City Hall - April 25, 2011

RUBEN WILLS, below, tries to avoid controversy in reelection (Page 4), an ANTI-HOMELESSNESS PROGRAM is in the crosshairs (Page 8)

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April 25, 2011

Can Dennis Walcott rescue the mayor's education legacy? pg. 10

ANDREW SCHWARTZ

Vol. 5, No. 10

and JOEL KLEIN, above, logs on for education technology (Page 19).

into the Retiree Health Benefit Trust Fund for a one-time burst of revenue.

“Everyone acknowledges it’s a rainyday fund,” Greenfield said. “The reality is that we’ve been dipping into it for years.

The purpose of having a rainy-day fund is that when it rains, you tap into it.”

“It’s a matter of fairness. It’s a matter of equity. It’s a matter of morality,” said Council Member David Greenfield. “This is the line in the sand.”

NYC Mayor’s office

Unlike past budgets, this year’s austere proposal is making Council members more nervous than usual.

Dollar Signs In advance of city budget fight, Council digs in on child care, looks to trust fund for extra cash

By Colin Campbell

E

ach year, Mayor Michael Bloomberg and members of the City Council exchange dire public statements about the budget, with the administration arguing for necessary spending cuts and legislators scrambling to protect cherished city programs.

Then, in June, everyone gathers in the vestibule of City Hall in front of the press corps to pat themselves on the back for negotiating a fair deal.

But this year, some Council members say the austere proposals sketched out in Bloomberg’s preliminary budget are making them more nervous than usual.

Council Member Gale Brewer said the “horror” of the proposed cuts will separate this year’s budget negotiations from those of past years.

As in the past, cuts to child-care services in the Administration for Children’s Services (ACS) have drawn the

www.cityhallnews.com Publisher/Executive Director: Darren Bloch

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APRIL 25, 2011

particular ire of advocates and Council members. The mayor is calling for up to $90 million in reductions to the ACS budget, which advocates say will hurt subsidies for nearly 17,000 children this year alone, in addition to losing 14,000 child-care slots since 2006.

Council Members Stephen Levin and David Greenfield have both said they would be unable to vote for a budget that contains those cuts.

“It’s a matter of fairness. It’s a matter of equity. It’s a matter of morality,” Greenfield said. “This is the line in the sand.”

Council Member Jumaane Williams blamed Bloomberg for the cuts, announcing at a recent rally at City Hall that “if the 17,000 child day-care slots are not in the budget, it’s because he did not deem it important.”

A host of other individual issues have been singled out by Council members, including cuts to libraries and plans to lay off 6,000 teachers, but these issues are

EDITORIAL Interim Editor: Philip Lentz plentz@manhattanmedia.com Managing Editor: Andrew J. Hawkins ahawkins@cityhallnews.com Reporters: Chris Bragg cbragg@cityhallnews.com Laura Nahmias lnahmias@cityhallnews.com Jon Lentz jlentz@cityhallnews.com Photography Editor: Andrew Schwartz Interns: Ismail Muhammad, Candace Wheeler

not generating as many absolutist statements as the child-care cuts.

Some Council members are still concerned about problems left over from last year’s budget. Council Member Peter Vallone said he couldn’t discuss the 2012 budget specifics until 2011 issues are resolved, notably funding districtattorney offices and a freshman NYPD class. He says both were underfunded in last year’s budget.

Bloomberg is defending the cuts, placing fault squarely on the federal government.

“The mayor’s budget increases the amount of city dollars that go into ACS by more than 20 percent,” said Marc LaVorgna, a Bloomberg spokesperson.

“But we…still have a reduction in the number of child-care dollars that comes from a drop-off of federal dollars.”

Bloomberg has also sharply criticized Albany’s budget deal, which was finalized on April 1.

“Proportionately, the cuts to New York City were unfair and outrageous,” the mayor said at the time, although he has since praised Gov. Andrew Cuomo and the Legislature for doing the best they could, given the circumstances.

Many programs that face the budget ax are relatively small, leaving members confident that money exists to restore funding. Some members advocate dipping

LaVorgna disagreed, saying that the city was not legally allowed to use the fund simply to restore programs the City Council wants to protect. But Council members say they are willing to try.

“There’s always ways to make things happen. Always ways to move money around,” said Council Member Domenic Recchia, chair of the Finance Committee.

Doug Turetsky, spokesperson for the city’s Independent Budget Office, confirmed that there is a roundabout method of pulling dollars out of some retirement-related programs and using the funds to offset proposed cuts.

The Council has been adept at securing the restorations to cherished programs, though the city’s $4 billion budget gap, combined with a stillstruggling economy, could doom any attempts to find new sources of revenue.

Brewer calculated that in good years, the City Council has restored around $700 million in cuts, while in bad years, like last year, the figure was closer to $300 million.

At this early stage, there are still many unknowns. Council Member Lew Fidler explained, “Every dollar you insist is spent on A is a dollar that can’t be spent on B. You don’t really know what the zero sum is until after the April tax returns come in.”

Fidler added that there was a “slim hope that we’ll find extra revenue.”

For its part, the mayor’s office is not publicly drawing any lines in the sand.

“The preliminary budget is just that, preliminary. Things do change,” LaVorgna said. “Some things will change, some things will not. We speak to the Council about every facet, and we are willing to negotiate every facet.” editor@cityhallnews.com

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CITY HALL

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theY are LoCkInG out neW York’s mIddLe CLass

“To everyone in the district, this has caused them to come out and support me even more,” Ruben Wills said of his recent financial troubles. “It’s actually a slap in the face for the people that voted for me.”

Ruben Wills is the only City Council member who must run for reelection this year.

Battle Of Wills Greg Meeks said to be seeking candidate to run against Ruben Wills

BY CHRIS BRAGG

W

hen Council Member Ruben Wills placed his hand on the Bible and took the oath of office in mid-December, the moment seemed to be one of détente.

Rep. Greg Meeks, the man who had feverishly tried to block Wills’ road to City Hall, stood beside the new Council member and applauded. In the four months since, Meeks has repeatedly promised to work with the incumbent as the Queens Democrat gears up to run for reelection in November.

In a hurried interview before Meeks boarded a flight to Colombia, the congressman denied having spoken to anyone about running against Wills.

“I have not talked to anyone about my support or my commitments in the race at all,” Meeks said.

Yet a number of politically pluggedin Democrats in southeast Queens tell a very different story.

In fact, they say Meeks has been

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APRIL 25, 2011

quietly looking for a candidate to run against Wills. This has created a lot of speculation about who will challenge Wills, who won a special election in November following the death of Council Member Tom White.

Nicole Paultre-Bell, who ran against Wills last year with Meeks’ support, is said to be uninterested in another run; she will instead focus on the nonprofit she founded in memory of her slain fiance, Sean Bell.

Lynn Nunes, who lost to White by four votes in 2009, was considered a highly viable candidate. Meeks even met with Nunes about a month ago to discuss a potential run, knowledgeable sources say, though Nunes ultimately decided to take a pass on the race.

(Disputing that any such meeting occurred, Meeks insisted that he “must have a twin brother, because I haven’t met with the guy.”)

Clifton Stanley Diaz, chairman of the Rochdale Village board of directors, has also emerged as a potential candidate.

Wills has grown so concerned about Meeks backing Diaz that the Council member and congressman are meeting to discuss the matter this week.

Other possible challengers could be 2010 candidate Harpreet Toor, and former

Council member and longtime Wills nemesis Allan Jennings. District leader Albert Baldeo would also be a strong contender, though Wills said Baldeo told him he did not plan to run.

Meeks and Wills have been political foes since 2008, when Wills challenged the congressman in a primary, and sharply criticized him for alleged ethical misconduct. Last year Meeks recruited PaultreBell to run against Wills, who pulled out a narrow victory by gaining the support of the rest of the southeast Queens political establishment.

There are many reasons why this November’s special election, which will choose a Council member to serve out the remainder of White’s term, is attracting so much interest. All of them have to do with the vulnerabilities of the incumbent. In office less than a year, Wills has not had time to build a political base.

Last month The Daily News reported the existence of two outstanding misdemeanor arrest warrants stemming from Wills’ contracting work more than a decade ago.

Wills has also been dealing with other personal foibles, which include unpaid debts for child support and questions about a member item Wills secured for his nonprofit while working for the State

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ANDREW SCHWARTZ

Senate. Wills acknowledged being so poor at handling money that his wife gives him only $100 in cash a week in an attempt to curtail his spending habits.

With so many local politicians under a cloud of scandal or investigation, including Meeks and State Sens. Shirley Huntley and Malcolm Smith, Wills said that residents of the district blame the media for the news stories.

“To everyone in the district, this has caused them to come out and support me even more,” Wills said. “It’s actually a slap in the face for the people that voted for me.”

Wills has spent his short time in office opposing the construction of a homeless shelter in his district and trying to help his constituents stem a tide of foreclosures that rate among the highest in the country.

But Wills’ money issues are never far away. While the Council member talked over coffee at a deli near City Hall, an aide walked in and handed him a thin manila envelope before abruptly departing. Wills pulled out a crisp $100 bill and bought a sandwich, soup and a Pepsi, burning through a full 10 percent of his weekly allowance.

If Wills wins reelection, some of his financial burdens would obviously be lifted with the guarantee of an $112,500 salary. Still, Wills does not expect his wife to back off anytime soon.

“No way she’s going to let me spend more,” Wills said. “Then, we’re going to have to get a house.” cbragg@cityhallnews.com

CITY HALL

Build Better – Build Safer – Build Union “At a time when the public and private sectors throughout the country are struggling to figure out how to move forward with long-term investments, New York City is leading the way.”

Mayor Michael R. Bloomberg

• • • •

Four Project Labor Agreements $5.3 billion in public projects 32,000 good middle-class construction jobs $300 million in savings used to create an additional 1,800 construction jobs in restored construction projects

“These agreements prove that when organized labor and government work together, we can promote good job creation for New York City’s middle class.”

Gary LaBarbera President, Building & Construction Trades Council of Greater New York

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“A Partnership Committed to the Future”

Central Questions In search for new president, Central Labor Council debates role’s powers, duties

By Chris Bragg

A

quiet campaign has begun to find the next president of the New York City Central Labor Council, the city’s embattled umbrella

labor organization.

The departure of former president Jack Ahern, who resigned in March under a cloud of scandal, gives the organization a chance to redefine itself at a time when the labor movement is increasingly under attack.

But how exactly the CLC will define the duties of its next president remains unclear.

Arthur Cheliotes, president of CWA 1180, and Jim Conigliaro, directing business representative for IAMAW District 15, have been reaching out to members of the CLC’s executive committee to express their interest in the job, according to two committee members. Christopher Erikson, business manager of IBEW Local 3, is also being encouraged to run.

The CLC has not had an openly contested leadership vote for the presi-

dent’s job in decades. A decision appears to be months off, giving the CLC time to figure out the future of the organization and the role of its president.

New York State AFL-CIO President Denis Hughes, who took temporary stewardship of the CLC following Ahern’s resignation, is likely to be a key figure in choosing a consensus candidate that will satisfy the competing interests within the organization, including public sector labor, the building trades and other private sector unions.

“The most important thing is that someone has the support of Denis Hughes, who has an outstanding record of putting

“The most important thing is that someone has the support of Denis Hughes, who has an outstanding record of putting folks in by consensus,” said Pat Purcell, political director of UFCW Local 1500.

Deputy Mayor Goldsmith wants to outsource the repair of the city’s ambulances, fire trucks and police cars to disreputable private repair shops.

Private auto mechanics undergo no background checks and have almost no oversight of their work. Can you imagine what would happen if a terrorist got under the hood of a police car?

Right now trustworthy city employees keep a close eye on our emergency vehicles and keep us safe. Goldsmith should keep it that way.

Paid for by Local 237 Teamsters

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APRIL 25, 2011

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folks in by consensus,” said Pat Purcell, political director of UFCW Local 1500.

The CLC executive committee is mulling several possible models for the organization. The organization could pattern itself after the state AFL-CIO, which has a fulltime president and a secretary-treasurer who functions as a deputy. The organization could also name one of its union leaders as a part-time unpaid president while a full-time executive director would run the CLC’s day-to-day operations.

After former CLC president Brian McLaughlin was indicted in 2006, Ed Ott, then the group’s director of policy, took the reins as a full-time executive director while Gary LaBarbera, of the Teamsters, assumed the part-time unsalaried role of president.

When Ahern assumed the presidency, Ott left the organization. Meanwhile, Ahern managed the organization on a part-time basis while maintaining his fulltime position as head of the Local 30 of the operating engineers.

That left a void in CLC’s leadership. The organization became less visible and onceregular meetings of the city unions’ political directors stopped for six months. At the same time, Ahern drew two salaries—one for the CLC presidency (which he doubled to $80,000) and $270,000 for running Local 30. He also helped secure union scholarships for his children. These actions alienated the council’s blue-collar membership and, under pressure from CLC member unions, Ahern resigned last month.

Now, even as candidates jockey for the presidency, insiders say the CLC must first decide how to rebuild its reputation following a period of unrest.

“First, we first have to determine what we want the Central Labor Council to be,” said Harry Nespoli, president of the Uniformed Sanitationmen’s Association. cbragg@cityhallnews.com

CITY HALL

Bloomberg’s new pension appointment could lead to tension with the comptroller

Andrew Schwartz

Pension Warrior

Our Perspective Wal-Mart: Desperate to Enter New York City and Still Unwelcome

By Stuart Appelbaum, President, Retail, Wholesale and Department Store Union, RWDSU, UFCW

By Laura Nahmias

M

ayor Michael Bloomberg has created a new position to better manage the city’s pension costs.

The job of chief pension administrator was given to Carolyn Wolpert, a former deputy division chief at the New York City Law Department, who is well versed in the nuances of the city’s five pension systems. Her job will be reporting to the deputy mayors and city pension boards on disability and policy matters.

But some observers see the appointment as a way for the mayor to gain broader influence over city pension policy. Under the city’s charter, Comptroller John Liu is the city’s chief pension manager, but Liu and the mayor disagree sharply over the origins, and solutions, of the city’s skyrocketing pension costs.

Wolpert’s role will be to give board members accurate information, said Marc LaVorgna, a Bloomberg spokesperson.

“My job is to make sure the city is represented,” she said, and then added, “represented appropriately.”

“The position was created to be central coordinator for the mayor’s trustees on the pension board,” such as eligibility requirements, board governance and decisions about the pension system’s efficacy, LaVorgna said.

But the decision to create such a position indicated to some insiders that the mayor believes that the information the boards currently receive, based on reports generated by the comptroller’s office, is not fully accurate.

The comptroller’s office did not return a request for comment.

Wolpert’s job, which carries an annual salary of $160,000, is largely advisory and is not intended to step on any toes, LaVorgna said.

“The purpose is to provide more information to the mayor’s representatives on the pension boards,” he said. “The mayor has appointees on the boards, the comptroller has appointees on the boards, the

CITY HALL

W The decision to appoint Carolyn Wolpert as chief pension administrator indicated to some insiders that the mayor may not entirely trust the information coming out of the comptroller’s office. unions have appointees on the boards.

Carolyn’s job is to advise the mayor’s appointees. We don’t see it as overlap.”

The appointment is the second position the mayor has created in the past year to help bring more management to the city’s pension program, which Bloomberg argues has become uncontrollable in recent years. In August 2010, Bloomberg appointed a chief investment officer, Ranji Nagaswami, to help guide the city’s investment programs.

As for protecting the funds, the mayor believes the state should work to limit employee benefit enhancements because the market is inherently unstable. Liu, on the other hand, contends that pension reform shouldn’t be made based on what he considers aberrant market conditions.

Neither one is absolutely correct, said Doug Turetsky, an analyst for the city’s Independent Budget Office.

“The comptroller makes clear that a considerable portion of the increase in pension costs is due to investment losses, but neither he nor the mayor have clearly pulled out how much may be due to wage increases, many of which happened under the mayor’s leadership,” Turetsky said.

For her part, Wolpert said she conceives of her role as coordinating information among the different funds, a task which she admits will not be easy.

“My job is to make sure the city is represented,” she said, and then added, “represented appropriately.”

“There are a lot of people with a lot of divergent interests in the pension area,” she said. “I just have to make sure we’re all working together.” lnahmias@cityhallnews.com

al-Mart has been all over the map regarding its New York City strategy.

Several years ago, they tried Queens. Then, they tried Staten Island. After it became clear that New Yorkers didn’t want them here, they even tried giving up, with WalMart CEO H. Lee Scott Jr. famously claiming in 2007 that he didn’t care if the retail giant ever came to New York City. At the time, Scott said that he didn’t think bringing Wal-Mart here was “worth the effort.”

But now, like an unwelcome guest, Wal-Mart is back, and their push reeks of desperation. A look at the big picture shows why Wal-Mart is still interested in New York City. Wal-Mart’s stock prices have flattened. It has saturated non-urban markets. Its U.S. growth has slowed. Sales in the U.S. have stagnated. The company is clearly in trouble. That’s why Wal-Mart is once again trying to take a bite out of the Big Apple. New York City offers Wal-Mart a huge, untapped market of consumers. But Wal-Mart needs New York City more than New York City needs Wal-Mart. It would do the same thing here it has done around the country: kill more retail jobs than it creates, harm existing businesses of all sizes, and force Wal-Mart workers to pay dearly for the company’s profits.

Consider The UC Berkeley Center for Labor Research’s startling new study, Living Wage Policies and Wal-Mart. According to the study, if Wal-Mart hiked its minimum wage to $12 per hour and in the extreme case, passed on costs fully to consumers, the average difference per shopping trip for Wal-Mart shoppers would be a miniscule increase of 46 cents. Poor and low-income Wal-Mart workers would see their pay increase between $1,020 and $4,640 annually. When confronted with this evidence, Wal-Mart declined to address why it won’t pay their employees better salaries. It’s the latest example why the company shouldn’t be welcome here.

And it’s just one of numerous reasons why opposition to Wal-Mart in New York City continues to grow. In recent weeks, more organizations representing diverse constituencies affected by the company have signed onto the Walmart Free NYC Campaign.

They are cutting through Wal-Mart’s slick spin and standing up for good jobs, strong workplace standards, and responsible business practices. They are helping to build a real movement across the five boroughs and online. For more information, and to get involved, please visit www.walmartfreenyc.org.

Visit us on the web at

www.rwdsu.org

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APRIL 25, 2011

7

Housing Disadvantage

HOMELESSNESS

BY THE NUMBERS

1

End of a maligned anti-homelessness program creates more problems for the city

BY LAURA NAHMIAS

N

ew York City’s homeless advocates have long lobbied for the demise of Work Advantage, a rental-assistance program designed to help homeless families leave the shelter system for permanent housing. They say the program is too costly, has a stringent time limit and is generally ineffective.

And at the end of April, those advocates will get their wish when Work Advantage comes to an end.

But in a cruel twist, the city has no plans to replace it with a rental-assistance program that works better.

Advantage provides rental assistance to 15,000 people, at a cost of $206 million per year. More than twothirds of the funding is provided by the state and federal government. But after persistent criticism of the program, Gov. Andrew Cuomo eliminated the state share of $35 million from his budget.

Advocates hoped the cut would force Mayor Mike Bloomberg to either fund the full cost of the program or explore ways to use the city’s public-housing stock to shelter the homeless population. Instead the mayor chose to cut all homeless rental assistance from his budget too.

The mayor didn’t trumpet the cut.

Other issues, such as potential teacher layoffs, received more attention. By the time the program’s advocates realized they needed to mount a lobbying campaign in Albany to maintain any rental-assistance program, it was too late.

Seth Diamond, the city’s homelessness commissioner, said he believed that until the budget was announced, the state would maintain the program’s funding.

“This was a very abrupt action by the state,” Diamond said. “It was both surprising and disappointing when it didn’t make it into the governor’s budget.”

The Coalition for the Homeless was one of the groups that opposed the Advantage program. Patrick Markee, the coalition’s executive director, said that more than a third of the families who received the subsidy ended up back in the shelter system, and that the program required 30 percent of participants’ income to go toward housing—a huge amount for homeless families.

“We were as surprised as anyone to see the cut in funding,” Markee said.

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APRIL 25, 2011

CITY HALL

He said the city should have opened up more of its own public housing to the city’s homeless, a policy used by former mayors Ed Koch and Rudy Giuliani.

The Bloomberg administration has “sabotaged that kind of a deal by refusing to use the federal programs,” he said.

However, the Bloomberg administration says it can no longer use federal programs to house the homeless. The waiting list for Section 8 federal housing in the city has 125,000 applicants. New applicants haven’t been accepted since 2009, and the budget cutting in Washington virtually guarantees scarce funding for the program for the near future. The city’s own public housing has a similarly long waiting list. New applicants can expect to wait seven years for a shot at a subsidized apartment.

Homelessness advocates and Diamond agree that elimination of the Advantage program will result in an increase in the city’s homeless population, as people who would have used Advantage will now remain in shelters. The number of homeless individuals in New York has increased 37 percent since the mayor’s first year in office, abetted by the poor economy and, some advocates claim, the mayor’s lack of commitment to housing the homeless. A recent homeless census showed the nightly population, some 40 percent of which are children, at about 39,500 people—the highest number recorded since the city began counting the homeless 30 years ago.

Both the Department of Homeless Services and homeless advocates agree there is a problem. They just disagree about what to do about it.

Diamond says the city will be required to build up to 70 new homeless shelters to accommodate the increase in demand created by the demise in Advantage. The spike in population should begin in May or June, according to DHS calculations.

The conversion of property to homeless shelters will likely touch off political battles throughout the city.

But Council members called that prospect of building 70 new homeless shelters wildly unrealistic. They say the city’s refusal to fund Advantage will leave more New York homeless on the streets.

That’s a charge Diamond emphatically denies. “There are no families going onto the street, and there will not be,” he

Years Work Advantage Program Has Been Active

15,000 Approximate Number of People Receiving Assistance in Advantage Program

$1,140

per month Average Income of Enrollees in Program

+ 37% Percent Change in Homeless from 2002–2010

135,000 Number of People on Waiting List for Public Housing in New York City

39.5% Percent of Daily Census Who Are Children:

$35

million Amount of Funding Cut in New York State Budget

$67.2

million Amount City Is Expected to Contribute to Program in Fiscal Year 2011 SourceS: The coaliTion for The homeleSS STaTe of The homeleSS reporT 2011, nYc independenT BudgeT office, nYc deparTmenT of homeleSS ServiceS

www.cityhallnews.com

www.cityhallnews.com

30% Amount of Income Enrollees are Required to Contribute Toward Rent

113,553 Number of Homeless Cycling Through Shelter Program in NYC in 2010

82,808 Number of Homeless Cycling Through Shelter Program in NYC in 2002

127,825

Number of People on Waiting List for Section 8 Vouchers in New York City

39,542 Average Daily Census of Homeless Persons: February 28, 2011

$206.9 million

Amount of Funding Advantage Program Requires Annually

$15

million Cost to the City to Fund the Program April for 2011

$279

million Increase in Spending on Shelters City Expects as Result of Cut to Advantage

CITY HALL APRIL 25, 2011

1

said. “We’ve already begun discussions at some places about new shelters, we’re actively looking for others, we’re talking to people who bring properties to us. This is an active discussion.”

When pressed about the projected increase in the homeless and the difficulty of housing such a large population, Diamond’s press assistant said the commissioner was not allowed to comment on hypothetical situations.

However, Diamond said the swell in population would not happen all at once.

expected sometime this week.

The cost to the city to fund the program for a full month is $15 million, Diamond said.

Council Member Annabel Palma said she has heard from tenants in the Advantage program who are uncertain whether they will be evicted after the program’s scheduled May 1 closing date. At that point, the tenants will be required to pay their apartments’ full rent.

“This is a game of politics. And it is shameful,” she said.

“Despite the problems with Advantage, losing it would leave the city without its principal exit strategy for families in shelters,” said Public Advocate Bill de Blasio.

Ironically, the cost to the city to create up to 70 new shelters is some $279 million, by the department’s own estimate, an amount far larger than the costs of the Advantage program in its entirety.

For the month of April, the city has been forced by court order to shoulder the full cost of the program, the result of a lawsuit filed on behalf of Advantage tenants by Legal Aid. The injunction said the city’s intention to close the program constituted a breach of contract. A ruling on whether the program will be shuttered by the scheduled May 1 deadline is

Even the program’s staunchest critics said the program was better than nothing.

“Despite the problems with Advantage, losing it would leave the city without its principal exit strategy for families in shelters,” said Public Advocate Bill de Blasio, who has been critical of Bloomberg administration policies toward the homeless since he was a City Council member.

“We have to find the will and the resources to keep programs in place that help the most vulnerable New Yorkers,” de Blasio said. lnahmias@cityhallnews.com

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APRIL 25, 2011

9

Mr. Cool Can Dennis Walcott rescue the mayor’s education legacy?

By Andrew J. Hawkins

ANDREW SCHWARTZ

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APRIL 25, 2011

www.cityhallnews.com

CITY HALL

L

ately, Dennis Walcott has been getting a lot of street shout-outs.

It happened on Friday as he was leaving P.S. 10 in Brooklyn, where he had just finished whipping up a healthy batch of soy-milk-and-banana waffles for a group of elementary school students. A black SUV slowed down just as Walcott was getting in his car.

“Doing a great job,” the driver shouted. Walcott responded with a thumbs-up.

It happened again the following Tuesday. As a light rain fell outside Tweed Courthouse, a man across the street spotted Walcott at the top of the stairs.

“We know you’ll do the right thing!” he yelled.

“Thank you,” Walcott shouted back. “I’ll try.”

It’s difficult to ascertain whether the giddy reception toward Walcott as chancellor is because of him or because of who he replaced, namely Cathie Black.

Either way, Walcott is slightly embarrassed by all the unsolicited love he has been getting lately. Not because he minds the attention, but because he knows that it is likely to be short-lived.

Regardless, he is determined to enjoy it while it lasts.

As soon as Bloomberg announced his appointment, he embarked on a punishing five-borough tour of schools, churches, special education meetings, town halls, playgrounds and community events. In addition to making waffles, he has danced to C+C Music Factory with a group of third graders, played kickball, done radio and television interviews, sparred with City Council members, Assembly members and state senators, read Langston Hughes’ poetry in Bryant Park and preached from the pulpit in DUMBO. All within the span of two weeks.

On Sunday afternoon, the day before his first as chancellor, Walcott said exhaustion had finally caught up with him.

“I slowed down,” he said, seated in the light-filled conference room with heavy oak doors and shutters referred to as the “Bat Cave” by people in Tweed. “I replenished my reserves and just took it easy.”

Walcott’s ubiquity stands in stark contrast to Black’s tightly controlled public rollout. Whereas Black suffered from several public gaffes and displayed a general lack of knowledge about the city’s school system, Walcott moves seamlessly through different education circles— teachers, lawmakers, students, advocates—never raising his voice except to laugh, promising to lower the temperature of the debate, vowing never to speak ill of teachers.

City Hall insiders say that so far, watching Walcott make the transition from deputy mayor to chancellor has been fascinating.

“He was very assertive, but he didn’t view being deputy mayor as an executive, more of a peacemaker or diplomat,” said one source close to the mayor. “It’ll be interesting to see, now that he has this authority, where he’ll take it.”

But his message will be the same as Black’s, just as Black’s was the same as Joel Klein’s. His easy grin and Zen-like demeanor is easily confused for acquiescence.

During a recent Council hearing on the Department of Education’s budget, one member called him a “breath of fresh air,” and thanked him for signaling an open mind on the issue of school closings.

Walcott, looking confused, responded that he had signaled no such thing.

More than a 100 schools have closed under Mayor Michael Bloomberg’s watch, many replaced by charters or smaller public schools. And if the mayor has his way, more failing schools will close in the future.

Meanwhile, relations between the city and the teachers union are at their nadir. Contract negotiations are stalled indefinitely. And the mayor’s aggressive push to eliminate “last in, first out” (LIFO) seniority rules and

CITY HALL

lower pension costs by possibly foisting higher healthcare payments on union members has turned the union against the city.

All of these things—that is, all those things that enrage education advocates about mayoral control, all those things driving the perception that Bloomberg is deaf to the concerns of teachers and parents, all those things that, as shown in a recent poll, contribute to a majority of New Yorkers disapproving of the mayor’s handling of the school system—will continue under the chancellorship of Dennis Walcott.

There is no question that Bloomberg wants to be

“This is not about Cathie, this is really about me,” Walcott said. “A third grader is able to see a man who is chancellor as a public school graduate. That means a lot.” remembered for his education policies. He wants to be the mayor that left the city’s school system in better shape than when he found it. But a key part in legacy building is coalition building. And whether Walcott can win back those constituencies that feel alienated by the mayor’s policies will be his greatest challenge, and possibly his legacy as well.

Lisa Donlan, president of District 1 Committee Education Council, was at a recent meeting Walcott convened at Tweed with education stakeholders across the city, a reintroduction of sorts. She said that she and others had tried to explain to Walcott the nature of their anger toward Bloomberg’s education policies, and their frustration with the opacity at DOE. Walcott’s response on the need for open dialogue sidestepped the fundamental issues, she said, leaving her skeptical that the new chancellor would have much of a calming effect on the debate.

“If you don’t allow people an outlet into shaping decisions earlier in the process, it is always going to come to that level pitch. That is not histrionics, that is the result of people having things forced upon them that aren’t acceptable,” Donlan said. “And I’m not sure he heard that.”

W

hen he was still deputy mayor for education and community development, Walcott would spend, on average, 10 session days in Albany lobbying for the mayor’s education agenda. Now that he is in the top spot, he says he intends to spend more time in the state capital, going over the policy wish list with the mayor’s lobbying team and cornering lawmakers with his gentle but forceful demands.

He is a familiar face to many in Albany. But how that will change the conversation over contentious issues like LIFO, pension reform and mayoral control is decidedly up in the air.

Four days after his appointment was first announced, Walcott was in Albany, meeting with education committee members in the State Senate and the Assembly. He did not meet with anyone from Gov. Andrew Cuomo’s office, though he says he intends to sit down with the governor’s education staff very soon.

He has an easy rapport with lawmakers. A kiss on the cheek for Sen. Shirley Huntley, a Queens Democrat, was all it took to make her laugh flirtatiously. He recalled the subject—biology—that Sen. Carl Marcellino, a Long Island Republican, taught as a teacher in the New York City public schools.

“I want to try to treat Albany as the sixth borough,” he told the gathered senators. “The difference of me now

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versus before is that I may have one or two more people walking with me, and there will be more cameras, but hopefully I’ll be the same person.”

Walcott said he remained optimistic that LIFO could be repealed this year, despite a lack of momentum for eliminating the seniority rule in the Legislature. He promised to keep a line of communication open between the Department of Education and the teachers union.

And he said he would look for ways to bring together supporters and opponents of the charter-school movement for a more constructive dialogue.

“I’m optimistic,” State Sen. Toby Ann Stavisky, ranking Democrat on the Senate Higher Education Committee, told him. “You’re not like the other chancellors.”

After the meeting, though, some legislators were decidedly less enthusiastic about Walcott’s appointment.

“While the temperature may not be as hot—potentially—he doesn’t offer any better understanding or appreciation of some of the policies that have been problematic,” said Sen. Bill Perkins, a vocal critic of Bloomberg’s education agenda. “These policies bring their own heat that defy the personality, even if it’s cool, like Dennis Walcott may be.”

Perkins, who last year survived a primary challenge in his Harlem district from an opponent backed by charterschool supporters, said that in some respects Walcott’s familiarity in the halls of the Capitol could be a liability for his efforts to push the mayor’s agenda.

“Some of us have got to know him, and, knowing him, we don’t expect anything different,” Perkins said.

“In fact, ironically, he could be worse. Why could it be worse? Sometimes they put up someone we know and have worked with to carry out the dirty deeds. They put a smiling face on it.”

Catherine Nolan, a Queens Democrat and chair of the Assembly Education Committee, said she was pleased that Walcott at least appears to be willing to debate the issues with legislators, unlike his predecessors.

“We could never get Joel Klein up here,” Nolan said.

“And of course Cathie Black wasn’t around long enough.

“That is not histrionics, that is the result of people having things forced upon them that aren’t acceptable,” said CEC1 president Lisa Donlan. “And I’m not sure [Walcott] heard that.”

So just having him here is a step forward, because there was no dialogue for so many years.”

“He should have been chancellor from day one,” Assembly Member Rory Lancman, a Queens Democrat, murmured to Nolan as he passed her in the hallway of the Legislative Office Building, An open dialogue between Walcott and his staff, legislators and state education officials will become increasingly crucial as the state and city undergo a number of seismic transitions. David Steiner, the state education commissioner, announced that he would be departing his post in August, just as the state begins implementing a new teacher-evaluation system and continues devising ways to increase the difficulty and decrease the predictability of standardized exams.

In other words, Walcott has arrived at a pivotal moment for education in New York.

“His test, obviously, will come during the first point of disagreement,” said Board of Regents chancellor Merryl Tisch. “How you manage disagreements, and how you manage the issues around what you’re disagreeing about, have to do with how impactful you can be during this particular moment.”

APRIL 25, 2011

11

W

henever he has a chance, Walcott likes to mention that not only was he a product of the city’s public school system, but so were his parents, his children and his grandson.

He says this not to draw a distinction between himself and Black, a magazine executive who sent her children to private school, but to highlight his own personal stake in improving the city’s school system.

“This is not about Cathie, this is really about me,” Walcott said. “A third grader is able to see a man who is chancellor as a public school graduate. That means a lot.”

His father was an exterminator and his mother, a social worker; both were city workers and union members. As a student, he had a particular fondness for history and French classes. On a recent visit to his old alma mater, Francis Lewis High School in Queens, Walcott was shocked to see his old history teacher, Stan Gordon, who despite being retired, had returned to the school when he heard his former pupil would be visiting.

“I asked him, ‘Do you really remember me?’” Walcott said. “And he said, ‘Yes, I really remember you.’”

Not all of Walcott’s interactions with teachers are likely to be as wistful going forward. He has reemphasized the city’s need to slash more than 6,000 teaching positions this year, coupled with the desire to eliminate

LIFO, which he says penalizes younger teachers who may bring new ideas and new methods to their classrooms. Many teachers support ending LIFO; some have even gone as far as forming advocacy groups to add their voices to the mayor’s.

But the United Federation of Teachers remains deeply opposed to any effort that would jeopardize teacherseniority rules. Further, the UFT claims the administration’s call for layoffs is bogus. And they have powerful friends standing beside them.

“I really, really hope we don’t have to lay teachers off,” said Council Speaker Christine Quinn. “Teachers are clearly a core service, no two ways around that, right? So laying them off, it’s hard to argue that wouldn’t have a negative effect on one of our most core services.”

She added, “I hope Dennis doesn’t want to lay teachers off.… My hope is that, come the end of June, when we’re voting on the budget, one way or the other we are able to avoid that.”

Walcott is unequivocal about layoffs, but argues that the need to cut should be seen not anti-teacher but rather a reflection of a harsh budget climate.

“It’s not an attack on seniority, it’s not an attack on teachers,” he said. “It’s really a discussion around having the best teachers in the classroom.”

If 6,000 teachers lose their jobs this year, Walcott will have the dubious honor of overseeing the largest reduction in the teaching workforce in years. But if fewer teachers are laid off than originally predicted, critics will accuse the mayor of crying wolf to change seniority rules. It’s a lose-lose scenario that Walcott, as the mayor’s chief schools advisor, will likely not walk away from unscathed.

But Walcott’s ability to improve his boss’ poll numbers, to improve the public’s perception of their local schools and to improve the schools themselves—

12

APRIL 25, 2011

Daniel Burnstein

Whether Walcott can win back those constituencies that feel alienated by the mayor’s policies will be his greatest challenge, and possibly his legacy, as well.

Walcott’s ubiquity stands in stark contrast to Cathie Black’s tightly controlled public rollout. through test scores, graduation rates and college readiness—may be out of his hands. UFT president Michael Mulgrew said that it hardly matters whether it’s Klein, Black or Walcott in the top spot, so long as the man in control is Michael Bloomberg.

“It doesn’t matter who the chancellor is,” Mulgrew said. “It’s the mayor’s policies that have hurt the school system.”

But that sort of sentiment has not dulled the celebratory atmosphere since Walcott took the reins.

At a citywide special-education advisory-committee meeting in Long Island City on a recent Saturday, Walcott sat for over an hour and a half listening to parents’ concerns about esoteric education programs like IEPs (Individualized Education Programs) and ARIS (Achievement

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Reporting and Innovation System). He gave assurances that the DOE would be a more open, receptive place under his chancellorship, before announcing he had to leave for choir practice.

Before he could go, though, the committee members had a surprise for the new chancellor: a decadently frosted chocolate cake that read “Congratulations New York City Schools Chancellor Dennis Walcott.”

Walcott grinned sheepishly. He posed for photos. He even offered to carve the cake. But when offered a piece, he shook his head. No sugar. No caffeine. Despite the hidden desires parents, teachers and advocates have about him, Dennis Walcott plays by his own rules.

“The sad part is,” he said politely, “I don’t eat cake.” ahawkins@cityhallnews.com

CITY HALL

Rent Wars Whether Cuomo can expand stabilization laws will hinge on Senate GOP

BY JON LENTZ

I

n the 1980s, Andrew Cuomo launched a homeless program that was acclaimed for its innovative model of housing. In the early 1990s, he helped revamp New York City’s housing policy for the homeless.

By the late 1990s, he was boosting affordable housing across the country as secretary of the U.S. Department of Housing and Urban Development.

The test looming for this housing advocate, now governor of New York, is where he’ll come down on the state’s rent regulation laws, which expire June 15.

“He’s no slouch on the housing issue,” said State Sen. Adriano Espaillat, who wants to strengthen the laws that stabilize rents for a million apartments in and around New York City. “We lost 300,000 units of affordable housing in the last 15 years. He knows this is an important issue for New York.”

But the governor’s remarkable housing résumé is no guarantee that Espaillat and other tenant advocates will get what they want. Cuomo says he wants to expand the rent regulations, but hasn’t specified which changes he supports.

In April, the Assembly, which is sympathetic to tenants, passed a bill to raise deregulation thresholds from $175,000 to $300,000 for tenant income and from $2,000 to $3,000 for rents and to limit rent

increases for new tenants to 10 percent.

The Republican Senate, which generally represents landlord interests, opposes the bill, and Cuomo has yet to

Doug Muzzio, a professor of public affairs at Baruch College, guessed that Skelos will be the first to blink. Since rent laws are a New York City issue, they are less important to upstate Senate Republicans.

“If Shelly’s in favor, and we can presume on the policy sense that Cuomo is in favor, it leaves Skelos,” Muzzio said.

“And I believe Skelos can be had.”

Joseph Strasburg, president of the prolandlord Rent Stabilization Association,

“If Shelly’s in favor, and we can presume on the policy sense that Cuomo is in favor of it, it leaves Skelos,” Doug Muzzio said. “And I believe Skelos can be had.” say where he stands. All sides expect rent regulations to be extended, but whether they’ll be strengthened, and if so by how much, could very well hinge on the fate of other major issues before the Legislature this spring.

Stronger tenant protections are a high priority for Assembly Speaker Sheldon Silver, who has attempted to link them to the governor’s proposal for a 2 percent property tax cap—a proposal that has already passed the Senate.

Silver has also raised the possibility of using the revival of New York City’s 421-a tax incentive program, which lapsed in 2010, as a bargaining chip with developers to get the Assembly rent bill through the Senate.

But observers expect the issue will ultimately be decided in negotiations between the governor and Senate Majority Leader Dean Skelos, a staunch landlord ally.

told landlords in March he was worried that Skelos might give ground on the rent regulation issue to get the governor to soften his demand for independent redistricting, which could jeopardize the Republicans’ Senate majority.

“Is this governor prepared to use that club over their heads and tell them that unless you play ball with me, I’m going to legislate you out of existence?” asked Strasburg, whose comments were captured in an unauthorized video. “I don’t know what he’ll do.”

Strasburg singled out for criticism a provision in the Assembly bill that would re-regulate market rate units that were deregulated due to vacancy decontrol since 2007.

The powerful Real Estate Board of New York, which has closer ties to the governor than Strasburg’s landlord group, wants rent regulations renewed in their current form, said Michael Slattery,

The 2011 fight over rent stabilization Assembly Democrats link stronger rent regulations to a proposed property tax cap, an idea rebuffed by Republicans and real estate leaders. Democrats also propose reviving the 421-a tax break for developers as a bargaining chip.

Jan. 9

Jan. 10

Gov. Andrew Cuomo insists a property tax cap and rent regulations are separate issues.

CITY HALL

Jan. 31

Feb. 24

The State Senate passes a law capping property tax growth at 2 percent.

Cuomo changes course, saying rent regulation and a property tax cap are “connected” and could be in the budget.

New York City Democratic legislators send a letter to Cuomo calling for rent control measures to be in the budget.

March 15 Housing advocates and Democratic lawmakers launch a campaign to extend rent laws “in the budget!”

Mid-March

March 17

REBNY President Steven Spinola says he is open to raising the $2,000 rent threshold to deregulate vacant apartments.

Cuomo backpedals, saying the tax cap and rent control are “too complicated” for the budget, but adds he will push for extending and expanding rent laws.

March 21

March 22

Senate Majority Leader Dean Skelos nixes rent control in the budget, saying that simply extending the law would be appropriate and that “rent control is not until June 15th.”

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a REBNY senior vice president.

But in mid-March, REBNY President Steven Spinola told the Wall Street Journal that REBNY would consider supporting a hike in the $2,000 threshold on vacancy decontrol if it were part of a broader compromise—which some believe could include renewal of the 421-a program.

“Unfortunately, the Real Estate Board of New York is more interested in development than they are in residential,” Strasburg told landlords. “So they sent a signal…where they indicated that they were willing to negotiate on rent stabilization. And this is probably done in concert with the governor’s office.”

Slattery insisted that his organization wants to renew the current regulations, since the gradual deregulation approved in the 1990s has opened the door for more capital investment in existing housing and improved the city’s housing quality.

“Certainly (Cuomo’s) association with REBNY and with real estate developers in New York may have generated some sympathy for the demonstrable costs of doing business in this sector,” said David Birdsell, a professor of public affairs at Baruch College. “There’s no question that landlords are under pressure, and want to take advantage of a rising market.”

Yet Espaillat, who met with the governor the morning the Assembly passed its bill, came away optimistic that Cuomo would broker a deal favoring tenants.

“He’s already set the tone by doing the budget early. He’s pretty much invested in strengthening the rent laws,” Espaillat said. “I think the governor rolled up his sleeves and he’s ready to rock and roll.” jlentz@nycapitolnews.com

In an unauthorized video, Joseph Strasburg explains that his pro-landlord Rent Stabilization Association shored up support by supporting Republicans like Skelos.

March 23

April 1

The budget is passed with no rent regulations.

Rent regulations are set to expire.

April 11

June 15

The Assembly passes bill to renew and strengthen rent regulations. Democratic state Sen. Adriano Espaillat predicts Senate passage in May.

APRIL 25, 2011

13

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issue spotlight:

Education HOUSING

Point/Counterpoint

While the state debates issues of rent regulation and vacancy decontrol, the city is barreling along toward achieving its ambitious goal to create and preserve 165,000 units of affordable housing. City Hall asked new Housing, Preservation and Development Commissioner Matthew Wambua and City Council Housing Committee Chair Erik Martin Dilan to discuss the housing issues that now face the city.

Mathew Wambua

Mathew Wambua: I think the overarching im-

challenge.

perative is simply to get the plan to 165,000 units, so if you break that down into its elemental pieces, that really means making on average 15,000 units per year in order to achieve that end. So, bearing down upon us is the end of June.

In order to do that, I think there’s a number of things I wanted to focus on over the course of the first couple of weeks. The first being nailing down the talent pool here, the personnel talent pool. There’s an amazing richness of talent and leadership that’s gotten us to this point. So I’m really focused on personnel, ensuring that the right folks who’ve gotten us here continue to be the right focus to get us to our finish line.

Dilan: It costs a lot to operate, so I think we all have to find ways to keep costs down. If owners can keep costs down, then they don’t have to charge tenants as much. The price of gasoline and fuel oil is one that I hear from owners as being a major hurdle to their operations. Some restrictions to Local Law 11 have proven to be cost-prohibitive. Obviously, Local Law 11 is a good law. It’s basically safety so the building structures remain safe, but we’ll take a look—a wide look—to see if there’s a way to continue to manage costs there. But it has to make sense and not compromise safety.

Eric Martin Dilan

Erik Martin Dilan: [The biggest priority] is continued development of low-in-

Wambua: I think that rent regulation is incredibly imperative, in that it affects a huge

come/affordable housing and continued effort working with the city on the city’s preservation model, as well as continuing to make sure that the 421-a trust fund that was created stays funded at the $200 million level. And to find ways to reduce the cost of operating housing for owners, without compromising safety.

number of the city’s constituency. Roughly one-third of the units are rent-regulated.

And so, clearly, we do see a need for a timely resolution. That said, it’s probably worth noting that from our perspective, while everything I said is true, we don’t necessarily see rent-regulated housing as being synonymous with affordable housing. The housing that we tend to focus on is income-restricted housing. As a consequence, it’s much more specific in terms of who it tends to help and who it doesn’t help.

Wambua: Definitely [state and federal budget cuts are one] of our largest challenges. As you’re familiar with, last week we did get some finality in respect to what this year’s budgetary cuts are going to look like from the federal government. We’d expected budget cuts. But what we didn’t expect was the magnitude of the cuts.

We’re also seeing, unanticipatedly, 80 percent for Section 8 administration funds, which we didn’t expect.

We’ve spent a lot of time over the course of the last six, seven years, and particularly the last three years, trying to ensure we’re as efficient an organization as possible in cutting expenses, in order to respond some of the difficulties in the economy.

And in so doing, manage to still be very thoughtful about maintaining core competencies, essential services.

Dilan: On the state level, I’m very concerned about what the cuts to the Advantage Program will do to some tenants who receive rental subsidy. On the federal level I’m very, very concerned about the impact it will have on HPD’s block-grant budget. I don’t know what was adopted or agreed to yet, at the federal level—I know there is agreement, but what it looks like for HPD I don’t know yet.

Wambua: I’ve met Councilman Dilan, but I haven’t actually had a chance to sit down yet. I think it’s scheduled and on the agenda, and I’m looking forward to it.

Dilan: No, I haven’t had a chance to meet with him at this point, but I’m hearing a lot of good things about him, and look forward to sitting down with him in the near future.

Wambua: What we’ve dealt with year after year have been the tax-levy budgetary difficulties. What we haven’t tended to deal with, or had to deal with, are federal budgetary issues. In the past when we did have budgetary cuts on the tax-levy side, on the city side, we’ve been able to be thoughtful about how to more creatively utilize other sources of funding such as federal funding. Now we are facing cuts on both sides—the tax-levy side as well as the federal side. That’s going to be a big

CITY HALL

Dilan: I believe there is a need for the program. In terms of threshold, what I think is right is hard to say. But I think we need to focus on—obviously, the number needs to go higher above the $2000 limit, but I think we need to focus on what can get consensus and what can actually pass. I pretty much know what the Democratic position is, but I haven’t had a chance to talk to any Senate Republicans on the issue. It’s just something I wouldn’t do.

Wambua: Atlantic Yards, I had not heard they were scaling back [affordable housing], to tell the truth. I’d heard that they were thinking about a new kind of development, which would be a modular multistory, I think 35-story modular development. But I wasn’t necessarily under the impression they were doing anything less than what they’d anticipated doing so much as different from what they’d anticipated doing.

For our product—the product we develop—for middle-income and lower-income housing, there’s huge significant unaccommodated demand, and so there’s cyclicality to the stuff that we do. In good times, people need us because rents are getting too high. In bad times, people need us even more because they have less income. So that unaccommodated demand isn’t necessarily being changed, depending on where you are in the cycle. So we’ll continue, as we always have, to do gangbuster business.

Dilan: I honestly hope they keep the commitment to build affordable housing. I understand that financing can be challenging at this point. So, for major projects like Atlantic Yards, I think we have to just to hold them to the commitment that they made to that community, and to Brooklyn, as well.

Now, on other projects, in terms of low-income rentals, banks are still lending.

It’s the ownership projects, the affordable home-ownership projects, where the banks are very rigorous, and rightfully so. Now, on who they’re going to lend to—I just wish this was the practice several years ago. We probably wouldn’t be in this mess.

www.cityhallnews.com

April 25, 2011

15

ISSUE SPOTLIGHT:

HOUSING

Sound-bites Mary Tek, rent-regulation organizer, Tenants & Neighbors The rent laws, which protect over two million New Yorkers, expire on June 15, 2011. Without rent regulation, more working- and middle-class families will face the possibility of eviction and homelessness, particularly in those neighborhoods facing the pressures of gentrification. This year, it is incumbent upon Governor Cuomo and the State Legislature to stand up to special interests and not just renew the rent laws, but also close the loopholes that have encouraged speculative investing in rent-regulated housing.

We need to change the dialogue about what rent regulation is and who it protects. Rent regulation is, first and foremost, about tenant rights; it protects tenants from landlord abuses in a time of severe housing shortage.

Rent-stabilized tenants have a median household income of $38,000 and over half of rent-regulated households are headed by immigrants. Rent regulation is a response to the housing emergency we face, and it provides stable housing for those who need it the most.

Joe Strasburg, president, Rent Stabilization Association of New York The most important housing issue currently is the ability of private owners to continue to provide affordable housing in New York. One issue that is being ignored is government-imposed costs of property taxes, water and sewer rates, and fee increases that are driving the providers of affordable housing in New York out of business.

AFFORDABLE HOUSING

BY THE NUMBERS

112,094 Number of affordable housing units built and rehabbed during the Bloomberg administration (2003-2011)

76% Percentage of those units reserved for low-income New Yorkers

165,000 housing units

Mario Mazzoni, executive director, Metropolitan Council on Housing We must end loopholes that allow landlords to destabilize rent-regulated apartments and opt out of affordablehousing programs. Our rent-regulation system requires no subsidies and protects 2.5 million mostly lower-income people, but it’s being rapidly phased out, so those who sidestep preservation and suggest that we could build and subsidize that much housing are flat out being dishonest.

The underlying failure of our affordable-housing policy for decades has been the insistence that for-profit landlords should always be part of the equation. Housing problems seem daunting largely because we start with this premise, but the truth is that a substantial amount of the housing needs in our society are fundamentally incompatible with a profit-making agenda.

Alison Badgett, executive director, NYS Association for Affordable Housing The 421-a tax abatement, which is critical to affordable-housing development and expired in December 2010, must be extended without imposing prevailing wage mandates on affordable-housing construction, as is currently being considered by the Legislature. The prevailing wage rate is at least double the market wage, and would drive up development costs by 30 percent, resulting in a 50-percent drop in the number of homes produced, or a $400/month increase in rent per unit.

Affordable housing is crucial to the city’s continued vitality; its construction and preservation should be a cornerstone of New York’s short- and long-range economic-development plans. Not only is affordable-housing construction proven to generate jobs and catalyze neighborhood renewal, but projections show New York City needs to create 300,000 to 400,000 new housing units in the next 20 years to accommodate population growth.

16

APRIL 25, 2011

between

Mayor’s goal by end of fiscal year 2014

$7.5 billion

$23,000 and $63,000 for a family of four

Low income housing (determined by family income)

$95,000

for a family of four Moderate income housing (determined by family income)

$138,000

for a family of four Middle income housing (determined by family income)

Cost of Mayor’s New Housing Marketplace Plan

SOURCES: HPD

Josh Lockwood, executive director, Habitat for Humanity-NYC Even with the mayor’s historic commitment to creating the most robust affordable-housing program in the nation, this recession is marked by a yawning gap between rich and poor, with too many hardworking folks—people like nurses and teacher aides, administrative assistants and bus drivers, who are the backbone of our city—living in dire and increasingly unaffordable circumstances. Our city depends on them to run smoothly, and it is in our best interests to strengthen rental protections and continue to increase housing investments that enable them to live and work here.

Given the foreclosure-related nature of this recession, affordable homeownership is being roundly dismissed in favor of affordable rental housing. But at Habitat-NYC, we find that when affordable homeownership is undertaken responsibly, foreclosures rarely occur. Moreover, home buyers in distressed areas help stabilize and strengthen communities. They care passionately about property values, local schools, crime and safety, and the entire neighborhood benefits.

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CITY HALL

TD Bank “Speaking Socially” Series Spotlights Affordable Housing State experts address 421-a program, prevailing wage questions in forum hosted by City Hall

By Jon Lentz

T

Andrew Schwartz

Alison Badgett, the executive director of the New York State Association for Affordable Housing.

CITY HALL

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Andrew Schwartz

he renewal of the state’s 421-a program, which encourages developers to create housing for low-income tenants, is critical to New York City’s real estate industry, two top affordable housing experts said last week at a “Speaking Socially” event hosted by City Hall.

The tax-incentive program lapsed last year, and the real estate industry has been clamoring to renew it to spur the development of new marketrate apartment building across the city. Its renewal is being debated in Albany, where Assembly Democrats have attempted to trade the tax-incentive program for stronger rent stabilization laws.

“421-a obviously has a success record of developing properties all along the city,” said Brian Lawlor, chief operating officer of New York State Homes and Community Renewal. “People are, and I know it for a fact, essentially sitting on the sidelines waiting to see what happens.”

Lawlor joined Alison Badgett, the executive director of the New York State Association for Affordable Housing, for a discussion of affordablehousing issues at the event in midtown Manhattan.

A key concern of real estate developers is certainty, said Lawlor, whose agency is made up of the state’s major housing and community renewal agencies.

“I know we’re at a point where people expect 421-a, that it’s been a successful program,” he said.

“I think the mayor has indicated that he supports it,

and it’s a city program; the state really just authorizes what they can bring.”

But the program isn’t enough to produce affordable housing by itself, said Badgett, whose organization is a trade group for the affordable-housing industry.

“Given the city’s tax structure, it’s critical, but it’s not the only piece,” she said.

If 421-a is not renewed, the Real Estate Board of New York is proposing that some tax breaks be renewed if a development’s affordable-housing units are allowed to remain rent regulated.

“Because 421-a works as a diminishing tax exemption, eventually you come to full taxation and your units on vacancy go out of rent stabilization,” Lawlor said. “There’s a proposal to have those units remain in rent stabilization in return for some extension of the tax exemption.”

Badgett raised a concern about one legislative proposal that would link renewal of 421-a to the imposition of a prevailing wage for workers who construct affordable housing. That bill is sponsored by Assembly housing chair Vito Lopez, and is said to have the support of Speaker Shelly Silver.

“That would drive up the costs of construction by 30 percent and could cut production in half,” Badgett said. “So we very much hope that that component of the bill is removed before it moves forward.”

Developers are also concerned that Mayor Mike Bloomberg’s policies are raising property taxes while reducing the budget for capital spending.

“When you look down at New York City, though, the mayor has implemented a 20-percent cut in capital programs, including affordable housing, which has meant that a lot of projects that would otherwise be ready to go have been pushed out to later years,” Badgett said.

Both experts said that developers have benefited from steady funding from the state, with affordablehousing programs emerging largely intact from state budget negotiations.

Lawlor called New York City “a model for the country,” with its wide variety of tax incentives and subsidies.

He highlighted his agency’s 80/20 program for larger projects as a key piece of the affordablehousing puzzle and a major job creator. The program offers tax-exempt financing to developments with at least 20 percent of the units set aside for low-income residents. Developers find the program attractive because the incentives enable them to build projects where 80 percent of the units can be rented at market rates.

In the depths of the financial crisis, Lawlor said, the agency stopped receiving proposals for

Brian Lawlor, chief operating officer of New York State Homes and Community Renewal.

80/20 projects because banks were unwilling to secure developers’ loans. But in recent months, the program has revived, which could signal a broader turnaround in the real estate market.

“At the end of 2010 we started to see that segment come to life, and now we do have a pipeline of probably about a billion dollars’ worth of projects in a couple different boroughs, particularly in Brooklyn,” Lawlor said.

But both experts agreed that more can be done.

The state’s low-income housing credit, which offered developers up to $4 million in recent years, helped fill the gaps on a number of housing projects.

In 2010, however, the tax credit was deferred for three years, which Lawlor called “a mistake.”

“This tax credit, though it’s small, it’s been a very critical gap filler on projects,” Badgett said. “The unfortunate impact is that investors may not see it as a reliable investment. So I think as the state looks to address its budget gaps, it should be very thorough in vetting the impact of what we’re doing.” jlentz@cityhallnews.com Series sponsored by

APRIL 25, 2011

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HE NIGHT BEFORE Cathie Black resigned, Mayor Mike Bloomberg was spotted in close conversation with her predecessor, Joel Klein. That seemed to signal to those in the education world that though Klein may have officially departed the city payroll last year for a job at News Corporation, he is still very much involved in the city’s education agenda.

From his eighth-floor office in News Corp.’s midtown headquarters, Klein spoke to City Hall about new schools chancellor Dennis Walcott, the necessity of controversy, the role of technology in education, and pizza.

City Hall: In a recent speech, Dennis Walcott said you two were joined at the hip.

Joel Klein: Last phone call at night, first phone call in the morning. Dennis is a friend for life. We worked together hand-in-glove for eight-and a-half years. He knows my department, he knows my people, he knows the issues, he knows the political people in the state, the elected officials, the parent leaders. I think he has solid judgment, he has a wonderful style. Even if you disagree with Dennis, it’s hard not to like him.

Some of this is trying to engage people, make sure they’re heard, they understand. To some degree there will be policy differences. When there are, policy differences generate debate. That’s what makes this job fun.

CH: He also said his main goal right now was to attempt to unpolarize the debate over education.

JK: To some degree, it’s always better to turn the volume down. But it’s also important to realize that when you’re dealing with important issues, even though it’s not personal, that doesn’t mean it’s not strongly felt. “Last in, first out”—those are issues that have some obvious political valence. The more you can do to keep the volume down, fine. But [on] some of these issues, people have strong disagreements. I’m sure Dennis doesn’t like budget cuts either. I never liked them. When you’re there, you have to operate within that context.

CH: You once said that education is inherently controversial. Do you feel anything is lost by trying to smooth out that controversy?

JK: If the way you turn down the volume is by abandoning core reform policies, that’s a bad outcome. I don’t think that’s what Dennis is saying. Forcefully he said he supports the policies, he supports the end of LIFO and charter schools and choice in the public school system, and all those things that are controversial. When you co-locate two schools, a public school and a charter school, that’s noisy. The more you can do to keep the debate from getting polarized and overheated, that’s great, but not at the expense of policy. That’s what I’ve always thought is the tricky play in this.

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CH: Is there an opportunity for a shift in policy?

JK: Sometimes people persuade you. There were times when originally on an issue I thought we should do X, and over time we did Y. These are strong issues, school reform. Every indication I have is that Dennis will be strong on those issues. And I think that’s critical. And sometimes those things will become controversial. Even if you don’t want them to be.

CH: What challenges will Walcott face now that he’s chancellor?

CITY HALL

JK: Biggest challenge is obviously navigating this budget.

To have layoffs that would be last in, first out would be a terrible impact on the school system. They’ve done a lot of research on the quality of teachers we’ve hired over the last half-dozen years. To lose those teachers as a group, there are some veteran teachers I’m sure that are phenomenal, but to just do it that way would be a problem. Negotiating this evaluation system with the union, he’s going to have to do that.

CH: Relations with the teachers union are about as low as they can be. Can Walcott fix that?

JK: He’s been doing this for eight years. He’s got a good relationship with Mulgrew. You want to work together, but not at the expense of good policies.

CH: The union says that getting rid of LIFO incentivizes principals to lay off senior teachers, because they cost more to keep on staff.

JK: I don’t think you should lay people off based on how much money they’re making, I think you should lay them off based on the quality of their teaching. That’s not what the union wants. The union wants to lay people off strictly based on reverse seniority. That’s not right.

CH: When you were chancellor, you had something of a national profile. Should Walcott go the same route?

JK: That’s really his call. Remember, though, things were a lot different. When I started, there was no Race to the Top. Forming the national presence really mattered.

I think it’s interesting [that] for virtually every major school hire, they’re hiring people from New York.

I think the reach of New York is now national. When I started, it was, obviously, a very different world. There were few reformers like Michelle [Rhee] and Michael Bennett in Denver. We tried to influence the national discussion. But Dennis has to decide what he wants to put his focus on. The national discussion is very different now from the discussion when I was chancellor five, six, seven years ago.

CH: Should Dennis have been the first choice? Was Cathie Black just an experiment?

JK: When the mayor brought in Cathie, he thought she was the right person for the job. Now he’s got Dennis. I don’t think I should try to figure out the order, I’m just happy now that Dennis is there. I think that the system will move forward.

CH: What have you been up to at News Corp.?

JK: We’re looking very hard at something I’ve been talking a lot about, which is how you use technology. Not putting kids on a computer, but really improving instruction and using data. I’m worried about next-generation

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Andrew Schwartz

Tech Support Blue Jay

learning. There was a study that came out last week, it’s a lot about the things I’ve been talking about, things we’ve been doing in New York with the school of one.

Here at News Corp. we’re thinking about specific things we need to build and develop, and we plan to be a big player in the education space.

CH: Some teachers are fearful of this type of technology and are worried about being marginalized. What is your response to that?

JK: I don’t see it. I talked to teachers when I was inside the school system and at the School of One, and they didn’t feel marginalized at all, they felt exhilarated. I think the teachers respond well to it. You always have to watch out in education for the ideological debates, and if people think that you’re going to eliminate adults and have nothing but computers, then that’s a ridiculous view of the world.

CH: There are persistent accusations about inflated graduation rates and test scores. Does that undermine the mayor’s agenda?

JK: The graduation numbers, they put them out every year. [Comptroller Tom] DiNapoli just did an audit, and he showed that the impact was small, and it didn’t impact the growth. ... Then you look at the national scores, and three out of four of those are big gains. Fourthgrade math, fourth-grade English and eighth-grade math, they’re undisputed; the city doesn’t administer those tests. Lastly, the state tests, even with all the changes, New York City outperformed all the other states.… So whether they were easier or harder, for our schools to have moved up dramatically reflects the fact that we are making progress. I was the first to say that they need to make the standards tougher and the graduation requirements harder, but the story of progress is compelling.

CH: If Dennis calls you after a particularly rambunctious Panel on Education Policy meeting and says he can’t take it anymore, are you going to come back?

JK: That ain’t going to happen. Dennis has been through a lot of rambunctious meetings, and he’s the right man, and he’ll be there, I expect, going forward. He’s unflappable; don’t worry about PEP meetings or anything like that.

Dennis has the lowest blood pressure of anybody I know.

CH: Where do you think that comes from?

JK: His was not an easy life, and I think he’s learned to turn down the volume and not overdramatize what’s going on. You ride the wave and just focus on making the progress. We did it for eight-and-a-half years together, and I couldn’t have had a better partner.

CH: He made waffles for some children in Brooklyn recently. Would you put your waffle recipe up next to his?

JK: There are things that I can cook that I would put up next to his, but he clearly hit a home run with those waffles. I’m not going to touch that. I’m more of a pizza man. ahawkins@cityhallnews.com APRIL 25, 2011

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