#090 Nov/Dec 1996 — Saving Affordable Housing


  Saving Affordable Housing Notes 2. The following two sections are based in part on “Cooperative Housing and the American Dream: Examining Resident Participation,” a 1993 master’s thesis by Frank […]


Saving Affordable Housing


2. The following two sections are based in part on “Cooperative Housing and the American Dream: Examining Resident Participation,” a 1993 master’s thesis by Frank Neidhardt for the Massachusetts Institute of Technology. [Back to text.]

3. CEDAC is a quasi-public corporation, chartered by act of the Massachusetts legislature in 1978, whose mission is to assist in the revitalization of economically distressed areas of Massachusetts. [Back to text.]

4. This training was provided by Boston-based housing consultant Emily Achtenberg. [Back to text.]

5. See Marksdale study, “Neighborhood Context” section. [Back to text.]

6. See Marksdale case study, in which CEDAC also played a key role. [Back to text.]

7. Columbus Avenue, where the Bancroft Apartments are located, is on the border between Jamaica Plain and Roxbury, so while the mailing address may be Roxbury, some residents would prefer to say they live in Jamaica Plain. [Back to text.]

8. The tenants’ council is made up of representatives of the various developments, and is organized with the assistance of the Urban Edge Community Services division. [Back to text.]

9. See Marksdale case study. [Back to text.]

10. CHFA first mortgage ($177,100), Federal Home Loan Bank Affordable Housing Program ($45,000), the state Division of Housing ($40,000), the City’s rental rehab program-second mortgage ($194,238), and the City’s Skyline housing trust fund ($51,350). [Back to text.]

11. The sponsoring communities are the Sisters of Mercy Housing of Auburn, the Sisters of Mercy Housing of Burlingame, the Sisters of Mercy Housing of Cedar Rapids, the Sisters of Mercy Housing of Omaha, and the Sisters of Saint Joseph of Peace, Western Province. Each of the Sponsoring Religious Communities appoints two sisters to “insure the constancy of the mission of Mercy Housing.” [Back to text.]

12. In 1992, Mercy Housing concluded a planning effort to increase its housing stock, its expertise sharing with other like-minded organizations, and its advocacy. The plan consolidated three separate corporations into Mercy Housing, Inc., (headed by Sister Lillian Murphy) and a subsidiary, Mercy Services Corporation (headed by Sister Geraldine Hoyler). The Catherine McAuley Housing Foundation also merged with Mercy Housing, forming the McAuley Fund and a technical assistance division. [Back to text.]

13. Decatur Place, located in a predominantly Hispanic neighborhood and with a predominantly Hispanic clientele, offers subsidized housing and on-site child care for a two-year period to single mothers with fewer than two children. During that time, the women are involved in full time school or work and monthly case management. [Back to text.]

14. The City of Chicago has 78 designated community areas. [Back to text.]

15. The loss of existing affordable housing is compounded by the fact that developers of new or rehabbed “affordable” units often charge more than many low income residents of Chicago can afford. This is because the City uses 80 percent of the median family income of the Primary Metropolitan Statistical Area (PMSA), which includes suburban communities in three counties, to set income and rent levels. The income of a family of four at 80 percent of the median for the PMSA was $33,396, according to the 1990 Census, while it would be only $24,566 based on the City of Chicago alone. But more than 23 percent of all Chicago families have incomes less than $15,000. As a result, City housing programs benefit mainly moderate income households. [Back to text.]

16. In 1990, banks lent $4 million in Englewood, barely over one-tenth of one percent of the total value of bank lending citywide. [Back to text.]

17. At the time of this study it was unclear whether this stipulation in AHC’s lease-purchase contract, which required renters to pay for repairs, was legal according Illinois law. [Back to text.]

18. This is apparently because rents do not fully cover costs including acquisition, rehab, property management, insurance, the cost of administering the bank loans and operation of the land trust. [Back to text.]

19. The following two “historical” sections are based heavily, in some places verbatim, on the following news media articles: “The Right Price,” The Harlem Tenant, Nov.-Dec. 1988; “Taking Title: Striking a Deal in Harlem” and “How To Get The Landlord To Sell Out,” City Limits, May 1984; Lee Daniels, “Co-op Project Aids Poor When A Landlord Quits,” New York Times, April 9, 1984; and Martin Fox, “Legal Aid Volunteers Help Tenants Become Own Landlord,” New York Law Journal, March 19, 1984. [Back to text.]

20. Several other attempts to identify “successful” co-ops in New York that would be willing to be studied were fruitless, within the amount of time the research team could invest in the task. [Back to text.]

21. “The 7-A legislation enables a court-appointed administrator to use rent monies to make repairs for conditions that are ‘dangerous to life, health or safety.’ As long as one third of tenants agree to the 7-A appointment, the initial 7-A legislation is an impetus for tenant organizing and enables tenants to replace landlords as managers and stabilize low-income housing that may be lost due to landlord abandonment and/or neglect (i.e. cutback in services). The landlord is still the legal owner of the building during the administrator’s term and can return to active management of the building when the court permits. However, while the administrator is managing the building, the owner is not authorized to collect any rents.” (NYC Commission on Human Rights, 1982, as cited in Oppenheim et al., 1993) [Back to text.]

22. This refers to the Mollen commission report on corruption in the NYPD, which had named the 30th Precinct in West Harlem as a target of investigation. By May 1994, 25 officers of the 30th Precinct were arrested on charges including narcotics conspiracy, shaking down drug dealers, robbery, assault and civil-rights violations. Then-Police Commissioner William Bratton estimated that 25 percent of the Precinct might ultimately be implicated in the scandal. Officers in the “Dirty 30” Precinct had been collaborating with drug dealers for so long, they had reportedly refined this activity into “an art form.” (Various articles, New York Times, April-May, 1994). [Back to text.]

23. However, no existing tenants had actually been receiving welfare. If any had been, such a policy would have been harder to implement. [Back to text.]

24. The increase in water and sewer costs disproportionately affects older apartment buildings, many of which are in low-income neighborhoods. These buildings have less efficient plumbing, and the units are frequently occupied by several people; both factors lead to higher usage relative to more modern buildings, which tend to be in higher income neighborhoods and have fewer persons per unit. Unless the city agrees to some tax relief for the limited equity cooperatives, which are private property, many co-ops would be either be faced with financial difficulty or have to raise rents to a level that might no longer be affordable to current residents, especially those on fixed incomes without rental subsidies. Several residents of the 140th Street co-op are currently on fixed incomes, and soon more residents will be at retirement age. [Back to text.]

25. The research team interviewed 5 households. Four households filled out and mailed back a survey form. [Back to text.]

26. Clearly, entrepreneurial leadership cannot exist without explicit or implicit support of its board of trustees. However, in this report we did not closely study the relationship between staff and board or sponsor. This is an area that needs more research. [Back to text.]

27. See “Previous Research” in Research Components. [Back to text.]

28. Keyes reports on a program called “The Security Initiative” in Boston as a good example of an institutional mechanism set up to network organizations and people around specific drug-and security-related issues. The Security Initiative was created to bring together the actors most directly impacted by the drug problems. Made up of representatives of management, the MHFA, Boston Housing Partnerships, and the MHFA-hired security force, the group has focused on the range of issues that impinge on security. Originally launched out of concern for the drug problem that sponsors were facing in their buildings, the forum has broadened to deal with all aspects of security. As such, its agenda gives vivid insight into both the issues that arise in the day-to-day effort to deal with drugs and the institutional responses that emerge to deal with those issues. On its agenda have been the following:

  • The development of the security patrol, which was eventually accepted and funded by MHFA;
  • The issues of tenant screening and the use of the Criminal Offender Record Information Act (CORI);
  • A vacancy on the Boston Housing Court and the need to insure that the new judge is sympathetic to the goals of the BHP;
  • Information that would help the police in directing busts at the development, such as floor plans of the building;
  • How to handle the emerging fear and anxiety among development managers in the face of the violence surrounding drugs and use of firearms;
  • The physical security of buildings and who is responsible for what kinds of actions such as keeping doors locked and windows bolted;
  • The utility of temporary restraining orders in keeping drug traffickers away from BHP developments;
  • Various pieces of state legislation bearing on the issues of drugs: who was sponsoring them, how they could be better formulated, and how to mobilize support for their passage in the legislature;
  • Notification of an anti-drug rally in front of the Massachusetts State House to support inclusion of drug dealers in pending RICO bill. [Back to text.]

29. See, for further example, Margery Austin Turner, Raymond J. Struyk and John Yinger, Housing Discrimination Study: Synthesis, Washington: U.S. Department of Housing and Urban Development, August 1991; and Alicia Munnell, Lynn Browne, James McEneaney, and Geoffrey Tootell, Mortgage Lending in Boston: Interpreting HMDA Data, Boston: Federal Reserve Bank of Boston, October 1992. [Back to text.]

30. Downpayment requirements of 20 percent dictate that would-be buyers have at least $24,000 up front in addition to several thousand additional dollars for closing fees. This is simply beyond the means of most American families under 40. [Back to text.]

31. In terms of race, 43.3 percent of whites, 76.6 percent of blacks, and 74.2 percent of Hispanics are shut out of the home-buying market. In terms of age, 71.2 percent of families headed by a 25- to 34-year-old and 47.2 percent of families in the 35 to 44 age category cannot afford to buy a home. Over a third of existing homeowners-and 91 percent of all current renter families (including 98 percent of black and Hispanic families)-could not afford to buy a house for more current prices. (Fronczek and Savage 1991) [Back to text.]

32. In the 1960s, the Section 221(d)(3) below-market interest rate and Section 236 interest subsidy programs used private ownership to increase the supply of multifamily housing for lower income families. The subsidy was a federally guaranteed loan with a reduced (subsidized) interest rate. In exchange for this limited subsidy and guaranteed loan, the owner executed a Regulatory Agreement containing restrictions on rent increases and tenant income eligibility. These restrictions, called “use” restrictions, were to remain in place as long as the Mortgage and Regulatory Agreement existed; the restrictions, however, could be terminated by a prepayment of the mortgage after 20 years. This provision was intended to attract private developers. [Back to text.]

33. Theodora Rollette, Executive Director of MPTA, as quoted in LIHIS ROUNDUP. Note that in the article Ms. Rollette cautions that the change to tenant control may be problematic, e.g., MPTA has had difficulty with management violations of its right to control the admissions process which is part of the purchase agreement. [Back to text.]

34. The “Emergency Low-Income Housing Preservation Act of 1987,” 12 U.S.C.A §§ 1715z-15, replaced by the “Low Income Housing Preservation and Resident Homeownership Act of 1990,” 12 U.S.C.A. §§4101-4125, established a qualified mandatory preservation program. [Back to text.]


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