Condemnation by imputation: Part 2, You tell me this town ain’t got no heart

April 24, 2014 | Affordable Housing, Blight, Crime, Development, Discrimination, Eminent domain, historic rehab, Housing, Income mixing, Kansas City, Real estate taxes, Section 8, Urban Renewal | No comments 52 views

[Continued from yesterday's Part 1.]

By: David A. Smith

You tell me this town ain’t got no heart. Well, well, well, you can never tell.
The sunny side of the street is dark. Well, well, well, you can never tell.

– Grateful Dead, Shakedown Street

Yesterday’s post opened the story of three properties along Armour Boulevard in Kansas City, old apartments that had been foreclosed and then historically rehabbed in 2006, and were now being accused of being a ‘social blight’ not for what they were, but for what seemed to be happening around them:

groucho_reading

Who are you going to believe: me or your lying eyes?

Sources used in this post

Tax Credit Advisor (April, 2014); brown font

Kansas City Star, March 31, 2014: black font

KCTV, March 18, 2014; aquamarine font

HUD’s statement to the City Plan Commission, February 4, 2014; gray font

The blight study by Sterrett Urban LLC, June 2, 2013; green font

KC Confidential, December 13, 2012: red font

The Pitch, May 26, 2005; violet font

All this was based on a single Blight Study that became progressively more questionable as one actually read it.  As referenced yesterday, the Blight Study invented its own definition of ‘social blight’ (a legal term referenced in a Missouri Supreme Court case), and it doesn’t say something I found by a bit of Googling – that in the Centene eminent domain decision the court ruled against the city (of Clayton) and for the property owners, reaching the conclusion that even economic underutilization wasn’t enough to find blight under Missouri’s eminent domain laws that were reformed in 2006.  If I’m interpreting the decision summary correctly, Centene held that a property had to be both a physical and a social blight for a city to take it by eminent domain.  Of course, the Blight Study author reaches for and grasps a different conclusion:

rose_mary_woods_reaching

Yes, this is a perfectly natural and logical conclusion

Based on the definition above, a social liability could be evidenced by crime, infant mortality, delinquency, code violations, disease, or any other number of metrics that are related to public health, safety, and welfare.

That is a legal conclusion being rendered by an anonymous author (presumably Patrick Sterrett, but who do we know?) who isn’t qualified to render legal opinions. 

[Query: Could he be sued for practicing law without a license? – Ed.]

In 2009 the Kansas City, Missouri Police Department, with assistance from the City prosecutor’s office, established the “Armour Boulevard Restriction Zone” (“Restriction Zone”), an area that is generally bounded by Walnut on the west, 33rd Street on the north, The Paseo on the east, and 37th Street on the south. The Bainbridge, Georgian Court, and Linda Vista are each included in the zone.

armour_boulevard_restriction_zone

The Armour Boulevard Restriction Zone

The Restriction Zone is designed to keep habitual criminals out of the area through the imposition of harsher sentences if an offender does not stay out of the area.

I have no idea how higher sentences based on which part of town is the crime scene passes any kind of equal justice Constitutional standard … but let’s leave that aside. 

The Kansas City Police Department also utilized its Crime Free Multi Housing Program to prevent crime in rental properties within the Central Patrol Division of the Police Department, which includes all of the Planning Area.

foot patrol project areas_1106

Areas designated for new officer foot patrols

Even a glance at the map shows that the areas identified as high crime also have high mobility: they are on major thoroughfares (not interstates) and may well be convenient open-air markets for the Anonymous Activities. 

Activity_a_typology

Oh the things that fit within the Anonymous Activities

Despite the efforts of all of the parties involved, residents, property owners, and business owners continue to complain about crime in the area, particularly in the area around The Bainbridge.

crime_2010_2012_dots

Armour/ Gillham Corridor PIEA, total crime statistics

In the crime occurrence map listed above, the Armour/ Gillham Corridor PIEA is outlined in black, and the Bainbridge is the cross-hatched area in right center.  The dot colors show the intensity of crime relative to the overall area.

crime_2010_2012_colors

What the dots mean

We’ll return to these charts later, as they represent the entirety of the evidence that has been mustered against The Bainbridge.

To start with, it is indisputable (and, remarkably, barely mentioned in the story so far) that The Bainbridge’s 2007 renovation has been a significant improvement to Armour Boulevard

2. The property was much worse before

The struggle on Armour dates long before Eagle Point arrived. The boulevard’s once grand apartment buildings, which during their heydays between World Wars I and II were home to many young professionals –

The development of Armour Boulevard – these large brick grande-dame apartment blocks – is representative of the twentieth century’s approach to high-density urban living.  It was modeled on the nineteenth-century’s approach, as pioneered by Hausmann’s Paris (itself created out of massive imperial urban renewal that displaced poor people, but that’s another story) and Manhattan’s brownstone avenues, and reached its peaked in the streetcar era (chronicled by Sam Bass Warner in Streetcar Suburbs).

georgian_court_post_card

Armour Boulevard, looking east: jujdging by the cars, this is about 1935

– by the 1970s had become predominately low-income housing.

‘Predominantly low-income housing’ is the Star’s euphemism for ‘black slums’.  Sadly, it was the fate of many such middle-class neighborhoods (often ethnic, Jewish or Polish or Italian) to become slums as postwar south-to-north migration of blacks into the manufacturing cities resulted, as rapid urbanization always does, in the reuse of existing property into tenements via conscious landlord under-main’tenance and overcrowding, and adverse selection as good landlords could not make the economics work and bad landlords bought them out.  Inside the tenements emerged an alternate power structure, one based on extortion and violence, and a haven of crime.

Police have been familiar with the Bainbridge for a long time. In 2005, before Eagle Point took over, police investigated three murders at the building.

Like Boston’s Hendry Street (profiled here), the property became a battleground. 

Prior to the purchase of the properties by Eagle Point in 2006, the properties were poorly managed, in poor physical condition, and suffered from high drug and crime problems which required HUD to initiate foreclosure.  The REAC scores for the properties during 1999-2005 averaged 53 for Bainbridge, 64 for Linda Vista, and 56 for Georgian Court (a score below 60 is considered ‘substandard’).

REAC scores go from 0 to 100; below 60 is grounds for HUD enforcement action; above 90 gets you exemption from inspection for two years.

Eight years ago, the U.S. Department of Housing and Urban Development foreclosed on the Bainbridge and the other buildings, and neighborhood residents and their City Council members hoped new ownership would end their exclusive use as Section 8 housing.

In the past, I’ve posted at length about poverty deconcentration versus income mixing – now, with forty-plus years of experience, we know that income mixing is a far better solution when it is possible, but it is not always possible, as shown by the experience in Galveston and Atlanta.  In Kansas City, as we will see, it’s currently impossible for The Bainbridge.

Nor is poverty deconcentration necessary, as the next point demonstrates.

3. The property is not physically blighted – it’s actually in excellent condition

The Bainbridge is a large property:

Combined, there are 303 apartments, all reserved for low-income residents under the Section 8 federal housing program.

The 2006 renovation was extensive – $57 million in total uses of funds, $188,000 per apartment, a gut rehab and historic preservation – and the results are visually impressive:

bainbridge_exterior_streetview

Is this your idea of blight?

bainbridge_kitchen

Who could live in squalor like this?

Though one could question whether this was a good use of Federal money, no one can seriously claim the property is physically blighted – and in fact, even the Blight Study doesn’t say so.

bainbridge_residenets_in_apartment

It’s a wonder these residents put up with such deplorable conditions.

No instances of blighting conditions were found with respect to “Defective or Inadequate Street Layout” and “Improper Subdivision or Obsolete Platting.” The photos below and in the Field Ledger Survey in Appendix B illustrate the conditions of the property at 900 E. Armour Boulevard.

The Blight Study embarrassed itself with these paragraphs:

The following blighting conditions were found to exist at the property at the time of inspection:

Deterioration of Site Improvements. The consultant viewed six windows on the property in which the screen window was broken or the screen fabric was ripped.

Mildred, call the police: I see ripped window screens.

cat_window_screen

That’s how cat burglars do it

A fence located in the surface parking lot near Campbell Street was leaning, suggesting a vehicle or other heavy object had run into it.

Leaning fences!  Catastrophe!

The electronic gate providing access to the surface parking lot on Campbell Street also appeared to be misaligned. There were some minor instances of litter on the sidewalks along the perimeter of the property. And landscaping was needed on the south frontage along Armour Boulevard between the curb and sidewalk.

900_e_armour_lack_of_landscaping

An example of ‘blight’ in the study: lack of landscaping

That sentence in particular is a total howler.  Aside from the dreadful blight conditions captured on pixels by the photograph above (included in the Blight Study), this hazardous condition occurs on public property (even though an owner is normally expected to police it, a sidewalk is public space).

Insanitary or Unsafe Conditions. Minor instances of litter were found on sidewalks at the perimeter of the property.

My God!  Litter!  Run!

run_jack_sparrow

Litter!

[Continued tomorrow in Part 3.]


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Condemnation by imputation: Part 1, Shakedown Street?

April 23, 2014 | Affordable Housing, Blight, Crime, Development, Discrimination, Eminent domain, Historic renovation, Housing, Income mixing, Kansas City, Section 8, urban, Urban Renewal | No comments 126 views

By: David A. Smith

Nothin’ shakin’ on Shakedown Street. Used to be the heart of town.

– Grateful Dead, Shakedown Street

When it comes to flimsy cases to justify the state’s using judicial or police power to intimidate and punish private owners, I thought I’d seen everything – what with National City’s ‘lower-value use equals blight’ argument and Boston’s attempted public shaming of Wendy Rist, but I recently came one that floored even me, involving an award-winning affordable housing property accused of being ‘socially blighted’ because crimes happen in its vicinity. 

bainbridge_main_lintel

Magnet for crime?  The Bainbridge’s main entrance

Sources used in this post

Tax Credit Advisor (April, 2014); brown font

Kansas City Star, March 31, 2014: black font

KCTV, March 18, 2014; aquamarine font

HUD’s statement to the City Plan Commission, February 4, 2014; gray font

The blight study by Sterrett Urban LLC, June 2, 2013; green font

KC Confidential, December 13, 2012: red font

The Pitch, May 26, 2005; violet font

 

As reported in the Kansas City Star (March 31, 2014):

Showdown on Armour Boulevard over ‘social liability’ of Bainbridge Apartments

Nobody claims the Bainbridge Apartments at 900 E. Armour Blvd. are a crime-free oasis in midtown Kansas City.

As far as I can tell, not having been to Kansas City in many years, nobody claims that midtown Kansas City is crime-free. 

kansas_city_crime_rates

Higher crime in the center city

Not Eagle Point Companie of Maine, the firm that owns and manages the low-income housing development, and certainly not its middle-class neighbors in historic Hyde Park or other nearby pre-World War II apartment buildings recently restored on Armour.

Just as every city has some lower-income people, it also has some older and declining neighborhoods. 

And in a showdown between the neighborhood, city officials, Eagle Point and the federal government, a city blight study has concluded that the Bainbridge is a “social liability.”

Actually, the more I read of the various documents (readily available on-line), including the Blight Study, the more astonished I became, and the more I came to believe that those pushing the ‘social blight’ designation, specifically the Planned Industrial Expansion Authority of Kansas City, have ulterior motives and have stirred up the community and some elected officials as camouflage. 

Though it’s tempting to jump straight into the factual arguments – and most journalists understandably succumbed to the temptation – to me that’s a mistake because it focuses on the victim (the property and its owner and residents), not on the perpetrator (PIEA).  That:

  • Leaves unexamined the city’s rickety grounds for even offering ‘social blight’ as a basis for taking someone’s property.
  • Focuses on scapegoating one property for the crime levels of a whole neighborhood.

For the moment, the scapegoating has worked – at least in the mainstream press:

If the city isn’t satisfied by Eagle Point’s response, the Kansas City Council could approve a move to ultimately condemn the property and seek new management.

‘Condemnation’ is a subcase of eminent domain where a property is found structurally unsound and ordered to be closed, then either renovated back to code or demolished.  (A city-owned parking garage only a few blocks from our offices is closed from condemnation, and in 2006 Mayor Menino talked about having the BRA develop an eighty-story tower on the site – which hasn’t happened yet.)

winthrop_square_parking_garage

Condemned, closed, and waiting – Winthrop Square parking garage

Despite throwing around eminent domain as if its members understood what it meant, the City council doesn’t seem to want anything as constructive or specific as new management (even if one concluded that ownership and management were the problem, which I conclude they are not) – it just wants to bash the owner (and through the owner, HUD) because bashing somebody feels good and looks politically tough for the voters.

But Eagle Point officials say their buildings have been unfairly targeted by the city blight study.

They’ve certainly been targeted.

City officials say they’re trying to force Eagle Point to respond to criticism about its management of the Bainbridge and two other nearby buildings, the Georgian Court at 400 E. Armour and Linda Vista at 1301 E. Armour.

Perhaps so, but they don’t level any criticisms at Eagle Point – and in fact, the blight study never even went on the property – it was conducted by a windshield inspection and then the blender-mixing of statistics to puree out a conclusion.

The blight study originally was to have been reviewed by the City Plan Commission in January, but has been postponed repeatedly and is now on hold.

It’s been postponed because it’s been challenged as improper and unsound both factually (addressed later on) and legally, and that is the starting point for our dismantlement of the case against The Bainbridge.

church_collapse

Your motives may have been pure, but your structure is unsound

1. Claiming ‘social blight’ as grounds for condemnation is legally dubious (at best)

Though any eminent domain law is subject to the Constitution and the Fifth Amendment’s takings clause, within that boundary different states can enact their own standards.  In the case of Missouri, as reported in the Sterrett Urban LLC blight study (June 2, 2013; green font), the relevant statutory language is this:

Chapter 100 of the Missouri Revised Statutes entitled Industrial Development allows for the creation of “The Planned Industrial Expansion Authority” within a city and empowers the authority to submit general redevelopment plans to the city.

Chapter 100 was enacted in 1960 and the PIEA authority was added to it in 1967, a time when many American cities were in turmoil and violent decline, and St. Louis’s own Pruitt-Igoe was on its way to being a hellhole that had to be demolished.

pruitt_igoe_1972

Pruitt-Igoe, first building demolition, 1972

The times were desperate, and the epidemic was physical blight.

However, “an authority shall not prepare a plan for a project area unless the governing body of the city has declared, by resolution or ordinance, the area to be blighted, insanitary or undeveloped industrial area in need of industrial development” (RSMo ch. 100.400.1 (2)).

Blighted, unsanitary or undeveloped’ – those words connote physical decay, something readily observable and incontrovertible.

detroit_blight_011

Blight in Detroit; neighborhoods disappearing

Chapter 100 provides the following definition for a blighted area:

“Blighted area”, an area which, by reason of the predominance of defective or inadequate street layout, insanitary or unsafe conditions, deterioration of site improvements, improper subdivision or obsolete platting, or the existence of conditions which endanger life or property by fire and other causes, or any combination of such factors, retards the provision of housing accommodations or constitutes an economic or social liability or a menace to the public health, safety, morals or welfare in its present condition and use; (RSMo ch. 100.310 (2)).

Look at the phrases: “Insanitary or unsafe conditions.”  “Endanger life or property by fire and other causes.”  The statute writers are describing what they saw in 1960 and 1967: cities falling physically apart.

detroit_riots_fire_bombed

Furniture store firebombed, Detroit, 1967

The term “social liability” is not defined by Missouri statute or in case law with the exception of Centene Plaza Redevelopment Corporation v. Mint Properties, et al., No. SC88487, 225 S.W.3d 431 (Supreme Court of Missouri. June 12, 2007). The opinion states the following as it relates to the definition of a social liability:

“Although the term “social liability” is not specifically defined by statute or in case law, the historical context suggests the definition of “social liability” focuses upon the health, safety, and welfare of the public. In that regard, it has been noted that the transformation of this country from primarily agricultural to a predominantly industrial society resulted in significant growth in the cities. Tax Increment Financing Com’n of Kansas City v. J.E. Dunn Const. Co., Inc., 781

S.W.2d 70, 78 (Mo. Banc 1989).

One result of this growth was blighted areas, which constituted a “menace injurious to the public health, safety, morals and welfare” of the residents. The blighted areas also presented economic concerns. The need to eliminate these conditions as a “breeding ground for juvenile delinquency, infant mortality, crime and disease,” prompted a move toward redevelopment.”

uline_ice_company

That’s urban blight

All of that language to me speaks of classical 1960s eminent domain – truly blighted cities, lawlessness overtaking citizenship – not some abstract ‘social blight’.

bainbridge_on_armour

Does this look like blight to you?  Bainbridge on Armour

[Continued tomorrow in Part 2.]

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History of a plot: Part 6, You can’t go home again

April 22, 2014 | Affordable Housing, Atlantic Yards, community groups, Corruption, Development, Housing, Income mixing, Lower East Side, Manhattan, New York City, NIMBYism, Non-Profits, Politics, poverty concentration, Public housing, Sheldon Silver, William Rapfogel, Zoning | No comments 177 views

[Continued from yesterday's Part 5 and the preceding Part 1, Part 2, Part 3, and  Part 4.]

By: David A. Smith

Those who plot the destruction of others often perish in the attempt.  – Phaedrus.

As we’ve seen in the preceding parts, once the Puerto Ricans had been cleared out of the Seward Park Urban Renewal Area (SPURA) in 1967, the site had become a political vacuum that many constituencies sought to fill with their own vision of what it should be, and for whom.  This was a moving target, because as the decades passed, the neighborhood changed from liability to asset; the resident population diversified beyond anybody’s imagining, and the symbolism of ‘affordable housing’ changed from ‘the worst of public housing’ to ‘middle-class people trying to stay in gentrifying Manhattan’. 

spura_2005_or_so

The most valuable parking lots in Manhattan?  The SPURA site, probably 2005 or so

Sources used in this post

New York Times (March 23, 2014): the story damning Mr. Rapfogel and Mr. Silver

New York Times (September 25, 2013; green font): Mr. Rapfogel’s indictment

New York Times (September 17, 2013; blue font): Announcement of development

New York Times Letter to the Editor, November 29, 1989; red font); Local opposition

essex_street_market

A beloved neighborhood amenity?  The Essex Street Retail market

Those pressures, and the facilitation referenced in yesterday’s Part 4, led in October, 2012 to “a unanimous vote 47 years in the making”, which then led to a development tender and a winning bidder, as reported in the New York Times (September 17, 2013; blue font):

After a three-year effort to forge a compromise, the Bloomberg administration plans to announce on Wednesday that it has selected developers to erect a complex called Essex Crossing at the location, long known as the Seward Park urban renewal area.  The development would include retail markets, restaurants, office space, a movie theater, parks, an Andy Warhol Museum and 1,000 apartments. Half of the apartments would be for low-, moderate- and middle-income families.

The expanded and evolving conception of affordable housing changed from concrete shoeboxes for the indolent featherbedding on welfare, but havens of urban accessibility for the middle-income.

sheldon_silver_2008

Sheldon Silver, 2008

Designed by SHoP Architects and Beyer Blinder Belle, the glassy, six-acre complex would be built over the next decade by a consortium on nine city-owned lots in a rapidly gentrifying neighborhood that was once home to working-class Italians, Jews, Puerto Ricans and Ukrainians.

As a result, affordable housing evolved from political pariah to political prize

Mr. Silver gave the guidelines his blessing.

When the facts change, I change my mind.  What do you do?” – John Maynard Keynes.

Longtime advocates went along, seeing a portion of something as better than all of nothing.

Perhaps they too had migrated up the income pyramid.

To reach this point, the administration engaged in an unprecedented collaboration with the local community board and a task force starting in 2008.

It says something about the death of as-of-right zoning that the property approval process took ‘only’ five years.

do_not_rush_through

Wouldn’t want to make a mistake

During the recession, late in 2008, Dominic Berg, then the chairman of Community Board 3, convened a committee to try to reach a consensus. “People were tired of looking at empty lots,” Mr. Berg said.

dominic_berg_and_daniel_pisciotta

Changing faces of a neighborhood: Mr. Berg, his partner Daniel Pisciotta, and their children

At the same time, Madelyn Wils and David Quart, executive vice presidents at the city’s Economic Development Corporation, also began working on creating a ground-up development plan for the largest city-owned site below 96th Street. Her bosses were skeptical, but gave them the go-ahead.

madelyn_wils

Where there’s a Wils there’s a way

If Essex Crossing is built, it would also represent the culmination of compromises by various factions in the neighborhood and by the city itself.

Edward Delgado, who was a teenager in 1967 when his family was forced to relocate, said he had always wanted housing for families of limited and modest means built on the site. “We had to go along with 50 percent affordable and 50 percent market-rate,” he said, “or we would’ve had another 50 years of empty lots.”

Eventually the parties did find a compromise, as to use and as to income levels.

spura_income_mix_graphic_aug_2012

The income mix, rendered graphically

(by an opponent of including market-rate housing)

Both sides drew representatives of disparate neighborhood groups to come up with a set of development principles, which eventually included mixed-income housing, an emphasis on artisanal retail rather than big-box stores, office space that included incubators for budding entrepreneurs, parks and a new Essex Street Market that would still have vendors that provided goods for many of the low-income residents of the neighborhood.

But they did not reach a consensus until after John Shapiro, chairman of the Center for Planning and the Environment at the Pratt Institute, conducted private sessions in which proponents of opposing visions, who had never sat at the same table, were asked for solutions that everyone could live with.

cassell_shapiro_hyers

Mr. Shapiro (center) at an AIA panel on public spaces

 

“One thing that made this so hard,” Mr. Shapiro said, “is that all the players around the table wanted assurances that if they agreed to something, the terms of the deal would not change 5 or 10 years down the line.”

That’s perfectly reasonable, given the Atlantic Yards experience.  That gives rise to the need for community legitimacy:

 

Developers bidding for the Seward Park site were required to team up with a local nonprofit. Mr. Ratner chose Mr. Rapfogel’s Met Council.

Friends help friends – and in any case, friends in helpful positions (as the Met Council undoubtedly was) are the best friends to have. 

As the process was nearing a close last year, Mr. Rapfogel was arrested.

rapfogel_arrest_exit

A man who knows his life will never be the same

Mr. Rapfogel has been indicted, we note, for personal crimes that are not yet connected to any political machinations regarding real estate development.  From the New York Times (September 25, 2013; green font):

Shortly after William E. Rapfogel became the leader of one of New York City’s most influential social service organizations in 1992, prosecutors say, he began to steal.

He received envelope after envelope, stuffed with skimmed cash kickbacks, according to a criminal complaint filed on Tuesday.  Also cited were a $27,000 check written to a contractor working on his apartment, roughly $100,000 to help his son buy a home, and a campaign finance scheme that manipulated the city’s matching-funds formula, fraudulently increasing campaign contributions to favored city politicians who provided government grants to his organization.

“It’s always sad and shocking when we discover that someone used a charity as their own personal piggy bank — but even more so when that scheme involves someone well respected in government and his community,” said New York Attorney General Eric Schneiderman in a news release announcing the charges.

“One must be honest even with evil, there is no other good course”—Jorn the Apostle, in Cities in Flight¸ page 546. 

pacher_devil

All right, Devil, you’re going to help me build a church

I just hope that with Mr. Rapfogel, unlike Michael McLaughlin, it is not falsum in uno, falsum in omnibus.  (But I fear the worst for him.)

Meanwhile, as reported in the New York Times, September 24, 2013:

On Sept. 18, another bidder was selected.

The change of bidder apparently made no difference to the eventual affordability mix.

In announcing the new plan, the city said priority would be given to some of the mostly Puerto Rican families displaced four decades ago. Construction is expected to begin next year.

The redevelopment would tap into the past by giving priority to some of the 2,000, largely Puerto Rican families displaced four decades ago, and into the future by creating a neighborhood hub with badly needed housing, small-scale retail and office space for tech companies and budding entrepreneurs.

Four and a half decades too late, the Puerto Ricans are acknowledged as equal denizens of the Lower East Side.

Mr. Delgado says he has kept in touch with some former neighborhood occupants, and though most are scattered apart and elderly, he hopes their children will have a chance to return.

Mr. Silver has steadfastly stood by Judy Rapfogel. But as to his long alliance with Mr. Rapfogel, that is done. “Let’s be clear,” he said in a recent interview, “I have nothing to do with Willie Rapfogel.”

Was it all a political plot?  Or was it the unintended demilitarized zone of a five-decade fight about cities and neighborhoods and ethnicity and income mixing, all personified by visions of housing alternatives?

Mr. Koch is dead. 

koch_aged

Okay, so I’m dead … but how’m I doing?

Mr. Rapfogel is indicted. 

rapfogel_arraigned

A tragic face: Mr. Rapfogel at his arraignment

Mr. Silver still reigns in Albany … but for how much longer?

nyt_they_kept_a_lower_east_side_silver_140321

Uneasy sits the head?  Mr. Silver in Albany

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History of a plot: Part 5, it’s not gentrification if it’s we who gentrify

April 18, 2014 | Affordable Housing, Atlantic Yards, community groups, Corruption, Development, Housing, Income mixing, Lower East Side, Manhattan, New York City, NIMBYism, Non-Profits, Politics, poverty concentration, Sheldon Silver, William Rapfogel, Zoning | No comments 362 views

[Continued from yesterday's Part 4 and the preceding Part 1, Part 2, and Part 3]

By: David A. Smith

When all the details fit in perfectly, something is probably wrong with the story.

– Charles Baxter

By the early 1990s, as we saw in the preceding Part 3, the SPURA site’s development standoff had defeated three mayors and was well on its way to outlasting its fourth (the urban placeholder David Dinkins) as the community had been unable to embrace developer Sam LeFrak.

spura_goles_rally

GOLES (Good Old Lower East Side) rally

for 100% affordable housing at SPURA

Sources used in this post

New York Times (March 23, 2014): the story damning Mr. Rapfogel and Mr. Silver

New York Times (September 25, 2013; green font): Mr. Rapfogel’s indictment

New York Times (September 17, 2013; blue font): Announcement of development

New York Times Letter to the Editor, November 29, 1989; red font); Local opposition

As Mr. LeFrak built on his father’s legacy of building affordable housing, including the landmark LeFrak City in Queens, his description of a collision of interests rings true, because LeFrak was extremely successful in developing affordable housing elsewhere in New York City.

“It was an exercise in frustration,” said Richard LeFrak, a developer who was twice selected to rebuild Seward Park but was unable to move forward. “You had the collision between the Jewish community in the Grant Houses and the Latino and Asian communities.”

lefrak_city_aerial

LeFrak City, from the air

lefrak_city_ground

LeFrak City, from the residents’ perspective

Once again, SPURA remained parking lots.

In 1994, Mr. Silver became speaker of the Assembly in Albany. Almost 30 years after it was cleared, the vast space on the Lower East Side remained desolate. That year he faced renewed accusations from housing advocates that he and U.J.C. had blocked plans for housing on the site to preserve his power and keep out other groups.

“They would rather have the vacant lots and rats than have minority people there,” said Frances Goldin, a leader in the Lower East Side Joint Planning Council, which fought for housing on the site, speaking to The New York Times that year.

frances_goldin_purple

Aux barricades!

Ms. Goldin’s reliability in divining other people’s motives has to be evaluated in light of her credentials as both a literary agent and a lifelong protester (seeking, among other things, lower rent for a favorite bookstore) who relished the Occupy protests,

In response, Mr. Silver said he only wanted “a buildable consensus plan” in a neighborhood that was too split to proceed.

But months later, he and Mr. Rapfogel quietly put their weight behind yet another new plan, from a handpicked developer who included no housing. According to official memos, Mr. Silver asked city officials to approve a “big box” store, like Costco, on the site.

And is it self-evidently clear that pursuing such a store is inherently nefarious and proof of political corruption?

The developer, Bruce Ratner, would build it.

bruce_ratner_microphone

The man who brought the Nets to Brooklyn: Bruce Ratner

The sponsor would be the South Manhattan Development Corporation, which Mr. Rapfogel then headed.

Aside from being headed by Mr. Rapfogel, the SMDC was and is the development arm of the United Jewish Council, so it was the most logical Jewish developer in the area.

“This proposal’s most prominent supporter is Assemblyman Sheldon Silver,” wrote Deborah C. Wright, the city’s housing commissioner under Mayor Rudolph W. Giuliani, in an internal memo. “I would love to see something positive happen here under our administration, but the conflicts here rival Bosnia!”

deborah_c_wright_carver_bancorp

Wright though the Lower East Side politically rivaled Bosnia

Charles Millard, then the head of the city’s Economic Development Corporation, wrote in another memo that Mr. Silver told him “the community does not want housing on the site.”

charles_millard

Millard says he was told the community didn’t want housing

The plan was never publicly discussed and went nowhere.

Post hoc ergo propter hoc?  Can we ascribe the plan’s failure to the scheming of Mr. Silver and Mr. Rapfogel?

“We had no idea Silver had done that,” said Harriet Cohen, who argued for affordable housing on the site as co-chairwoman of the Seward Park Area Redevelopment Coalition.

Even without redevelopment, change came anyhow.

In the years that followed, Jewish dominance waned. A wave of fashionable urban professionals changed the look and feel of the shops and restaurants.

Do my eyes deceive me?  Is the New York Times embracing … gentrification?

Stores that sold skullcaps or kosher wine were replaced by hip wine bars and cafes. Kossar’s Hot Bialys, a Jewish institution on Grand Street, remains, but two doors down is Doughnut Plant, which sells things like Valrhona chocolate doughnuts, for as much as $3 apiece.

hot_bialys

An institution

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Getcher hot bialys here

Not only did the minority become the majority, but also the great American wealth escalator worked its desired magic.  As New York City’s economy revived, the Lower East Side rose from armpit of Manhattan to being a highly desirable residential location, walkable to burgeoning Wall Street – and those co-operatives, developed to be affordable, had evolved into a source of substantial wealth.

At Cooperative Village, where the Rapfogels and Silvers raised their children and still live, tenants were allowed to sell on the open market beginning in 2000, after decades of values’ being capped. One two-bedroom apartment was recently on the market for $965,000.

In other words, the residents of Co-operative Village have now become fully market acclimated – and that is a good thing.

And the ties between Mr. Silver, Mr. Rapfogel and Mr. Ratner strengthened.

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The Rapfogel clan: Ora, Michael’s wife, Michael, William and Judy Rapfogl

The Rapfogels’ eldest son, Michael, finished law school in 2005 and soon went to work for Mr. Ratner. The job was seen internally as a way to please Mr. Silver, say people familiar with the son’s work; Mr. Ratner’s company rejects the notion.

While we want to imbue political figures with skullduggeries worthy of the extended families in Game of Thrones, I doubt that young mister Rapfogel would go to work for a company just to please his father.

tywin_tyrion

You will marry whom I tell you to, and you will give me a son by her

In 2006, the Public Authorities Control Board, over which Mr. Silver has significant control, approved Mr. Ratner’s Atlantic Yards project in Brooklyn.

Now that connection is and has always been a scandal in its trampling of property owners’ rights. 

I posted extensively about Atlantic Yards at the time and several times thereafter, using in part the spectacular, Pulitzer-worthy work by the unceasing Norman Oder.  Whatever else it might have been, Atlantic Yards was a gross abuse of eminent domain for economic development, as well as a continuing bait-and-switch as to how much affordable housing would be developed, when and where and for whom, and whether the public benefit of that affordable housing was enough to justify the enormous public resources delivered to the project.

Intervention by Mr. Silver and others enabled the project to retain a lucrative tax break, even as that break was actually being phased out (and even as the affordable housing component kept getting deferred, whittled away, and watered down).

One must honor Norman Oder, who carries on as a self-appointed and incredibly effective investigator. 

Norman Oder carrying on.  He remains a steadfast witness.

ford_witness

At times, we can only witness

In 2008, Forest City Ratner, which compared to other developers makes few political contributions, gave $58,420 to the Democratic Assembly Campaign Committee, which is controlled by Mr. Silver.  [And noted carefully at the time by Mr. Oder. – Ed.]

That same year, Mr. Ratner helped raise $1 million for Met Council and was honored at a luncheon given by Mr. Rapfogel and Mr. Silver. “Bruce is responsible for much of the development and growth that’s gone on in Brooklyn and in Manhattan,” Mr. Silver said at the event. “He is a major force in New York City for the good.”

Here again, Norman Oder did what for many years the New York Times would not: he chronicled these connections as they occurred (November 28, 2008):

Let’s take another look at the cozy relationship between Assembly Speaker Sheldon Silver, the Metropolitan Council on Jewish Poverty [the charity Mr. Rapfogel headed and from which he is alleged to have embezzled millions – Ed.], and developer Forest City Ratner. There’s nothing illegal, just another episode of the questionable one-hand-washes-the-other power configuration that seems so prevalent in the city and state.

Silver says that those who care about process are “naive.” Perhaps that’s also his message for those who had hoped he’d ask hard questions about Atlantic Yards.

It’s ironic that the Times is now trying to draw connections between Mr. Silver and real estate development when, six years ago, the Times chose to overlook connections right in front of its editorial face.  As I wrote at the time:

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One Norman Oder, in time-lapse photography?

In all this, Mr. Oder has run absolute circles around the New York Times, even to the point of highlighting, and returning frequently to, the Times‘ conflict of interest in covering the story, since FCR has been developing the Times new headquarters.

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No conflicts, but great interest: Norman Oder

Mr. Oder has done this, as far as I can tell, out of nothing more than intellectual orneriness, a sense that the full story has not been told.

In any case, now that Atlantic Yards is fully completed, and Forest City Ratner is no longer building the Times‘s headquarters building, the Times finally caught up with the story:

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Occupied by the Times, built by Ratner

By 2011, with all the neighborhood changes, consensus finally seemed possible. The local community board adopted development guidelines that included 800 to 1,000 apartments, with 20 percent, or as few as 160 units, set aside for low-income tenants.

[Continued tomorrow in Part 6.]


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History of a plot: Part 4, Housing for whom?

April 17, 2014 | Affordable Housing, Atlantic Yards, community groups, Corruption, Housing, Income mixing, Lower East Side, Manhattan, New York City, NIMBYism, Non-Profits, Politics, poverty concentration, Public housing, Sheldon Silver, William Rapfogel, Zoning | No comments 240 views

[Continued from yesterday's Part 3 and the preceding Part 1 and Part 2.]

By: David A. Smith

The king died, and then the queen dies is a story.  The king died, and then the queen died of grief, is a plot.  – E. M. Forster

As we’ve seen in the three parts up to now, the site that became known as SPURA was an eminent-domain battleground in the 1960s, and then a vacant political landscape in the 1970s and into the early 1980s.

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The Lower East Side, 1980s: probably the corner of Ludlow and Essex,

From a New York Times blog post that “documents the dwindling Jewish presence on the Lower East Side of Manhattan in the 1980s.”

Sources used in this post

New York Times (March 23, 2014): the story damning Mr. Rapfogel and Mr. Silver

New York Times (September 25, 2013; green font): Mr. Rapfogel’s indictment

New York Times (September 17, 2013; blue font): Announcement of development

New York Times Letter to the Editor, November 29, 1989; red font); Local opposition

During this period, though I didn’t know it at the time (being too young to have any context), affordable housing was losing its brand value; indeed, we all called it ‘subsidized housing’ – a bad phrase – or ‘low income housing’, and that made its status as a code word and bogeyman even more manifest.

bogeyman

I’m moving in next door

Soon after, Mr. Rapfogel took a post in Mr. Goldin’s office as liaison to the Jewish community. He also became head of United Jewish Council’s development arm, South Manhattan Development Corporation, and soon after wrote an article in the group’s newspaper saying his mission was to “retain the distinctly Jewish religious and cultural identity of our community.”

“We wait with bated breath for the development of the Seward Park Urban Renewal Area,” he wrote in 1985. “City government must never again believe that it will force more low-income housing on a community that has been made into a poverty ghetto.”

Here again, two decades after 1967, is the recurring political theme of Messrs. Rapfogel and Silver: too much low-income housing will yield poverty concentration and turn the neighborhood into an economic ghetto.  Today that view looks ridiculous, given the property’s location, but even in the mid-1980s the area looked like something out of The French Connection.

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Mike and Vinnie, Lower East Side Shopping, 1985

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Street preacher, Lower East Side, 1985

Throughout the 1980s and 1990s, Mr. Silver and Mr. Rapfogel co-hosted annual legislative meetings put on by U.J.C., and later by Met Council, with the affable Mr. Rapfogel serving as the master of ceremonies and the taciturn Mr. Silver lending gravitas.  Plans for the site were an occasional focus of those meetings.

That was the case in 1988, after the Koch administration selected the Lefrak Organization to build a project with a mix of commercial and residential projects on the site. Advocates for the poor opposed the plan’s dearth of low-income housing.

The 1980s were a time of change for affordable housing’s public and industry perception. 

On the one hand, poverty concentration in public housing and Section 8, a consequence of the Federal housing preferences, was making affordable housing properties politically toxic.

no_to_toxic

I won’t vote for anything that stinks

Important historical note.  I cannot find the following on the Web, but I experienced it and remember it and know that it is true.

The Federal preferences, now made voluntary (though still followed in some places), advised owners of both public and Section 8 assisted affordable housing that they have to give first priority in new vacancies to people meeting any of three criteria: (A) living in substandard housing (which included homelessness), (B) paying a severe rent burden (housing cost greater than 50% of income), or (C) displaced by Federal action (e.g. eminent domain.  In practice, Items A and B dominated, and both of them had the inevitable consequence of selecting for the poorest of the poor – and most frequently, for the homeless. 

The result was steady poverty concentration – residents who moved out of Section 8 or public housing tended to be those who had elevated their income, while those who moved in were quite poor (now called Extremely Low Income or ELI).  This steady adverse economic section had two consequences: (1) Section 8 became ever-more costly per apartment, because new renters paid 30% of an ever-smaller incoming income, and (2) Section 8 became the place to go if you were homeless. 

That, in turn, led to a backlash by communities, something I did not fully appreciate until our company, Recap, was completing the LIHPRHA preservation of an elderly property just outside of Pittsburgh, and the town sued in Federal court to enjoin the closing, because the elderly residents and the city alderman were terrified that adding the Section 8 would turn the property into a homelessness den where substance abusers would prey upon the elderly.

barbara_mikulski

Are we clear on this yet?

As the correlation strengthened between public housing/ Section 8 housing and ‘Zip codes of pathology,’ as Maryland Senator Barbara Mikulski called them, localities (and judges) began mandating poverty deconcentration, as codified legally in Chicago’s 1976 Gautreaux decision which deemed poverty concentration to be segregation.

dorothy_gautreaux

Toto, I don’t want to live in the projects anymore:

Plaintiff Dorothy Gautreaux of Chicago

On the other hand, meanwhile, poverty concentration, the de-institutionalization of what we then called the mentally ill, and the addictive effects of hard drugs (especially crack cocaine, which entered America in the mid-1980s and directly contributed to a spike in crime rates at affordable housing properties – again, I remember this hitting our properties), led homeless advocates to argue that (1) housing had to be focused on those most in need, even if that meant fewer apartments at much higher cost, and (2) for many extremely low income households, housing had to be coupled with ongoing supportive services funded by government. 

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An epidemic in low income neighborhoods: Tom Brokaw, 1980s

The rise in New York City’s homeless led to confrontations, including around the Delancey Street site, like that referenced in, as shown by this New York Times Letter to the Editor (November 29, 1989; red font):

Recently a group of squatters took over a building on Fourth Street, between Avenues B and C, and dubbed it the ”Alphabet City Community Center in the East Village.” This group is not representative of the community and has sought to work outside it for its own agenda.

The building on Fourth Street is the proposed site for 82 units of single room occupancy housing for single homeless elderly people, to be sponsored by the New York Foundation for Senior Citizens. Those who protested the city’s action to empty the building did not even know that a project for the elderly was proposed for the site. When the Department of Housing Preservation and Development and the police tried to secure the building, the squatters threw eggs, bottles of urine and stones at them.

Shades of the thankfully-vanished Occupy squatting fad.

One squatter was quoted as saying that a tree that needed to be cleared should not be cut as it will last forever, but the senior citizens will die.

There is a great housing need in the Lower East Side. Given the increase in homelessness and limited resources of land and money, we need to work together as a community for the best possible plan. Those who are not part of the solution are part of the problem.

Elaine Chan, Budget Coordinator, Lower East Side Joint Planning Council New York, Nov. 9, 1989


Ms. Chan stayed on the issue, as demonstrated by another New York Times Letter to the Editor (April 16, 1991):

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Lower East Side protest, 1991

On the Lower East Side, no single minority has the population needed to create a Latino, Asian or African-American council district. But by combining their numbers, we achieve lines within which lives an 83% minority population. From that district a minority candidate has the best opportunity to be elected. (Most people working on districting around the city believe a minimum of 75% minority population is necessary to assure the election of a minority candidate.)

That is politics, the minority becoming the majority, either via immigration/ emigration, assimilation, or coalition:

The longstanding split in the community had some Latinos and housing advocates demanding that the city build only low-income housing on the site, while residents of the nearby co-ops countered that only commercial development was appropriate.

sam_lefrak_richard

Sam LeFrak and his son Richard, some years ago

[Continued tomorrow in Part 5.]

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