[NYtenants-online] New Towers, Old Tenements 1/17/02

Tenant tenant@tenant.net
Thu, 17 Jan 2002 11:13:00 -0500


NYtenants Online/TenantNet                               1/17/02
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IN THIS ISSUE ...

New Towers, Old Tenements
Friedman Steps In
Memorial for Julie Lobbia

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HE CERTAINLY HAS BIG SHOES TO FILL. With this week's Village Voice, 
reporter ANDREW FRIEDMAN steps into the void left when 'Towers and 
Tenements' columnist JULIE LOBBIA passed away last Thanksgiving Day.

Her family, friends and colleagues lost a sister, a buddy, a co-worker. To 
those of us who knew Julie in connection with her work on 'Towers and 
Tenements,' we lost arguably the best investigative reporter in New York 
City (which was only reinforced when the Real Estate Paper of Record -- the 
New York Times -- failed to acknowledge her passing). We also lost a quiet, 
passionate & effective activist. Julie was known to help a number of 
distressed tenants outside of her reporting. We lost a person who set 
standards, who understood the subject matter, who performed due diligence 
and who was articulate and accurate in her reporting. For information on 
the Memorial Service, see below.

What the other papers never seem to understand is that it's not only the 
intrigue of the machinations and manipulations (some might say mutilations) 
of the zoning and housing codes, or the political calculus and chicanery. 
That's fodder for goo-goo's and Andrew Klutzman junkies. What is important 
is the IMPACT on the personal level and on the broader level, the 
development of public policy and how communities live and die.

We have collected various remembrances of Julie and placed them on 
www.tenant.net

All this is why Andrew Friedman is fully aware of the tenant and 
neighborhood communities' expectations. For right now, Towers and Tenements 
is expected to appear every other week. His first column under the T&T 
heading is reprinted below, exposing the impact on tenants of former 
Housing Secretary (and now NY gubernatorial candidate) Andrew Cuomo's HUD 
scandal.

Friedman is not new to housing issues, having written for the Village Voice 
for the last eighteen months and prior to that, the Long Island Voice. Like 
Julie, he also worked at various papers in the Midwest -- Cincinnati, Grand 
Rapids and Chicago.

While continuing Julie's work exposing landlords and real estate scams, 
Friedman hopes to examine issues relating to how real estate policy is 
determined (or not determined).

We are hopeful that Andrew Friedman will wear the shoes well. He may be 
contacted at afriedman@villagevoice.com

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A MEMORIAL SERVICE FOR JULIE LOBBIA will be held on Saturday, February 2 at 
2 P.M. While the service is open to the public, including tenants who 
appreciated and were affected by Julie's work, the family has requested we 
not post the location in a public notice -- only because the location is 
not that huge.

For those who would like to attend, please send an email to 
tenant@tenant.net and IN THE SUBJECT LINE OF THE EMAIL put in the words 
"Lobbia Service" (of course, without the quotes). We will email the 
location to all who request it.

A GATHERING OF JULIE'S FAMILY, FRIENDS AND COLLEAGUES:
A free form memorial service with music, pictures, garlic,
red wine and an open mike -- let's call it "Spinning for Julie."

Date: Saturday, February 2, 2002
Time: 2PM

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Towers & Tenements
Village Voice, January 16 - 22, 2002
by Andrew Friedman

AFTER ARRESTS IN THE HUD SCANDAL, WILL ITS VICTIMS LOSE THEIR HOMES?

SRO Limbo

Sekou Traore thinks his bad luck started in 1996, when he returned home to 
Mali for a visit. In the year he ended up staying there, he lost his 
passport and tore up his leg in a motorcycle accident. When he returned to 
Harlem, where he has lived for 17 years, he found out his wife had left 
him. Soon after, he lost his apartment. He found a new home in the summer 
of 1997, in a single-room-occupancy building at 74 West 131st Street, 
sharing a room with his cousin, Zibo Bedia, a bike messenger. He thought 
his luck had finally changed.

Over the years, Traore has worked as a florist and as a salesman, a far cry 
from his teenage years running a 40-ton drill for a French oil company. He 
is barely employed, in poor health, and eking out a living translating for 
immigrants. As luck would have it, his current residence has been caught up 
in one of the most staggering federal housing frauds in recent memory.

The scam has ravaged about 470 buildings across Harlem and Brooklyn and 30 
in the Bronx and Queens since 1998, and hasn't received anywhere near its 
due public outcry. Taxpayers are currently bailing out the more than $70 
million in government-backed loans that lined the pockets of the real 
estate speculators, mortgage lenders, appraisers, lawyers, and nonprofits, 
an extraordinary number of them from Long Island, who perpetrated it.

Generally, the scam worked like this: Speculators bought distressed 
buildings, many filled with poor and working-class tenants. Then the 
speculators recruited churches and nonprofits with no experience in 
developing housing and showed them how to secure 203(k) mortgage loans 
backed by the U.S. Department of Housing and Urban Development to buy these 
buildings at hugely inflated prices. The loans are meant to provide money 
for ordinary people to purchase and rehab vacant buildings for affordable 
housing. Only the catatonic state of Andrew Cuomo's HUD administration can 
account for why the unqualified nonprofits obtained the loans.

Appraisers in on the deal signed off on the bloated prices for knowing 
mortgage companies who loaned the money and then dumped the mortgages on 
the open market. The cash disappeared, and the nonprofits defaulted. Law 
enforcement officials say the nonprofits often got kickbacks of $5000 a 
building, and closed the loans with funds from the crooked developers, 
violating HUD rules.

So far, 33 people have been arrested in the case and 19 have pleaded 
guilty. In December, six defendants connected with the Helpline Soul Rescue 
Ministry in Brooklyn negotiated a settlement with Attorney General Eliot 
Spitzer's office to pay $226,500 into a restitution fund for tenants. The 
lawsuit charged that Helpline had acted as a front in the purchase of 65 
buildings in Brooklyn and helped skim more than $2 million in loan money.

But the complexities of the scam make it easy to lose sight of the fact 
that these rogues left 1500 families marooned in more than 250 buildings. 
Once the suburbanites had the buildings in their clutches, they just walked 
away. The tenants who were left suffering in the dark and cold in 
deteriorating housing are a snapshot of New York's poor and working 
class—MTA workers and bike messengers, peddlers and ragpickers, nurses and 
moving men. For more than a year, all across upper Manhattan, central 
Brooklyn, Queens, and the Bronx, they seem to have been completely 
forgotten. In order to get by, they developed their own strong 
associational networks and went to work.

"That year was terrible," Traore says. "We had to do everything ourselves."

At a brownstone at 3 West 119th Street, 62-year-old Tony Hobson led a fight 
to clear his building of the lead-pipe-wielding troublemakers who were 
using it as a crack house and crash pad. Tenants pooled their money to pay 
off a $5000 Con Ed bill to keep the lights on. They bought supplies that 
handyman resident Lawrence Jones, 59, used to install toilets, light 
fixtures, and bulbs. He paneled the walls himself, fixed the pipes, and 
painted the place a bright yellow. "We spent money here," Hobson says, "in 
order to survive."

"We want to own this building," says Traore, back in 74 West 131. " We have 
to seek some advice first to see how we can borrow money to takeover the 
building and self-manage it so everybody can stay in their rooms."

Ironically, though, tenants have commonly been the last to know their 
fates. When the scandal broke, Hobson heard it on the streets. Now that the 
authorities are starting to retake the buildings—HUD holds about 200 so 
far, and is foreclosing on the rest—the situation is just as frustrating. 
After all the value they put into these buildings in money and sweat, 
residents have understandably balked at the demands of court-appointed 
administrators demanding rent without making real repairs and saying that 
any repairs must come out of the rent roll. Out-of-town HUD managers have 
also rankled tenants with leases they have presented for signing.

As Hobson puts it, "How are you going to send us letters for rent when no 
one's been in here to interview the tenants or fix anything? We don't mind 
paying the damn rent if they get something going on over here."

Last month, with some fanfare, U.S. Housing Secretary Mel Martinez 
announced a plan to rescue the 514 buildings. The feds nearly doubled their 
earlier assistance offer, to $130 million, and promised that no tenants 
will be displaced. The buildings will go into four programs run by the 
city's Department of Housing Preservation and Development—164 buildings to 
the Neighborhood Redevelopment and Neighborhood Entrepreneurs programs, 172 
to Neighborhood Homes, and 178 to Homeworks.

On its face, the plan offers slim hope that tenants will be able to remain 
in their buildings. While at least 250 buildings are occupied, about 300 
are heading into programs designed for homeowners, not renters. Only two of 
the programs mandate the inclusion of rent-stabilized apartments at all. 
And it is more curious that the highest number of buildings is slated for 
the Homeworks Program, which helps private developers rehab homes for sale 
on the open market. Homeworks has no limits on buyers' incomes, and a 1998 
round of Homeworks buildings in Harlem sold for between $350,000 and 
$500,000, hardly affordable housing, although some of those prices were 
inflated by the very scam that started all this. HPD officials stress that 
the numbers are only estimates. They "anticipate" none of the occupied 
buildings will go into Homeworks, that solutions will be handcrafted for 
the SROs, and that the department will not firm up the plan until spring 
"at the earliest." "The goal of our housing rehabilitation programs is not 
to displace tenants," emphasizes HPD spokeswoman Kim Brown.

One of two things will probably happen to Sekou Traore and the other 
tenants. If they are moved out so that the buildings can be rehabbed under 
one of the city programs, their rents when they return, certain to be 
higher, will be subsidized by Section 8 vouchers. More likely, they will be 
permanently relocated to apartments elsewhere, again with rent subsidies.

"Section 8 vouchers will be available for eligible tenants," Brown says. 
"Tenants in single-room-occupancy buildings will be provided with 
appropriate housing within the neighborhood, when possible." This is not 
greatly comforting news. City programs that stress returning buildings to 
developers as fast as possible lack any serious provisions for 
self-determination or real respect for tenancy rights in a specific 
building. Terry Poe, an organizer at the West Side SRO Law Project, which 
has worked with the tenants, put the matter in perspective with a question, 
"Will tenants have a say in the final disposition of the buildings?"

The answer seems to be no.
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