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EDITORIAL

UNDER THE INFLUENCE

THERE'S NOT A LOT that can persuade more than 4,000 people to forego the diversions and oblig- ations of a summer Saturday. But there they were at the Javits Center on July 20, willingly knee-deep in the geeky minutiae of urban plan- ning. attending the Civic Alliance's "Listening to the City" event in order to weigh in on the future of the World Trade Center site. That members of the public had a desire to respond to the Port Authority and the Lower Manhattan Development Corporation's redevel- opment concepts was not surprising. Each of the six proposals presented cold variations on the theme of revenue for the Port Authority, and to differing degrees each was an appalling affront on the ideals of commemoration and civic unity that emerged with such phenomenal clarity in public discourse following September 11. While there were many opinions voiced that day, such disappointment was a consistent theme. But the participants' presence there said something else just as loudly. About one-third of the people punching numbers into remote con- trols reported that they were confident their input would make a difference-this, over two semi-private authorities that have no direct pub-

lic accountability. Even more, 45 percent, were at least hopeful of having some impact. Think about the last time you felt that way. Professional advocates are a privileged bunch; most of us have no power to alter the physical and social form of the world around us. Whether to circumnavigate the bulk of grossly overbuilt office towers, involuntarily leave our kids with strangers all day, or get used to 97-degree heat, we are always the ones who have to adjust. The Javits Center crowd was a self-selected bunch of engaged citizens, prone to optimism about their power to make a difference. But they were hardly suffering from delusions. Less than a week after they carne together, Governor Pata- ki, who has as much influence as anyone over the Port Authority and LMDC, announced that he was recommending that a substantial portion of the 11 million square feet of office space the Port Authority seeks to rebuild should be con- structed elsewhere in lower Manhattan. Sure, Pataki may change his tune once November passes. But when he does, New Yorkers will be able to point back to their high-tech referendum and say: This is what we think. Democracy doesn't come cheap. It cost the Civic Alliance $2 mil1ion to pull together this pro- ject, a lot of that spent on aggressive promotion

and outreach to make sure people showed up. But it's worth the money. The power of these efforts lies in their very difference from the usual methods by which community activists seek to secure political influence. Litigation can be enormously powerful, but as the Campaign for Fiscal Equity learned with its school financing suit, it can crumble on the desk of the wrong judge. Community organizing and demonstra- tions only work where consensus is already strong, and they rely on labor-intensive work that may never take on a life of its own. And the amount of organizational staff time that has gone into trying to get coverage in the New York Times could probably run a small country. "Listening to the City" was a one-of-a-kind event, galvanized by a calamity and the popular impulse to heal a wound in the city. But what it showed is that with enough financing and coop- eration, it is possible to 'open a precious channel of civic political influence on those issues that certain segments of the public care deeply about.

that certain segments of the public care deeply about. -Alyssa Katz Editor Cover photo by Aaron

-Alyssa Katz

Editor

Cover photo by Aaron Lee Fineman; Fly and Mac McGill, artists and squatters on the Lower East Side.

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CONTENTS

~ I~~~TUR S

CONTENTS ~ I~~~TUR S ELECTION 2002: 18 THE DEMS WHO WOULD RUN NEW YORK Andrew Cuomo

ELECTION 2002:

18 THE DEMS WHO

WOULD RUN NEW YORK

Andrew Cuomo and Carl McCall want our votes. We wanted to know more. What their campaigns aren't telling you about their public service priorities.

21 POLITICAL CONSCIOUSNESS

Liz Krueger has battled bureaucrats, empowered the poor and prevailed in a tough campaign. But can she turn the most thankless elected job in New York into a force for change? By Alyssa Katz

24 SOLD OUT

Officials said street vendors had to leave New York's shopping districts because they were bad for business. Now the sidewalks are clear-not just of vendors, but customers too. By Hilary Russ

29

SQUATTERS' RITES

The activists, laborers and artists who've made abandoned buildings into viable homes were the scourge of City Hall. Now Loisada's last outlaws have become government-sponsored homeowners. By Robert Neuwirth

become government-sponsored homeowners. By Robert Neuwirth 5 FRONTLI NES: MODEL GARDENS DEFENDING THE OUTSPOKEN NY:

5 FRONTLI NES: MODEL GARDENS

DEFENDING THE OUTSPOKEN

NY: MEET THE DAKOTAS

YOU

CAN'T WAIT

DIGITAl

COOP CONVERSION

BUMPER

BUSES

PARENTAL ADVISORY SEEKER

A

GUYANIAN LAMENT

DIVERSIFY,

DAMMIT

INSIDE TRACK

11 PREGNANT PAUSE

The Board of Ed is backing off its 36-year-old pledge to provide special schools for teenage moms, but placing them back in regular schools delivers its own problems. By Charu Gupta

INTElliGENCE

36 THE BIG IDEA

Need city budget revenue? Tax Wall Street. Nearly every other major financial city does. By J.W. Mason

38 CITY LIT

Money Has No Smell: The Africanization of New York City, by Paul

Stoller. Reviewed by Hakim Hasan

SEPTEMBER/OCTOBER 2002

40 MAKING CHANGE

Take donated computers. Add free software. Stir gently with staff training, time-consuming customization and inevitable glitches. By Steven Gnagni

42 NYC INC.

New York's collection of livable neighborhoods should attract businesses looking for places that make their workers happy, but you wouldn't know that if you listened to city officials. By David Hochman

2

EDITORIAL

47

JOB ADS

50 PROFESSIONAL DIRECTORY

58 OFFICE OF THE CITY VISIONARY

3

LETTERS

DON'T TREAD ON My ROAD

Thank you for your feature about the work of some extraordinary individuals who are engaged-as I am-in the struggle for justice and opportunity for immigrant New Yorkers

["Truth, Justice and the American Way," May 2002]. I am writing to respond to inaccurate comments that Isabel Gonzalez, an activist pro-

abou t Make the Road by Walking,

where I am a member of the staff collective. Make the Road is a democratic, membership- based organization that builds power for low- income, black and Latino New Yorkers through grassroots community organizing. Members elect Make the Road's board of directors from their own ranks. They decide what issues we organize around and how we move our cam- paigns forward. The role of staff-both organiz- ers and attorneys-is to develop new leaders and to support member-led organizing campaigns. While we occasionally use litigation ro advance our organizing, our primary strategy is direct action organizing-it works since we have over 600 energetic Make the Road leaders and members. Make the Road by Walking has forced the city welfare bureaucracy to end decades of discrimination, we have won hun- dreds of thousands of dollars in back wages, and we have cleaned up hazardous vacant lots, repaved streets and brought new parks and hundreds of new trees to our community. And we're just getting started.

filed, made

Amir Tafari

MEMBER ENTHUSIAST

I am writing in response to comments made

by Isabel Gonzalez in your recent collection of immigrant activist profiles. I am 19 years old and a member of Make the Road's Youth Power Project. Our project, along with others at Make the Road, all work in the same way: Adult and youth members and staff together fight against injustice. I was elected by the other youth members of Make the Road to represent them on our board of directors. As a member of the board, I help to make important decisions about how our organization is run . I am not

intimidated by the staff members Isabel refers to as "white men with law degrees. "

I am sometimes intimidated to raise my

voice in front of our government, which rarely

listens to my community's concerns. Staff

members of Make the Road, including some white men with law degrees, have worked long hours to help me and others not feel intimidat- ed about demanding justice. Members at Make the Road make decisions about our organizing campaigns. Members facilitate meetings. Members help to write press releases, and members speak to the press. Members and staff raise their fists rogether at the marches and pro tests that we organize. The road doesn't build itself and it is not built by one person alone. It is made by many people for all of us to walk along. The Road is Mad e by Walking-together. Luis Reyes

No LIMITS

The article about the struggle to improve the public schools ["Social Promotion," June 2002] was very informative. Unfortunately, it also includes a common error. In New York State law, there is no class size limit for any grade. Instead, there is a voluntary state pro- gram that provides limited funds to help schoo ls reduce class size to 20 in grades K-3. But even for this ptogram, the funds have been frozen at $140 million for the last two years, because of Governor Pataki and the state Senate. Even if the program was expanded to $225 mil- lion-the amount originally agreed on-this still would be insufficient to reduce the class sizes in all New York City schools in the early grades. However, in the rest of the state, almost all other school districts have reached this goal. Moreover, as the story points out, in New York City there needs to be more funds for new classroom space. There was a federal program, started under President Clinton, that brought millions more to New York City to reduce class size in overcrowded schools by hiring extra teachers to provide small group instruction. But the Bush administration eliminated this program, with very little attention paid by the local or national media.

Leonie Haimson Chairperson Class Size Matters

CORRECTION

We neglected to credit Sune Woods for her photography, which accompanied "Dubious Benefits" Uuly/August 2002] .

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CITY LIMITS

FRONT LINES

FRONT LINES Jake Price How Will Our Gardens Grow? A DELEGATION FROM PARIS' parks department recently

Jake Price

How Will Our Gardens Grow?

A DELEGATION FROM PARIS' parks department recently visited the Big Apple to study how New York does community gardens. "Right now there are very few collective gardens in Paris," says Antoine Cassard of Paris-Nature, which coordinates environmental educational programming in the city. "We want to find a way for people to be more active and engaged in the parks." Cassard was one of about 500 greening professionals and enthusiasts who came to New York from across the U.S., Canada and Europe for the 23rd annual American Community Gardening Association conference in late July. With community gardens a new concept in Paris, Cassard says, "New York is a model we'd like to follow." At the moment, though, local gardeners are not sure exactly what kind of model New York represents. As City Limits went to press, State Attor- ney General Eliot Spitzer and Mayor Michael Bloomberg were reported- ly close to reaching a deal on the fate of nearly half of the city's 650 com- munity gardens. The legal barcle dates back to 1999, when Spitzer sued to block the Giu- liani administration from auctioning gardens as "vacant lots. " The following February, a judge issued a restraining order that has prevented the city from developing any of the roughly 300 gardens currently under the jurisdiction of its Department of Housing Preservation and Development. HPD says it has plans to develop more than 2,900 units of affordable

SEPTEMBER/OCTOBER 2002

housing on 131 of those 300 garden sites, and that the gardeners are jeop- ardizing $48 million in state and federal funds. Spitzer, however, argues that the gardens-many of which are more than 20 years old-should be considered park land, and that the city should review the environmental impacts of replacing them with housing. While neither the Attorney General's office nor HPD would comment on the progress of the talks, insiders say HPD is now insisting on develop- ing just the gardens that have been okayed for housing by the City Coun- cil. The city would then put the rest of the 131 disputed gardens through land use hearings that would give gardeners the chance to defend them. Spitzer is also reportedly demanding that the city relocate gardeners who

are displaced from their land. Meanwhile, some gardeners are pushing for legislation that would allow gardens to apply for petmanent status. Councilmember Joseph Addabbo, a bill sponsor, says he will not schedule hearings until Bloomberg and Spitzer sercle. Watching a throng of protesters in bug costumes outside City Hall, Cassard found the complexities of New York's open space wars baffling. His

gardens, and gardeners there

neighbors to the east, in

have so much clout that if the city decides it wants to build on their land, it has to compensate them with funds and an equal portion of space else- where. Says Cassard, "I find it ironic that 1 work for the city in Paris, and here 1 attended a demonstration against City Hall." -Sarah Ferguson

Berlin, have 80 ,000

5

FRONT LINES

The Whistleblower's Dilemma

FRONT LINES The Whistleblower's Dilemma City claims wider protections put workers at risk. By Carolyn Szczepanski

City claims wider protections put workers at risk.

By Carolyn Szczepanski

WHEN CHRIS ROBERTS got a face full of herbi- cide while on the job as an assistant gardener in a West Harlem playground, his managers at the New York City Parks Department laughed. When he dropped our of the herbicide applica- tor training program because of animal safety concerns, his coworkers chuckled. But when Roberts began reporting haz- ardous chemical storage and unsafe spraying procedures to his supervisors and to the city's Department of Environmental Protection, his bosses seem to have lost their sense of humor. And Chris Roberts lost his job. "It was really blatant," he says of his termi- nation, which he claims came withour an expla- nation and happened only days before he would have been eligible for increased workers rights. "It sent a message that if you're speaking out, it's going to catch up and they'll get rid of you." Parks Department officials say they fired Roberts because of his poor job performance

6

and erratic attendance. They did not, however, provide specific examples. Roberts says he never received a job performance evaluation, nor was he ever placed in the department's pro- gram for employees with high absentee rates. Roberts is now preparing to fue a lawsuit against the city, claiming that his supervisors vio- lated the state's civil service law, which protects government workers who report violations that endanger public health to another agency. He hopes his tactic will get him his job back, because it's his only chance: Neither the state nor city whistleblower laws offer him any protection. Some members of the City Council are now trying to change that. Helen Sears of Queens has drafted a bill to add protections to the city's whistleblower law. The Council Committee on Standards and Ethics, which she chairs, plans to hold a public hearing on the proposed amend- ment in September. "Whistleblowers need to feel a strong sense of protection when they

come forward to expose

Sears and her bill's supporters-there are seven signed on so far-hope to encourage more wimesses to wrongdoing to come forward. The current city whistleblower law, written in 1984, offers some protections for employees of mayoral agencies who report on-the-job incidents of cor- ruption, criminal activity and conflict of interest. Those complaints must be fued with the city's Department of Investigation, Public Advocate, comptroller or City Council members. Roberts had no such job protection, because he had made

corruption ," she says.

his report on a job safety violation, and made it to the Department of Environmental Protection. Sears' legislation would allow whistleblowers working at any agency or institution that is at least partially funded by the city to register con- cerns with any government official or agency authorized to monitor government performance. Those concerns could include gross mismanage- ment, waste of public funds and violations of any law. The bill also calls for confidentiality for com- plainants-something that is not assured now. "We need to do more to encourage a climate in which employees feel free to discuss all aspects of their jobs," says Beth Haroules of the New York Civil Liberties Union. The civil rights group has long advocated for stronger employee protec- tions, and it has started to make some progress:

In June, the group won a lawsuit that challenged gag-order policies, put in place by the Giuliani administration, that prohibited employees from talking to the press and the general public about misconduct in city agencies. The next step, says Haroules, is changing the city law. Figuring our exactly how, however, has proven difficult. The NYCLU has yet to support Sears' bill, hoping to see broader First Amend- ment rights for whistleblowers. Haroules believes that any city worker who speaks out abour cor- ruption publicly-not just to the prescribed city agencies---ought to be protected by law. Public Advocate Betsy Gotbaum is also call- ing for a more comprehensive education pro- gram and more feedback on its inquiries by the city Department of Investigation. But DOl fears these kinds of changes might make things worse. "We may start having reports falling into the cracks with agencies who do not know how to handle a report and actually place the whistleblower at risk," says Alain Burgeois, the agency's first deputy commissioner. The cur- rent law is effective and well-used, he says, citing the fact that the department receives on average 8,500 complaints a year. Proponents of change still remain hopeful. ''The culture in the past has been one of com- plete control over the discussion of informa- tion," says Haroules. "But the Bloomberg administration is more attuned to the employ- ee as a watchdog, a guardian. It's just a question of clarifying the rules of the game." •

Carolyn Szczepanski is a

writer.

Queens-based freelance

CITY LIMITS

FRONTLINES

=== HOUSlttG ===

Trust a Bust for New York

THE NATIONAL AFFORDABLE housing movement took a step forward in July, when a Congressional committee voted ro double the funding that state and local housing trust

funds currently spend ro create affordable housing. But as

stand now, New York won't receive a dim e. July 11 , the House Financial Services Commi ttee

passed an amendment ro the Housing Affordability for America Act of 2002. Drafted by Bernie Sanders ofVer- mont and sponsored by Sue Kelly of Westchester Coun- ty, the amendment calls for providing one-ro-one match- ing funds for the 282 state and local housing trust funds that currently exist nationwide. According ro Sanders' office, these funds spend about $750 million a year ro produce, preserve and rehabilitate affordable housing. While housing advocates and their political support- ers agree this vo te is a vicrory, it's not the one they were initially seeking. Another measure so ught ro shin billions of dollars a year from the mammoth Federal Housing Administration insurance fund surplus into a national housing trust fund, aiming ro help developers create 1.5

million units of affordable housi ng

It was defeated in committee. Concerned from the outset that the more ambitious measure would come under swift attack by the Bush administration-which is on record as opposed ro a national affordable housing trust fund-Sanders offered

the alternative amendment, with the hope that it might be

strengthe ned in the Senate.

initialIy intended, we do think it's a major step forward in

addressing the housing crisis," says Sanders aide Joel Barkin. "We hope this will encourage more local housing trust funds." The Empire State certainly needs one. New York is one ofonly eight states, along with Alabama, Arkansas and the Dakotas, that does not have a designated housing trust

fund , with a

There are 38 state housing trust funds in 34 states nation-

wide, 42 local trust funds in 22 states and another 142 city funds in New Jersey, according ro a report released this summer by the Center for Comm uni ty Change. Meanwhile, housing advocates are talking with the Bloomberg administration about other funding options. "Flexible capital," says Joe Weisbord of the affordable housing developers' coalition Housing First. "That's what we need in New York. " Center for Communi ty Change field coordinaror Laura Barrett, who has been helping cities and states establish housing trust funds, notes that putting a trust rogether is not that big a deal: "These are measures that city councils come up with and promote

because they think they're

a great idea. " The Housing

Affordab ili ty Act now moves on for consideration in the

things

On

over the next decade.

"Though it's not what we had

committed, ongoing so urce of revenue.

full House of Representatives. -Jill Grossman

SEPTEMBER/OCTOBER 2002

URBANLEGEND

URBANLEGEND Fountain of Youth NAIROBI does not look like he's been an organizer for nearly a

Fountain of Youth

NAIROBI

does not look like he's been an organizer for nearly a decade. His tall , slender frame is draped with the trappings of youth: a trendy sleeveless shirt, baggy jeans and shell top sneakers. With a Discman in one hand and cellular phone in the other, he doesn 't seem to fit the part of executive director of Youth Organizers United, a growing nonprofit sexual and reproductive health organization. His unconventional manner has helped shape the group, which he founded two winters ago. The naysayers told him, "I don't have a college degree. I have no managerial skills. I' mtoo silly," Shellow recalls . But, he adds, "With statistics that say young people make up more than 50 per- cent of all HIV infection, I cannot [give up]. I was set out to prove everybody wrong. " Shellow's penchant for being what he laughingly calls "a troublemaker" began at 15, when he became a youth advocate for the AIDS and Adolescents Network of New York. He wanted to learn more about the disease that was affecting his family and community. In 1999, MNNY closed its doors. But Shellow refused to become just a little orphan of MNNY. For months, he and a corps of youth advocates held trainings on diversity and sex- ual health in parks and on the streets. In February 2000 they formalized the organization , and hired 26 advocates . Now, Shellow hopes the group can retain what he calls " a youthy spirit. " The age limit for staff members is 25, giving him just a couple more years to spread the message about HIV and AIDS and its impact on young people . He certainly does not plan to waste any time . YOU's schedule is packed with in-school public education forums about HIV and AIDS, sex- uality and reproductive health. They distribute condoms and help organize big events like Youth Action Day, which brings hundreds of teens to Albany to meet with legislators. YOU's work has certainly drawn attention. Two years ago, Shellow became the youngest person ("and the only young person ," he says) elected to the New York City HIV Prevention Planning Group, a public body that allocates federal funds to AIDS organizations through- out the city. Although hit with obstacles like lack of space and displacement- their offices are two blocks from ground zero, which left them homeless for six months-YOU is emerg- ing as an influential voice of youth within the HIV and AIDS community. -Jessica Rodriguez

SHELLOW IS A MASTER of disguise. The 23-year-old Flatbush native certainly

7

FRONT llNES

c::::=:::::::f ECHN0~0GY==

Home Wiring

"ARRIBA LAS MUJERES," Yolanda Torres cheers- "Women arise"_as she and four other women haul huge Dell computer boxes up onto their shoulders and up the stoop into their apartments on West 140th Street. Torres and many of her neighbors are becoming first-time computer own- ers. Just a few months after moving into the five- story cooperative that they spent thousands of dollars and hours rehabbing, they hope to use their new appliances to run their building better. Their building is the first of about 70 low- income coops that will receive computers and internet access under the Urban Homesteading Assistance Board's Connecting Communities program. Funded by a $450,000 grant from the U.S. Department of Commerce's Technical Opportunities Program, with one-to-one com- munity matching funds, the initiative aims to give residents the sofrware and hardware to both learn job skills and improve their homes. "The vision is to create a technological eco- system for cooperative buildings to better man- age their budgets and mobilize to improve their communities," says Jared Goldstein, UHAB's digital programs development director. Since 1973, UHAB has helped set up 1,200 low- income coops. By wiring a cluster of 11 buildings in West Harlem with cable modems, for starters, UHAB hopes to ensure that tenants can stay up

J
J

to date on legislation, housing training sessions and techniques to run their homes smoothly. In addition to sending members regular email updates on pertinent housing informa- tion, UHAB established a web site that will post resources and host chat rooms in which tenant leaders from different buildings can exchange ideas and ultimately, Goldstein hopes, create neighborhood councils. After fully wiring those 11 buildings, at a cost of about $5,000 each (the broadband will cost each tenant about $8 a month), UHAB also plans to give computers---donated by Per Scholas, a nonprofit technology provider-and wiring to

three residents in each of another 58 buildings. But UHAB's buildings could be one of the last to benefit from the federal Technical Opportunities Program, which has supported 500 such projects nationwide since 1994. Pres- ident George W Bush recently called for cut- ting its entire $12 million budget. At press time, some members of Congress were working to restore the funding. "It's a shame because it's not for a lack of money, but a lack of priorities," says Torres. "The government takes away programs that help the poor people lifr themselves up."

-Nicole Karsin

== 8USINES-S

Chinatown's Bus Wars

THE WHITE BUS PARKED by the Citibank on Canal Street has been sitting there since Memorial Day weekend, when Dejian Chen tried to use it to run over a driver from a rival bus company. In the early morning of May 26, Chen sat behind the wheel of his bus, idling at China- town's unofficial bus terminal on East Broad-

way and Forsyth Street. He was waiting for Chen Lundong, an employee of Far Well Tours, to come out of a local deli with his morning cof-

fee . Just

Chen threw the gear in reverse and tried to squeeze Lundong between his bus and another. Lundong survived and was rushed to Bellevue

Hospital. And Chen was arrested, adding yet another skirmish to the police department's records on the feuding bus companies.

as Lundong walked behind Chen's bus,

8

For the last several years, a number of small bus companies have shuttled passengers between the Chinatowns of New York, Boston, Philadel- phia and Washington, D.C. The fares are unbeat- able: While commercial bus companies based at the Port Authority charge about $40 for a round trip ticket to Philadelphia, a ride with these more informal establishments runs about $10. The companies started up to cater to China- rown residents, mostly members of the Fukinese community. Many live or work in another city, relying on the buses to visit family and shop. After a few years, word of the bus services spread, attracting bargain-hunters from across the city. And with the growth in business came cutthroat competition. About three years ago, the sole bus line running from New York to Philadelphia split in two. "They've been fight- ing ever since," says police officer David Yap of Chinatown's 5th Precinct, noting that employ- ees of both companies have been arrested for assaulting one another.

The attempted murder in May has drawn the attention of the New York and Philadelphia police departments , as well as the Federal Bureau ofInvestigation, who all say they are investigat- ing the incident, though they would not com- ment on the specific nature of the inquiries. Tracking the companies down is not easy. ''The bus companies change their name every week," says Justin Yu, a reporter with World Journal, a national Chinese newspaper that cov- ered the story. Many Chinatown residents and merchants know of the feud but can't name the companies. "They are in a big fight, " says an employee of the Chinese Consolidated Benevo- lent Association, a network of 60 Chinese organ- izations, sharing all the information he had. For now, fighting between companies seems to have cooled and business is bustling. And Eastern Travels & Tour, its name stenciled on the side of Chen's white bus, now travels to Boston instead of Philadelphia.

-Steven Ehrenberg

CITY LIMITS

FRONTLINES

=== E0UCATI 0N===

Educating the Schools

WITH A NEW WEB SITE scheduled to launch this fall, the organization Advocates for Children hopes to help par- ems of children in public schools teach the Board ofEdu- cation some urgent lessons.

www.insideschoolsnyc.org, will provide the

first online forum for public feedback to school superin- tendents, principals and other administrators, on every- thing from gangs in schools ro loose asbestos, school cur- riculum to school buses. Parents will be led through the process of filing a complaint, choosing from among 20 main topics. They will then be informed about any laws relating to the topic and given a text area to fill in their concerns. Next, they have the option of emailing or faxing the letter ro the appropriate school officials, including prin- cipals, superintendents and Board of Ed staff. An auto- mated email to parents follows up with each complaint two weeks later, inquiring whether the issue has been sat- isfactorily resolved. But Advocates for Children does not have the staff to follow up in person. That's where the project's other fea- (Ure comes in: the power to amass and track complaint data allover the city. If there are numerous reports about a problem at a particular school, or certain problems that are widespread throughout a district or school system, project staff will know it. It remains to be seen what Advocates for Children will do with the data. At the least, they will post it on their website and use it to write internal reports and hold press conferences. "We want to make sure that individuals get satisfaction, but we're equally excited that we're able to track issues in the aggregate," says Jill Chaifetz, the organization's executive director. "We can't do individual advocacy, but for systemic things, we can." Noreen Connell, executive direcror of the reform group Educational Priorities Panel, says that she antici- pates the site will bring much-needed clarity to com- munication between parents and schools. Parents, she says, need to learn how ro use legal information to get results, instead of relying on emotional pleas. It's also rare for parents to document their exchanges with school administrators. Advocates for Children is hoping the digital divide won't get in the way. Although the web site is currently only in English, the group plans to offer a bilingual edi- tion. It is also training staff at public libraries, commu- nity centers and community-based organizations about

the site. This August, with their kids still on break, a group of parents was scheduled to go to work in Advocates' office, banging around the system for bugs. -Socheata Poeuv

The si te,

SEPTEMBER/OCTOBER 2002

for bugs. -Socheata Poeuv The si te, SEPTEMBER/OCTOBER 2002 FIRSTHAND ACold Welcome COMING TO NEW YORK

FIRSTHAND

ACold Welcome COMING TO NEW YORK FROM GUYANA was a dream that came through in
ACold Welcome
COMING TO NEW YORK FROM GUYANA was a dream that came through in January 2000.
My wife and daughter came with me .
We arrived at JFK airport around 10 p.m. It was snowing and I had on a T-shirt and jeans
and was braving the cold standing outside the airport awaiting our hosts. Some people
passed by and said , " Young man, get in the airport or put on some clothes ." The weather
didn't feel that bad because I was in the land I had dreamed of.
But that night , my dreams were dampened . Our host's apartment was a one-bedroom.
She pays $600 for rent and another $200 for utilities, and only earns $1,000 amonth. I real-
ized people here are facing some of the same problems as in my country.
I began job-hunting at places like building contractors, hospitals, nursing homes and
various stores. I got my first job at a nursing home in the food department, where I am still
working. I never did work like this before, except for myself at home, sweeping, mopping and
taking out garbage . Sometimes pride came upon me because of the type of work I had to do.
My dreams about America seemed
unrealistic and began to affect me mentally. It got worse
after working and drawing pay for weeks and the money wasn't enough to assist with the basic
needs . We stayed at my mother's and I worried that we would never make it on our own .
Then , my wife left me . We had a big quarrel one night , and the next evening, when I
returned from work, she had already picked up her clothes and our daughter. I told her Amer-
ica really brought out her ingratitude, that she used me: We quarreled over the years in
Guyana and she never packed up and moved out.
Now, my focus is on doing more positive things in my life. I am going to school to get my
GED and after that I would like to go to college. With a GED certificate I would feel much
more confident when I go to apply for a job, and it would give me the opportunity for a bet-
ter living. What I'm earning now is small and I'mstruggling.
After all my trials and tribulations, I am feeling beauty. New York has opened my eyes
and mind to life survival.
-Orin Abrams

9

FRONT LINES

  No Picnic in the Park Forget your sa l on dinners-how about apicnic? About
 

No Picnic in the Park

Forget your sa l on dinners-how about apicnic? About 150 city parks workers on welfare hauled their ther- moses and paper plates to the doorstep of Mayor Bloomberg's Upper East Side townhouse in late June to extend him this invitation. Their din- ner conversation, they hoped, would concern t he Parks Op portunity Pro- gram, which gives New Yorkers reaching their five-year limit on fed- eral we lf are one-year job s wit h bene- fits. Last fall, the Giuliani adminis- tration froze the program. While the protesters never di ned with Bloomie, the mayor did shore up the jobs efforts: 3,500 workers are being hired for six-monthstints again this year.

with Bloomie, the mayor did shore up the jobs efforts: 3,500 workers are being hired for
workers are being hired for six-monthstints again this year. == HDUSING Neverending Stories IN THE LATEST

== HDUSING

Neverending Stories

IN THE LATEST CHAPTER of a 26-year legal saga challenging racial discrimination in south Williamsburg housing projects, the city Hous- ing Authority and Hispanic and Hasidic advo- cacy organizations recently reached a settlement that will toughen monitoring of tenants moving in and out of the buildings, and require that more black and Hispanic families move in. The agreement settles an action brought by the Puerto Rican Legal Defense Fund, which first sued the city over housing discrimination in 1976. In its most recent challenge, PRLDEF argued that NYCHA's lax monitor- ing doomed an earlier agreement that was sup- posed to bring more Latino and black families into three predominantly Hasidic housing projects: Bedford Gardens, Jonathan Williams Plaza and Taylor-Wythe Houses. The city's lack of oversight amounted to "an informal policy of replacing Hasidic families with Hasidic families and maintaining strict racial quotas," says Marty Needelman, chief counsel

10

for Brooklyn Legal Services Corporation A, who worked on the lawsuits until 1995. Both NYCHA and PRLDEF confirmed they'd reached an agreement but would not comment on the case until federal Judge Robert Sweet approves their settlement, which he is expected to do by the end of September. Under the agreement, NYCHA will offer Sec- tion 8 housing vouchers to the first 150 Hasidic families who volunteer to leave their homes in the three housing developments and look for afford- able apartments on the open market. The agency agreed to then rent those empty apartments pri- marily to Latino and black families from Williamsburg on the city's long waiting list for public housing. In addition, the settlement man- dates that the city notify both PRLDEF and the United Jewish Organization of Williamsburg- which has been advocating on behalf of the Hasidic families in the buildings-each time an apartment transfer takes place. Non-white families and advocates have been battling with NYCHA over their Williamsburg housing policies for decades. When PRLDEF first flied suit, the group alleged that the city was granting preference to

three buildings. They discovered that, at that time, the Housing Authority had quotas to fill between 60 and 75 percent of the apartments with white tenants. In 1978, a federal judge ordered the Housing Authority to stop using quotas, but PRLDEF continued its litigation, seeking a remedy for previous decades of dis- crimination. Its first agreement with the city, reached in 1980, temporarily gave preference to black and Latino families seeking open apartments, and moved to uJrimately make the approval process color-blind. That did not quite happen, though. Nine years later, they returned ro court and got the city ro agree to place non-white families in the next 190 available apartments. While NYCHA did fulfill that requirement, the ratio of Hasidic to Latino families remained the same, according to Needelman . So in 2000, PRLDEF returned to court to pursue the lat- est deal. Needelman is cautiously optimistic about the outcome: "It's very disappointing that the city and the Housing Authority did- n't get the message that discrimination and favoritism in housing aren't acceptable. And now? We shall see."

Hasidic applicants for open apartments in the

-Matt Pacenza

CITY LIMITS

INSIDE TRACK

Pregnant Pause

Facing abysmal test scores and worse attendance, shouldfive mom-and-baby schools shape up or shut down? By Charu Gupta

mom-and-baby schools shape up or shut down? By Charu Gupta JASMIN LOPEZ IS APOPULAR, feisty redhead,

JASMIN LOPEZ IS APOPULAR, feisty redhead, half-

Cuban, half Puerto Rican. She likes her jeans extra snug, wears her hair up in a cight rabbit-tail bun and doesn't care if she is late to class. At her old high school, Park West in Manhattan, she would go to classes one day, cut the next. Her sophomore year, she failed most of her classes. She also became pregnant. By the time she real- ized what was happening, it was summer vaca- cion. School was closed. Her boyfriend was his- tory. And Jasmin was 16 years old. With the advice of her foster mother, who is also a social worker, Jasmin opted for a change. She learned about a special school for pregnant girls, and two years ago this September-seven

SEPTEMBER/OCTOBER 2002

months pregnant-she began commuting to P911 in East Harlem, one of five New York City public schools under the Alternative Pro- gram for Pregnant and Parencing Teens. Also known as a " P-school," P911 is indeed a different place. Girls between the ages of 14 and 21 carry diaper bags to class and talk about their "baby-daddy-mamas" (the baby's father's mother). At breakfast, which is free, Jasmin asks a very round-stomached girl, "Are you d ilated yet?" The schools boasts small classes and its counselors and social worker can be watchful to the point of nagging, giving impromptu hallway or cafeteria pep talks on the importance of nutrition, exercise, patience

and attendance. At P911, Jasmin says she has fou nd camaraderie and attention and is happy that she wasn't the "only one pregnant." But Jasmin's progress toward a high school diploma has been minimal. Jasmin, now 18, still has at least eight classes to go before she can graduate. She failed the math Regents test this year and has failed the English Regents exams three times. And Jasmin is not alone . Only 24 percent of ninth graders at P911 passed the English Regents exams last January. Less than 5 percent passed the math tests. And an English teacher there estimates most students are read- ing at a third- or fourth-grade level. Today, 36 years into the only high school

11

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program that the Board of Education offers to address the needs of pregnant and parenting teens, school officials are wondering if some- thing has gone terribly wtong. "I would say that we have concerns at this point about the level of success that's being achieved," says Alan Werner, a deputy superintendent of Alternative Schools, whose office oversees the

P-schools. Classrooms either lie empty or echo with the voices of a half-dozen students, who often spend class time filling out worksheets or writ- ing in journals. Jasmin's eighth period math class played Scrabble for a week straight because the teacher was on juty duty and the school had not hired a substitute. After a recent assessment of the P-schools, the Board of Ed plans to restruct ure the pro- gram. At least one of the five schools, Teen Aid High School in Brooklyn Heights, will not reopen this fall. The remaining four schools will change who and what they teach. Accord- ing to Joan Davis, the manager for the Board of Ed's high school day care programs, the schools will share more classes with neighbor-

allow non-pregnant

ing high schools and wi ll

junior high school girls as young as 12 to start attending the program. The schools' curricu- lum will also be revamped to better reflect the statewide Regents tests, which are now required for graduation. The superintendent's office would not dis- cuss details of the changes or the reasons behind them. What is clear, though, is that school offi- cials are acknowledging that the experiment of giving pregnant students a place of their own has faltered. At the same time, no one is yet sure of a better way to ensure these girls' success.

THE P-SCHOOlS WERE BORN at a time when teen

pregnancy had reached epidemic levels. Board of Ed officials and a group of concerned teach- ers created the Alternative Program for Preg- nant and Parenting Teenagers in 1966, when one out of every 10 teenage girls in New York City was pregnant. Designed to provide safe havens for high school students dealing with the stresses of parenthood, the program took pregnant students out of a coed environment and away from heavier workloads and gave them a temporary place-for no more than two school years-to start raising their babies. Assigned small classes, teachers were expected to offer students advice on everything from standard high school curriculum to how to breasrfeed, read to their babies and cope with the demands of motherhood at a young age. The schools never fully realized that poten-

CITY LIMITS

rial, however. Arrendance has always been low. On a good day, abour 40 percenr of rhe sru- denrs ar P911 show up, many kepr away by docrors' appoinrmenrs, orhers by day care

rroubles. (P911 's day care cenrer has

only 40

slots, despire enrollmenr of more than

100 stu-

denrs.) Arrempts to cater to all the studenrs' needs slowly fell victim to mismanagemenr and neglect. The budget for bilingual and remedial classes was slashed. After-school programs on art and African dance we re cur last year. But teachers say the kids' needs for extra help, par- ticularly in literacy, are stronger than ever. "P- schools are not meeting these new demands," says one Bronx P-school teacher who has been with the program for more than 20 years and spoke on condition of anonymity. But ar one time they did handle srudenrs'

School officials are acknowledging that the experiment of giving pregnant students a place of their own has faltered.

needs more effectively, say other educators who have long been involved with the program. 'They did a berrer job with the kids in the early days because they understood the focus berrer," says the principal of a Bronx high school who, in 1982, was parr of the Citywide Taskforce on Pregnant and Parenring Teens that ushered day care inro city high schools. (Fearing repercus- sions from the Board of Ed, she requested that her name nor be used.) More serious Iireracy problems, she adds, have surfaced in recenr years. While thar task force has historically focused more on its broader mission of reducing adoles- cent pregnancies, the group of 100 social wel£ue agencies, educators, policymakers and advocares has begun brainstorming for solutions to the P- schools' problems. Earlier this year, abour 20 members of the group met to identify services pregnant teens need most at the P-schools, honing in on literacy intervention and emotional support.

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INSIDE TRACK

"We're concerned with the lack of services these kids are provided with," says Marilyn Mosley, the task force's director. Since 1987, Board of Ed reg- ulations have required mainstream high schools to designate a staff liaison for every pregnant girl. This has never happened, Mosley says: "There's nothing in place by the Board of Education that picks up the pieces after a child leaves school because they are pregnant. " Her group plans to present recommendations to the Bloomberg administration this fall.

THE NEW YORK CIVil LIBERTIES UNION is glad to

see more people stepping into the debate. For the last decade, the civil rights group has vocally opposed the existence of P-schools, fighting to keep pregnant teens in their regular high schools, one case at a time. "We want equality in their education and their Regents testing and getting their high school diploma," says Rebekah Diller, director of the NYCLU's Reproductive Rights Project. "Our problem with the P-schools," she says, is that "they've become a dumping ground and an excuse for shunting aside academics. " In a 2000 survey of 28 high school admis- sions offices, the NYCLU found a pervasive lack of understanding of state and federal equal educational opportunities laws. By law, any

alternative program is voluntary-a pregnant student has the right to stay in the school of her choice. "Too many times, P-schools are offered as the only choice once a girl becomes preg- nant," says Diller. And with the rise of high stakes testing and more rigorous high school graduation require- ments in New York City over the last few years, Diller says the situation has worsened as some principals try to rid their schools of stu- dents who might bring down their schools' overall performance. Danyel Thomas, for one, was by no means at the top of her class at her old high school in northern Manhattan, but she says she was making decent grades. When she became pregnant as a junior, Danyel says her guidance counselors told her the school didn't have the proper insurance to keep her. They suggested Danyel look into P911 instead. "I didn't have to go to P911," says Danyel almost 18 months later. "I could have stayed in my school and I would've been out already and I would have probably been in college by now." Danyel finally got her high school diploma this January, at age 19, while still at P911. She started attending a Manhattan business-training program a few weeks later. "In the name of accountability and high-

stakes testing," says the principal and former task force member, "we have made it very diffi- cult for these kids to finish high school." And many of the students haven't made it through schoo!. They have left the P-schools, or been asked to leave. Last year, there were 802 students in the program-346 fewer than two years ago. This is pardy due to declining rates in teen pregnancy. But many students dropped out or transferred to GED programs for a faster track to graduation. Of the 243 students on P911 's roster two years ago, 33 left for high school equivalency programs. Three attended evening school to earn gradu- ation credits, and 28 students transferred back to a mainstream high school. Citywide, near- ly 400 P-school students either dropped out or were kicked out for missing more than two weeks of classes. The introduction of child care in high schools, though significant, has not been enough. As oflast December, 44 of the city's 213 high schools had day care centers to handle a total of 680 babies. According to the New York State Department of Health, there are about 11 ,000 teen mothers in the five boroughs . With the Board of Ed now directly under the jurisdiction of Mayor Bloomberg since July, the NYCLU met with representatives from

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CITY LIMITS

INSIDETRA CK

Ciry Hall. "They were concerned and we're hopefUl they will take proactive steps," says Diller. "Our whole approach is that you have to do things in the regular and P-schools at the same time."

While eager to place Jasmin in a smaller school where she would get more attemion, Alita and Ray Camacho, Jasmin's foster par- ems, say the school was not all they had hoped it would be. "I don't see her in the books," says Ray. "The book bag stays in the car." Jasmin plans to leave P911 in September and finish her senior year at West Side High School in Manhattan. Despite promises ofequipping girls with job skills, vocational training is limited at the P-

of one

schoo ls. Jasmin's job training consisted

class period in the school's main office faxing,

filing, answering phones, sorting the mail and running errands. Until last year, the school brought in professional women working in business, social work and education for a Sat- urday mentoring program, but a lack of inter- est and money shut it down. Board of Ed Administrator Joan Davis argues that flawed as they are, the P-schools remain necessary. "For those kids who have already dropped out, those with psychological,

emotional problems," she says, "they need this

as a transition ." According to the Child Trends,

a research group, 50 percent of girls become pregnant within a few years of dropping out of

Jasmin's eighth grade math class played Scrabble for aweek straight while their teacher was on jury duty_

school. If nothing else, says Davis, the schools can try to catch those who might otherwise have more babies while they're still teenagers. But Davis also hints at disillusionment. "The five schools are enough," she says. "There's no

more need for segregated high schools for preg- nant girls." Instead, the need, said Davis, is for more accessible day care in mainstream high schools. Althea Gibson Treadwell is fighting to keep the P-schools alive and is optimistic she can turn them around. The principal of all five P-schools since last September, Treadwell says the push to be more in line with the state education stan- dards "has made us more accountable for the coment of our classes. It has also given us the opportuniry to make sure our girls are comply- ing, so when they go back to their regular school, time here isn't wasted time." The former assis- tant principal for special education at Theodore Roosevelt High School in the Bronx, Treadwell hopes to bring back home schooling and voca- tional programs to the P-schools. But not everyone shares her rosy view. Instead, they fear a future in which, without a investment of public resources, there will be no alternatives. "I don't think the P-schools are the answer," says the Bronx principal who served on the task force. "The danger is, if you don't have the P-schools, you have nothing." •

Charu

Gupta is a Manhattan-based freelance

writer.

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These Derns Want We Want to sought 16 What Andrew Cuomo's HUD history tells the city
sought
sought

16

What Andrew Cuomo's HUD history tells the city

For a malt with the political ambitions of Andrew Cuomo.

as H UD secretary (after fOllr Inore as assistant

in chwge of commllnity planning and development) might have seemed like alt ideal opportun.ity. TV appearances, rib- bon cuttings, reams ofliterally concrete accomplishments-the

his four years

young aspirant lVith little more than a name and a nOllproJi-t

quick~y accllmulated all th e makin gs

of e l ec toral success.

He also happened to have walked into one of the most

When h e took over in Rep ublicans in Co n-

gress had vowed to abolish. It was certain~y all easy tw get- bureau cra tic, cripppled ~J' antiquated in/ormation sj'st ems

thankless jobs in th e president 50 cab in e t. 1997, Cilomo inh erited an agency that

and often entangled in messy lotall/.rban politics. Desp ite eIWI)·t hing-inclilding a controversial downsizing of

agenc)" staf/under his watch-Cuomo left his mark. He helped revamp subsidy programs so thatl-IUD-sponsored apartments stayed affordable, alld sllccessful~r pushed for expanding homeownership. Vet sometimes it lVas hard to k/lOW who he was working fO/: [n Im e Clintonian fashioll, CUO/l1O :S- llUD

to sati~b'/fIWI)' co nstitu en cies, and the putative be/leJi--

cia ries offederal hOllsing and development progra ms did not

alwa)"s feel like th ey came first. As th e stories below detail, Cu omo 's I-IUD loos en ed over- sight of hom e lenders, pressed for grea ter fl exibilit)" for cities spending federal dollars and pushed private redevelopment of former public hOllsing sites. Thos e moves and others brought powed LtI pllblic- alld pril'Clte-sector players to the support of H U D alld its proj ec ts-and Lo CU OIllO

hilllse~l A~yone won-

dering {{Ihat his priorities might be

ask what th ey were

description was savior of cities.

1V0uld do ll'ellt o

as

when Cuomo:~ official job

governor of Ne /IJ Vork

Did Cleaning House Clean Out Homeowners?

D uring the late 1990s, a wave of individual cata- strophes swept through urban, minority neigh-

from Ozone Park ro

borhoods . Homeowners

Philadelphia to Atlanta watched their dreams collapse, as their mortgage payments skyrocketed beyond their means. Most had taken out their first mortgages thanks

to the Federal Housing Administration, a HUD divi- sion that promotes homeownership by protecting lenders in the event that a borrower can't pay back.

cOl/lil/l/ ed 01/ p age I S

CITY LIMITS

to Run New York. Know More.

to Run New York. Know More. Dov Tale: How Carl McCall helped bail out a political

Dov Tale: How Carl McCall helped bail out a political ally

By Jesse Goldstein and Theodore Ross

Ai er Representative Jesse Jackson Jr. announced his support of gubernatorial candidate Andrew Cuomo in early May, Cuomo's pponent, State Comptroller H. Carl McCall, called on his good

friend, Assemblymember Dov Hikind, to denounce the endorsement. Hikind was perfectly happy to do so: Jackson, after all, had voted against

House resolution calling for total solidarity between the u.S. and

a

Israel, a measure Hikind staunchly supported. He was also glad to help McCall, whom he had endorsed in the 1998 State Comptroller race. Now, Hikind is backing McCall in the upcoming Democratic guberna- torial race--carrying with him the influence of more than 10,000 Orthodox Jewish votes in and around the 48th Assembly District. Also at McCall's request, Hikind had accompanied the state comptroller to Israel this past March. The trip, which is best known for a photo op of McCall firing a rifle in the West Bank, garnered crit- icism from not only Cuomo's supporters but also some of McCall's, who questioned the comptroller's decision to visit Israeli settlements. But McCall was merely answering Hikind's demand that he "do something meaningful" in response to the Mideast crisis. It's not the first time that McCall has done Hikind a favor. After Hikind's July 1998 acquittal of federal corruption charges in connec- tion with the Jewish social service organization Council ofJewish Orga- nizations (COJO) of Borough Park-and a congratulatory phone call from McCall two days later-McCall's office paid Hikind $420,000 to

cover his legal expenses. The payment, approved by Carl McCall and former State Attorney General Dennis Vacco, was made in February 1999 under a little-known secrion of New York's Public Officers Law that provides for the payment of "reasonable legal fees" to state employ- ees accused and then acquitted of crimes related to their job. Over the past five years, not counting Hikind, there have been 30 instances

in which New York State employees were reimbursed

for legal expenses under the Public Officers Law. The total amount of reimbursements made to the 30 state employees as of May 2001 equaled $262,789,

just slightly more than half of the sum paid to Hikind by McCall's office. The only problem is that Hikind should have never received the payment. The Public Officers Law requires that state employees provide "the orig- inal or a copy of an accusatory instrument within ten days" of arraignment. Hikind was indicted on August 7, 1997 and did not submit any paperwork until July 21, 1998. He missed the 10-day applica- tion period for reimbursement by nearly a year. Hikind's attorney, wannabe Borough Park City

cOlllilllled 011 page 19

SEPTEMBER/OCTOBER 2002

17

Andrew Cuomo

property, saddling borrowers with unaffordable loans and decrepit homes. Though Congress tied HUD's hands, there was still wiggle room for ini- tiatives to regulate appraisers and assist borrowers. But Secretary Cuomo failed to institute a key reform that could have protected homebuyers, charges William Sentner, president of the American Guild of Appraisers. In June 1999, HUD proposed that all FHA mortgage lenders give potential homebuyers a copy of the full appraisal 15 days before closing. A few months later, the fmal rule was published, and it required that lenders give borrow- ers only a summary of the appraisal, just five days before closing. "The Mort- gage Bankers Association of America and the National Association of Real- tors had gotten a hold ofCuomo," concludes Sentner. "They made sure con- sumers had no time to ask questions. They didn't want scrutiny." "Five days seemed more than adequate," protests former FHA Commis- sioner William Apgar, now a lecturer at the Kennedy School of Government at Harvard. He says HUD under Cuomo did its best to rein in fraudulent appraisers, but that ultimately the agency was handcuffed by the mandate to have lenders select their own appraisers, which he compared to "sending a rabbit out to deliver the lettuce." At the least, HUD could have watched those appraisers more closely, according to a 1999 report from Con- gress' investigative wing, the General Accounting Office. It stated flatly that "HUD is not doing a good job of mon- itoring the performance of appraisers," particularly because the agency didn't adequately double-check their esti- mates. And even when it did, the GAO reported, appraisers with poor records were rarely penalized. In 1998, HUD discovered that 246 appraisers in Philadelphia and Denver had each sub- mitted at least two bad appraisals, "but only 11 of the appraisers were prohibit- ed from doing subsequent FHA appraisals," the GAO noted. As the number of FHA foreclo- sures rose steeply at the end of the 1990s, homeowners and activists fought hard to get pol icymakers' attention. At first, those efforts fell on deaf ears. One upstate New York activist, who asked not to be named, remembers back to 1997 and 1998, when she and others pleaded with HUD and FHA to take predatory lending serious ly. "They didn't want to use the word 'predatory' at all, even with clearly fraudulent lending practices going on," she remembers. When Cuomo finally did act-beginning in late 1999-he moved forcefully. Even typically cynical activists say they were impressed by the strong legislative actions recommended by a national predatory lending task force that Cuomo and several Democratic senators convened in April 2000. Cuomo announced an ambitious plan that May to fight FHA fraud, including a temporary moratorium on foreclosures in key "hot wnes" where FHA delinquency rates were high, and a pledge to punish corrupt lenders and appraisers. Most notably for victimized homeowners, Cuomo pledged that his staff would re-do fraudulent mortgages in the hot wnes, so that bad loans didn't result in foreclosures. While hopes were high that May, the last two years have seen only dis-

continlledji'olll page 16

The last decade has seen a massive increase in mortgage defaults among FHA borrowers. In 1992,6.9 percent of borrowers fell more than 90 days behind on their payments. By early 2002, the rate had climbed to 11.2 percent. Andrew Cuomo played a critical role in developing federal housing policies closely tied to the foreclosure explosion. He downsized HUD's staff just as auditors warned that the agency's oversight was skimpy. And he loosened some lending regulations, even as the evidence mounted that lenders themselves were knowingly selling loans that were guaran- teed to bankrupt borrowers. Clearly, no one public official or agency bears responsibility for the sharp expansion of predatoty lending, the unseemly practice of selling high-cost loans-and employing misleading sales tactics and hidden fees-to low- income borrowers. Sweeping changes in the mortgage industry, growing interest from Wall Street and advances in technology played critical roles. Even so, the HUD secretary's role in combating FHA foreclosures and preda- tory lending demands close scrutiny. As highway workers and retired teachers lost their homes to slimy salespeople and an indifferent bureaucracy, where was Andrew Cuomo?

and an indifferent bureaucracy, where was Andrew Cuomo? O ne of Cuomo's first acts as sec-

O ne of Cuomo's first acts as sec-

retary was an aggressive effort

to continue the downsizing

that had begun under his predecessor, Henry Cisneros. He announced a massive reorganization of the agency and further job cuts, with the goal of shrinking the workforce by nearly 30 percent more. FHA bore the brunt of the shrinkage; staff dropped from 5,100 workers to roughly 3,200. Even before those cuts, an indepen- dent audit from the accounting giant KPMG had warned HUD in 1997 that FHA staffing was inadequate to prevent mortgage defaults. The reductions were also put in place just as HUD was pushing an expansion of FHA lending, in part by raising the cap on loans that could be insured from $86,000 to $208,800, to meet President Clinton's goal of increasing homeownership among poor and minority Americans. That expansion was successful: Between 1997 and 1999, total FHA lending grew by 63 percent. But it came at a price. Estimating the actual value of a property is a crucial safeguard in home lending. But following a congressional mandate, in 1994 HUD changed the appraisal process, from randomly assigning an appraiser to allowing a lender to pick its own. The industry had convinced Congress that the randomized process was too slow and was bad for business. It may have been, but in this case, Congress' cure has been worse than the disease. In cities where recent FHA scandals have rocked neighbor- hoods-like the 203(k) mess that has led to nearly 600 abandoned build- ings in New York City-at the heart of the problem were appraisers acting in collusion with unethical lenders. Typically, they overstated the value of

continued 011 page 20

18

CITY LIMITS

Carl Me Call

$5,250 in donations from Friends of Dov Hikind since the reimburse-

ment. Jerusalem Reclamation Project's mission is to create a Jewish-only Jerusalem by buying out Arab owned property in the city's eastern section. Shortly after reimbursement, Friends of Dov Hikind paid his daugh- ter Deena $1,100 and his son Yoni $675. It also spent $14,561 on car payments, $9,110 on insurance payments, and $8,553 in American Express fees. (Friends of Dov Hikind failed to return phone calls from City Limits inquiring about the purpose of these expenditures.) Benson- hurst COJO received $500 and employees in Hikind's Assembly office have received a combined total bonus of $1,100. But the biggest recipi- ent of the comptroller's largesse was Wolf Sender, a former Giuliani assis- tant commissioner in the Division of Youth and Community Develop-

ment who testified on

Since February 2000, about a year after Hikind's reimbursement, Sender began receiving payments from Friends of Dov Hikind, for a total of $5,950, according to the most recent Board of Elections reports. Friends has spent more money on consulting fees for Sender than for any other indi- vidual since Hikind's reimbursement was issued in February 1999. After Sender lost his $67,000-a- year position under Giuliani that same month, he remained largely unemployed until McCall gave him a $70,746-a-year assistant public infor- mation position on the comptroller's staff. Hikind recommended Sender to McCall's office. Following Hikind's acquittal, Sender claimed that Giuliani officials had urged him to testify against Hikind. When Sender lost his city position in February 1999, Hikind supported Sender's contention that he had been fired because he failed to provide incriminating testimony dur- ing Hikind's trial. Sender is not the first Hikind ally to receive a patronage job with McCall. After Hikind supported McCall's 1998 campaign, his former chief of staff, Jeff Reznik, received a $59,232-a-year position in the comptroller's office. The McCall-Hikind friendship has endured since then. He paid his condolences and sat shiva with Hikind and his mother afrer Dov's father passed away in April 2000. At Hikind's behest he gave at least $1,200 to a West Bank fundraising group, the One Israel Fund, and paid $3,000 to attend a March 1999 fundraiser for Hikind's failed Brooklyn Borough President run. He also attended the opening of Hikind's United New York Democratic Club in Borough Park and, last May, spent $2,500 to attend a Hikind fundraiser at a private Brooklyn residence. Come primary time, Hikind will most likely use what Speaker Shel- don Silver has coined his "pit-bull" political instincts to gather a large Jewish bloc vore in support of Carl McCall. Given their close history,

this should come as no surprise.•

continued from page 1 7

Council member Robert Miller, argued that his client couldn't have filed ear- lier because the wording of the indictment did not clearly indicate that

Hikind was charged with crimes related to his role as a public official. Yet the

indictment states, "Hikind

Assembly to obtain hundreds of thousands of dollars in state funding for the cOJO entities." It further alleges that Hikind "devised and participated in a

scheme to defraud the people of the State of New York." Paul Chernick, for- mer director of the now defunct COJ0 of Borough Park, pleaded guilty to misappropriating state funds and attempting to bribe Hikind. Hikind's lawyer argued that he accepted the money without "corrupt intent." Donald Berens, the deputy Attorney General who oversaw the case, says he cannot recall why Hikind's reimbursement was approved: "I remember the names of Dov Hikind and COJO. I do not remember much beyond that. " While the AG's office decides whether or not an applicant qualifies for reimbursement, it's the comptroller's office that determines the "reasonable- ness of the legal fees and expenses." In an inter-office memo dated December 1, 1998, State Comptroller assistant counsel Harvey Silverstein commented, "The top hourly rates before discount and the total billed, even after discount, are historically high." In February 1999 Silverstein reiterated, "[O]ur office was still concerned that the fee seemed high" and "that some of the legal fees needed fUrther justification." Silverstein calculated that the Hikind reimburse- ment should equal $393,629.25, for a compiled 3,332.21 hours worked by Hikind's six attorneys. Silverstein's rec- ommendation was discarded. McCall's office approved reimburse-

ment with just $61 ,000

[used] his position with the New York State

Hikind's behalf during the assemblymember's trial.

Hikind's behalf during the assemblymember's trial. deducted from the $481,000 requested by Hikind. What did

deducted from

the $481,000 requested by Hikind. What did Hikind do with the money? The comptroller's office says it's not its business. Asked if she knew what happened with the reim- bursement, spokesperson Theresa Bourgeois responded, "No, we don't. We made the payment." She further commented that McCall himself had no awareness of, nor involvement in, the Hikind reimbursement. Hikind's defense team, from the law firm Newman, Schwartz & Greenberg, had already been compensated for its work by December 1, 1998. The reimbursement therefore went to two Hikind-associated funds. Trust For Fair Justice, the legal defense fund that helped raise money for Hikind's court case-it appears to have worked on no other cases-received $332,000 from McCall's office. Friends of Dov Hikind, Hikind's campaign fundraising organization, received $88,000 . Like COJO funds, which Hikind was accused of using to pay for his children's schools and his nephew's wedding caterer, along with trips to Israel and France, the comptroller's reimbursement has been kind to Hikind's family. The ultra-conservative Jerusalem Reclamation Project, for which Hikind's wife, Shani, serves as executive director, has received

Jesse Goldstein is a Brooklyn-based freelance writer. Theodore Ross is a free- lance writer in Los Angeles.

SEPTEMBER/OCTOBER 2002

19

Andrew Cuomo

COII/;lIuedjrolll page 18

turers on behalf of the poor and brought television cameras into the nation's most blighted areas. But some housing advocates who worked with Cuomo say he had another side as well, one that clid not always further the interest of the most clisenftanchised. They point, in particular, to a series of decisions Cuomo made following pressure from big city mayors, governors and redevelop- ment officials. The officials wanted to loosen the mandates attached to Community Development Block Grants (CDBG)-a $4.4 billion-a-year program targeted primarily at low- and moderate-income communities- so the grants could be used to fund more general projects, like repaving roads and redeveloping commercial clistricts. "We were yelling from the sidelines," says one low-income housing advocate who unsuccessfully fought the changes in the mid-1990s. "We clidn't have the political juices. " The CDBG decisions left many in the public interest community feeling luke- warm or clisappointed in Cuomo, as if the opportunity presented by a Democratic administration had been missed. "Cuomo always listened to a conversation with two ears," said Cushing Dolbeare, the founder of the National Low Income Housing Coali- tion. "One was on the substance; one was on the politics." When Cuomo arrived at HUD in 1993, the political muscle, both in Congress and in the halls of HUD, wanted decreased regula- tion for local governments that rely on the money. At an August meeting, Cuomo, then IIIIIIIF:L an assistant secretary, announced a total I/Iljt,~= il reworking of the planning process, combining

three other pro-

grams into something he called the "Consoli- dated Plan." The change unclid language that encouraged local officials to spend their money on their neecliest residents, says Ed Gramlich, an advocate who objected to Cuomo's plans at the meeting. "They tossed everything out," says Gramlich, a senior researcher at the Center for Community Change. "There were no more instructions, and they said we are just going to start with a clean slate." Howard Glaser, who was Cuomo's deputy assistant from 1994 to 1996, says that HUD had a very good rea- son for the change: to save funcling for CDBG in the face of attacks from a hostile Congress. ''Andrew's approach on the whole at HUD was always to take away arguments that the Republicans had, [in order] to save the programs," says Glaser. "Had Andrew Cuomo not taken action to make these programs work better, Congress without a doubt would have taken the money ftom these programs." The problem with CDBG, he says, was that local officials were failing to spend all the money they received. Glaser blames onerous regulatory requirements, which called for localities to report such data as the income levels for benefIciaries of jobs programs. At the time of the regulatory changes, local governments were already

abusing the system. A 1993 audit by the HUD Inspector General, Susan

appointment. The agency created narrow eligibility requirements for relief-the loans had to be less than two years old, and had to be more than 30 percent overvalued-that eliminated many homeowners who were seek-

ing help. The process dragged on; not until this past April clid HUD's actu-

al remecliation offers come through. They were grossly inadequate, says

Rick Wagner, director of litigation fot Brooklyn Legal Services Corporation

A, who recently fIled a pair oflawsuits against mortgage lenders and HUD

on behalf of homeowners who received no compensation. "The

HUD has treated them as if what happened is their fault, " says Wagner. "It

was simply a sound bite, a press conference, an illusory solution to a very real problem designed to reflect on Cuomo well politically,

but not to

Others say Cuomo is not to blame. Ken Strong, clirector of research and policy at the Community Law Office in Baltimore, where

nearly a thousand homebuyers bought over- valued properties that had been "fupped" by corrupt realtors and lenders, thinks that Cuomo's good intentions were dashed when

Democrats lost the White House: "It was my impression that time ran out before they had

a chance," says Strong. Apgar agrees: "My

November

[2000], we would have gonen the job done." There's no debate that Andrew Cuomo's response to the FHA lending crisis was inadequate. Two years after he announced he would not "rest until we know that not one FHA borrower falls prey to these prac- tices ," the number of foreclosures continues

sense is if we had stayed there past

fact is that

continues sense is if we had stayed there past fact is that remecliate in any powerful

remecliate in any powerful way. "

to rise. We're left only with the question of why the measures to fIx it failed: Were they too little, or too late? Bruce Marks, CEO of the Neighborhood Assistance Corporation of America, a non- profIt that makes loans to low-income bor-

rowers,

and no rue, " says Marks of HUD 's efforts to fIght fraud. "Our experience with Andrew Cuomo was that ultimately he was not will.ing to go to war against abusive practices in the

~I"'~"" CDBG

applications with

picks the former. "It was a lot of smoke

mortgage industry."-

Cily Limils editors

Did new flexibility preserve anti-poverty dollars----or give cities loose cash?

L ong a visible champion for the impoverished, Andrew Cuomo kept himself in the headlines during his eight-year stint at the HUD. He chastised New York City for its homeless policy (eventually taking

over administration of its federal funds), threatened to sue gun manufac-

COllliltlled 011 page 4-+

20

CITY LIMITS

Political Consciousness This fall, Liz Krueger faces a bitter battle to hold on to her

Political

Consciousness

This fall, Liz Krueger faces a bitter battle to hold on to her East Side State Senate seat. Her seven months as an idealist in the depths ofAlbanyforce the question: Why would anyone want herjob?

By Alyssa Katz

ALBANY-At 9:30 a.m. on a Tuesday, the Alco- holism and Drug Abuse corruninee of the New York State Senate is wasting no time in anending [0 public business. On the agenda this May morning are nominations for new members of the Advisory Council [0 the Scate Office ofAlco- hol and Subsrance Abuse Services, which funds and oversees drug treacmem programs. Senacor Pedro Espada, Jr. of the Bronx has recently caken

SEPTEMBER/OCTOBER 2002

over as chair of the comminee, a reward for switching his allegiance earlier this year from the Democratic Pacey co join the Senate's Republican majoriry. He cakes pains noc [0 make eye comacr with the handfUl of Democracs in the room. Liz Krueger, the newest Democrat in the Republican-comrolled State Senate, is one of them. At the comminee table, she riffles through a scack of papers, searching in vain for any back-

ground information on the nominees. None of the other Democracs seems [0 have gotten advance notice of the candidates, either. Her col- league Dan Hevesi of Queens asks Espada [0 delay the vote until they can find out more about the nominees' qualifications. But Espada, dis- playing a Bushian air of bewilderment as he leans over [0 receive an earful of advice from a com- minee staffer, responds firmly. "We have co move the nomination. We've been [Old this is a neces- sary thing to do," he lectures them. "The con- cerns are duly noted. The nominees are passed out of corruninee." Krueger is no more successful in seeking discussion of a bill that would establish a local review process for new substance abuse treat- ment houses, giving mayors and neighbors influence [0 relocate or even block the facilities. "You might have communities that don't want halfway houses," Krueger tells the comminee. "That doesn't indicate a need for extensive reg- ulation." Unswayed, Espada calls a vote; the bill passes, as it already has the Assembly. Krueger is a legislacor with virtually no power. She can introduce bills, but they will never get out of comminee unless she ghost- writes one for a Republican. If she calls a hear- ing, she shouldn't expect anyone outside her parry [0 show up. Likewise, if she wants to attend a hearing called by a Republican , she has

21

to sit in the audience, just because they say so. Committee meetings are so brief they are often over before she gets to them, and Krueger is not a tardy person (even if she still sometimes gets lost in the labyrinths of the capitol build- ing). One meeting that rarely lets out early, though, is the Agriculture Committee's, which has the power to influence hunger-related fund- ing and policy-an area of great interest to Krueger, who spent 20 years as an advocate for low-income people before taking office. There, committee members can expect a feast with hostess Lorraine Hoffmann (R-Syracuse), sup- plied by the food producers of New York State. In April, the menu featured ostrich kebabs, farmed by a lone entrepreneur. The birds, and the farmer's need to expand his markets, were the only item on the agenda. He had every reason to expect some help: In the past year, the committee has sought to add three cents in taxes to the price of eggs to create a marketing program for the product, and, in a measure that became law, granted tax exemptions to livestock breeders and horse boarders. Krueger tried and failed to raise other business that day:

"I was taking away time from the urgent

business of the people," she recalls with

well-flexed sarcasm. Life as an idealist in Albany is a little bit like being a human on Mars, a planet Krueger says bears some resemblance to her new workplace. When she speaks up among her colleagues to address a chair in committee, she says, "Some of them look like, 'You're crazy-why are you bother- ing them?'" But no incident this year captured the frustrations of Senate Democrats more than their attempt this May to introduce campaign fmance reform legislation, comple- menting a bill in the Assembly. Under new majority-written rules, each party conference can only bring three bills directly to the floor each year without going through Republican- controlled committees, using a procedure called a "motion to discharge." Only the bill's sponsor can speak, and then just for five minutes. And when a vote is taken on the motion, any sena- tor who is not in the room but has checked in earlier that day is on record as voting "no. " (For all other votes, the opposite is true, which is why the chambers are usually half-empty dur- ing session .) So when it came time for minority leader Martin Connor to make his five-minute case for an immediate vote on the campaign finance

measure, the Republican majority blocked it the easiest way they could. They walked out.

IS THIS WHAT LIZ KRUEGER spent twO years and at least $1.5 million to do for a living? As State Senator for the Upper East Side, she's now running for the third time in 24 months for one of the least powerful elected offices in the state, against an opponent who promises to be well-financed and formidable. Even if she holds onto her seat, Krueger's involuntary paralysis as a Democratic senator is in striking contrast with where she's been until now. Before winning the job in a hard-fought special election this past winter, Krueger was known as a notably effective advocate for the

three men, currently Governor George Pataki, Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno, make all the decisions, putting Albany into perpetual grid- lock. They also privately decide how to spend the vast bulk of the $90 billion state budget. In theory, this should all work out just fine for New York City. After all, the Democrats have the state Assembly all to themselves, with their own committees and dollars and agendas. But in New York State, where Democratic vot- ers outnumber Republicans by about 2 million, the current order gives the Republican party and its upstate base disproportionate influence over state spending and legislative priorities. The stuff Krueger cares about-ensuring ade- quate resources for the poor, promoting public health care, constructing afford- able housing--couldn't be further off their agenda. This year, rank-and-file members had about two hours to review the budget, hundreds of pages long, before voting on it. They themselves have a say on only a small fraction, about $100 million a year in each house, handed to them as "mem- ber items" to spend on favored district projects and to shore up political support. "All of a sudden, I'm Santa Claus? With your taxpayer dollars?" Krueger jokes, and it sounds like self-righteousness-except that, of course, she's right. But Krueger needn't worry about spending too much of our money. In the Senate, Republicans get up to 10 times as much apiece to spend on member items as Democrats, according to staff esti- mates, as well as budgets for more staff, with higher salaries. (The reverse is true in the Assembly.) Pedro Espada is now suing the Bronx Demo- cratic Patty in an effort to remain on the Demo- cratic ballot this fall despite his switch in alle- giance to the Republicans. He was only doing what he had to do, Espada swore to the court, to make sure that his impoverished district got more of the state dollars that it so urgently needs. As reported by the New York Times, tucked neatly into the 2003 budget was $745,000 in grants for the Bronx health clinics where he setves as exec- utive director.

FOR KRUEGER, the daily trials of life in the legislature are made tolerable by an admittedly utopian and to most ears ludicrous prospect:

that New York's state legislature could be a dif- ferent kind of place, where members wouldn't

"Each session seems to be worse than the preceding-less productive, more frustrating, " says former State Senator Franz Leichter. "It's worse than embarrassing, and after a while you don't want to be tainted to be part of the system. "

poor. She used her skills as a proselytizer, coali- tion-builder and dealmaker to create models for setvices, including anti-eviction programs, food stamp education programs, and the city's first food bank. She got things done. In Albany, Krueger now opens her door for progressive advocates like herself. She routinely calls her former colleagues at the Community Food Resource Center and other organizations for advice and ideas, and Tuesday afternoons bring to her office a passel of lobbyists and well-wishers from New York City's social ser- vice, housing and health care agencies. But even ifher party were in the majority, she wouldn't be able to help them much. If voters in New York City know one thing about how busi- ness gets done in Albany-a big if-it's that

22

CITY LIMITS

have to stop being politicians, but could start being effective public servants. Good government advocates are convinced that New York's state legislature is the least democratic and most partisan in the country. "Each session seems to be worse than the pre- ceding-less productive, more frustrating, " says former Manhattan Senator Franz Leichter, who retired in 1998 after 30 years and now sirs on the Federal Housing Finance Board in Wash- ington. "It's worse than embarrassing, and after a while you don't want to be tainted to be part of the system." The session that ended in June was notably unproductive for an election year, without progress on Rockefeller drug law reform, a minimum wage increase, brownfields cleanup rules or predatory priests. Governor Pataki and the majorities in each house are absolutely confident of their reelec- tion, and they see no reason to mess with that. Parry discipline is enforced by a gauntlet of majority-written rules in each house, and the ability of both parties' leadership to withhold funds from mem- bers who step out of line. The neat divi- sion of power between Assembly Democrars and Senate Republicans is also reinforced from without by unions and other big-dollar campaign contribu- tors rewarding their benefactors. The minority leader in the Senate, 25-year veteran Martin Connor, is supportive of liberal members but not particularly inclined to rock the boat. In May, Con- nor shocked fellow party members when, at the groundbreaking for the Brooklyn Bridge State Park, he said that candidate Pataki had done more "things for the people of Brooklyn than I've seen of any other governor." But leadership's iron control is also an invit- ing target for subversion. Wimess the so-called Bragman coup two years ago, when a sizeable faction of Democrars led by a Syracuse assem- blymember attempted, unsuccessfully and with painfUl repercussions, to depose Silver from the Speaker's seat, complaining that they had little active role in lawmaking. Around that same time, the balance of power in the Senate also appeared vulnerable. In 1999 and 2000, Democrars Eric Schneiderman and Tom Duane, along with Rochester's Rick Dollinger and Albany's Neil Breslin, decided to shake things up. They aggressively used the motion to discharge to compel the Senate to debate and even pass bills on gay civil righrs,

SEPTEMBER/OCTOBER 2002

abortion clinic access and other issues Assembly Democrars were also pushing. At the same time, the Senate Democratic Campaign Committee, headed by Schneiderman, went on the offensive for the upcoming elections. The Republicans held the majority by only six sears out of 61, and the presidential race promised to bring Gore voters to the polls in force. Even if Democrars couldn't take them all, the threat of losing some sears might be enough to force Republicans to reckon with the Democratic legislative agenda. Krueger was the star recruit for the Democ- rats' cause. Even though she lost to Republican Roy Goodman in a squeaker that took longer to resolve than Bush v. Gore, Krueger was the story of the 2000 Senate race: a liberal, wealthy, charismatic and competent Upper East Sider

the minority," says Barbara Bartoletti, legislative director for the League of Women Voters. "This was a vendetta against a group of people." That backlash against the upstart Democrats is now defining the Senate elections this fall, and Krueger is being shown no mercy. She's fac- ing a challenge from Andrew Eristoff, an East Side Republican who left the City Council in 1999 to serve as finance chief for the Giuliani administration. As of mid-July, Eristoff had raised about $400,000-including $167,000 from his own family-and spent nearly as much, mostly on mailings, ads and consultants. Krueger had raised just under $81,000. That's not her only new hurdle: During redistricting this spring, Bruno redrew her district to excise Peter Cooper Village, Stuyvesant Town and Waterside Plaza, the areas where Krueger ran most strongly in the previous races. Meanwhile, redistricting has also put Schneiderman on the defensive-and pushed Dollinger into retirement. In early July, Dollinger, a 10-year veteran of the Senate and a dogged advocate for improved health care and legislative reform, decided to leave the Senate rather than take a pri- mary challenge from Joe Robach, a leader of the Bragman coup attempt who has switched to Republican and is getting sig- nificant backing from the party. Schneiderman has decided to fight it out. His Upper West Side district shifted north, to include heavily Dominican Washington Heights, where ex-City Councilmember Guillermo Linares, a Democrat, is now running with GOP support. Political observers wager Schnei- derman will be able to hang on. But in some sense he will still lose, because he'll have to spend this summer and fall raising money to keep himself in office-not helping other Democrats run for the Senate. "I wish we were in a stronger position to take more sears," acknowledges Krueger. Hevesi is also leaving, after redistricting pitted him against fellow Queens Democrat Toby Stavisky. In Brooklyn, Democrat Vincent Gentile is expected to get a stiff challenge ftom Republi- can Councilmember Marty Golden. And in a new Brooklyn district, another former coun- cilmember, Noach Dear, is favored; there are rumors that he, too, plans to turn Republican. Indeed, some Democrars are livid at Schnei- derman and the campaign committee for what the critics consider a reckless and counterpto- ductive crusade. "It's totally the biggest failure

co n [inn ed on page 4 .5

Last year Senate leadership locked down the chamber, forcing senators to get permission to go to the bathroom. "This was a vendetta," says one veteran lobbyist.

with an impressive track record as an advocate for the poor. Then Goodman departed his post for a job in the Bloomberg administration and the race started anew; Krueger battled Assem- blymember John Ravitz for the seat, and won. But when she finally arrived this past Febru- ary, the State Senate was an even more inhos- pitable place, if that's possible. Once the majori- ty leadership restricted use of the motion to dis- charge, the group of Democrars found a new way to be nudniks: they staged a slow roll call for every bill, and debated each for as long as possi- ble. The Republicans were not pleased. On one memorable occasion, leadership locked down the chamber, forcing senators to get permission even to go to the bathroom. "It has gotten so totali- tarian and dosed because of the effectiveness of

23

H aggling on his cell phone with Citibank over exorbitant fees, straddling a pile of

H aggling on his cell phone with Citibank over exorbitant fees, straddling a pile of bills, and helping customers all at the same time, David Ramnauth holds court outside his parents' hardware store. He constantly nods hello, and gets patted on

the shoulder by men walking past. Ramnauth seems to know everyone on Bedford-Stuyvesant's Fulton Street. With good reason: he's been working in the area since 1979. His par- ents now own the building and store he stands in ftont of, and his btoth- er owns Rose, a beaucy supply business down the street, right next door

to a health food store that a Ramnauth cousin runs. Ramnauth's family didn't always have so much real estate. When they

24

started out, they were licensed street vendors, selling fragrances and cos- tume jewelry. ("It was the disco era, so we sold big pearls and medallions ," he recalls.) By juggling street sales, college and his mother's office clean- ing job for over two decades-one Ramnauth would watch the tables while the others were occupied-they built three small businesses and began investing time, money and love into the neighborhood. Now, they are vendors, residents, customers, shopkeepers, building owners and small business operators, all in one family. "We were in the right place at the right time," says Ramnauth. Yet the Ramnauths aren't reaping many benefits these days. Rents are up on Fulton Street, but business is down-way down. And according to

CITY LIMITS

Ramnauth and scores of other small merchants on Fulron's main commer- cial strip, it's plummeting

Ramnauth and scores of other small merchants on Fulron's main commer- cial strip, it's plummeting because of a measure that was intended ro help local merchants: getting street vendors off the sidewalks of Fulron Street. In May of200 1, the city, using police on horseback and in helicopters, and with metal barricades and special task force tearns, removed all street vendors-whether they were licensed or not-from Fulron Street. As with most vendor crackdowns, the city was responding ro complaints from residents, commuters and real estate groups ro Brooklyn's Commu- nity Board 3. According to District Manager Lewis Watkins, local busi- ness owners wanted the vendors out too, but were too afraid to come for- ward. "Sto re owners complained under their breath-we were getting a

SEPTEMBER/OCTOBER 2002

Through street vending, David Ramnauth's family built a smaU business empire on Brooklyn's Fulton Street.

lot of complaints from people who

never had a face," says Watkins. Then-

City Councilmember Anneue Robinson lobbied hard for the vendors' removal, which was implemented as part of a $3 million Brooklyn Cham- ber of Commerce and city Department of Business Services revitalization project called Fulton First. But on Fulton Street, it's difficult to find a single retailer who will acknowledge supporting the campaign for the vendors' eviction. Shop owners satisfied with the outcome are just as scarce. When the crush of vendors along Fulton Street's sidewalks was swept away, Ramnauth esti- mates, "all businesses out here lost 20 percent" of their sales. The street vendors, it turns out, were one strand in the web of relationships that snared customers and sustained Fulton Street. In interviews up and down the strip--from Bedford to New York avenues-almost all small merchants say the same thing. While a few shop owners report that removal of the vendors did not affect their prof- its one way or another-''!'m not waiting for vendors to bring us busi- ness," says record store owner Charlie Rawlston--even they have to admit that business did not improve. And it's not just the crashing econ- omy, they say. The majority date the local slump to the vendors' removal, after which business "instandy dropped," contends Roberto Mader, who has wotked on Fulton Street for seven years. Then, he adds, "9/11 fin- ished it off" Over and over, vendors and merchants alike mutter phras- es like "Just look," gesturing with a wave of the hand to point out the obvious: deserted streets, abandoned storefronts, empty marketplaces. Inside the narrow Rose beauty store, Ramnauth's niece Tina, a cheru- bic 17-year old, lists benefits that vendors brought to the area, and, in

turn, to her parents' corner store: variety, crowds, liveliness, and music that "made you feel wanted, like you belong. Caribbean people like to have some music to bop their heads to," she explains, herself of Guyanese and Indian descent. Without the vendors, says Tina, "i t's just dead. " Outside, Tina's mother Rose notes that "zero visibility" restrictions have also limited their ability to pay their $6,000 rent every month. Enforced at the same time as vending crackdowns, these city regulations, which prohibit shops from cluttering street sighdines by displaying their wares outside, have the same goal: pristine, merchandise-free sidewalks. Yet most stores along Fulton Street put inventory outside-in a way, becoming vendors themselves--even though they risk fines of up to $1,000. Siuing in the midst of her T-shirts and handkerchiefs, Rose explains: "If you have high rent and no foot traffic, $800 feels like $8,000. If I didn't do this, I couldn't pay the rent." Visible goods- whether a vendor's or the store's--equal sales. While some merchants still think vendors constitute unfair competi- tion, others see them as threads of the same commercial web. Mader has worked for seven years in a store that sells everything you would expect to see at vendors' tables: hats, scarves, beaded sandals, trinkets, bags, and more. But business didn't improve with vendors out of the way. In fact, when they were out on the sidewalks en masse, "I wouldn't be sitring down on a Saturday," says 27-year-old Mader from his tiny chair. A few doors away, his mother, Pamela, a Trinidadian vendor of incense, had drawn up petitions in support of vendors remaining on the street, giving them to then-Councilmember Robinson. Now, her son's store is losing out. "They made a big mistake for everyone," says Cobra, an aspiring pho- tographer who works in a small photo and gifr shop on Fulton Street, close to Nostrand, the epicenter of the Bedford-Stuyvesant shopping strip. "Fulton Street is not what it used to be, " sighs the 23-year-old philosophically. "Ask anyone." Across the street from Cobra, in a housewares store literally stuffed

2S

to the rafters with towels, sheets, curtains, and other home goods, an attractive, quiet man estimates that without the vendors in front of the shop, they're losing $400 per day, $700 a day on Saturdays. They had to layoff one staff member, and those who remain work fewer shifts. (Because most of them were violating vending or zero visibility laws, vendors and many merchants were afraid to give City Limits full or even first names.) It wasn't just sales that deteriorated, either. Two weeks after vendors were removed, says Pamela, an old lady was mugged of $200 at the bus stop across the street. While some people say crime was worse with the crowds and the vendors, Tina says, "If somebody was in trouble, they'd be the first ones there-even before the cops." "Before, you couldn't have stolen something and gotten more than

merchants can't even put out their own stuff?" demands Jack Katz, pres- ident of the Flatbush Business Improvement District, which succeeded in getting vendors off Flatbush Avenue. "They were breaking the law being in the street. It was not kosher." Fred Hooke, head of the city Department of Business Services' Ven- dor Micro Enterprise Initiative, which coordinates enforcement of vend- ing laws and helps set up alternative vending sites, also finds illegal street vending hard to defend. While the city caps the number of vending per- mits, issuing 3,000 food licenses and 853 general vending licenses, Hooke's agency estimates that about 17, 000 people are vending without permits or licenses. Hooke and others cite a range of egregious behavior, from leaving garbage and causing congestion to hawking stolen or boot- legged goods. "It's a false notion that these streets need vendors, that stores will suffer" without them, he says. "Study after study has shown that vendors constitute a public haz-

ard. There's no doubt about that. "

Yet serious market analysis, studies, or surveys are conducted before sweeping vendors off the streets. (Asked to cite particular studies, Hooke could not name one.) Rather, city officials usually make the decision after meetings with local business and com- munity groups. "When it's done, there's no market analysis that supports it," says Mark Winston Grif- fith, executive director of the Central Brooklyn Part- nership (and a City Limits board member) , which is a parmer in Fulton First. "It's just based on sensibility and aesthetic and class-based resentment toward a certain kind of people." Steve Balkin did one of the few studies on the topic. An economist at Roosevelt University in Chica- go, Balkin studied the destruction of that city's famed vendor market on Maxwell Street. Since 1912, push- carts crammed the sidewalks and lanes of Maxwell Street, especially on Sundays, when over 1,000 ven- dors congregated. Known the world over, the market served low-income residents, mostly Mrican-Ameri- can, as well as a multi-ethnic mix of people from

throughout the city. A well-known hangout for blues musicians, Maxwell Street is often called the birth- place of the electric blues, since musicians had to amp up their sound to be heard over the commercial din. Over the years, the vendors thrived, even as the neighborhood fell into disrepair. Then, in the early 1990s, the nearby University of illinois at Chicago

decided to expand student housing to Maxwell Street. Balkin and others initially welcomed the idea, believing it would revitalize the area. But in 1994, the university decided the Maxwell Street vendors had to go, prompting outrage from Chicagoans and from urbanists the world round. As the university closed the market with the city's help, Balkin and two fellow researchers tried to estimate the impact. What they found was intriguing. As soon as the peddlers and street vendors moved out-even before the university began to demolish sur- rounding buildings-the local merchants' business dropped. "People were coming there for the vibrancy of the street life," explains Balkin, "not to buy hats and suits."

In a cost-benefit analysis, they calculated that monetary loss to users of

they calculated that monetary loss to users of Cobra says customers fled Fulton Street as soon

Cobra says customers fled Fulton Street as soon as the city cleared

street vendors away

.

two feet," before being caught, says Cobra. "Everyone looked out for each other. Now, evetyone looks out for themselves."

W hile the vitality street vendors offer might seem as obvi- ous as the desolation their absence brings, other mer- chants and businesses often fail to see it until the vendors are gone. Many storefront retailers believe the vendors,

with their proximity to customers, have an unfair competitive advan- tage-especially if they're selling the same product.

"Why should somebody be allowed to peddle on the street when my

26

CITY LIMITS

the market-including lost income ro vendors and their relocation expenses, and lost shoppers' savings-would be $35.2 million over a pro- jected seven-year period. When they facrored in indirect losses-from vendors no longer spending their money in their area; by local wholesalers from whom ven-

dors had bought goods; and from money not being spent at other neigh- borhood businesses, because even regular shoppers went elsewhere once the vendors were gone-the removal of the vendors represented a loss of almost $50 million (about equal ro the subsidy the university received ro move into the space). Balkin's srudy pur a dollar value on what the Fulron Street merchants learned on the job: Street vending, even if it's illegal, obeys basic eco- nomic laws. A competitive market that benefits some or all participants and harms none has reached a state called Parero optima-in short, a win-win situation. And whether or not well-meaning officials and com- muniry representatives realize it, it's ofren what you find on srreers where vendors thrive. "What the srore doesn't have, the vendors will," notes an employ- ee at the housewares srore on Ful- ron Srreer. Ofren pedestrians would stop ro browse a vendor's goods, she says, and "rum around and see something they like in the srore"-a statement echoed almost verbatim by Cobra and other shop- keepers. Ramnauth agrees. "Any rime you have choices," he says, "you get more business." As businesses cluster cogether in the same geographic space, their profirs tend co rise-even if they're selling the same producr. Economisrs call it the agglomera- tion principle, and it's why several competing department srores will all be located at the same mall. That street vending helps local merchants is "almost textbook" economics, agrees Margaret Craw- ford, a professor of urban design

communiry is particularly important in low-income neighborhoods, where any means of entering the formal economy can make the differ- ence between a life of hope and one of desperation," says Chip Mellor, president of the conservative, anti-regularory Institute for Justice think tank in Washingron, D.C. In Chicago, the vendors on Maxwell Srreet arrracted defenders from the opposite extreme of the ideological spectrum: "It's a sad day in Amer- ica," chuckles Balkin, "when the Maoist Revolutionary Communist Parry has to defend free enterprise."

A s freshman council member for Lower Manhattan, Alan Ger- son's fiery baptism into ciry politics includes deciding what ro do abour the growing souks in Soho, Chinarown and espe- cially around Ground Zero. Yawning at the end of a long day,

Gerson suggests a three-pronged approach co vending: IdentifY the

suggests a three-pronged approach co vending: IdentifY the and at the Bedford-Stuyvesant Cooperative Market, Jah Thomas

and

at the Bedford-Stuyvesant Cooperative Market, Jah Thomas and Amadou Perry

only see a fraction of the customers they got on Fulton Street.

appropriate time, place and densiry for sidewalk vending; work with vendors on-site ro address sanitation or noise complaints; and develop something he calls a "vendor benevolent sociery." And if that fails, con- sider putting them in a marketplace. When law enforcement crackdowns promoting "qualiry of life" tar- geted street vendors in the mid-1990s, the city's Department of Business Services (DBS) came up with a plan ro incubate the entrepreneurial dreams of vendors who were swept off the sidewalks. In consultation with several other ciry agencies, DBS set up "alternative markets" in previously vacant, usually ciry-owned lots in Harlem, Bed-Sruy, Flatbush

cOlltioued on page -+6

and planning at Harvard Universi-

ry's Graduate School of Design. Like Balkin, she believes that street vendors create "natural markets," identifYing consumer demand and filling it. (Crawford jokingly adds that when ciry planners regulate vendors, it's usually because they "have ro

make work for themselves. ")

Another scholar who has studied street vendors' relationship to the sur- rounding formal economy is Universiry of Nebraska-Lincoln urban anthro- pologist John Gaber. Afrer nine months of field research, Gaber found that illegal vendors on Manhattan's 14th Srreet provide a "positive synergistic conrribution" to local merchants by selling complementary goods and cre-

ating a distinctive environment for shopping. It's not just academics who think vendors uplifr neighborhoods. "There is strong anecdotal evidence ro suggest that a vibrant vending

SEPTEMBER/OCTOBER 2002

27

A great day on the Lower East Side: Soon, these squatters will own their homes.
A great day on the
Lower East Side:
Soon, these squatters will own their homes.

28

CITY LIMITS

ers , I es • Loisaida 's last outlaws are about to make their most
ers , I es • Loisaida 's last outlaws are about to make their most
ers , I es • Loisaida 's last outlaws are about to make their most

ers , I es

ers , I es • Loisaida 's last outlaws are about to make their most revolutionary

Loisaida 's last outlaws are about to make their most revolutionary move yet: legal occupation.

By Robert Neuwirth . Photographs by Aaron Lee Fineman .

T his is the story of a housing war, and an unexpected victory for some of the city's most maligned activists.

On one side were the Lower East Side's squatters, ordinary people who illegally occu- pied some of the city's most decrepit aban- doned buildings. Against them stood the city of New York, which through three mayors was ready to use its full firepower to get them out. The story of their conflicts is one of pitched battles, paramilitary assaults, and incredible bravery and risk. And for more than 200 squat- ters who toughed it out and are still in their homes, it's now a story with a happy ending. In the spring of 1989, the squatters of Umbrella House barricaded themselves in their building when the city's demolition crew arrived at the foot of Avenue C to tear it down. As the wrecking ball started to swing, biting into the vacant tenement next door and com- ing ever closer to their homes, they stationed themselves in their windows and defied the police to take them out. "I put a big sign on my window that said, 'I'm willing to die for my home, how about you?, '" recalls Umbrella House squatter Siob- han Meow. ''And I meant it, I really meant it. I wasn't fucking around. Because I had nothing other than that building." During a three-day standoff, the police blocked offAvenue C between East 2nd and 3rd streets while the squatters bricked up their front

door and ducked in and out through back alleys. They brought in water from a fire hydrant around the corner. They used buckets for toilets, scurrying out of their building under cover of darkness to empty the waste into city sewers. They took showers outdoors, in the runoff from rainstorms. Because the city Department of Housing Preservation and Development (HPD) had ripped out most of the interior staircase,

SEPTEMBER/OCTOBER 2002

they used the rear fire escape as stairs. Compared with what went down at other squats, this was a minor skirmish. On May 30, 1995, hundreds of heavily armed NYPD riot cops invaded the East Village in an armored personnel carrier, evicting squatters from 541 and 545 East 13th Street and arresting 31. The battles were not confined to Manhattan:

Between 1990 and 1995, the city used every weapon at its disposal-police officers, fire- men, EMTs, housing cops-to evict hundreds of squatters, mostly low-income Latino factory workers and their families, from about 200 South Bronx apartments. Three successive mayors-Koch, Dinkins and Giuliani-treated squatters as if they were more dangerous than violent criminals. The hardball tactics, along with changes in the housing market, seemed to spell the end of squatting in the city. By the late 1990s, there were only about a couple of hundred squatters lefr in Manhattan, most of them in a dozen buildings on the Lower East Side. But now, 11 of the Lower East Side's 12 remaining squats are about to sign a deal with their old archenemy. The Loisaida squats, last bastion of illegal occupancy, are becoming offi- cial, and soon the squatters will own their homes. For the past three years, the squatters have been quietly working to buy their apart- ment houses from the city and turn them into low-income cooperatives. And afrer decades of arguing that legalizing squats would encourage squatters to invade buildings everywhere, the city has agreed to do just that. In late August 1999, the Lower East Side's remaining squatters began secret negotiations with the Giuliani administration. Much like shuttle diplomacy in the Middle East, they never talked directly; instead, they communicated through an intermediary, the Urban Home-

steading Assisrance Board (UHAB), a local non- profit that helps tenants take over and manage their buildings. Afrer much discussion, they cut their own version of the Camp David accords. The squatters have agreed to tame their anar- chist tendencies and become legal, hiring archi- tects to bring their homegrown rehabs up to code. The city has agreed to sell the buildings to UHAB, which will take responsibility for them during the renovations and then sell them back to the tenants as low-income cooperatives. The deal, hammered out during the last days of the Giuliani administration, was delayed after September 11 . But Mayor Michael Bloomberg's staffers have honored the basic framework, and on June 26, the deal to save the squats passed the City Council. Sever- al weeks later, Bloomberg signed off on it. No one, not even those close to the deal, knows for sure why the city finally agreed to end this two-decade standoff. HPD Commis- sioner Jerilyn Perine declined repeated requests for an interview, issuing a written statement that said, "HPD is continuing its longstanding policy of conveying our in rem properties to quality, non-profit developers. We are confi- dent that UHAB will make sure the buildings are rehabilitated and become safe, decent and affordable housing for local residents." But the lengthy, bitter squatter battles of the past suggest what the city's reasons might be. Informed observers speculate that since most of the remaining squatter buildings are stable and well-run, they would resist attempts at eviction and get sympathetic press coverage in the process. Since at least one of the squats agreed to drop ongoing litigation, the deal has also saved the city considerable court costs- anoth- er one of Mayor Bloomberg's goals. For the squatters, going legal means aban- doning their outsider status, which has been

29

John Ferris, poet. Lives at 292 East 3rd Street. Zenzele Browne, painter. Lives at 278

John Ferris, poet. Lives at 292 East 3rd Street.

John Ferris, poet. Lives at 292 East 3rd Street. Zenzele Browne, painter. Lives at 278 East

Zenzele Browne, painter. Lives at 278 East 7th Street.

Zenzele Browne, painter. Lives at 278 East 7th Street. Rosemary Wa ll s, artist. Lives at

Rosemary Wa ll s, artist. Lives at 719 East 6th Street.

30

both an ethical stand and a source of pride. "I'm kind of torn on that, because, well, I'm kinda proud of beating the system," admitS John Wag- ner, who has lived at Serenity House on East 9th

Street since the early 1990s. One friend

of Wag-

ner's, who used to live in the squat and thinks that the squatters are selling out, sends him let- ters addressed to "house thief John Wagner. " But going legit after decades of extraJegaJ occupation is less of a contradiction than it might seem. While outSiders, city bureaucratS and even some housing activistS regard them as middJe- class anarchist scoffiaws, the squatters themselves invoke the more practical notion ofold-fashioned sweat equity ownership. Their longtime defiance may have been political, but it was aJso practical. They wanted to keep their homes. For Wagner and the others, legalizing the squatS is just anoth- er way to do that. 'The whole issue of taking over vacant space and using it is revolutionary, according to the establishment," said Hafid Lalaoui-who lived in many East Village squats over the years, most recently at Bullet Space on East 3rd Street-as he basks in the afternoon shade on Avenue C. "But it's not steaJing. It's recycling and trans- forming and building community. We were not anarchists, not anti-establishment. We were Struggling to survive-period."

N ew York's squatS were born from the

flames of arson and abandonment. Land-

lords deserted swaths of structures in the

1970s, and the city began foreclosing en masse, taking thousands of buildings at a time. Almost immediately, people began moving into the vacant buildings, rescuing them from destruc- tion and decay. The early squatters were the typ- ical New York melting pot: whites and blacks, Puerto Ricans and Latinos, party animaJs and politicos, gentle hippies and genuine radicals, lots of poor people and a few who seemed inter- ested in upward mobility. For some, squatting was a political act, a way to reclaim unused and blighted property for the people where the gov- ernment had clearly failed. For many others, it was just a way to afford a place to live. By the early 1990s, there were between 500 and 1,000 squatters spread through 32 build- ings on Manhattan's Lower East Side. The city had foreclosed on thousands of abandoned buildings during the 1970s and 1980s, so by then most of the squats were owned by the gov- ernment. Squatting, initiaJly embraced by neighborhoods and activistS aJike, was begin- ning to faJI out of favor with both. Some com- munity residentS were openly skeptical about the vaJues and motives of the Loisaida squatters,

seeing them simply as pampered politicaJ white kids seeking a cheap rent. (In the homesteading heyday of the 1970s, the squats were probably about 70 percent Latino. And while it's true that they got whiter over time, they are far from monolithic: In the 11 squats going legaJ, 50 per- cent of residents are white, 20 percent Latino, 23 percent African-American, 2 percent Asian and 5 percent identifying themselves as other or mixed. There are families, too: 39 of the 236 squatters are children.) Their bitterest enemies, though, were non- profit affordable housing groups. For years, the Loisaida squatters refused to work through approved channels. This irked many progres- sives and local housing organizers, who saw them as interfering with legitimate affordable housing goaJs. The disagreementS were partly political-some of the squatters' anarchist antics were bringing the neighborhood bad press. But for some affordable housing developers, the ani- mus was more direct: They were competing for the rapidJy shrinking city-owned housing stock. The city painted squatters as enemies of affordable housing, evicting them if any develop- er had a plausible plan for low- or moderate- income apartments. Some in the housing devel- opment field played aJong eagerly. Antonio Pagan, a nonprofit-developer-turned-City Council member, labeled the squatters "yuppie gentrifiers disguising themselves in revolutionary garb to get free rent. " For their part, the squatters viewed traditionaJ housing activistS as selloutS. But for every ideological firebrand, there were other squatters who were aJmost apolitical. For every squatter who gleefully mouthed words of revolution there were others who had no time for ideology because they were too busy instaJling new beams. For every drug-addJed party animaJ, there were squatters who were 9- to-5 working stiffs. "The trouble with squats is they attract dead- beatS like maggotS to a corpse," recaJls one squat- ter leader as he leans on a ladder near one of his homemade windows. "You've got a core group of workers, and then you've got the parasites. The squatS that didn't survive were the ones where people used them to do drugs and get drunk. " The squatters who thrived did so by engaging in what might be caJled self-help opportunism. Interviews with successful squatters show that they actuaJIy have quite a bit in common with their sworn enemies, reaJ estate developers. For instance, just as developers ofren look to take over vaJuable buildings that may have faJIen into city hands, many squatters who took over their buildings in the early 1980s took advantage of a controversiaJ city program caJled Operation

CITY LI M ITS

A Brief History of Squatting

South Bronx, 1977: Going Banana Kelly Members of the Banana

Kelly Community Improvement Association "liberate" three buildings on banana-shaped Kelly Street in the South Bronx. These squatters are cele- brated, not arrested: The Citizen 's Committee of New York gives Banana

Kelly its biggest-yet Self-Help Neighborhood Award, the squatters are feted

in the Bronx Borough President's office and local banks even take out sub-

way ads saluting "sweat equity" takeovers.

East New York, 1985: The Long Squat Summer Over the sum-

mer of 1985, ACORN and the Harlem Reclamation Project win widespread support for squatting with dozens of high-profile building takeovers. Before squatting any buildings, the ACORN squatters first asked the city

to renovate 2,000 abandoned, rotting East New York buildings. (It didn't.)

Senator Thomas Bartosiewicz (D-Brooklyn ) and

three ACORN activists get arrested for breaking into an abandoned city- owned building in East New York. (In the end, ACORN got to keep the build- ings it seized: The group formed the Mutual Housing Association of New York, and the city turned over 58 buildings, plus $2.7 million in city fund- ing to rehab and run them.) ACORN lobbies for a law, based on one in Chicago, which would bar the city from evicting any squatter who improves

his or her property. "I don't think you could ever make squatting legal:

On August 22, State

sniffs East New York City Councilmember Priscilla Wooten . "Can you imag- ine what that would do to a city like this? "

Bronx, 1987: Community on the Move Onetime Loisaida home-

steader Matthew Lee founds Inner City Press, a community newspaper for the South Bronx featuring free verse poetry and how-to tips on homesteading. In 1988, Lee starts meeting every week with local families in the South Bronx who want to clean up and renovate buildings . By 1993, 150 families-almost all low-wage Latino factory workers-occupy about a dozen buildings.

Bronx, 1991-1993: Community on the Ropes

December 1990-January 1991: Even though squatters say they'd be will- ing to join a city-run program, the city sends 200 cops in riot gear to force families out of Inner City Press' original Crotona Park East buildings after two space-heater fires. Another group of Bronx buildings is evicted when the

land is slated for

September 1991: After a 31-year-Old firefighter dies while fighting a fire supposedly set by a squatter, Mayor David Dinkins vows to remove squatters from all city-owned buildings.

March 1992: Inner City Press meets with then-HPD Commissioner Felice Michetti to discuss the future oftheir homesteading efforts. "Our buildings may be owned by the city, " sexagenarian squatter Enrique Deleo says to Michetti. "But the city is the property of the people and we are the peo- pie." Later that summer, HPD demands a list of buildings Inner City Press

is squatting. When Inner City Press refuses, HPD breaks off negotiations.

July 8, 1993: Cops, firemen, EMS and HPD officials swarm two Inner City Press buildings, 670 and 675 East 170th Street in Morrisania. For the Bron x squatters, it's the fourth eviction in three years. Sixty-year-old Deleo goes up to the roof and almost jumps; cops take him down, arrest him and charge him with "attempted suicide." Cops escort 32 families from the building, taking them straight to homeless shelters in the Bronx and Manhattan. Eight months later, most families from the 170th Street build- ings are still living in welfare hotels, costing the city $80 a day per house- hold. To this day, about 200 people live in Inner City buildings . Though they have repeatedly tried to legalize them , even enlisting Congressman Jose Serrano (D-Bronx) to help, their status remains unresolved.

a "moderate-income " housing development.

East 13th Street, 1993-1997: Adverse Possession is Nine- Tenths of the Law

1994: Squatters sue to get title to five buildings, 535-45 East 13th between

A and B. The squatters, some of whom have lived there for more than 10

years, use the legal doctrine of "adverse possession " : If you've had contin- uous use of property, with no formal objection from the owner, it 's yours. In

'" -:- ! iij ~ :§
'"
-:-
!
iij
~

8

Frank Morales defending 319 East 8th St. in 1989. The building was later torn down.

Their lawyer is Stanley Cohen, now best known

for defending Sheik Omar Abdel-Rahman and other Islamic militants.

1995: State Supreme Court Justice Elliot Wilk issues a preliminary injunc- tion against the city's eviction plans, rejecting its claim it urgently needs the buildings for a $3.9 million, mostly low-income housing development it's been planning since 1990. "For more than a decade," wrote the judge, the city " demonstrated no interest in preserving this housing stock. They knowingly allowed it to deteriorate and to become a magnet for drug traf- fic, to the detriment of the surrounding neighborhood. "

other words, squatter 's rights.

1996: When a state appellate court lifts the injunction, the Giuliani admin- istration wastes no time in evicting the squatters, sending bulldozers, barri- cades and Dumpsters and razing their gardens. Police arrest five people. Two days later, police arrest 23 protesters for marching to Tompkins Square

Park in support

of the squatters .

January 1997: The city owns 1,325 vacant buildings.

713 East 9th Street, 1999: Dos Blockos April 27, 1999: Squatters

chain themselves to the fire escape, cement the doors shut, block halls and stairwells with refrigerators, air conditioners and washing machines, and hurl bottle rockets at riot-clad cops to keep them out of Dos Blockos. It doesn't work: Emergency Services workers drill a hole in the brick wall, and power-saw through the chains . Hundreds gather on the street outside, singing as cops take down the banner proclaiming "We the people won't go. " One squatter leans out the window, shouting " Help, police, they're breaking into my home! " The city let the building stand vacant for 12 years before the squatters seized it. The squatters, who put in a new roof, electricity and running water, also tried to get rent-stabilized leases . Instead, the city sells the building to a private developer for $285,000 , and charges 13 of the 22 squatters with obstructing governmental administration. "The only crime they comm itted ," rages City Councilmember Margarita Lopez, "was to save that building. "

-Annia Ciezadlo

Sources: City Limits archives, New York Times, New York Newsday, Washington Post, New York Daily News, Associated Press, Village Voice, Los Angeles Times.

Popeye, relaxing in his home recording studio, says C Squat was "total hectic hell" until

Popeye, relaxing in his home recording studio, says C Squat was "total hectic hell" until residents laid down some rules.

Pressure Point, a paramilitary police action against the drug trade that forced heroin addicts and dealers to abandon many buildings that had served as shooting galleries. When the dealers and addicts moved out, the squatters quickly moved in, figuring their actions might not be noticed while the police were otherwise engaged. Successful squatters chose their takeover tar- gets carefully. One particularly savvy local activist advised them to identify a building slat- ed for the city's "cross-subsidy" program-a compromise plan allowing developers to do high-income construction in exchange for cre- ating a certain number of affordable apart- ments. Because the program was controversial, even among housing activists, the squatters fig- ured the cross-subsidy building they found would be mired in political red tape for years, and that their occupation might fly under the radar. It did, and today that building is the squat called Umbrella House. When gentrification became the new threat

on the block, canny squatters fought it. But they also put it to work for their buildings, pil- fering from every neighborhood dumpster and construction site, scavenging joists, plywood, rebar, toilets, tile, pipes, plumbing. Others combed the neighborhood for materials, even hauling perfectly good used toilets out of the trash when buildings were required by law to install new water-saving low-flow models. Through it all, the squatters maintained a relentless focus on making their buildings habit- able. Though many squats started with an inter- esting blend of communitarian and libertarian values, the squatters quickly realized that if they were going to build something permanent, they couldn't run their buildings like Dodge City. They would need to lay down laws, too. So, from the early days of occupancy, squat- ters at Umbrella House drew up a few rules:

among them, no drugs, no violence, no theft, no racism, no sexual harassment. A few mem- bers of the initial core group were thrown out

because they began to break those ironclad principles. Similarly, at C Squat-a haven for punk musicians with a penchant for loud noise and hard living-some hard-working residents were ultimately forced out when their addic- tions spun out of control. Popeye has been in C Squat for eight years, which makes him a grizzled veteran, as the

streak of gray in his hair confirms. Sprawled in

a frayed chair in the roughly rehabbed room that is at once bedroom, living room and

recording studio, he remembers the early days

of C Squat. " It was total hectic hell when every-

one was 18 ,"

freedom. But rules exist for a reason, too. We have applied them, and good friends have been tossed. " In some cases, he adds, the threat of eviction pushed addicts to try to clean up. "Sometimes the prospect of being severed from your group of friends , from your family, is the only countervailing force" to addiction, he says. After the 1988 riots in Tompkins Square Park, when police moved to break up a tent city, local squats welcomed many of the park's former occupants. It was a turning point, both for the neighborhood and for the squats. "We thought we could do this big liberal idealistic thing," recalls Umbrella's Siobhan Meow. "But you can't be nice to criminals. You can't give

people stuff for free because they'll just shit on it. These guys were literally hanging their asses out the windows and shirting into the courtyard. They almost brought the house

down

we survived that was more of a

miracle than the city leaving us alone."

he says. "Bohemia is devoted to

That

O utsid e, some of the Loisaida squats maintain a graffiti-scarred look, as if to inform passersby that they've been

through the wars. Others look much like the gentrified rehabs that surround them. Some still require residents to black out their win- dows at night because they are afraid Con Ed will discover that they are stealing power and move to shut them down. Inside, squatter apartments are done up in styles as diverse as the residents themselves. Some are spartan places-dean but rustic, with salvaged windows and crudely patched floors. Others are as genteel as you can imagine , with fine floors and carpeting, fully equipped kitchens, and plenty of exposed brick walls. To climb the steps in C Squat is to walk up

a living graffiti artwork. The halls resemble

subway cars a few decades ago. But instead of monikers, these tags are battle cries for revolu- tion, outlaw logos, complaints and humorous takes on official slogans. "School-Free Drug

Zone," one door proclaims. At Umbrella House, the walls are much more restrained:

One of the choicer tags notes that if you want to ear the rich, you've gor [0 cook them firsr. The Lower East Side squats inherited a tra- dirion of do-ir-yourself anarchist activism. Bur in the buildings that survived, residents did not spend all their time partying or pushing politi- cal platforms. While many squatters clearly were interested in a social revolurion, they didn't lose their focus on improving their homes. "The idea was [0 take this on as a con- struction projecr," says a politically acrive squatter who has occupied one East Village building for 17 years. (Like many other squat- rers interviewed for rhis arricle, she didn't want to be named: Ar the rime, they were still illegal

years. "This building was so ronen, it was liter- ally like a rainforest in here," he remembers. "We had nothing. No money, no marerials, no rools. We were just doing the lamest scuff" The squaners learned as they went. "The roofleaked so bad that yo u could be in the base- ment, look up, and see the sky," adds Dann. "When it rained hard, we had these tarps to funnel all the water into buckets, and we had to run a bucker brigade to pour the water out the windows." The rarp sysrem, and the fact that passersby would get soaked if they didn't have umbrellas, gave Umbrella House its name. To replace the dozens of stairs that were miss- ing, Meow scavenged thick rebar from a side- walk replacement projecr on St. Marks Place. Then the squar held a staircase party at ABC No

Place. Then the squar held a staircase party at ABC No Siobhan Meow, who rescues and

Siobhan Meow, who rescues and neuters Loisaida's stray cats, calls his Umbrella House pad "the furry love kitten cat farm. "

occupanrs in the city's eyes.) "First get the building, then secure the building, then water- proof the building, and on and on. Most squar- rers are not activisrs-they're workers." Squar- rers needed to do labor-intensive construcrion like fixing roofs, replacing joisrs and building walls. Ar Umbrella House, Geoff Dann remembers, "For the first five years, thar's all we did-work." Standing in the spacious bur rustic top-floor aparrment in Umbrella House thar he shares with the 89 cars he has rescued from around the neighborhood, Siobhan Meow (who takes his lasr name from his feline roommares) recalls whar kind of hell he lived in for the first few

SEPTEMBER/OCTOBER 2002

Rio, sening the rebar in molds and pouring con- crere around it. As the finishing touch, artists embellished the concrete with riles, glass frag- ments, even palm and face prints. "They were definirely nor code," concedes Meow, bur they worked fme until early this year, when the build- ing finally agreed [0 accepr new risers. Every building has a similar srory. Ar C Squat (155 Avenue C), the beams were so roned that the building had sunk almosr a foor in the cen- rer. The squaners jacked the building up and replaced the joists one by one. They got their replacement beams £Tom workers ar a nearby gur rehab. In return for six-packs of beer, the work- ers saved the old but scill usable joists they were

11 FXR UPRS, NO DN PMT

292 East Third

haven for artists and musicians with a gallery on the ground floo r. A very low-income building ; at one point, the person with the most stable job was a waitress. Residents: 10. Estimated cost of rehab needed: $211,750. *

719 East Sixth Street. Demographically speak-

ing, the oldest squat. A real Lo isaida mix: aging

rad icals, punk rock parents

gravitated here by chance. Some are even eligi- ble for Social Security. Residents: 28. Cost of rehab: $574,751.

209 East 7th Street. A stable building of families

and children, where women take leadership. Resi- dents: 35. Estimated cost of rehab: $514,251.

274 East 7th Street . Residents call it Rainbow

Co-op, but others call them "the Germans, " because of the high number of European immi- grants. Residents: 21 . Cost of rehab: $393,251.

278 East 7th Street. Known for stable house-

holds and families, this squat was never vacant.

Res idents: 33. Cost of rehab: $574,751.

733 East 9th Street, aka Serenity. Sandwiched

between two pricey buildings, Serenity's punk rock aesthetic has not endeared it to the neigh- bors; they continua lly report it to the Fire Depart- ment. Residents: 34. Cost of rehab: $544,501.

377 East 10th Street. A quiet squat, with lots of

veteran squatters who

squats over the years. Residents: 19. Cost of rehab: $423,501.

544 East 13th Street. Movie star Rosario Daw- son-W ill Smith's girlfriend in Men in Black II- spent time here growing up, and her family still lives in the building. Residents: 16. Cost of rehab: $333,751.

and folks who just

Bullet Space. A

Street, aka

have

lived

in

multiple

7 1/2 2nd Avenue. Might be the most middle- class squat. Occupants include an MTA mechan- ic and a businessman who imports fish from South America. Residents: 15. Cost of rehab:

$242,001.

21-23 Avenue C, aka Umbrella House . Once known as the UN squat, because of its diversity. Now, about one-third of the house is South Amer- ican, mostly from Colombia. Residents: 24. Cost of rehab: $605,001.

155 Avenue C , aka C Squat. The youngest squat,

with most residents in their twenties and a few still in their teens. About one-third make their liv-

ing doing seasonal farm work, picking blueberries in Maine and cranberries in Massachusetts . Beloved crash pad known for concerts, parties, screenings and skateboarding tourneys. Resi-

dents: 16. Cost

-AC

of rehab: $484,001 .

*all preliminary estimates

33

removing and passed them on to the squaners. "For a year or more we lived like a Hopi Vil- lage, with ladders going up each floor," says Popeye, who was burned out of several East Village buildings before he moved into C Squat. He adds with a laugh that for a building with so many punk musicians, it was great hav- ing a huge hole in center of the house, because you could haul heavy amps up or down with a rope-and-pulley system. After their three-day battle with police, Umbrella House's squaners outfoxed a city stop-

police, Umbrella House's squaners outfoxed a city stop- Inside CSquat: rules for rooftop use. C Squat

Inside CSquat: rules for rooftop use.

outfoxed a city stop- Inside CSquat: rules for rooftop use. C Squat scavenged building supplies from

C Squat scavenged building supplies from materials abundant in the neighborhood.

supplies from materials abundant in the neighborhood. Once CSquat is legal, Popeye promises, "we' ll just

Once CSquat is legal, Popeye promises, "we' ll just tag it to death anyway."

34

work order by tunneling under Avenue C to install a waste line and tie it into the sewer main. "If they found out that we had no drains or waste line, they could have evicted us," explains Geoff Dann, who joined the Umbrella House crew in early 1989. "We were about halfway into the job when the city came. They came on a Fri- day night and really pulled our pants down." The city inspector gave the squatters until Monday morning to fill in the hole they had dug in Avenue C. At a house meeting that evening, the squatters resolved to resort to sub- terfuge: They would cover the street with boards or steel plates, and tunnel under them to install the waste line in a secret underground marathon. Dann, who spent an eight-hour shift cramming himself into the narrow open- ing and chopping at the hard earth with a short-handled shovel, recalls dirt cascading onto his head every time a car passed overhead. After the pipe was installed, the squatters had to pack dirt back into the hole so the tunnel would be invisible when inspectors returned in the morning. "We worked 24 hours a day for three days straight," says Meow of his time in the hole. "It was like a scene out of The Great Escape. We were the sandhogs from hell."

F or 15 years, various squatters had

approached UHAB about the possibilities

of becoming legal, hoping to guarantee

they wouldn't get kicked out. And for 15 years, UHAB probed the matter with the city-and ran into a brick wall. From Koch to Dinkins,

the answer was blunt: "Prior administrations refused to accept squatters as human," recalls

Joe Center,

But the Giuliani administration, whatever its reasons, finally decided to keep talking in the summer of 1999. The negotiations, which took three years, were not especially arduous. They were simply time-consuming, mainly because all the players needed some time to suss each other out. At C Squat, many of the younger occupants just don't feel comfortable with authority fig- ures, and they considered executives from non- profit housing agencies to be hypocrites to boot. But UHAB's commitment to communi- tarian principles eventually quieted the squat- ters' fears. (It also didn't hurt that Center, though soft-spoken, has a long record in the city's radical movements and can cite guerrilla history as well as any squatter.) "We wouldn't be doing this without UHAB ," says Ellen Kessler, who has squatted on East 7th Street since 1981 and now lives at number 278.

UHAB 's associate director.

"They're objective. They have nothing to gain or lose. And their principles are in line with what ours should be." In the end, only one building, 272 East 7th Street, refused to participate, telling Center that they had documentation of the city's con- spiracy to cleanse the Lower East Side of peo- ple of color, and would win in court if it ever tried to kick them out. Staying out of the deal is their right, notes Center, but it makes him fear for their future. "I think they've isolated themselves," he frets, adding that he doesn't think "a racist, classist court system" is going to protect them. Once they learned to trust UHAB, the squat- ters had to trust the city. That the Giuliani administration was willing to allow them to stay is a mystery that even the squaners don't risk try- ing to explain. But they're beginning to believe that City Hall is not trying to arrest them this time around: When a fire broke out in 377 East 10th Street last March, HPD sealed the building and relocated the squaners through the Red Cross as though they were ordinary tenants. And when the Fire Department threatened to vacate Umbrella House for building code violations last fall, HPD pulled strings for the squatters, telling the city's building and fire inspectors to back off, informing them that the city was working to fix the problems, and fixing stairs and fire escapes. "That was, like, amazing," says Meow. "It's hard to be bitter enemies when they fix the stairs and fire escapes for free. " In another show of good faith, the city agreed to a fallback plan in the aftermath of September 11. Not knowing who the next mayor would be, HPD agreed to immediately lease the buildings to UHAB if the deal's future was threatened. (HPD disputes this ver- sion of events, saying that any reference to such an agreement is inaccurate.) The final agreement relies on a fiction: The city is selling the buildings as if they are vacant, transferring them to UHAB for $1 each. Thus, on paper at least, the city still does not have to acknowledge the squatters as legitimate resi- dents. More importantly, the city will not put any money into renovation. (That's not to say, though, that the squatters won't be attempting to corral funds from other government pro- grams, such as block grant funding or low- interest loans, down the line.) UHAB will then flip the buildings to the squatters, who will run them as limited equity cooperatives, meaning that squatters will not be able to make a quick fortune by turning around and selling what are supposed to be apartments for low-income people. The squat-

CITY LIMITS

ters have signed agreemems mat mere will be no subleasing-indeed, no reming of apart- mems at all-and that all units must be sold back to the tenant association rather than to new shareholders, reducing the chance that anyone who suddenly becomes greedy will demand under-the-table paymems for me right to purchase an apartmem. UHAB will also work with each building to cobble together the finances to make renova- tions possible. Cemer estimates mat the total cost of rehabbing the 11 buildings will be about $4.9 million, to be paid for with a com- bination of cash equity, bank financing and, for three of the squats, revenue from ground-

floor retail storefroms. The construction credo can be summed up in a few words: "You make

it legal," says Cemer. "You don't do anyrhing

else. These buildings are going to become barely legal." The number of electrical outlets,

for example, will be the code minimum instead ofUHAB's more generous standard of one outlet per wall. Ultimately, Center estimates mat monthly maimenance paymems could balloon to about

$120 a room--or perhaps 25 percem more man

is me norm in the average new limited equity

coop-mostly because me buildings will have to take on some debt. But costs will still be far, far

below me mousands a monm me apartmems could command on me open market. For Umbrella House, that may mean "rems" (or "donations to me building fund,"

as Siobhan Meow prefers to say) rising to $500

a momh from about $100 . "That will be

hard," he admits. And at 544 East 13th Street, one of the original invaders, who emered me building in 1984, notes that her momhly pay-

mems will rise 400 percem-from about $100

a momh to over $400. 'Tm going to feel the pinch," she admits.

A; they prepare to become owners, me squatters will face some culture shock. or one, they have always been out-

siders-and they've learned to live wim hard- ships. Many of me buildings still have no heat and no gas-at least, not legally. Now, wim higher monmly rems and an ownership stake, some squatters worry me complaims are going to start-about how clean me halls are or whemer staircase light bulbs are promptly replaced, or about me state of me paim job in me common areas of me building, or about junk someone may be stor- ing on the roof. In a way, the squatter buildings now risk becoming a bit middle class. "We have to make choices based on what's

.,

A family of squatters: Sophie Herivelomalala with husband Dan Yafet, who has lived at 209 East 7th Street since 1987, and two little Yafets.

going to be good for this building 10 years down me road," says Meow. "And mere's a danger that me tenant association could turn imo a bunch of backbiting freaks. " Already, at least one of me squats has split into bitterly opposing factions. Hafid Lalaoui, who now lives in Portland, Maine, supports me plan for me squatters to own meir homes. But he's a bit sad, too. "I think this idea of having me building owned will be a big change," he says. "People will begin to have me concept of 'this is mine.' That wasn't what it was about originally, and I'm worried about mat." Meow agrees. "I would rather continue me way we're going-if we could be left alone, " he says. "But me stakes have changed. We know mat if we don't take me deal it would be a mat- ter of time before me city came after us. " Up at C Squat, Popeye becomes philosoph- ical as he considers me future. "This place is an ongoing experirnem, an informal urban commune," he says. "It's easier to pay rent and not have to know or depend on

me person who lives next to you. For whatever reason, me city made a mistake. We slipped mrough me cracks in mis place that abhors what we are. Being here, in a mundane and

tiny way,

Popeye sees me squats-particularly me punk vision of C Squat-as heir to me democratic tra- dition of me beats and me hippies. The coop vision, he says, won't end mose ideals. In a way, it will enable mem to cominue, by ensuring mat "mis little place mat ain't like me rest of me world will go on. As long as this lime thing is here , mis kind of spirit will persist in Manhattan. " Besides, he adds, owning meir apartmems will not change people's spirit, and new walls and fresh paint won't crush the C Squat aes- thetic. Says Popeye , with a wry smile as he heads out the door to go to work, "1 can guar- antee you: Afrer the rehab, we'll just tag it to deam anyway. " •

is committing treason ."

Additional reporting by Annia Ciezadlo.

Tax the Street

HongKongdoes it. So does London. Whydon't we?

By lW. Mason

HIGH FINANCE DOESN'T have the prestige it had

a year ago . As the city prepares to invest bil- lions in rebuilding Wall Street, new financial scandals joust for front-page space with New York's looming budget gap. New Yorkers might be excused for asking, How can we make sure the Street does something for the city? Here's one idea: Tax the financial markets. From 1907 to 1981, the state levied a stock transfer tax of up to a nickel a share, which worked out to about 0.2 percent of each trans- action. Every share traded on the New York and American stock exchanges was liable for the tax, no matter where the buyer, seller or broker happened to be. (Strictly speaking, the tax still exists but is instantly rebated . An addi- tional federal tax, 1/300th of a percent on stock transfers, is also assessed to fund the Securities and Exchange Commission.)

A stock transfer tax is part of the broader family of securities transaction taxes. The most famous member of this family is probably the hypothetical "Tobin tax" on international cur- rency transactions, which Nobel prize-winner James Tobin proposed as a tool to limit the kind of destructive financial speculation that has contributed to financial crises throughout the developing world. Whether transaction taxes really reduce mar- ket volatility is a matter of considerable dispute. But no one doubts that they can raise a lot of rev- enue. And arguably, they do so with a minimum of the "distortions" that, for economists, are the real cost of taxation. For an economist, the only meaningful expense of a tax is the change in pe0- ple's behavior that it causes. And there's little evi- dence that a stock transfer tax would significant- ly change the behavior of investors, brokers or anyone else. If anything, it might help curb the excesses of speculation that have helped bring Wall Street into its current crisis. In 1981, the last year New York's tax was in effect, it brought in $328 million for the city. (The tax was collected by the state but, under

a deal worked out by Mayor John Lindsay in the 1960s, the proceeds were passed to the

INTELLIGENCE

IDEA

THE

BIG

the proceeds were passed to the INTELLIGENCE IDEA THE BIG city.) If the same tax were

city.) If the same tax were imposed on today's hyperactive markets, it would bring in nearly $8 billion a year. No one is currently proposing that. Advo- cates of the tax-led by the Working Families Party and the independent Fiscal Policy Insti- [Ute-are calling for a tax at one-tenth the old nickel rate, or half a penny per share, capped at $35 per transaction. (This would work out to an average tax rate of less than 0.02 percent.) The tax would bring in an estimated $800 million a year--exactly enough, as it happens, to cover the $753 million budget shortfall projected for this year by the city's Independent Budget Office.

SO MUCH FOR THE BENEFITS. What about the

costs? Some fear the financial services indus- try-banks and brokers-will leave the city; others believe the exchanges themselves will pull up stakes. Less apocalyptically, but per- haps more realistically, some worry that even if the brokers stay, they'll direct their trades over- seas. "The bottom line is," says Don Mele of the New York City Partnership, "how much business which otherwise would have hap- pened in New York won't happen?" The answer is probably not much. Because

the tax would apply to all shares traded on the New York exchanges, no matter where the broker, buyer or seller was, the vast bulk of the industry would be unable to avoid it by leav- ing town. "So unless you believe this tax will cause the entire stock exchange to move, which on its face is absurd," says Dan Cantor of the Working Families Party, "you're not going to see businesses leave." Not everyone agrees it's absurd. (The New York Stock Exchange, which got Bloomberg's attention this July when it hinted it might move half its operations to Westchester, declined repeated requests for comment.) But consider: The tax would increase trading costs by less than 1 percent-and that would be paid by investors, not by the exchanges. New York City's pledge of massive financial support to build a new New York Stock Exchange doesn't alter the fact that it would be enor- mously expensive for the exchange to relocate outside of New York City, bringing infinitesi- mal cost savings. If the exchange does move, it will be for a lot of other reasons-cheaper rent and security concerns foremost among them. A more serious worry is that since many stocks traded on the New York exchanges are

also traded on foreign markets, brokers might try to save their customers the cost of the tax by directing their orders abroad. Such a shift would cost the ci ty little in the short term, but in the

long run could erode the primacy of New York's markets. As Mele says, there is no guarantee that New York will be the world's fmancial hub for- ever: "Who ever would have thought of Singa- pore as a major financial center 10 years ago?" As it happens, Singapore, number two on the Heritage Foundation's Economic Freedom index, already levies stock transfer taxes. So does number one, Hong Kong. London, a market which, as Mele rightly notes , has been gaining business from New York in the past decade, has one of the world's highest stock-transfer taxes, 0.5 percent--over 20 times the proposed New York rate. It's possible that tax-avoidance would lead to trading overseas, but where? Indeed, in much of the

world taxing sales of stocks is as natural as tax- ing sales of cigarettes. France charges 0.15 per- cent of the stock's value, Germany 0.17 percent, Switzerland 0.15 percent, Ireland a full 1 percent. At least 30 countries, includ- ing almost all of New York's major competitors, tax stock transfers, accord- ing to a recent Poli tical Economy Research Insti-

tute paper by economists Robert Pollin, Dean Baker and Marc Schabere. All else being equal, market participants would no doubt avoid the tax if they could. But all else is never equal. Total transaction costs on stock trades-commissions, spreads, fees levied by the exchanges-are seldom less

than 2 percent. Given that few taxes are as high as one-tenth of that, it's not surprising that taxes are swamped by other factors in determining where trades take place.

is that it falls much more heavily on short- term speculation than on the Warren Buffets of the world who buy and hold. The small tax being proposed is unlikely ro affect investor behavior much one way or the other; but to the extent it encourages longer time horizons, we might expect more productive investment by American firms. And if the tax reduced short-term speculation , moderating Wall Street's boom and bust cycles, the city would benefit directly as well. Some suggest limiting the tax, at least ini- tially, to the most potentially damaging forms of speculation. Jane D'Arista, an economist at the Financial Markets Center, proposes begin- ning with a tax limited to short-sales, the prac- tice of selling borrowed shares in the hopes they will decline. "Some limits on the most egregious forms of speculation are absolutely necessary,"

says D'Arista. As Pollin notes, a new tax on Wall Street probably has better odds of passing now than any time in the past generation. "The collapse of the 1990s bubble makes clear that re-regulat- ing financial markets in an intelligent way is a matter of urgency," he says.

"Stock transfer taxes are highly flexible policy tools. If they are set at a low rate, they discourage only the most highly speculative traders and still raise lots of revenue. " Whether to rein in speculation or to raise revenue, an y proposal to reinstate the stock transfer tax will face an uphill fight. In the wake of September 11, it's hard to make the case for imposing any new burden on lower Manhattan, especially when few realize how small the tax's burden would actually be. But its proponents are optimistic: Although Mayor Bloomberg doesn't think much of the idea, a majority of the City Council is already on record in support of reviving the stock transfer tax. "G iven how big a deficit we're about to

face," says Cantor hopefully, "something that wouldn't have a chance in ordinary years may actually happen. " •

In much of the world, taxing sales of stocks is as natural as taxing cigarettes.

IN FACT, IT'S UNLIKElY that the tax New York

is considering would have any noticeable effect on market behavior at all. But if it did, the most likely response would be that investors would simply trade less. (There's some evi- dence that this was one of the main responses when the London tax was extended to previ- ously untaxed transactions in 1986.) Though it would reduce the revenue from the tax a bit, this would not necessarily be a bad thing. One benefit of a stock-transfer tax

j. W Mason is a Ph.D candidate in economics at the University ofMassachusetts-Amherst.

SEPTEMBER/OCTOBER 2002

INTELLIGENCE

IDEA

THE

BIG

NEW

REPORTS

With land for new housing rapidly dwindling, nonprofit developers and others are warily eye- ing the city'sroughly 5,000 brownfields-for- merly industrial or commercial sites, many along waterfronts, with moderate contamina- tion-as virtually the final option for inner- city development. Unfortunately, as this most recent issue of the Citizens Housing and Plan- ning Council newsletter cogently and suc- cinctly details , such development is stalled by legislative indifference in Albany, since devel- opers won't proceed until laws are in place that clearly delineate their clean-up responsi- bilities and future liabilities.

"Brownfields Burnout," The Urban Prospect May/June 2002 www.chpcny.orWprospect.htmlor 212-286·9211

While the Community Reinvestment Act has certainly succeeded in promoting lending and investment in poor neighborhoods, its provi- sions cover fewer than 30 percent of all home purchase loans. That's because the primary activity that the law seeks to promote-mort- gage lending-is now dominated by non- CRA-regulated mortgage lenders . To ensure that the act can still give activists the tools they need to assess banking in their commu- nities, this massive Ford Foundation-commis- sioned report suggests extending CRA to cover all mortgage lending.

"The 25th Anniversary of the Community Reinvestment Act: Access to Capital in an Evolving Financial Services System," The Joint Center for HousingStudies

www.jchs.harvard.eduor617-495-7908

To label this study as depressing is an under- statement. Of the thousands of 18-year-olds who "graduated" from foster care in Califor- nia, Illinois and South Carolina in the mid-

1990s,

on Iy 45

percent of the youth

ever

worked at any time during the three years studied. Those dismal rates aren't much worse than two other peer groups: foster care youth who were reunited with their families before

they turned 18, and a general group of low- income young people.

"Employment Outcomes of Youth Aging Out of Foster Care," University of Chicago aspe.hhs.gov/hsp/alisthtm or 202-690-7858

37

INTELLIGENCE

CITY

LIT

Out of Africa

By Hakim Hasan

INTELLIGENCE CITY LIT Out of Africa By Hakim Hasan Money Has No Smell The Africanization of
Money Has No Smell The Africanization of New York City Paul Stoller
Money
Has
No
Smell
The
Africanization
of
New
York
City
Paul
Stoller

Money Has No Smell: The Africanization of New York City By Paul Stoller The University of Chicago Press, $18, 232 pages

FROM 1992 TO 1999, I worked as a book ven- dor on Sixth Avenue at 8th Street in Green- wich Village. It was there that I befriended Yusef, an African from COte d'Ivoire who was trying to "make business," as he put it, by sell- ing African masks. In 1994, Yusef's father died. Because his temporary visa had expired, INS regulations barred him from returning ifhe left the United States. Yusef had to choose berween attending his father's funeral or remaining in the United States. He decided to stay. For me, Yusef's decision was a revelation. Like many black Americans, I romanticized Africa, but knew nothing of the realiry of poverry there. I knew little about the econom- ic devastation in Africa when France, pressed by the World Bank, devalued the CFA-franc (the currency of 14 African countries that belonged to the Communaute Financiere Africaine), causing the cost of medicine and simple goods to skyrocket. Nor did I realize the role that corrupt post-colonial African leaders played in the fiscal mismanagement of African countries. But Yusef's decision magnified the terrible economic conditions in Cote d'Ivoire, which he talked about endlessly. In Money Has No Smell Paul Stoller draws a connection berween the intractable poverry most Africans endure and the predicament of African immigrants like my friend. Stoller, an anthropologist at West Chester Universiry in Pennsylvania, examines the lives of African traders who fled their continent to become street vendors in New York Ciry. New York Ciry has seen rwo distinct surges of migration by African traders. The first, which began as early as 1982, came primarily from Senegal; the second wave, with West African traders coming en masse from Ghana, Nigeria, Mali, and Cote d'Ivoire during the 1990s, is Stoller's primary focus. When the Senegalese arrived in New York Ciry in the early 1980s, they set up shop on fashionable Fifth Avenue in front of ultra-chic stores like Bergdorf Goodman, Saks Fifth Avenue and Trump Tower, which had its own coterie of chic boutiques on the ground floor.

They sold counterfeits of Rolex- es and other brand name watch-

es 1990s, competition heated up berween the ubiquitous Sene- galese vendors and the newly arrived West African traders from Mali, Cote d'Ivoire, Ghana and Nigeria. Inevitably, the Fifth Avenue Merchants Association, led by Donald Trump, began to com- plain to the Koch Administra- tion about the vendors. Forced to leave the sacrosanct Fifth Avenue commercial district in

1988, the vendors migrated to 125th Street in Harlem, nostal- gically regarded by some histori- ans and cultural critics as the "cultural capital" of black America. It was here, interestingly enough, that the newly arrived West Africans abandoned Rolexes in favor of Afrocentric baseball caps, tee-shirts, textiles, jewelry, and art to black Americans. The rich Afrocentric market in Harlem gave rise to unexpected business alliances berween Africans and Koreans. Stoller documents how "Afrocentric" goods were manufactured by Koreans in sweatshops along Canal Street in lower Manhattan, then bought wholesale by African street vendors uptown and sold to black Americans, to whom they symbolized authentic African heritage and identiry.

from makeshift tables . In the

the Gap. Whether or not this was a deliberate attempt to appear American-Stoller does not say-the lesson is clear: Globalization creates cultural transvestites, global citizens able to operate in a multitude of ethnic milieus. But as street vendors multiplied along 125th Street, Harlem's main commercial artery, tensions began to rise berween the vendors, local merchants, and the political establishment: Community Board 10, the 125th Street Business Improvement District, and the Harlem Business Alliance, among others. Like the Fifth Avenue Merchants Association, these converging interests peti- tioned Mayor Dinkins, and later Mayor Giu- liani, to remove the vendors. In 1994, under the auspices of then-Police Commissioner William Bratton, Mayor Giu- liani disbanded the vendors on 125th with a show of police force that bordered on a mili- tary invasion . The wholesale removal of the vendors from 125th Street was one of Giu- liani's first symbolic acts of control over public space, one that set the tone for his rancorous relationship with the black communiry during his rwo terms as mayor. To further complicate maners, the Ciry, in an unlikely-some said unholy-po litical alliance, put a local mosque

did

not want to bow out of the lucrative market, " writes Stoller. "And so they traveled uptown to invest in bolts of wholesale 'Ghanaian kente,' which they brought to their sweatshops in lower Manhartan, producing hundreds of 'kente' caps

at a price cheaper than one could get buying cloth on 125th Street and commissioning an African tailor." While the African vendors sold Afrocentric goods to black Americans-what Stoller calls a "simulated" version of authentic African iden- tiry-many of the vendors wore baggy "home- boy" jeans, baseball hats, and clothing from

"Korean merchants in lower Manhattan

in charge of the vendors. Officials of the Masjid Malcolm X Shabazz now preside over an alternative vending site at 116th Street. Stoller's account is painfully accurate, though he fails to document the rise of Busi- ness Imptovement Districts (BIDs) in New York City in the early 1980s and during the 1990s. This is a serious omission, because of the influence they had in regulating the use of public space. The BIDs successfully pressured police and city officials to remove vendors, even when they were in full compliance with city vending ordinances. This is complicated terrain. To his credit, Stoller articulates the nexus between global trade policies and poverty in Africa. Yet he fails to show how economic development policies in poor black communities (in this case Harlem) can also cause economic fissures and migrations of their own. Undoubtedly, the macro-migration of West African traders to New York City as a response to globalization is

important to reconcile and understand. Howev- er, the constant micro- migration of African vendors within New York City is also impor- tant. Do the vendors dis- tinguish between the political and economic forces that drove them from their homelands and those that drove them from 125th Street? The African vendors in Stoller's book, very

much like my friend Yusef, share a stark disillusionment with Amer- ica. But it is tempered by economic expediency and geography: in the end, they prefer to be dis- illusioned in America, with a greater chance of economic survival, than in Africa. They have no

time for lofty speeches or negritude analysis. They gather their goods. They move. They sell. And so, after the police crackdown on vendors in Harlem, Yusef migrated to the Village; we agreed that he would sell his masks from under- neath my book vending table.

street vendors. They create informal banks to loan one another money, paying back only what they have borrowed, since interest is for- bidden by Islamic law. Their collective goal is to maintain their tradition of trading and the economic lifelines to their families. There are instances when Stoller's infor- mants' accounts of village and family life are

unconvincing. This is particularly true when the vendors talk about sexual fidelity and polygamy. Their stories convey that there is no strife, no tension-all is well in traditional African society; ye t, Stoller writes:

"To avoid opportunities for infidelity, long-distance traders often insist that their wives live in the family compound, surround- ed by observant relatives who enforce codes of

sexual fidelity

if they are travelling, believe it is their inalien-

able right to have sexual relationships with other women. As Muslims, moreover, they

have a right, if they chose and are financially able, to marry as many

as four women." One wonders if Stoller has

read So Long A Letter

by the Senegalese femi- nist novelist Marima Ba. Considered a clas- sic work of African lit- erature, Ba debunks the myth of happy "co- wives" in polygamous marriages and demon- strates how "culture" has been used to limit, if not destroy, the ambitions of women.

of these men, especially

many

Migrant street vendors sell watches, kente cloth and African identity.

But for the most part, Stoller's "montage of social analysis and ethnographic description" is purposeful. vibrant and unobtrusive. Based on fieldwork he conducted in New York City from 1992 to 1998, Stoller's intricate theoretical narrative creates what Meyer Shapiro, the great art his- torian, called "an entrance" into the lives of West African vendors in New York City. By examining the lives of African vendors, Money Has No Smell uncovers the hidden anthropology of African life in America. Deeply informed by Stoller's extensive experi- ence as a cultural anthropologist on both sides of the Atlantic, Stoller's book gives us a fasci- nating glimpse of New York City's third world urban future.•

Hakim Hasan is the Director of the Audrey Cohen College Urban Institute in New York City.

WITHOUT LAPSING INTO academic doublespeak, Stoller traces the consequences of globalization on the diasporic lives of his informants, men like Issifi Mayaka, El Hadj Moru Sifi, Idrissa Dan Inna, all of whom are devout Muslims. Relying on cooperative economic practices based on Islam, many see survival by trade as life, fortitude and honor-the ethos of most

SEPTEMBER/OCTOBER 2002

INTELLIGENCE

LIT

CITY

NOW

READ

THIS

Capitol Offenders: HowPrivate Interests Govern Our States

By Diane Renzulli and The Center for Public Integrity Public Integrity Books, $14

Creating this must have been hell. CPI, a good government group, brought its Beltway-sharp- ened investigative skills to state capitols , com- pi ling campaign contributions and personal financial information from the nation's 7,400 state leg islators into a huge database. The result is a compendium of numbers and out- raged anecdotes about insider deal-making, corporate influence an d overt corruption. One stunning factoi d: America has 36,959 registered lobbying interests-nearly five for each legisla- tor nationwide.

MakingWorKPay: America After Welfare

Edited by Robert Kuttner The New Press, $18.95

 

The 18 American Prospect stories here take two seemingly contradictory approaches: While chastising local governmentsfor heedlessly push- ing welfare recipients into the unforgiving low- wage ma rket , it also applauds programs that help low-wage workers build their careers and incomes. The approach belies the nuanced reality of welfare reform: Its seamy side ignored by cele- bratory policymakers nationwide, its successes in expanding child care and job training under- played by progressive advocates and thinkers.

Grounds For Play: The Movement that Built Playgrounds for the People of New York

By Justin Krebs NewYorkers for Parks, Donation requested

Playgrounds don't just happen, this brief but engaging history argues; they exist because of the hard work of activists who have prioritized

safe recreational spaces for youth. The highlight is images of youth in the city's playgrounds-

from a dim shot

of boys

playing

a primitive game

of basketball in a back alley to a bird 's-eye view of elaborate group dances in 1930s Harlem.

39

INTELLIGENCE

MAKING

CHANGE

INTELLIGENCE MAKING CHANGE Poverty 3.0 Couldfree software andcomputers wire a grassroots revolution? By Steven Gnagni THE
INTELLIGENCE MAKING CHANGE Poverty 3.0 Couldfree software andcomputers wire a grassroots revolution? By Steven Gnagni THE

Poverty 3.0

Couldfree software andcomputers wire a grassroots revolution?

By Steven Gnagni

THE IDEA SEEMED so simple, yet so powerful. First, take a bunch of old, decrepit computers nobody else wanted. Install bare bones soft- ware-an operating system, a word processing program, email and an Internet browser. Finally, distribute the computers to low-income people, and fly them across the digital divide. For Robin Acree, a welfare organizer in cen- tral Missouri, the plan sounded perfect. The local university extension offered 14 computers it no longer needed. Acree's technology provider was willing to handle software installation and training. And her board members all needed

computers-most had never owned one. As if that wasn't enough ro convince her, Acree found herself drawn in by one last detail. The software itself was state of the art, and it would cost nothing. Created by a group of pro- grammers scattered across the world, this kind of software--called "open source" software because the programs can be openly distributed and modified-promised ro be more bug- and failure-free, because it was developed and test- ed by a collective of programmers and users. In late April, Acree's New York City-based computer consultants-Dirk Slater and Arif Mamdani, of the Welfare Law Center's Low Income Nerworking and Communications (LINC) project-rook a trip ro Mexico, Mis- souri, where Acree's low-income organizing group , Grass Roots Organizing, is based. Out of the 14 donated computers, a hodgepodge of

486s and low-end

It took rwo enrire days ro install the new software. "We fully expected to run into prob- lems," says Mamdani. "That's the other thing about older machines. You never know exactly what you're getting. There were a bunch of flop-

Penriums, 10 worked well .

py drives, a couple of CD-ROMs that weren't working, but the hard drives were all working." Once the computers were set up, Mamdani trained Acree and her staff, first as a group and then individually. Three of the board members had some experience with Windows machines, and the other three had little or no experience with computers at all. There were some quick successes. One board member, as soon as she saw that she had a word processing program, immediately start- ed wriring a letter to the governor. "That's very powerful," says Acree. "We just gave her a com- puter that someone else was going to throw

away, and

Gloria Curtis, another board member from Columbia, Missouri , now uses the internet to research welfare programs in other states. She's also studying to be a paralegal and is complet- ing all of the course exams online. Other board members now email Acree constantly, setting up meetings and responding to her messages. But they had some steep learning curves, too. While open source programs are just as func- rional as Microsoft Word or Internet Explorer, there are small differences-a function may be listed under a different menu, for example, or it may have a slightly different name. Those differ- ences have slowed Acree down. "It's a hard tran- sirion for me right now," Acree says. "There seem to be extra steps involved that I'm not used to doing. I'm very open-minded about it, but I srill don't feel right."

look wh a t she can do now. "

IN 1984, A FORMER MIT computer scienrist named Richard Stallman suggested that software would become better if you made the source code accessible to anyone, allowing other pro-

grammers a crack at improving it. They might rewrite some of the code, which could make the program run faster or crash less; they might also create enrirely new features . In 2000, a small group of nonprofits founded an organizarion dedicated to promoring and crearing open source software: the Nonprofit Open Source Iniriarive, or NOSI (www.nosi.net). But while a small number of technology assistance providers in the nonprofit sector are actively promoting the use of open source soft- ware, they're also finding out that the software is srill a work in progress. In some cases, the

software is very intuitive and user-friendly ; but

in others, setting up the software and learning to use it can be so difficult it may even impede the work of the organizarion. Part of the prob- lem is that because the software was developed by individuals, not companies, the documenta-

tion and support are often more complicated,

INTELLIGENCE

MAKING

CHANGE

or even lacking entirely. So while the organiza- tions are saving money by getting free software, they end up paying consultants to help them set up and customize open source programs. And while software can be expensive, setup and upkeep are often the more expensive costs in any technology project, says Jason Hutchins, director of business relations for NonprofitSolu-

tions.Net, a technology consultancy for human services and community-based organizations. Not everything is complicated to set up. Downloading and installing Mozilla, an open source web browser designed by Netscape pro- grammers, is as simple as getting the Netscape browser. But installing and configuring Pagetool, an open source program that allows inexperi- enced computer users to create and update web pages, or installing the Linux operating system with a desktop interface that looks like Windows, is more complicated.

For nonprofits, the real power of open source, says Hutchins, is in small, free, easy-to- configure office and Web applications. 'Til go into nonprofits, and they'll be talking about how they need to buy

and customize some large, extensive piece of software to communi- cate with each other," Hutchins explains. "And I just say 'Look, why don't yo u just get AOL Instant Messenger.' I spend an inordinate amount of time going into organizations just pointing Out free stuff. It's probably the first

something where I would say to a group, 'You don't need my help ro do this,'" Slater says. "But actually, I do know a couple of groups, like [Brooklyn-based] Make the Road by Walk- ing, that have had some computing expertise in house, and they've been able to set them up themselves." It's much more rare to fmd examples of open source being used on individual computers. Because of this, the Missouri project was a big trial for Slater and Mamdani. They carefully chose the software: KDE and Gnome, two desk-

top interfaces that look a lot like Windows; the web browser Mozilla; and two word processing programs, OpenOffice and AbiWord. Mamdani says he and Slater soon found one challenge they didn't expect: Retraining experi- enced users accustomed to using commercial programs. They fust had to ask, "How are you used to doing this?" and

then had to show the user the new way to do the task. With com- pletely inexperienced users, "the training was easier," Mamdani says. "There was nothing to relearn." For Acree's group,

How to turn old computers into organizing tools.

Slater focused on finding technologies that would enable Acree and her board members to do organizing work. Running open source software on donated computers is a clear winner for any organizing group, Slater says, and last July LINC launched a similar project with New York City low-income membership group Community Voices Heard (CVH). "I hate this term, but there's a digital divide on our board-people who have computers, people who don't have computers," says Paul Getsos, executive director of CVH. Without the low cost of open source software, says Getsos, CVH couldn't consider giving computers ro all eight of its board members. And in addition to its low cost, the small-scale nature of open source soft- ware makes it possible to use donated computers. "Ifwe're talking about a $1,000 investment," says Getsos, "ies much more attractive."

For CVH, Slater is considering using Page- tool. Available in a Spanish-language version, the program allows organizers to update their web sites themselves. "You can actually get a bit more of your constituency involved in the development of the site itself," Slater says. "For us, that's huge." •

thing I do. "

The other real money-saver, Hutchins says, is open source software for servers-the large com- puters that host files, web pages, and sometimes software applications. "Most of your big non- profits here in the city are paying professional hosting services with huge contracts," he says. "We're talking $60,000 annually for having multiple servers. For that kind of budget, they could have somebody on staff building and cus- tomizing applications with open source."

like-

ly already using some form of open source soft- ware, whether they know it or not, and it's usual- lyon their servers. The most common application is an open source web site server called Apache. According ro a survey released in March, 54 per- cent of all web sites use Apache to serve content.

IN FACT, MANY human services non profits are

The second most common use of open source software, says Slater, is installing the

Steven

Gnagni

is

an

Astoria-based freelance

Linux operating system on a file server. "It's not

writer.

CITY

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WEB

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ARCHIVES.

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INTELLIGENCE

NYC

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Doing Our Marketing

By David Hochman

ONCE UPON A TIME, back during the dot-com labor shortage, I heard the chief operating offi- cer of a major Internet company address a Crain's breakfast-a regular event at which read- ers of the weekly business publication and oth- ers socialize, and listen to a panel of journalists interview leading business and political figures. The COO's company was a classic New York City success story: He and his parmers grew a vibrant technology business (still with us today) by feeding off our dominance in advertising. Of all the complaints a new media mogul might have leveled at New York, this entrepreneur chose to vent his wrath against rent control. Why, he asked, should longtime residents of the city lock up a valuable resource that his new employees needed-and at bar- gain prices, no less-simply because they were longtime residents? If this intolerable and irra- tional subsidy continued, pretty soon his employees would have to commute from so far away, they would no longer be recruitable. The city would shrivel and die if his newly arrived programmers could not be housed in the style to which they were accustomed and entitled. Much to his credit, the then-president of the New York City Economic Development Corporation took the floor in response. The COO's complaint was sustainable, he said, only if one ignored the many viable residential neighborhoods outside Manhattan-all sub- stantially cheaper per square foot, and most a fast subway ride away from the business dis- tricts. Had the complainant ever seen Brooklyn Heights, or Cobble Hill, or Jamaica Estates? Had he ever been outside Manhattan, for that matter? The EDC head made admirably clear that the city is actually richly endowed with neighborhoods quite suitable for professional, technical and managerial talent. This exchange opened up for me a much larger question: What does the city do to pro- mote its strengths on the issues that really mat- ter to entrepreneurs and senior executives? And while we're at it, what exactly are the most important issues? How do we reach the people who actually make the private-sector decision about where a job will be created, and where one will be destroyed? Shouldn't the city that

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can sell anything learn to sell itself? When they are shaking down cities for subsi- dies, companies like to say that they decide where to locate based on tax rates and business costs, and the financial incentives offered to them to offset those costs. But the survey evidence is over- whelmingly clear that what they really value is infrastructure-knowledge infrastructure, in modern times--and easy access to skilled man- agers, hardworking professionals, experienced technical staff, and reliable ordinary labor. For example, when the Bank of Boston sur- veyed 4,000 "MIT-related" companies nation- wide and asked why these generally fast-growing, high-wage employers chose their present loca- tions , respondents ranked "quality of life" as the single most important factor, followed by "skilled

professionals" and "proximity to markets. "

dentally, "regulatory climate" and "taxes" were tied for least important, while "labor" and "low business cost" ranked somewhere in the middle. Such results emerge time and again, in stud- ies by economists at the Milken Institute, from Michael Porter's colleagues at Harvard Business School, in my own work with Battelle Memo- rial Institute, and from many state-level or regional technology-trade associations. The link is clear: To a business deciding where to locate , "quality of life" means quality as per- ceived by the key workforce. Of course, there's one very particular class of worker that business owners and senior execu- tives are very concerned about: themselves. Economic-development practitioners have long privately held that the best predictor for any corporate location was minimization of the decision-maker's driving time! In fact, in a sur- vey of early-stage biotech firms conducted some years ago by the Washington (State) Biotechnology and Biomedical Association, 93 percent of respondents agreed that their choice of location was influenced by the desire of the company founder or CEO to live in the area. That result beat the next-most-frequently cited factor (proximity to an institution of higher education) by 9 percentage points.

Inci-

EXECUTIVES OF THE CITY'S few remaining large

multinational corporations can afford to mini-

mize their commute time while satisfying their quality of life needs by allocating their gener- ous compensation packages to Manhattan rents and private-school tuitions. Or, if they want more space, they can commute from a wealthy suburb with good schools. As for the