following story from the New York Times says that an apartment tower on 10th Ave. and 42nd St., will have 84 of its 417 apartments reserved for low- and moderate-income tenants. You should now find out *how* these 84 tenants will be selected.

This is my neighborhood. I used to write about these landlord-tenant battles in the late 70s, for the Clinton Community Press, which was published by Housing Conservation Coordinators, which is mentioned below. And I wrote some great stories. (There was the landlord who was illegally trying to get rid of an elderly woman. so he tore the door off her apartment, and actually got a cop to tell her she had to leave -- during Christmas week....)

I got some of those great stories from Joe Restuccia and Nancy Kyracou, also mentioned below. They can help you find out how to get on the waiting lists for those 84 apartments.


This article from
has been sent to you by Norman Bauman

25-Year Feud Ends With Deal for a Tower Near Times Sq.

December 25, 2000


Oliver Grbec can still recall the winter 20 years ago when the pipes mysteriously burst and the heat went out in his battered tenement three blocks west of what is now known as the new, tourist-friendly Times Square. And that was just one chapter in a quarter-century history of contested turf.

Mr. Grbec and other families in two adjacent buildings at 10th Avenue and 42nd Street have endured attempts by unscrupulous landlords to freeze them out, flood them out, burn them out and otherwise force them out. Speculators hoping to make a fortune by building a high- rise on the site, the southwest corner of 10th Avenue and 42nd Street, wanted to demolish the tenements, built a century ago as model housing for workers. They were designed by the architect Ernest Flagg, who had created one of the city's first skyscrapers, the Singer Tower in Lower Manhattan, since demolished.

During the real estate boom in the 1980's, and again in the 1990's, developers tried and failed to either oust the tenants or lure them away with promises of cash.

Now, the quarter-century-long battle is coming to a dramatic end. The tenants, city housing officials, a nonprofit corporation and a developer, Hal Fetner, have struck an unusual deal in which the tenements will be completely rehabilitated. Next door, Mr. Fetner, who closed on his tax- exempt financing last Thursday, plans to build a 45-story apartment tower, the Victory, on some of the most valuable real estate in the city. At the same time, nearly 200 apartments will be built for low- and moderate-income tenants.

"There have been numerous attempts over the past 10 years to redevelop the site, but nobody's been able to hold together a coalition of tenants, developers and government," said Alicia Glen, assistant commissioner for housing finance at the Department of Housing Preservation. "This is really an amazing feat. You're talking about mixed-income housing at a premier location."

Mr. Grbec, a retired waiter and a tenant leader during the worst of times, said he was cautiously optimistic. At 71, he shares his three- room apartment with three cats. The kitchen doubles as a living room, with three chairs and shelves lined with vitamins and the faded photographs of his neighbors, his comrades-in-arms, now dead.

"During the coldest winter in New York, we didn't have heat, water, nothing," Mr. Grbec recalled. "We had to get water from the street, the fire hydrant. At that time, many people left. Maybe now it'll be different."

The agreement with Mr. Fetner, who heads a group that bought the site in 1996, took more than two years of often frustrating meetings, negotiations and hard-nosed bargaining. But even today, a few longtime tenants, who have tangled with more than one developer bearing gifts only to be betrayed, remain suspicious.

"They want to dump us out of here and build a high-rise," grumbled one of them, Perry Washington.

But most residents, as well as tenant advocates and city officials, say they think the time has finally come for what one community board official called the neighborhood's most blighted corner.

Under the terms of the agreement, Mr. Fetner will renovate the now- vacant six-story building at 500 West 42nd Street, creating 25 apartments with one to three bedrooms for Mr. Grbec and about 30 residents of the two adjoining tenements. The estimated cost is $2.5 million to $3 million. Ms. Glen said that would resolve a judge's 1982 finding of tenant harassment. The property owner was required to build permanent low-income housing for the tenants before the property could be developed. At the request of the tenants, the building will be run by the Clinton Housing Development Company, a nonprofit builder in the neighborhood.

Mr. Fetner will retain the retail space on the ground floor of the building along 10th Avenue.

He will also build the apartment tower, where 84 of the 417 apartments will be reserved for low- and moderate-income people, to qualify for low-interest financing from the state and federal governments. The developer also obtained a zoning bonus, allowing him to build a taller tower in return for including an additional 16 apartments for poor and working-class tenants.

The rear wings of the two buildings would be sheared off to create a rear courtyard that would be shared by the new apartment tower.

Some tenants said they had feared that if they had to move out during renovations, the developer would not allow them to move back in. But under the agreement, Mr. Fetner must rehabilitate the empty building for the tenants before he can move any new residents into the tower.

The executive director of the Clinton Housing Development Company, Joe Restuccia, said he, Mr. Fetner and city housing officials were discussing a plan in which Clinton Housing would take over the two remaining tenements, at 502 and 506 West 42nd Street, and create 67 apartments for the homeless and mentally ill and offer social services, with up to $9 million in city financing.

"We had a choice," Mr. Fetner said. "We could either fight with the tenants and maybe get to build in five years, or we could find some common ground."

The chairwoman of the local community board, Katherine Gray, said she welcomed the deal. "It's the most notorious site in the area," she said. "We're hopeful everything will work out as planned."

Built in 1899, the tenements were the first fireproof housing in the city for working-class residents. The buildings featured interior courtyards that provided a great deal of light and air for the apartments.

The Flagg family retained control of the property until the early 1970's, after which a succession of slumlords took control. Over the years the buildings lost their ironwork embellishments, and the six-room apartments were cut into smaller and smaller units.

According to a 1982 finding by Paul Blank, a city administrative judge, a series of owners led by a landlord, Henry A. Roth, unleashed a campaign in the late 1970's and early 1980's to oust the tenants so that the buildings would be sold, according to the judge, "at a good price to real estate speculators." Raw sewage was left in the basements, the security system was destroyed, doors were stripped from apartments and Mr. Roth refused to provide heat and hot water or repair broken pipes and windows. Tenants complained of periodic fires erupting in the refuse.

The judge also cited the involvement of Joseph Bald, a Queens man who was at the center of many state and federal investigations of a citywide arson-for-profit scheme. Mr. Bald was later convicted of arson in a case unrelated to the buildings on 42nd Street.

The harassment campaign, however, drove out more than half of the 170 families living in the buildings on the block in the mid-1970's. The remaining tenants, including Mr. Grbec, fought back, starting a rent strike, patrolling the buildings to keep drug dealers away and repairing the boilers.

"They were pretty determined they weren't going to leave," said Nancy Kyriacou, a tenant advocate at Housing Conservation Coordinators who helped organize the residents' first tenants' association. "They kept that building going."

During one brief interlude in 1979, Fred Papert, a nonprofit developer, and Lewis Futterman, a for-profit developer, negotiated to lease and rehabilitate the buildings for mixed- income residents, but the city allowed Mr. Roth to regain control of the property.

In November 1982, demolition crews illegally demolished two buildings on the block and tore gaping holes in a third, before Ms. Kyriacou frantically called the city's housing commissioner at the time, Anthony B. Gliedman, at home and he ordered it stopped.

Throughout much of the 1980's, Mr. Roth continued to urge the tenants to leave. He later lost the buildings to his lender, a bank that subsequently failed, plunging the buildings and the tenants into a netherworld.

"We've been on our own for many years," said Ana Marrero, treasurer of the tenants' association in 506 West 42nd Street and a resident for 15 years. "We painted the hallways ourselves. No one else cared."

In the late 1980's and more recently, developers including William Zeckendorf Jr. and Harry Macklowe sought to develop the site but could not work out an arrangement with either the bank or the tenants.

In 1996, with the once-derelict Times Square undergoing a revival, the developer Bruce Brickman and a Connecticut nursing home operator, Jack Friedler, bought the property for about $1.3 million from the Federal Deposit Insurance Corporation. The group bought two other parcels on the block and initially tried to evict the tenants and demolish the buildings.

By 1999, Mr. Brickman began negotiating with the tenants and sold a majority stake in the project to Mr. Fetner, a residential builder who was eventually able to work out a deal that satisfied most tenants, salvaged the tenements and allowed him to build a residential tower.

"In one fell swoop there is more affordable housing created on this one site than we do in an entire year," said Mr. Restuccia, of the Clinton Housing Development Company. "It was like cracking heads. Everybody had to compromise. But it's remarkable to see it all come together."

The New York Times on the Web


New York Times

April 20, 2001

Real Estate: Increase in Tax Credit May Mean More Low-Income Housing


Next month, when developers apply to New York City or the state for the latest round of federal housing tax credits, there will be more available, thanks to an increase in financing for the program by Washington. Since the developers who are awarded the tax credits then sell them to corporations and use the proceeds to help build rental housing for low-income families, both the city and the state expect an increase in such housing.

The financing increase, 40 percent over two years for each state, is the first in the 15- year history of the program, which was part of the Tax Reform Act of 1986. It was the result of legislation passed last December after a four-year campaign by housing advocates.

As a result of the increase, the amount of tax credits allocated to each state per person will rise to $1.50 this year and to $1.75 next year from the current $1.25. That means New York State's allotment, which was $22.7 million last year, will be $28.4 million this year and $33.2 million in 2002. After that, the increase is tied to inflation.

New Jersey's $10.1 million allotment last year will increase to $12.6 million this year and to $14.7 million next year, according to the National Council of State Housing Agencies, based in Washington. Connecticut's $4.1 million portion, the group said, will rise to $5.1 million this year and to $5.9 million in 2002.

New York State's Division of Housing and Community Renewal, which administers the state's tax credits, estimates that the 3,100 low-income units produced on average each year in the state will increase by 600 this year and by 1,200 in 2002.

The state gives part of its credits, about 54 percent in the last few years, to state- sponsored projects in New York City as well as to the city's Department of Housing Preservation and Development. The department uses the credits with its housing programs, which focus mostly on rehabilitation, to produce about 1,400 apartments a year.

Alicia Glen, assistant commissioner for housing finance at the housing department, said the city was asking that its allocation of credits from the state be increased to $12 million from $8.5 million. The increase would add 480 low-income apartments this year, she said.

Under the federal program, each state allocates its credits to nonprofit or for-profit developers to help finance the construction or renovation of apartments for people who earn no more than 60 percent of an area's median income. In New York City, the median income is $59,100 for a family of four. Rents in such developments are capped at 30 percent of a tenant's income.

Developers are selected according to criteria set by each state, like location or whether the development is a renovation or new construction. Once allocated to the developers of low-income housing, the credits are then sold to investors, mainly corporations, which provide cash needed for construction. Buyers get a $1 tax credit for 75 to 80 cents, said Marc D. Schnitzer, a managing director at the Related Capital Company of Manhattan, among the largest private buyers of tax credits in the country.

Mr. Schnitzer said his company bought $515 million worth of credits for $420 million last year from developers across the nation. The developers used the $420 million to help finance the construction of 85 projects with 10,850 apartments, he said.

Then his company passed the tax credits to its institutional investors, which used the credits to offset their federal income tax liabilities. The credits are appealing, Mr. Schnitzer said, "because there are not many good tax shelters for corporations."

For developers, offsetting construction costs through the sale of tax credits lets them lease apartments at lower rents.

A $19 million project near the Grand Concourse in the Bronx that is nearing completion was awarded $8 million in tax credits and $11 million in financing from the city. Its developer, RSE Management of the Bronx, is renovating seven buildings scattered over four blocks. Half of the 153 apartments had been vacant. The credits "help subsidize the shortfall in the rents," said Ramon A. Escobar, RSE's president. "Without them, I couldn't do a full rehabilitation."

Over the years the competition for the credits increased, as did the price investors paid for them. "But that was not enough to offset the toll inflation took on the credits," said Barbara J. Thompson, director of policy and government affairs at the National Council of State Housing Agencies. She said that as construction costs rose nationally, the number of low-income units produced using tax credits had been falling since 1995 and that last year's total of 62,420 units was among the lowest in the program's history.