Académique Documents
Professionnel Documents
Culture Documents
by Tom Robbins
Just south of Delancey Street on the Lower East Side,
where traffic headed onto and off the Williamsburg
Bridge whizzes past swarms of shoppers seeking out the
area's famed bargains, lie several vacant acres of cityowned real estate. Except for a handful of buildings that
have escaped the wrecker's ball, and two fiercely contested housing developments, most of the 14 square
blocks have remained largely unused since the late 1960s
when they were designated an urban renewal area. Since
that time the use of those acres has been fought over
almost as much as certain areas of the Middle East, and
nearly as many failed peace initiatives lie buried in the
rubble of its demolished buildings.
The latest, and perhaps the final, city attempt to
balance the competing demands of the area's Jewish
and Hispanic populations, received only partial approval by the Board of Estimate on April 24. The Jewish
community, based mainly in 4,500 cooperative apartments south of the renewal area, has sought commercial
buildings or middle income housing on the sites. The
large, housing-needy Hispanic population to the north
and west, has long urged the construction of lower
income housing units.
CITY LIMITS/May 1980
city has managed on other urban renewal sites to provide for standing buildings and they should do it here as
well."
According to Marino, demolition of the buildings will
take place, but not for some time. At the moment no
evictions will be ordered. While the Stein amendment
provided for rehabilitation of the buildings for low income families, there are no plans in the works to do
that.
On site 2B, where the low income family initiative was
defeated, things appear to be in limbo. A firehouse on
the site that has served as a youth center for several
years may face ultimate demolition as well. The plan advanced by the Grand Street Settlement, which was the
sponsor of the housing, called for the firehouse to be
preserved.
What will ultimately be built there remains to be seen,
and may call for a new round of negotiations. But having demonstrated they have the political clout to stymie
low income housing, the United Jewish Council is not
expected to concede much. Balin of the UJC said his
organization would be in support of elderly housing on
that site as well. But Marino, noting that an additional
site has been slated for elderly housing to be sponsored
by the UJC and the Bialystoker Synagogue, said "I
don't think it makes sense to make that area the gerontology center of the U.S."
According to Ken Kimmerling, attorney for the Joint
Planning Council, the group is looking into the
possibility of litigation, challenging the Board's vote.
"We originally fought to keep the city from taking
any of the buildings around here," said Nestor Cortijo,
"then we fought their original plan to build nothing but
middle and upper income housing. Now we're still
fighting to get the housing our people need." 0
borhood leaders are asking what good it is to win impressive agreements on reinvestment from banks when
the interest rate is 15 or 16 per cent, rates that even more
affluent people have trouble affording.
They have linked the high interest rates to policies
enacted by the Fed as part of the Carter
Administration's attempt to reduce inflation.
The neighborhood participants at the meeting came
armed with two specific proposals.
The Fed should require lower reserves from banks
that are willing to lend to low and moderate income persons at 8 per cent instead of 15 per cent.
For banks that agree to lend to low and moderate
income borrowers, the Fed should lower the interest rate
it charges from 13 per cent to 6 or 7 per cent.
These demands were the first real attempt to crack
open the so-far impenetrable wall that seems to protect
the traditional ways housing is financed in this country.
Instead of subsidizing interest rates for large developers
the way programs such as 236 and 221(d)(3) were designed, these lower rates would be offered to low and
moderate income homeowners tenant cooperatives and
responsible landlords by banks with the aid of the
Federal Reserve.
In keeping with his tough-guy image as the sole
protector of the U.S. economy, Volcker refused to
agree to any of the group's demands, saying they represented activities the Fed has "traditionally not
engaged in." It was brought to his attention that 16 per
cent interest rates on mortgages were something most
people had never dealt with either.
Volcker's aides said a program of requiring lower
reserves in exchange for lower interest rates on mortgages would be illegal. This point has been disputed by
other economists with whom neighborhood leaders and
researchers have consulted. As for the idea of lowering
the rate of interest for loans to banks so they could pass
these on to consumers, one aide to Volcker remarked
that this was clearly possible legally. Then why wouldn't
Volcker do it? "It's a political decision," the aide said.
"Volcker was clearly not prepared to agree to anything
at this meeting. He did not want to understand that we
were there to pressure him to get after the financial institutions," said Richie Gallagher of the Northwest
Bronx Community and Clergy Coalition, who attended
the meeting. "He kept saying that if we were looking for
subsidies that we should go knock on HUD's door. "
Neighborhood leaders are now putting together
strategies for dealing with the Fed at the local level as
well as trying to push for Congressional hearings into
the crisis of housing financing in low and moderate income neighborhoods. New York City's Coalition
Against Redlining is considering various says to
organize around this issue locally. Any reader who is interested in learning more should contact Roger Hayes,
CAR, 198 Broadway, Room 1100, N.Y. 10038. (212)
964-7200.0 Roger Hayes
VOLCKER SPURNS 8%
INTEREST RATE IDEA
Eight community leaders representing hundreds of
local organizations throughout the country met with
Paul Volcker, chairman of the Federal Reserve Bank, on
May 6 to present him with ideas for reducing interest
rates in low and moderate income neighborhoods. The
lower rates would apply to mortgages, home improvement and rehabilitation loans for small homes and
multiple dwellings.
The meeting took place as the result of a demonstration at Volcker's officer on April 14 by about 700
delegates to the 9th Annual National Peoples Action
Conference.
Neighborhood groups from around the country have
felt over the past year that victories won through the
Community Reinvestment Act (CRA) were often being
nullified because of soaring interest rates. Redlining by
price has begun to replace redlining by location. NeighCITY LIMITS/May 1980
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