Mitchell-Lama Buyouts - Washington Post

[consigliere]

The article below, by Michael Powell, appeared in the September 28, 2003 online edition of the The Washington Post:  
 
N.Y. Tenants Feel Squeezed in the Middle
 
Near Ground Zero, Housing Complex Seems Twice Cursed
 
The 3,000 tenants of Independence Plaza feel twice cursed. On Sept. 11, 2001, many stood on their terraces and watched as the World Trade Center collapsed four blocks away. Clouds of toxic ash swept over them, their residential towers swayed like reeds, and many left on the run.
 
The tenants returned and nourished their neighborhood back to health. Their bravery became a staple of news accounts.
 
Now they face the prospect of a more permanent dislocation. Independence Plaza's new landlord has filed papers to remove its 1,329 apartments from a state subsidy program for middle-income tenants, a move that could hike rents to the gold-plated levels commanded throughout the rest of Tribeca, a former warehouse district now thick with stockbrokers and movie stars.
 
"You tell me, where do we go?" said Diane Lapson, who moved to Independence Plaza in 1975 and rallied the neighborhood in the months after Sept. 11. "No one can afford to live around here. Where do the secretaries and firemen and construction workers live in this city?"
 
It's a lament heard from tenants throughout New York City. Thirty-nine landlords have already withdrawn their housing projects from the middle-income rental subsidy program known as Mitchell-Lama, named after its long-forgotten legislative sponsors. Such conversions, which are legal once a building has been in the program 20 years, would remove rent caps from 200,000 units of middle-income housing even as the city suffers a crisis in affordable housing.
 
Neither terrorist attacks nor a stock market crash nor the loss of 240,000 jobs has cooled this city's superheated housing market. Twenty percent of New Yorkers live in poverty, and another 13 percent teeter on its edge. Yet housing costs have jumped 78 percent in the past five years.
 
Nowhere is the market hotter than in Tribeca, the pie-shaped neighborhood encompassing Independence Plaza and Ground Zero. Lofts here sell in multiples of millions of dollars, and market-rate studio apartments rent at $2,000 per month.
 
The only middle-class residents in this corner of downtown bought their apartments a decade ago -- or they live in Independence Plaza, home to 20 percent of Tribeca's population. Fifty-two percent of the tenants at Independence Plaza earn less than $75,000 a year; 6.5 percent earn more than $150,000. Higher-income tenants pay a rental surcharge, although their rents are not nearly at market levels.
 
"Preserving the middle class in this city is a critical imperative," said City Council Speaker Gifford Miller, who has proposed a bill that would slow the pace of such conversions. "Manhattan is getting progressively more hollowed out in the middle-income range, and now we face the loss of 25,000 units of Mitchell-Lama."
 
Independence Plaza's new landlord, Laurence Gluck, has suggested that such fears are overblown, at least at his development. He says as many as two-thirds of the tenants might be eligible for federal Section 8 vouchers, which would underwrite their rents. In an interview with the local Tribeca Trib he promised to take a "modest, moderate and humane approach" as he hikes rents to market rates. "I'm going to make it my business to assuage them," he said. "It's not my business plan to evict people. Period."
 
But, as Miller suggests, there's more at stake than the passing of a rental subsidy program. As money pushes into every pore of Manhattan, the roiling mix of class and race that once defined the borough seems a receding memory.
 
"Even a lot of wealthy people move to this city because they like the vibe, that street mix," said Joseph Weisbord of Housing First, a group pushing for the construction of more affordable housing in New York.
 
"To the extent that we still value diversity, we are losing something ineffable."
 
To understand the peculiar and intense emotions swirling among the tenants in Independence Plaza's three towers, one must cast back to when so many arrived in the mid-1970s. No real estate broker had yet coined the term Tribeca. This was Washington Market, and it was a residential frontier.
 
City and state officials conceived Independence Plaza as a residential twin for the World Trade Center towers. They hoped to draw commerce and tenants to a corner of the city grown moribund in the 1960s. To that end, the city and state -- as was true of all Mitchell-Lama projects -- put up 95 percent of the financing for Independence Plaza, and guaranteed the landlord a return of 6 percent.
 
Tenants, drawn by discounted rents based on their income, found only broken cobblestone streets, small factories and printing shops, and the Martinson Coffee factory, which suffused the neighborhood with the scent of its strong brew. There was no supermarket and no drugstore.
 
"I had been living in an apartment in Greenwich Village where the roaches were riding bareback on the mice, so I was desperate to get into Independence Plaza," said Lapson, 53. "But we were true pioneers -- you had to ride the subway or your bike just to shop for basics. The first winter it snowed, and no one even bothered to plow."
 
Vicki Green, blond and wearing shades, pauses on the sidewalk beneath her tower on Greenwich Street and recalls how her mother threw a fit when she moved here in the 1970s.
 
"She yelled at me: 'How can you take your children to this place?' Then we built a park; we started the first school" -- the now nationally regarded P.S. 234 -- "with six children," Green recalled. "Now we have the American dream -- a mixed-income, mixed-race community. And they want to kick us out because we're not wealthy enough to conform to a rich man's view of Tribeca."
 
Tenants and landlords here tend to be congenitally conspiratorial when talking of one another. And a master plan to render the project white and wealthy may be a bit of an exaggeration. But the tenants at Independence Plaza are aging. And the view from the upper floors of their 30-story towers, with vistas of the Hudson River and lower Manhattan's jagged spires, is breathtaking.
 
So there is little doubt that, with the passage of time, Independence Plaza will become a luxury development. When that happens, said Harold Donoghue, something will be lost. A former tenant president, Donoghue is a small, wiry man who moved here from a $50-a-month flat in the East Village in 1975, with his books of Strindberg and Shakespeare, Tolstoy and Henry Miller. An itinerant college instructor, he lives with his cat, Lester.
 
"The dynamics are obvious," Donoghue says with a shrug. "We will gradually die out, and slowly the building will become market-rate."
 
He looks out his window at the Hudson River. "I'm a realist -- it's a Darwinian world. But the question is, in the future, where does a working stiff live in this city of ours?"