N.Y. Funds $5.1-Billion Effort : Bronx Reborn: Housing Emerges From the Ashes

In the flames, smoke and fury as the South Bronx burned around them, the besieged police officers nicknamed their station house “Ft. Apache.”

When the firestorm of the mid- ‘70s finally subsided, leaving the blackened shells of buildings and weed-filled vacant lots where structures once stood, the police renamed their precinct. They called it the “Little House on the Prairie.”

For more than a decade, the South Bronx has stood as a national symbol of urban arson and its aftermath. But there are fresh sounds in New York neighborhoods such as the South Bronx these days--the sounds of construction.

New York City has embarked on the largest municipal building program in the United States, a massive $5.1-billion effort designed to create 252,000 units of affordable housing and reclaim some of the worst neighborhoods in the nation.

In its scope and ambition, the effort rivals the large-scale federal housing programs after World War II and during President Lyndon B. Johnson’s Great Society. But there is a difference which may serve as a model for other communities in the tight budget years of the Bush Administration: New York largely is using its own money.

“The city of New York has undertaken probably the largest housing program in its history,” said Paul Grogan, president of the nonprofit Local Initiatives Support Corp., which helps fund construction across the country. “No other city in America is spending its own money on housing to the degree that New York is, either in relative or absolute terms.

“There will be more housing this year in New York than at any time under the federal programs. It is astonishing.”

Abraham Biderman, commissioner of New York’s Department of Housing Preservation and Development, said: “We are rebuilding a part of New York that was lost in the 1970s. If we are successful, what happened in the ‘70s will be a memory.”

During that era, New York came dangerously close to bankruptcy, public housing deteriorated, whole neighborhoods were torched and white flight to suburbia accelerated.

Now, the $5.1-billion housing initiative stands both as a symbol of the city’s fiscal health and the financial markets’ faith in New York’s future. All but $300 million of the total already has been raised.

Strictly Screens Tenants

The city hopes to avoid many of the problems that plagued public housing in the past by stricter screening of tenants and giving residents a greater say in their building’s future.

Judged against past memories, the resettlement of parts of the South Bronx is startling.

The grime has been sandblasted from old buildings that are being remodeled. In the Longwood section, historic townhouses that easily would sell for $1 million in prime areas of Manhattan have been restored.

Other blocks are lined with new one-family homes straight from suburbia. Suddenly, there are almost no vacant apartments. Stores are thriving. According to the Department of Housing Preservation and Development, roughly half of the Bronx eventually will be restored.

Evidence of a returning population is shown in school attendance figures.

Enrollment Rises

For 69 years, Public School 62 has stood on Fox Street, once one of the worst Bronx blocks. Faded photographs of old classes, when the borough had a different ethnicity, hang on the walls of Principal Muriel Pagan’s office. This year, 876 pupils attend P.S. 62 versus 690 last year. Two years ago, there were about 400 students.

Nineteen percent of Pagan’s pupils are from homeless families who have been relocated to newly renovated buildings from welfare hotels, mostly in Manhattan.

Some community leaders and educators, while congratulating the city for its concern, worry about the consequences of packing new housing with the homeless. They fear fresh ghettos are being created while fragile neighborhoods are struggling to recover.

“We are not saying that people from the welfare hotels and the shelters are not good people,” said Genevieve S. Brooks, executive director of the Mid-Bronx Desperadoes Housing Corp., a widely respected community development corporation. “But there has to be a balance. A few families with social problems can destroy a building. They (the families) should be spread out.”

“To us it appears as though they are using us as a dumping ground to clean out midtown and other areas of the business district that have concentrations of welfare hotels,” charged Getz Obstfeld, director of the Banana Kelly Community Improvement Assn., founded in 1977 in the South Bronx.

“To place a whole set of population that has similar problems together, I think we are ghettoizing them,” added Pagan. “I don’t know if that’s good. But politics be politics. Whatever they think they’ll have to do, they’ll do.”

Decision Risky

The decision in 1985 by New York Mayor Edward I. Koch to seek billions of dollars from financial markets was risky. It had taken years for the city to repay federally guaranteed loans during the fiscal crisis when the city almost was forced into bankruptcy. In addition, the Ronald Reagan Administration had all but withdrawn from financing public housing.

Some mayoral advisers counseled caution, even though the city is in good fiscal shape now. They reasoned that spending large amounts on housing for poor, moderate- and middle-income families would take dollars from bridges, waterways, road repairs and other badly needed projects.

On the other side, advocates for the homeless were stepping up political pressure for a solution. At the same time, New York’s middle class was being priced out of the home-buying market not only in the city but in nearby suburbs. Studies showed 98% of families earning less than $50,000 a year were unable to move from rentals.

Fears existed that without subsidized moderate- and middle-income housing, young middle-class professionals, teachers, firefighters and police officers would be forced to move out of the region, deepening the great divide between rich and poor in New York.

“There was a debate in 1985. A lot of people were very much against it and they saw it as using enormous resources,” Biderman recalled. “In the end, the mayor said there was no choice. Nobody else is going to do it for us.”

Sets 1998 Deadline

The plan calls for about 5,000 buildings--every vacant, city-owned structure acquired through tax foreclosure--to be rehabilitated by 1998. In addition, the city’s entire stock of 4,000 occupied, tax-foreclosed buildings would be renovated. The plan also called for fixing up privately owned buildings for low-income residents and greatly expanding New York’s existing programs for building affordable homes and apartments for moderate- and middle-income buyers. A total of 15,000 units would be set aside for the homeless.

Construction has begun on 33,000 housing units. In 1985, when the Koch Administration contemplated such a giant step, New York spent $25 million for housing. This year it will spend $640 million, with $853 million projected for 1990. Presently, 17% of the city’s capital budget is being spent on housing, mostly in Harlem, the Bronx and Brooklyn.

“This time, New York shows the way,” praised an editorial in the Chicago Tribune. But municipal officials complain the massive initiative has received less attention than it deserves in New York.

“I think there is a lack of credibility about what we do,” said Biderman.

“Most people who are opinion makers in this town don’t see what we do because we don’t work in midtown. We have under construction this year about 17 million square feet of residential space, which is twice as much as all the office buildings going up. But it is going up in different neighborhoods. When you take opinion makers out to those neighborhoods, they come back quite impressed.”

New York’s housing initiative rests on the bedrock of some hard-earned lessons.

Community groups are deeply involved both as builders and building managers. Tenants are encouraged to form associations and to buy their apartments so they have a stake in the structure. Buildings are reasonably sized, in contrast to the impersonal high-rise projects of the past, which did not encourage a sense of belonging. Tenants are screened with the objective of responsible citizenship. City planners have tried to build not on the edge of neighborhoods, but outward from existing centers of development.

In the South Bronx, the Banana Kelly Community Improvement Assn. for over a decade has been a catalyst and a pioneer in neighborhood revitalization. The group, formed with a staff of two people (it now has 85 and a budget of $22 million) got its name because Kelly Street, where the first building was renovated, is curved like a banana. Since its inception, the association has rehabilitated more than 400 apartments.

Banana Kelly (its motto is “Don’t Move, Improve”) operates a broad spectrum of programs, ranging from tenant and community organizing to teen-age job training and education. Municipal officials have chosen Banana Kelly as a major partner, and this year it has 333 units of low- and moderate-income housing under construction.

In some cases, New York City makes grants to the community organization; in others, it lends money. In some instances, Banana Kelly serves strictly as a developer; in others it manages structures after they are completed.

Owners Join in Work

In some cases, potential co-op owners are expected to take part in a sweat equity program where they perform a portion of the work themselves. This approach not only saves money but provides a psychological stake in the building.

Obstfeld, Banana Kelly’s director, sees his community development corporation serving as a neighborhood anchor.

“If you are going to start to rebuild an area, you have to have grass-roots involvement,” he said. “ . . . When you are looking at the South Bronx, the areas where there is rebirth are where there are strong community organizations that have taken root. That is a major lesson.”

Banana Kelly is heavily involved in the debate over the migration of homeless families from welfare hotels and shelters to poor neighborhoods. The organization has lobbied strongly against filling entire buildings with the homeless and has worked to institute a system of pre-tenant screening for the structures it manages.

Prospective tenants fill out detailed applications and are interviewed by the group’s workers as part of the screening process. They are visited at home and even in shelters.

“When we are working with families who are homeless, we do shelter visits,” said Obstfeld. “We actually visit them in the shelter to see how they are maintaining their rooms. We check references with previous landlords, job references, any other type of personal references. These people are our neighbors. We want to make sure they are good neighbors. . . . We want to make sure we want them in the community.”

Evicts Drug Users

Banana Kelly will not tolerate drugs in the buildings it manages and has evicted more than 40 drug-using families in the last three years.

Obstfeld is concerned about plans by the Koch Administration to create more than 350 units of homeless housing within three blocks of Banana Kelly’s headquarters.

The experience of some tenants in a city-renovated and city-managed building on Leggett Avenue shows both the problems and opportunities that former shelter occupants can face.

When Milagros Pagan (no relation to the school principal) moved from a homeless shelter with her son to a $286-a-month, second-floor apartment in a red-brick building, she had visions of a new life. Before moving in, she was screened by city social workers who instructed her, among other things, about budgeting, caring for her apartment, avoiding drugs and not letting her children run wild in the hallways.

But when she arrived, she received a shock. Some other formerly homeless tenants threw used diapers out windows, let their children make noise and play softball in the halls. They constantly borrowed food and did not keep their apartments clean.

“I feel like I am back in the shelter,” Pagan said the other morning as she visited with a friend. “ . . . There is no togetherness. It is a pity because the city is trying. I’ve got to give them that much. At least, the city gave us a home.”

Seen as Exception

Biderman sees such difficulties as the exception rather than the rule. He defends the competency of the screening process and the Koch Administration’s policy of relocating large numbers of homeless families together.

“They basically meld right into the community. They are indistinguishable,” the commissioner said. “We have found they are very cognizant of how important a resource we have given them, which is a home. And they take very good care.”

Biderman said about 40 homeless families were relocated to a building in the West Bronx. But when the city wanted to rehabilitate the structure across the street for other homeless people, the first group of homeless families objected.

“That tells you something about how they have acclimated themselves,” he said.

New York’s Spending On Public Housing Despite no federal commitment, New York plans to spend $5.1 billion over 10 years to create 252,000 new units of affordable housing, the largest municipal building program in the country.

( Figures are in millions of dollars for each fiscal year. * Projected.)