Volume 74, Number 27 | November 03 - 09, 2004



At Oct. 26 City Hall rally for new “right of first refusal” bill, in foreground, from left, Councilmember Charles Barron, Speaker Gifford Miller, Councilmember Bill Perkins, Representative Nydia Velazquez, District Leader Rosie Mendez, Councilmember Margarita Lopez, State Senator Tom Duane and Councilember Alan Gerson, the bill’s primary sponsor.

Subsidized tenants are sold on the new buyout bill

By Albert Amateau

More than 500 tenants of subsidized housing, many from the Lower East Side, rallied at City Hall on Tuesday in support of a bill introduced by City Councilmember Alan Gerson that would give tenants the first right to buy their buildings when landlords take projects out of subsidy programs,

The Tenant Empowerment Act, which Gerson introduced in February, had the support of a majority of the Council, including Speaker Gifford Miller at a first hearing on Oct. 28 before the Council’s Committee on Housing.

Despite concerns about the bill’s legality under state law and “unintended consequences” of the bill that might undermine tenants’ ability to buy the buildings, Shaun Donovan, the city’s Housing Preservation and Development commissioner, agreed at the hearing that Mayor Bloomberg’s administration endorsed the goals of the legislation and he pledged to work with the Council to achieve the goals.

The legislation is intended to preserve affordable housing threatened by federal cuts in programs including Mitchell-Lama and project-based Section 8 subsidies that would encourage landlords to leave those programs and force tenants to pay market-rate rents.

Elected officials at the rally on the City Hall steps and in the Council chamber hearing denounced recent attempts by President Bush’s administration to eliminate or cut Section 8 subsidies, turning the event into a “Vote for Kerry,” or at least a “Vote Against Bush” rally.

Gerson has said the bill could also serve as a safety net for Tribeca’s Independence Plaza residents, many of whom are now eligible for Section 8 “sticky voucher” rent subsidies.

Housing advocates said the bill was needed to save 110,000 affordable units in projects throughout the city whose owners will be able to leave project-based Section 8 and Mitchell-Lama programs in the next few years.

Councilmembers Margarita Lopez, Christine Quinn, Deputy Majority Leader Bill Perkins, State Senator Tom Duane and Congressmember Nydia Velazquez, strongly supported the bill, Intro 186.

As part of his agreement in the broad goal of the bill, Donovan reminded the Council that he, Housing Authority chairperson Tino Hernandez and Mayor Bloomberg all went to Washington earlier this year and successfully got the Department of Housing and Urban Development to restore $52 million to the city’s share of Section 8 voucher programs and to postpone damaging changes to the Section 8 program.

But tenants from a group of nine Lower East Side Section 8 subsidized building on E. Ninth, 10th and 11th and 12th Sts. who turned out to support the bill, said they remained anxious about the future.

Maizie Suarez, a resident of an E. 10th St. building for 25 years and an organizer with Good Old Lower East Side, said tenants were worried that their landlord could leave the Section 8 program in 2006.

Asked if he thought his fellow tenants could buy their buildings if the landlord opted to leave the subsidy program, Ben Goris, a tenant leader from a group of three 26-story Section 8 projects on Broome St. between Ridge and Pitt Sts., said, “Yes. That’s what we want. If we all get together and we have the chance, we’ll be able to buy the buildings.”

Marie Christopher, tenant leader of 210 Stanton St., built 20 years ago with 171 apartments, said the building’s landlord has just agreed to remain in Section 8 under a city-sponsored program that would raise the subsidy he gets from HUD to market rate over 15 years under a city-sponsored program. “But what if the federal money is not there?” she asked. “Is the agreement still good? Anything can happen.”

Deborah Gonzales, a leader at 10 Stanton St., with 147 apartments, said she wanted her fellow tenants to be able to buy the building because the Section 8 program for the project is up for renewal in 2005.

Donovan referred to the recent agreement with West Village Houses tenants involving the owner of the complex and the city as an illustration of the city’s efforts to save affordable housing. The deal involved the landlord agreeing to accept a price below market value, the tenants agreeing to paying more rent and the city agreeing to tax breaks and providing low-cost financing. Donovan contended that financing should be put in place before legislation giving tenants the right of first refusal to buy out landlords who choose to quit affordable housing programs.

Gerson, however, said that future city administrations are not as certain to be as concerned about saving affordable housing programs as the current one. “Intro 186 is to assure that tenants will have the right to preserve affordable housing in the future,” he said.

Regarding financing for the bill, Gerson said he intends to develop a plan for a $1.2 billion housing trust fund consisting of nonprofit developers, labor unions, banks, private developers and city funds to enable tenants to buy their buildings. He called on the Lower Manhattan Development Corp. to spend $254 million toward this fund a few weeks ago.

In response to Donovan’s concerns that tenant groups might not keep the projects they buy from landlords as affordable housing, Lopez said that the legislation would be amended to restrict for-profit resale.

Councilmember Charles Barron of Brooklyn also disputed Donovan’s assertion that the bill would run afoul of the state eminent domain law. Barron insisted that the right of first refusal is not like the state taking of private property for a public purpose, “like a stadium for the Knicks or the Jets.”

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