Issue #104, March/April 1999
CDCs, Social Capital, and Housing Quality
By Susan Saegert and Gary Winkel
|In a deteriorated section of Brooklyn, New York, one building stands
out on the block. It is newly renovated and better kept than surrounding
properties. The CDC that owns it did a thorough renovation financed in
part by special funding for rehousing families from homeless shelters.
These funds transformed previously derelict apartments into clean, modern,
though small, units. New tenants were chosen from families in homeless
shelters who came with time-limited rent subsidies. The CDC nurtured a
tenants association of longtime residents and worked with them to reduce
crime in the building and improve physical upkeep. However, the tenants
association had no role in making decisions about financing or renovation,
or in tenant selection.
After several years, social relations among residents became increasingly tense and fragmented. The longer-term residents ran the tenant association in a way that isolated the formerly homeless families. Most formerly homeless residents wanted to move out since the apartments were too small for their households, social relations were unpleasant, and they were nervous about what would happen when their rental subsidies ran out. With an ineffective tenants association and an antagonistic tenant body, living conditions in the building began deteriorating within a few years of the renovation.
Balancing the Books vs. Building Social Capital
This case shows some typical trade-offs CDCs make in trying to improve the physical housing stock and build social organization. For most CDCs, the kind of financing available usually comes with strings that limit resident control. The decisions this CDC made kept the building fiscally sound but strained the social bonds among tenants. Negative attitudes and lack of tenant commitment to maintaining the building were beginning to erode its physical quality as well.
CDCs' strengths are said to lie in combining physical development with local control, thus expanding residents' ability to achieve collective goals and encouraging political participation and economic development. Robert Putman's theory of social capital seems to validate the potential of CDCs for improving poor neighborhoods. Participation in voluntary organizations is said to encourage social networks and norms characterized by trust and mutual responsibility. The social capital that these relationships are supposed to create supports achievement of collective and individual goals and leads to both economic development and civic participation.
Yet critics contend that systematic evidence that CDCs create social capital or improve the physical environment on a large scale and over the long run is limited and based mostly on case studies. Comparisons with private and public sector revitalization efforts are also lacking. Despite the impressive site tours and residents' testimonials CDCs often arrange for visitors, day to day experience with housing revitalization in poor inner-city neighborhoods sometimes leads residents and housing experts to question whether CDCs are really achieving their goals.
The City University of New York (CUNY) Housing Environments Research Group's 18 years of qualitative and quantitative studies of New York City's most deteriorated housing stock show both real successes and persistent problems. New York City's distressed tax-foreclosed housing provides almost a natural experiment for the comparison of approaches to housing revitalization including sales to CDCs, to screened private landlords, to tenants as limited equity co-operatives through New York City's Tenant Interim Lease (TIL) Program, and, briefly, to the New York City Housing Authority. Surveys of over 6,000 poor minority residents of almost 700 buildings found that tenants living in CDC buildings rated them as better than those in public ownership, and about the same as those sold to private landlords. But from the tenants' points of view the most successful buildings both physically and socially were tenant owned co-ops.
CDCs' tenants did rate higher on measures of social capital than tenants in privately and publicly owned buildings, though lower than co-op residents. Statistical analysis showed that when CDC tenants did evaluate their buildings as providing good living conditions and a crime free environment, they also reported stronger norms of mutual responsibility and networks of mutual assistance among tenants as well as the existence of a viable tenants association and more resident leadership.
Co-op Ownership and Training Teaches Necessary Skills
A case study of another building, which its tenants had rated as providing a relatively high quality of life in 1994, presents a cautionary tale. Two years after the survey, visits to the building and a search of New York City Real Property records showed that the CDC had lost title in a construction lien. The company that foreclosed on the building sold it to another company, which flipped it again. By 1996, a tenant who previously worked as the building manager owned the building. This owner, an older Caribbean woman, ran the building much like the leaders in co-ops, by relying on her son and tenants to keep the building up through their own efforts. However, without cooperative ownership and the training provided to co-ops in the TIL Program, the tenants were less committed to and involved in running the building. They also had not had the opportunity to learn the necessary skills like boiler maintenance and bookkeeping, leading to problems in keeping the building physically and financially sound.
The CDC that lost the building had at one time been strongly committed to tenant empowerment. However, the organization's stability declined through a series of leadership and fiscal crises that were hard to disentangle. Over time, the CDC regained a semblance of fiscal soundness and leadership focus. But in the process, the crises led to worsened relationships between the organization and its tenants. By 1995, CDC staff publicly blamed the deterioration of buildings on their tenants and advocated for programs that would house fewer very poor and homeless families. While mixing incomes in housing probably has many good consequences, the CDC's spin on its fortunes fails to recognize the contribution the CDC made to building deterioration through fiscal insolvency and ineffective management practices.
The CUNY Housing Environments Research Group's overall findings suggest that the cases described above are not unusual. However, while it certainly matters how tenants evaluate living conditions in their buildings, it would be useful to look at other data sources for a clearer picture of what CDCs contribute.
Good and Bad News for CDCs
The New York City Police Department began recording crime events by address in the first half of 1995, just after the Housing Environments Research Group and the Task Force on City Owned Buildings had surveyed 3,000 Brooklyn residents of buildings the city took in lieu of taxes. In the buildings surveyed in Brooklyn, 11 percent of the CDCs and 10 percent of the co-ops had one crime reported to the police in the first six months of 1995. The crime rates for privately owned buildings were the highest. Police records showed that one crime had been reported in 21 percent of the private landlord buildings, and more than 8 percent had reports of from two to eight crimes. This rate was higher than in buildings still in city ownership. One crime was reported by 13 percent of city-owned buildings and two or three crimes by an additional 3 percent. In more complex analyses that statistically controlled for tenant characteristics, number of units per building, and neighborhood crime rates, CDCs and co-ops were significantly lower in police reports of crime. Further analysis showed that buildings with functioning tenants associations and stronger norms of mutual responsibility had lower police data crime rates.
The analysis of police crime data is both good news and bad news for CDCs. Obviously, limiting the level of crime in these buildings with very low-income minority residents located in poor, high crime areas of Brooklyn is a major accomplishment. It is puzzling, however, that tenants in CDC buildings were not as likely as co-op tenants to rate crime as low in the survey data. There could be several explanations. CDC tenants may not report as much of the crime they are aware of to the police as co-op residents do. Tenants may not perceive lower crime rates because they are less directly involved in bringing them about. Maybe the six months worth of data analyzed were less typical for CDCs than for co-ops. What is clear is that when tenants were organized and had strong expectations of each other for responsible behavior, both tenant perceptions of crime and police reports of crime were lower.
Constants in New York Low-Income Housing
All types of owners find it hard to provide decent living conditions, build social capital, and stay fiscally solvent when the residents are poor.
CDC choices to achieve fiscal soundness sometimes resulted in "churning" of the tenant population to maximize subsidies and income. The same problems occurred in privately owned buildings. While co-ops faced serious economic problems, they were more likely to solve them without displacing residents and while maintaining building services. But choices like deferring payments on property taxes and other public charges bring threats of loss of the building through foreclosure.
Organizational crises also occurred in all forms of ownership. They more often resulted in worse living conditions or tenant turnover in CDC and privately owned buildings. The social structures and relationships co-op ownership requires provide resources for solving issues, as well as a higher tolerance level for problems, since tenants are responsible for decision making.
Solutions to the Social Capital vs. Financial Capital Dilemma
CDCs themselves could reduce the tension between building community and financial solvency by revamping their organizations to include tenants in decision making about costs, financing options, tenant selection, and the other hard aspects of management. CDCs around the country that provide housing through leasehold co-ops have shown that this is possible. To make this approach work, tenant organizing, skill training, and organizational development must be high priorities for CDCs. This approach requires staff time, coordination with CDC leadership, development and financing, and persistent, conscious effort and self-evaluation.
The programs that finance low-income housing could make this task easier. At present, the Low Income Housing Tax Credit provides the major funds for CDC housing. The intermediaries for tax credit financing often prefer a strong business orientation from its CDCs and implicitly or explicitly balk at "too much" resident control of decision making. Numerous federal and local programs require that ownership transfers, financing agreements, assessments of fiscal soundness, and lines of communication be handled in transactions among CDC staff and representatives of financing, development, and government institutions. If residents are left out of the lines of communication and have no decision-making rights, their involvement can only be token.
While it is difficult to find ways to change obstacles to resident control, New York City's TIL Program shows that some success is possible. For instance, after years of complaints by tenants and advocates of underfunding and lack of accountability, the formation of a TIL working group including program officials and program constituents has led to many improvements like resident involvement in rehab design and per-unit renovation funding on a par with other programs. Of course problems persist, but this and other mechanisms have been found to address them. Similar approaches seem likely to succeed for CDCs if they and the institutions on which they depend become convinced that building community and building sound investments can and must go hand in hand.
"Brown Kids in White Suburbs: Housing Mobility and the Multiple Faces of Social Capital" by Xavier de Souza Briggs. Fannie Mae Foundation Housing Policy Debate, Volume 9, Issue 1, 1998. www.fanniemaefoundation.org
Susan Saegert is director of the Housing Environment's Research Group of the Center for Human Environments and a professor of environmental psychology at the City University of New York Graduate School. She is the author of From Abandonment to Hope: Community Households in Harlem (Columbia University Press 1990), with Jacqueline Leavitt. Gary Winkel, a professor of environmental psychology in the same department, also teaches and consults on advanced statistical methods and was the founder of the journal Environment and Behavior. Saegert and Winkel published an article, "Social Capital and the Revitalization of New York City's Distressed Inner City Housing," in Housing Policy Debate, 1998, Volume 9, #1, 16-60, on the survey data referred to in this article.