May/June 1997

Shelter Shorts


New York's Rent Regulations Expire; Compromise Reached

Their worst nightmares realized, 2.5 million tenants watched rent regulations expire at 12:01 a.m. on June 16, leaving New York City and State without rent protections for the first time since World War II. Having flexed their political muscle, state legislative leaders and Governor Pataki then held a marathon all-night session to hammer out a compromise, which the legislature approved on June 20.

The new laws, according to The New York Times, the Daily News, and other news reports, extend for six years rent regulations for almost all current tenants of rent-controlled and rent-stabilized units. Once apartments become vacant, however, landlords can increase rents by 20 percent for new tenants – up from the previous ceiling of 9 percent. The new laws also permit increases above the initial 20 percent in cases where previous tenants had occupied the unit for eight years or more and in cases where rent was less than $300. New York City's Rent Guidelines Board retains control over annual increases for tenants remaining in regulated units.

While this agreement does allow greater rent increases, it provides more protection than the vacancy decontrol plan proposed by the Republicans, which would have allowed landlords to charge market rate rents when rent-regulated units became vacant. The new law also retains succession rights, which allows tenants to pass along rent regulated apartments to family members, but limits them to one generation, and to immediate family members, not aunts, uncles, nieces, or nephews. The agreement came down in favor of landlords on one hotly contested issue requiring tenants to place monthly rent in escrow accounts during disputes with landlords.

The only tenants in rent-regulated apartments who will lose protection immediately are those whose household income exceeds $175,000 for two consecutive years and whose rent is more than $2,000 monthly. This amounts to roughly 1,300 units in New York City.

Initial reaction to the new regulations was mixed, with tenant advocacy groups and landlord groups alike offering both positive and negative comments.

(Read the full story of the fight in Shelterforce #94.)

Business, Banks, and Foundations Partner with CDCs

With cutbacks of federal programs in full swing, recent weeks have seen something a trend in foundations and corporations announcing multi-million dollar collaborations to support affordable housing and community development.

In May, for example, a group of foundations, corporations, and banks announced the Neighborhood 2000 Fund (212-454-3487), a four-year, $15 million effort to support 50 CDCs working to revitalize  New York City neighborhoods. Before the end of 1997, Neighborhood 2000 expects to begin making grants of up to $75,000 annually for four years to selected CDCs. After the first four years, the fund's planners envision generating ongoing funding through a tax credit program. The initiative's lead agencies include Banker's Trust, the Rockefeller Foundation, and LISC. The New York Community Trust will administer the fund.

Another community development funder, Bank of America Community Development Bank, recently pledged $1.1 million to begin the Bank of America Leadership Academy. Over the next three years, 105 CBO senior staff will participate in a workshop series focused on affordable housing production, economic development, asset management, organizational development, collaboration building, and leadership development. The Development Training Institute (410-338-2512), designed and will conduct the workshops at its Baltimore campus.

The National Equity Fund (NEF), a LISC affiliate, announced in June that several dozen corporations will invest $300 million for affordable housing development through the Low Income Housing Tax Credit. NEF, which uses the credit to create annual corporate investment funds, will fulfill the commitment to provide equity to nonprofit developers in New York City, Newark, Philadelphia, Chicago, Detroit, Cleveland, Indianapolis, Atlanta, and several other cities.

Rev. William Cunningham, a 67-year old Roman Catholic priest, civil rights advocate, and founder of one of the nation's largest anti-poverty programs, died in Detroit on May 27. Father Cunningham founded the nonprofit organization Focus: Hope in the aftermath of Detroit's 1960s race riots, The New York Times reported. The organization, which started with a few high school student volunteers, now has thousands of volunteers, 800 employees, and a $71 million annual budget. Focus: Hope distributes food to 47,500 people a month and trains more than a thousand, mostly black youths each year as engineers and factory technicians. It operates its own factory as a training ground and sells auto parts to Detroit's Big Three – General Motors, Ford, and Chrysler – which have become active supporters. Yet Father Cunningham periodically criticized the auto industry for not doing enough to promote racial harmony. At a conference of almost 1,000 auto makers and auto parts executives, he denounced the scarcity of blacks in the audience. For years, Father Cunningham was also critical of the Detroit-area Catholic Church for not actively encouraging mostly white parishes to work with mostly black parishes to prevent racial violence.


Short Takes

"Environmental Justice" has been the rallying cry in the Newark, New Jersey, Ironbound Committee Against Toxic Waste's fight to prevent a sludge processing plant from operating in the neighborhood. The New Jersey Department of Environmental Protection (DEP) recently joined the chorus, when it denied the plant's permit partly on the grounds that allowing the plant to open would amount to "environmental injustice." According to the Ironbound Community Corporation, the U. S. Environmental Protection Agency (EPA) defines environmental justice as exempting low-income and minority communities from shouldering a disproportionate share of environmental problems. In the long struggle to reverse the perception of the Ironbound as a dumping ground for toxic waste, this step is both a victory and a caveat for residents of the community, which lost a previous battle against a garbage incinerator. Wheelabrator, Inc., the company seeking to open the plant, has appealed DEP's decision. As one Ironbound resident commented, "Part of the fight is over, but the whole fight is not over. We have to watch out for ourselves, because nobody is watching out for us." For now, however, 20,000 tons of sludge will not add to Newark's toxic "fair share." Contact: the Ironbound Community Corporation, 95 Fleming Ave., Newark, NJ 07105.


Cambridge, Mass., has had a housing trust fund since 1988, but with the elimination of rent control last year, the city anticipates greater demand for decent affordable housing. This April, Cambridge's City Council approved a real estate transfer tax increase to raise additional revenue for its Affordable Housing Trust, which provides loans to build new affordable units and help nonprofit organizations rehabilitate distressed properties. The trust now receives revenue from office and commercial developers' impact fees and from city appropriations. The proposed increase would impose a one percent fee on purchasers of residential real estate in Cambridge, exempting the first $300,000 of the purchase price. The petition must be passed by the state legislature, signed by the Governor, and approved by Cambridge voters in the next regular election. After Massachusetts voters  eliminated rent control, the City committed a $2 million appropriation for each of the next 10 years. Since its inception, the trust fund has spent more than $4 million to provide some 750 affordable housing units. Contact: Vali Buland, City of Cambridge, Office of the City Solicitor, 795 Massachusetts Ave., Cambridge, MA 02139; 617-349-4121.

The Mayor's Task Force in San Francisco has analyzed the effects of welfare reform on services, housing, income, employment, and the city's budget and polices. The task force's housing committee identified those at-risk for housing loss, determined short-term strategies to stabilize housing for those facing income reductions, and examined long-term strategies to increase housing affordability and integrate housing into service delivery. The report also suggests ways for the housing industry to contribute to employment, job training, and support services. A committee member stressed, "It needs to be recognized how important housing is around issues of income, benefit levels, jobs, and training." To obtain the report, contact the Bay Area Government's "Welfare Reform Network" via the Internet at http://www.abag.ca.gov./bayarea/wreform/.

Twelve African-American residents of Kansas City recently filed suit against 22 insurance companies doing business in Missouri – virtually "the entire market" in the area – following studies by the Missouri Department of Insurance on the state's insurance redlining problem. In gathering information, the plaintiffs discovered a map of St. Louis in one insurance company's office, with the inner city marked with a circle and the words "ineligible property." The insurance companies moved to dismiss, on the grounds that the old McCarran-Ferguson Act gives states the power to regulate insurance companies. But Judge Fernando Gaitan, Jr., ruled that HUD's Fair Housing Act and several circuit courts have applied federal Fair Housing regulations to insurance. Contact: Fair Housing Council, 835 W. Jefferson St. #100, Louisville, KY 40202. 502-583-3247; fax 502-583-3180.

Many Historically Black Colleges and Universities (HBCUs) are working to expand their role and effectiveness in addressing local community development needs. To support this work, HUD has announced the expected availability of up to $6.5 million in funds for FY1997. In order to ensure that some previously unfunded HBCUs will receive awards in this competition, HUD will award one-half the available funds to applicants that the HUD HBCU program has not previously funded. The deadline for this round of funding is July 28. Contact: Delores Pruden or John Simmons, HBCU Program, Office of Community Planning and Development, HUD, 451 Seventh St. SW, Washington, DC 20410; 202-708-1590.

This past winter saw groundbreaking on St. Ambrose Housing Aid Center's 1,000th renovation of a Baltimore home. Since 1974, St. Ambrose has also helped almost 5,000 families buy their first homes. A gift of $30,000 from NationsBank, which has also partnered with St. Ambrose on two loans and a line of credit totaling nearly $500,000, will salvage the vacant rowhouse. Vincent P. Quayle, executive director of St. Ambrose, said the bank's participation is "vital" to the success of his mission. Contact: St. Ambrose Housing Aid Center, 321 E. 25th St., Baltimore, MD 21218; 410-366-8550.

The Delaware State Housing Authority (DSHA) recently announced a $104,000 grant for a statewide Rental Security Deposit Loan Program. The grant, to West End Neighborhood House in Wilmington, will provide loans and grants for security deposits to low-income Delawareans who can afford a monthly rent payment but not an additional security deposit. The one-time loan of up to $800, with a 4 percent interest rate, can also be applied to utility deposits and moving expenses. DSHA Director Susan A. Frank said the grant will prevent more than 300 Delaware families from the threat homelessness. Since the program was initiated over 4 years ago, it has assisted almost 300 families. Contact: DSHA Information Office, 302-739-4263.
 

Copyright 1997

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