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5. Tenant Responses to the Urban Housing Crisis, 1970-1984

Ronald Lawson with the assistance of Reuben B. Johnson III

Recognition, Prosperity, Expansion, and Frustrations, 1976-1984

As New York City recovered from the 1975 financial crisis, the real estate industry reorganized its political forces to increase pressure on rent regulations, and the revival of the housing market resulted in renewed threats of tenant displacement. These dangers, however, initially paled beside a new prominence that was achieved by the tenant movement: private and public attempts to ameliorate the decay that continued to ravage the neighborhoods of the poor brought an unheralded prosperity to a segment of the movement, while concurrently activists won new measures of political recognition. Nevertheless, such progress also raised questions concerning the direction and ultimate impact of the movement.

He Who Pays the Piper: The Proliferation and Decline of External Funding

In the second half of the 1970s, large amounts of external funding became available to tenant organizations sponsoring the rehabilitation of abandoned buildings and their conversion to low-income co-ops. Then, toward the end of the decade, when the city of New York unexpectedly found itself the landlord of thousands of tenants in decayed housing, it utilized federal funds to become the most avid of all promoters of low-income conversions. However, when the cutbacks in federal funding began to be felt in the early 1980s, following the election of Ronald Reagan, the earlier euphoria over external funding was replaced by a period of reevaluation.

Organizations at all three levels of the tenant movement had, before the mid-1970s, typically existed in the slack in the lives of a handful of people, in borrowed space (often in the apartment of one of the founders), using an available phone, and relying on a member with access to a mimeograph machine at work to run off publicity fliers, membership forms, and so forth. Expenses were met from the pockets of the leaders and organizers themselves, by "passing the hat" at meetings, from the proceeds of fund-raising events patronized by members and their friends, and from membership dues. However, such resources proved inadequate to sustain organizations trying to help tenants cope with spreading abandonment and could not begin to support the costs of rehabilitating low-income housing.

Prior to New York City's 1975 fiscal crisis, most programs to rehabilitate abandoned housing and convert it into low-income cooperatives focused solely on the individual buildings. Only more sophisticated, extra-movement sponsors, such as the Settlement Housing Fund, tried to have their overhead costs included in the rehabilitation budget, and then these amounts proved totally inadequate to cover the staff time expended.[44] However, in these early years neighborhood organizations began to draw small support from a variety of private sources, such as churches (priests of the Catholic church, in particular, became involved in neighborhoods where valuable institutions were in danger of destruction as parishioners fled decay), foundations, banks, and the manufacturers of materials used in sweat equity rehabilitation, which financed low staff salaries in some instances. The Community Management Program also provided salaries for managers and repair personnel.

The financial crisis wiped out funding for the rehabilitation of all would-be low-income co-ops except for a few sweat equity projects that included CETA job-training components. Those affiliates of ANHD that had gained Community Management contracts from the city continued to receive that income. The rest did what they could to combat decay through organizing tenants, sometimes choosing to do this full time while surviving on unemployment benefits, and making lists of buildings that could only be saved through rehabilitation. Meanwhile, Schur's eagle eye was open for possibilities to increase their effectiveness by securing funds for their endeavors.

One such opportunity arose when, toward the end of 1975, the city proposed accelerating its program under which abandoned buildings were demolished. ANHD affiliates were strongly opposed to demolitions when they saw the buildings as sound and rehabilitable. They argued that such buildings should be sealed, rather than demolished, in the hope that rehabilitation funds for them would become available. When the city planned to use federal Community Development funds for demolition, ANHD threatened to tie up the funds in extended litigation. Rather than risk this, the city met with ANHD representatives and agreed to fund demolition and sealing as a single program and to accept the recommendations of local organizations concerning which buildings should be sealed rather than demolished. ANHD members were subsequently awarded sealing contracts. Meanwhile, contracts were signed for the first three of fourteen projected sweat equity buildings under which unemployed persons received on-the-job training funded by grants through CETA and the Law Enforcement Assistance Act. Yet other ANHD members began to receive weatherization contracts from the Department of Housing and Urban Development (HUD).[45]

Meanwhile, the ongoing sweat equity projects were attracting a great deal of media attention: there was drama, and eye-catching photographs, in both the personnel involved and in the transformation of the abandoned buildings. The Renigades, a "youth gang for the people" in East Harlem, made especially striking copy during 1974-1975. Then, in March and April 1976, the People's Development Corporation (PDC) in the Morrisania section of the Bronx and Adopt-a-Building on Manhattan's Lower East Side were covered in key television newscasts. The report featuring the latter's initial sweat equity co-op conversion project on the CBS Evening News with Walter Cronkite presented it as an alternative to abandonment and as an example to other cities across the country. Its experiments with solar and wind power, and then the sweaters' victory in court which forced Consolidated Edison, the utility company, to buy the excess electricity generated by its windmill, were highlighted in succeeding months.[46] Such favorable publicity helped ease negotiations between HUD, HDA, and the Chemical Bank, which eventually, in 1977, led to the announcement of a National Urban Homesteading Demonstration Program, under which these two neighborhood organizations received contracts for twelve sweat equity projects utilizing CETA-funded labor. Opportunities for neighborhood organizations to sponsor the rehabilitation of abandoned buildings were thus clearly beginning to revive by 1977.

Meanwhile, however, a rift between Bob Schur, executive director of ANHD, and the federation's Operations Committee, or board, was widening, and in July 1977 Schur was forced to resign. The man who was unsurpassed at finding ways in which to use HDA and federal programs innovatively had been less successful in running an organization: he did not take directions well from his board and was inclined to go behind its back when it disagreed with him. His exit was a huge loss; since ANHD had been created as a vehicle for him, it was almost impossible for anyone to succeed him there. The federation floundered for several years thereafter, going through three executive directors in rapid succession at the outset.

In October 1977 the situation of organizations grappling with the problems of housing abandonment changed dramatically when President Jimmy Carter made an unexpected, two-stop visit to the South Bronx. One stop was on Charlotte Street, in the midst of utter devastation; the other was on heavily decayed Washington Avenue, where he inspected the almost completed initial PDC sweat equity site and responded appreciably to the contrast it offered to the abandonment he had seen. This incident triggered a rash of favorable publicity for the rehabilitation efforts of tenants in New York City. The next morning the New York Times told the world that "A Loan and Some 'Sweat Equity' Create an Oasis Amid Desolation."[47] Heady times followed, as this segment of the movement received backing from churches, foundations, professionals, and all levels of government.

The rapid increase in external funding transformed many of the neighborhood organizations, especially those that had already begun to attract attention. PDC found that the delays that usually beset its proposals were suddenly truncated, with the result that its budget increased to $4 million and its number of members and employees to 250 -- both tenfold increases -- in a year. The growth of Adopt-a-Building was equally dramatic. Its three leaders had survived on unemployment checks while organizing full time in 1975, and the following year they had put together minor church, city, and foundation support; now grants and contracts multiplied, and by 1978- 1979 its budget stood at $2.7 million, while $1.5 million more flowed as mortgage funds to finance building rehabilitation. By 1980- 1981 its budget had passed $4 million and its paid staff ninety.[48]

Many of the other ANHD members also showed substantial, though more modest, increases in funding. In 1976 ANHD surveyed twenty-seven of its affiliates and found that twenty-two of them were receiving $6.2 million in external funds -- an average of $282,000 each. Of this amount, 75 percent flowed from Community Management and job-training funds, while another $1 million came from Model Cities and Community Development antipoverty grants.[49] When, in 1980- 1981, attempts were made to reinterview the leaders of the 135 neighborhood organizations and federations studied in 1974- 1976, it was found that 55 of the 89 still functioning had received $39.5 million -- or a mean of $718,000 each -- from a much wider variety of external sources in 1980. This figure omits the many organizations created since 1977 to compete for the newly available funds. The enthusiasm of funders was so great that, for example, HUD extended the homesteading demonstration to two other neighborhood organizations, and thirteen buildings, with a commitment of $2.2 million, despite the fact that the first phase of the demonstration was already far behind schedule.[50]

This expansion had a profound effect on ANHD. As early as March 1978 it had become the largest CETA umbrella group in New York City, funneling trainee personnel to its affiliates. It channeled almost all its attention into administering the program for the next four years. This represented a remarkable narrowing of its focus.

The impact of the sudden flood of external funding was even greater for most of the recipient neighborhood organizations. On the one hand it allowed them to implement new goals, such as rehabilitation, tenant ownership and management, imparting skills to tenants, and creating jobs for them, that had previously been outside the scope of the tenant movement. On the other hand, it led frequently to the displacement of previous goals. Some funders demanded specific changes in proposals before funding them: some foundations, for example, refused to fund the organizing of rent strikes. More often, neighborhood organizations tailored their proposals to meet the known preferences of funders or plugged into programs where the funders had already set the rules. The Community Management Program, for example, insisted that the neighborhood organizations with contracts manage the buildings directly rather than help tenants manage the buildings themselves, which led some neighborhood organizations to protest that they would become bureaucratic stand-ins for landlords. However, the majority of contractors accepted the roles assigned them and usually ceased trying to organize tenants altogether. The most usual reason for goal displacement, however, was that the sudden surge of funding for specific tasks squeezed out activities that were not covered by the grants. The leaders who, while their neighborhood organizations were small and largely internally funded, frequently spent much of their time organizing tenants to use their collective leverage against housing problems, now found themselves administering large projects, meeting stringent reporting requirements, and writing new funding proposals in order to keep income flowing. Since most grants were categorical, flexible funds were scarce -- amounting, for example, to only 3.9 percent of Adopt-a-Building's total budget in 1980 and only 2.0 percent of Los Sures'.[51] Consequently, the typical neighborhood organization found itself working intensively on the few buildings it was funded to rehabilitate or manage and no longer trying to organize the tenants of the neighborhood.

When organizations previously staffed by volunteers first received external funding, the service of the staff was usually excellent: they could now work full time for a cause they cared about, but where their previous participation had been limited to their spare time. They therefore typically showed high commitment by working long hours and often continuing unpaid in their positions for months if breaks in funding occurred. However, this level of commitment tended to erode as personnel turned over, especially when funding triggered rapid growth, diluting the influence of committed members and hastening bureaucratization. The strain of large changes in scale was compounded when many of the new employees were CETA workers with no background in the movement, who were available primarily because they needed a job, not because of commitment to the cause. Moreover, under the rules of the program they usually had to be replaced by new recruits, often just as they were being socialized to the goals and ideology of the organization. External funding also had the effect of drying up the pool of volunteer participants.

Nowhere was the impact of dramatic, uncontrolled growth felt more acutely than at PDC, which had been made a symbol of the rehabilitation segment of the tenant movement by a fifteen-minute visit from President Carter:

PDC ... met none of the basic conditions for the survival of a small, complex business: its management had no experience working as a team; there was little trust between workers and management; the operation was badly under-capitalized especially in terms of covering administrative overhead and cash flow needs; it did not have good relations with its vendors, and vertical lines of authority had never been implemented. PDC's managers had control over neither their workforce nor their balance sheets.

As for the homesteaders, pulling sweat "became just labor, a negative thing." Homesteaders were "working for the money, working as long as they could." Sweat time became the price workers had to pay to get a CETA job, instead of a commitment to an apartment, to themselves, to the community. Between late August, 1978, and January, 1979, over a third of the homesteaders were either fired or quit.[52]

Finally, the firing of a group of workers in February 1979 was followed by two months of arson, break-ins, theft, protest, and violence, which included the destruction of PDC's financial records. Within a few weeks most of the managers were fired or quit, and by the end of the year PDC's visionary leader, Ramon Rueda, had also resigned and most of the senior homesteaders had pulled out: only supervisors and no-show CETA employees were left.

Doug Moritz, the leader of Los Sures, one of the best-known and most successful neighborhood organizations, whose budget eventually topped $6 million, commented retrospectively in 1980 that the funded programs "diverted us from organizing, from an educational thrust. We sacrificed our local base, as we failed to educate the new tenants who moved in, and came to be seen -- rightly -- as part of the establishment." A board member of ANHD stated that "collectively we lost the involvement of local people, and instead adopted a contractor relationship with only a few buildings. As a result we can no longer say that we represent, or are even in touch with, the neighborhoods."[53] Many of the neighborhood organizations stopped organizing tenants just when the rent strike strategy of spending rents on services and repairs, and thus seizing de facto control of buildings, was being widely accepted and could have become a way of building considerable strength at the grass roots and forcing input to policy. Other organizations, whose formation was stimulated by the availability of external funding, never learned to organize tenants at all. The warning of Met Council concerning the danger of cooptation present in accepting external funding had been shown to contain considerable truth.

Some organizations managed to retain their combativeness after receiving external funding. This was possible when they retained flexibility because they continued to raise a substantial proportion of their income internally and their external funding was spread over multiple sources, with much of it coming from churches and other local institutions. Nevertheless, any degree of dependence could create a dilemma: for example, a group of neighborhood organizations working together in the Northwest Bronx Community and Clergy Coalition, which had earlier received financial support from local banks, found later that if they wished to protest against investment redlining in their neighborhoods, they would need to pressure these funders.[54] That they nevertheless chose to press ahead is a result, in part, of the protection afforded by their multiple sources of funding. Needless to say, the income from these banks dried up.

Some of these neighborhood organizations (notably members of NWBCCC) so succeeded in overcoming the problem of combining paid staff with volunteers that they achieved the highest participation levels of all. Participation was encouraged in several ways. Since their primary internal source of income was fund-raising (through dances, concerts, brunches, festivals, raffles, basketball games, and so forth), tenants whom they had helped were able to show their gratitude by selling (and buying) tickets. Not only did this approach create slots for those who otherwise would not have been active, but both the ticket selling and the events themselves strengthened social networks. Second, these organizations typically attempted to form block associations where they already had one or two well-organized buildings. These created opportunities for building activists to become involved outside their own building organizations but close to home, where they were concerned about the fate of the buildings and network ties could ease access. Block associations also created an intermediate but unfunded locus of activity, where tenants were less likely to feel the urge to leave the work to salaried organizers. Third, because these organizations typically addressed multiple issues, constituents were more likely to find a continuing relevance there once their initial issue was settled. Participation was therefore less ephemeral.

The City's In Rem Crisis

In 1978 a major new ingredient was added to the abandonment/rehabilitation/tenant ownership landscape. A new city law, Local Law 45 of 1977, allowing properties to be taken in rem -- that is, foreclosed for tax arrears -- once their owners were one year behind in payments rather than three years as previously, took effect. By this change the city council had hoped to accomplish two things: (1) to encourage owners to pay what was owed rather than lose their properties; and (2) to reduce the decay of those buildings taken by the city. However, the law's result was that the flow of buildings eligible for vesting by the city increased substantially, so it suddenly found itself the largest owner of deteriorated housing, a situation it was totally unprepared to manage. Between 1978 and 1981, vestings brought more than 16,500 residential properties to city ownership, and in 1981, demolitions and sales notwithstanding, more than 8,000 in rem buildings containing almost 112,000 units remained in city hands. Of these, 34,000 units were occupied. Eighteen percent of the occupied units were in buildings categorized as dilapidated, a rate four times that in the city as a whole. Their tenants were overwhelmingly drawn from racial minorities (only 19 percent white) and the poor (with a median income of $6,865, only 62 percent of that of all renters).[55]

In developing its response to the in rem crisis, the city administration had to take three factors into account: (1) housing activists were insisting that it was essential that much of this housing stock be preserved as a housing resource for low- and moderate-income people;[56] (2) it would not be possible to sell most of the property to private landlords without special incentives; and (3) the city did not want to own and manage the property permanently. Consequently, the city experimented with the concept of selling buildings to their tenants and installed Philip St. Georges, formerly head of UHAB, the chief source of technical assistance to sweat equity buildings, as head of a new Division of Alternative Management Programs (DAMP) within the city housing agency, which was itself symbolically renamed the Department of Housing Preservation and Development (HPD).

The main DAMP programs utilized two familiar tenant strategies. The first was the Community Management Program (CMP), whose goal was the sale of the properties after moderate rehabilitation to either the tenants as a co-op or the managing neighborhood organization, which could then continue to manage them. Since moderate rehabilitation of the buildings would continue under the supervision of the managers and at city expense (using federal Community Development funds), purchasers would escape the burden of debt service added to their rent.[57] The second program, the Tenant Interim Lease Program (TIL), was a variation on those early low-income coops where the tenants had taken the initiative without the help of a sponsoring neighborhood organization. In this case, organized tenants could gain experience through managing their building, while rehabilitation that was much more limited than under the CMP was carried out under city auspices; ultimately tenants could purchase the building and form a low-income co-opt The purchase price under both programs, as voted by the city Board of Estimate, was to be $250 per unit. Other alternative programs had the Housing Authority, private management companies, or previous 7-A administrators managing and potentially buying buildings. By the end of 1979, one-third of the occupied in rem units were enrolled in a DAMP program, and almost two-thirds of these were in TIL or CMP.[58] The city had unexpectedly donned the mantle of chief sponsor of low-income co-ops.

The TIL program grew by far the most rapidly. In part this was because, with its limited rehabilitation component, it cost the city least. In part it was because TIL was the natural route taken by tenants who were already in de facto control of their buildings as a result of spending their collectively held rent monies.

The commitment of the city administration to maintaining in rem buildings as a low-income housing resource began to waver as early as the second half of 1979. Mayor Edward Koch regarded the program as too costly: the total bill to the city between 1978 and 1981 was $342 million, while it raised less than $100 million in rents -- rent collection during the first three years averaged less than 50 percent. The administration began to focus instead on selling buildings and minimizing interim management costs while maximizing the ultimate sales price. A moratorium on auctions, which had been imposed as a result of pressure from tenant activists, was lifted, and sales resumed in November 1979 with a fanfare of media publicity that attracted the lower middle class and boosted prices. Concurrently, there were reports that the city was delaying approval of sales of property to tenants at $250 per unit in Manhattan neighborhoods where the market was reviving: Mayor Koch told a heated town meeting in Clinton, the site of the proposed convention center, that he would not let tenants buy in rem units at $250 and then stand to make a profit by selling them.[59]

Tenants in DAMP buildings had already responded to rehabilitation efforts and their opportunities for input to management with rent collection rates exceeding 85 percent. Nevertheless, the administration pressured both TIL and CMP for sales because it feared that since two years had elapsed without them, the tenants were preferring to remain under city ownership as a hedge against unexpected costs and problems. Eventually, in mid-1980, the first five TIL buildings were sold to their tenants. The CMP, however, did not sell its first building until 1982. Consequently, four of the nineteen CMP contracts were cut out in 1980. Meanwhile, the city was delaying vesting so that it could slow the influx of in rem buildings, and thus left the tenants in many newly abandoned buildings to fend for themselves.[60]

Many of the TIL buildings had organized without the help of a neighborhood organization, and the structure of the TIL program reinforced their isolation. Nevertheless, their common problems -- such as the impact of the seemingly inevitable rent increases on poor tenants, the need for more rehabilitation, protection from major problems that might emerge once the tenants had taken control, and a guarantee of the disputed $250 purchase price -- created networks that eventually resulted in the formation of the TIL Coalition. Its meeting with HPD commissioners early in 1980 elicited a promise of section 8 funds as a buffer against rent increases, but nothing firm on their other demands.[61]

By early 1984 a total of 115 TIL buildings had been bought by their tenants, while tenants were managing another 92 in the pipeline. TIL was regarded by the city as the most successful of the DAMP programs. However, the modest level of city-funded rehabilitation in these buildings meant that many tenant co-ops would have to borrow after purchase to complete the work.

The Reagan Presidency: Reevaluation, Convergence, and Divergence

The election of Ronald Reagan at the end of 1980 resulted in cuts in the budgets of the neighborhood organizations engaged in rehabilitation and in the elimination of programs they had come to rely on. Thus, the CETA programs were discontinued, section 8 was phased out, and Community Development funds were no longer restricted for use by the poor. In 1983 a HUD-sponsored study of the impact of budget cuts on eighty neighborhood groups, half of which were in New York State, found that the greatest impact was caused by the elimination of CETA funds, which had removed the bulk of the staff of the organizations. Other cuts had been felt first in "soft" services, since the construction pipeline was slower to come to a halt.[62]

Organizations faced major strategy revisions as a result of the cuts. Bonnie grower, executive director of ANHD, announced at a retreat that the loss of ANHD's CETA contract had removed about half of its staff of thirty together with a good deal of what had become its direction. There was talk of lean times, self-reliance, and survival, and Brower announced a new emphasis on policy advocacy for neighborhood development. Robert Schur in his last article before his sudden death in March 1982, argued that the rehabilitation segment had responded to the availability of external funds by moving from confrontation to cooptation, only to find that the government then canceled its part of the bargain. Rehabilitation neighborhood organizations were left with the choice of competing with one another for a piece of the shrinking pie or getting "back to basics" by becoming confrontational in order to force authorities to respond to them. Schur urged them to organize communities as they had once done but had now forgotten how to and, because to be alone was to be weak, to build networks by reactivating and radicalizing their federations. Steve Katz, one of People's Development Corporation's early activists, agreed: they had expected rents would be decontrolled within a few years, while a measure passed by the city council the previous year introduced annual rent increases for apartments while they remained rent controlled.[63] Also, the threat of tenant displacement took on new forms. In the neighborhoods of the poor the culprit was the many faces of abandonment: fires, absent services, unsafe buildings, the stripping of pipes and appliances from vacant apartments. For tenants of stable working-class and lower-middle-class neighborhoods, the threats were gentrification, manifested in evictions to make way for luxury redevelopment and "brownstoning," and hospital expansion. And for tenants of desirable buildings, the threats took the form of two landlord strategies: cooperative conversions with the eviction of non-purchasing tenants, and "encouraging" tenants with rent-regulated apartments to move so that rents could be decontrolled to regulate how such amounts could be used. The gap between the needs of the older, larger, sophisticated members of ANHD and the younger, smaller organizations undermined grower's attempts to build cooperating networks.[64]

The Reagan cuts gave further impetus to the determination of the city administration to rationalize programs dealing with the in rem crisis. Once again lack of unity hampered the tenant response. For example, the CMP, which had already undergone shrinkage from nineteen to fifteen contracts in 1980, was said to be facing much greater cuts again in 1981. However, in spite of the existence of a Community Management Coalition sponsored by ANHD, members acted to protect their own interests at the expense of others, rather than attempting to protect them all by utilizing their combined clout.

However, in 1982 the pressing need to resolve the dispute over the purchase price of units in TIL and CMP buildings demonstrated that bridges could be built. At issue was the refusal of the city to sell twelve TIL buildings in Clinton to their tenants for $250 per unit, as promised and originally voted. The tenants in many TIL buildings, recognizing that the decision reached concerning the Clinton properties would affect them all, organized into a cohesive, articulate force, which orchestrated a campaign that won coverage in the major media and then presented a focused, disciplined, powerful display of anger at meetings of the Board of Estimate. The board finally voted that the $250 sales price would be retained, but that on resale of apartments appraised at more than $2,000 the city would "recapture" 40 percent of the owner's profit. This compromise decision, which revealed a concern for the recapture of profits that the city usually did not have when it made subsidies to developers or corporations, failed to protect the buildings in sought-after neighborhoods from gentrification while also refusing the opportunity to help stabilize them as housing for the poor by channeling profits back into the co-ops.[65]

At the beginning of 1982, tenants belonging to the Union of City Tenants, an organization representing tenants in in rem buildings, challenged the right of the city to increase their rents without first improving services and claimed that their rights to due process and to equal protection were being denied. The Koch administration had, in 1979, obtained the passage of a bill through the city council giving HPD the right to raise rents in city-owned buildings, thus eliminating the protection of rent regulations for in rem tenants. Rent increases were seen as essential to returning buildings to profitability and thus to securing their sale back to the private sector. Increases were not in fact implemented until late in 1981, and it was these that were the subject of Laureano v. Koch. Behind this challenge lay the fact that the median gross rent: income ratio for in rem tenants already stood at 36 percent as compared with 28 percent for all renters in the city: to tenant leaders these were the last buildings where rent increases should have been imposed in order to make them profitable. In November 1982 Judge Sheldon Levy, in the state supreme court, ruled in favor of the tenants and ordered HPD to promulgate rules, regulations, and procedures governing rent increases before reinstating any rent hikes. In June 1983 this ruling was upheld by the state appellate division.[66]

Buildings organized by Met Council had initially refused to enter the TIL program. However, the Laureano decision temporarily removed one of Met Council's objections to the program -- that it would clear the way for rent restructuring. Met Council had also become aware that in rem buildings in DAMP programs were obtaining better repairs and that other in rem buildings were now more likely to be auctioned to the highest bidder, which left tenants without opportunity for input and at the mercy of small speculators and hustlers who were prepared to buy buildings in decaying neighborhoods. Pragmatically, Met Council decided to reverse its position and support tenants who chose to enter the TIL program and ultimately buy their buildings.[67]

Meanwhile, the sweat equity program had remained separate from DAMP, but by 1980 its promise had faded considerably. The HUD demonstration project had faltered: of the twelve buildings planned for phase I, only seven went into production, and it seemed likely that four of these would not be completed. Difficulties integrating CETA with sweat equity and the internal problems of both PDC and Adopt-a-Building were seen as chiefly to blame. Moreover, the strategy was also having economic problems because costs had risen to such an extent that the income groups originally involved could no longer afford the projected rents. The resulting pessimism led HPD to make only two sweat equity loans in two years at the end of the 1970s and to effectively kill sweat equity in 1980 when the cost per unit passed $30,000. A total of only fifty buildings with 583 units had been completed or were in process using sweat equity.[68]

In 1981 a group of tenants that had been frustrated when Commissioner Anthony Gleidman killed sweat equity proposed that the city make a grant to cover the cost of highly skilled work in a row of buildings on Amsterdam Avenue; they would then do the rest. The buildings would be affordable because they would not carry a mortgage. The city eventually signed, and its cost turned out to be $5,000 per unit. The new program was dubbed "urban homesteading," and other buildings followed the first into the program. HPD has since issued two "requests for proposals," the second with so much hoopla and so little critical information that the crowd that appeared at the advertised time to collect application forms took on the dimensions of a riot. Moreover, since the total available for grants was only $1 million, it was announced that preference would be given to those needing the lowest grants. Ultimately, 519 applications were received for a maximum of perhaps a dozen or so grants. Those that called on UHAB, the traditional source of technical assistance for sweat equity projects, found they were refused: "We can't in good conscience give assistance," said Cheryl Edmonds, veteran of the first sweat equity project to be completed and guide to every form the strategy adopted since then, "This just isn't a low income program, we are already overloaded, and this is doomed to fail."[69]

The Reagan years brought reevaluation and greater agreement on the importance of tenant organizing, confrontation strategies, and the worth of the DAMP programs. However, the budget cuts also brought increased competition among tenant organizations for the funds available and greater efforts by the city to conserve its resources. The result was that within the rehabilitation segment of the tenant movement there were several instances of individualistic behavior by neighborhood organizations -- a divergence that clashed with the calls for unity. Withdrawal from dependency on external funds was proving difficult. The problem of how best to mobilize resources for organizations representing the poor in their struggle with housing decay and abandonment remained unsolved.

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