Content, Cover Story, Domestic, Issue, New York — March 18, 2010 at 6:35 am

Notes from the 15th Floor

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When I moved to New York City last year to attend Columbia University, I knew that finding housing would be a challenge; after three weeks of frustration, I finally managed to find an acceptable studio apartment one mile north of campus. What I didn’t know was that the apartment was available because the previous tenant had recently leapt to his death out of the 15th-story window. That element of surrealism would foreshadow some of my sociological experiences in the new building.

I live in 3333 Broadway, a massive, 1,193-apartment building towering over the Manhattanville/Hamilton Heights neighborhood of West Harlem. It comprises its own U.S. census tract with over 4,000 residents, and the neighborhood—bustling, safe, and convenient to transportation—is booming; in the last two weeks, a Dunkin Donuts, a supermarket and a deli have sprung up within a two-block radius.

Affordability, however, is a challenge, as in most places in Manhattan. I am putting myself through school with a job and $45,000 per year in loans, with well over half of my living expenses represented by my rent—$1,190/month. When I learned that many, but not all, of my neighbors have half or more of their rent paid by government subsidies, I was struck by the parallels with the neighborhood that I grew up in.
I emigrated from Russia with my family in 1994 in search of the promise of opportunity in America. And America delivered—I grew up in beautiful and affluent Princeton, New Jersey, due to a stroke of luck: we secured a spot in heavily-subsidized housing development. We had a two-bedroom townhouse in a safe and beautiful neighborhood, just a mile from a neighborhood with home prices averaging $800,000. The total rent was a steal at approximately $650/month.

Growing up, I always viewed the federal subsidies as a springboard to lift my family out of poverty, and felt a responsibility to strive to improve my situation. However, at 3333 Broadway, I found another environment entirely. In West Harlem, living on federal subsidies is not a means to betterment but rather a culture that feeds on itself.

This made me curious—as someone who tends to drift between classical and modern political liberalism—about the justice and efficacy of the extensive housing subsidies available throughout the United States, the sort that I had richly benefited from but now found myself reexamining with new critical eyes.

I am who I am because I grew up in Princeton. As much as I try, it is almost impossible to imagine what I might have become were it not for subsidies—to evaluate fairness from a hypothetical position where I am blind to my own status and background, through what the philosopher John Rawls described as a “veil of ignorance.”

Not only is it difficult to see the world but through our own biased perspective,the fact that subsidies secured life-long advantages for me and helped me attain educational and career goals make me an exception, not the rule. This was something I realized only after moving to New York: 38 percent of my neighbors live not only under the poverty line, according to the United States census, but in a vastly different economic reality than I had grown up knowing in Princeton.

A HISTORY OF GOOD INTENTIONS

When 3333 Broadway—which is officially called the Riverside Park Community—was built in 1975, it stood as one of the largest residential buildings in the United States. The building was incorporated into the Mitchell-Lama Housing Program, utopian 1955 scheme, named after two members of the legislature, which gave tax abatements, cheap land and low-interest, government-subsidized mortgages to developers to build low-income housing. It was supposed to alleviate a housing shortage and providing middle-class families with a temporary leg up.

When the building was removed from the program—an action allowable under the agreement—after 20 years and the prepayment of the balance of the mortgage, many tenants faced significant rent increases. Political pressure from people “losing their homes” succeeded in securing a response. A compromise was reached between the government, tenants, and landlord; tenants received Section 8 “Enhanced” Vouchers—a special category of subsidies specially distributed to make up for the removal of the Mitchell-Lama restrictions and named after the section of the U.S. Housing and Community Development Act of 1974 where the program was originally authorized.

With these vouchers, tenants pay either their prior subsidized rent or 30% of their income; the vouchers—financed by the federal government—pay the rest directly to the landlord, even as rents go up (which cannot happen unless the landlord justifies the increase to the Department of Housing and Urban Development). Significantly, the vouchers do not expire, continuing to pay out every month so long as the tenant stays in their apartment.

An estimated three-quarters of 3333 Broadway’s population is comprised of Section 8 tenants, and this is not likely to change soon because of the enduring nature of the assistance, despite the fact that one of the objectives of the original law was “the reduction of the isolation of income groups within communities.”

UNINTENDED CONSEQUENCES, UNEQUAL RESULTS

The distribution of housing subsidies does not seem to correspond with any real economic criteria, but is rather scattershot and dependent on luck. For example, while I have no significant assets and am on par or below my neighbors in terms of economic status, I have no access to this housing assistance because of the convoluted and unequal way these benefits are distributed. The cashier I chatted with at a deli on my block commutes over an hour each way to work, earning $28,000 year. He had looked at 3333 Broadway, but was unable to afford the $1,700 / month rent for a 1-bedroom apartment. There were no more Section 8 Enhanced vouchers available.

This constantly-shifting patchwork of inconsistent funding policies contributes to tension at 3333 Broadway, which tends to come out at tenants’ meetings. An organized tenants’ association, call the New Concerned Tenants Union Association of 3333, has held meetings and rallies against market rents, submetering (the practice of charging tenants for individual utility usage), inadequate repairs, and discrimination against subsidized tenants. They are also often assisted by legal aid and tenants’ rights societies, which seek to help them take legal and financial action against the landlord and educate them about the best way to maintain or receive government assistance.

The Tenants’ Association is led by Alicia Barksdale, 49, an energetic paralegal and college student who has lived in the Riverside Park Community for more than three decades and faithfully represents the interests of her constituents. She is also a community liaison for New York City Councilman Robert Jackson, who represents the area. “It’s obvious that the landlord wants Section 8 tenants out, so that they can do what they want with the building; they do more for market-rate tenants than for people who have been here for years,” she said. “There are issues with repairs, rodents, bed bugs, and heat.” Ms. Barksdale also agrees, however, that it’s not fair for people to be charged vastly different rents for similar apartments; “the entire building should be placed back into Mitchell-Lama,” she added.

A primary issue here seems to be the concept that being compelled by economic circumstances to move is an unfair situation where the economy must be steadied by the government. So, policies buffer citizens from the vagaries of the market that may lead to relocation. The average American moves every five years, and some would say that this is not an issue of basic fairness. Ms. Barksdale, however, disagrees: “when you’ve lived somewhere for years, you become rooted and active in your community. It’s not fair to have to move because the rent goes up,” she said.

THE LANDLORD

The primary target of Ms. Barksdale’s grievances is Urban American Management Corp., a West New York, NJ-based firm that purchased the building for $280 million. The deal was completed in 2007, two years after the previous owner removed the complex from the Mitchell-Lama program. “When a tenant moves out, which happens for a wide variety of reasons, we improve the apartment and charge what the market will bear,” Mr. Eisenberg said. “People choose to pay it because they like the area and want a nice place to live. In fact, the building is better off now than it was when we bought it. We’ve put millions of dollars into repairs and improvements.”

Douglas Eisenberg, Chief Operating Officer of Urban American, explained that his company treats all tenants equally, and there is no reason to treat Section 8 tenants any differently. A Section 8 voucher is not available to someone like me because the program was a special measure for people who were already living in the building when it was taken out of the Mitchell-Lama program.

Mr. Eisenberg also explained that although Urban American helps tenants deal with the appropriate authorities to maintain their vouchers, it has nothing to do with the subsidy, which is a product of the relationship between the tenant and the City. “The only situations in which a tenant may lose their voucher due to maintenance or repair related issues is if a city inspection finds problems in the apartment and the tenant does not permit access for repairs to be made or for the reinspection of completed repairs,” he added.

Max Hartman, like Mr. Eisenberg, is continuing in his family business. He is a landlord who manages two 20-unit buildings one block north of 3333 Broadway and has encountered problems with the system of housing subsidies currently in place.

“In my rent-regulated buildings, the City does not allow me to raise rents on certain units—which are already leased at rates well below the market—by more than a small amount, typically 3% per year,” Mr. Hartman said. When, for example, heating oil prices increase, he has no choice but to pass the cost along to his free-market tenants in order to stay afloat. He explains, “This is unfair—I have regrettably watched hard-working families and small-business owners move out of my buildings and farther away from their jobs because they were unable to afford the increases.”

Mr. Hartman has had to resort to some creative strategies to address the unfairness created by the housing system and to contend with rising costs. He negotiated a $15,000 cash payment to a tenant of his, in exchange for their moving out of a 3-bedroom apartment in the building that they were paying $300 / month for. He admitted, “This was an unusual situation, but the unfairness of rent regulation made this a win-win for me and my tenant; they received fair compensation, and I believe the true value of the apartment, after renovation, is $2,400 / month.”

Although the issue in this case was rent regulation and not housing vouchers, these price ceilings are another example of government intervention with far-reaching and sometimes unexpected consequences. Mr. Hartman’s reaction to all of this: “These subsidies create a culture of entitlement and disincentivize hard work. As the economist Thomas Sowell said, ‘all of my housing has always been affordable, because I only housed where I could afford!’”

THE TENANT

Urban American has also been accused of colluding with Columbia University, with which they say they have no relationship. Columbia has acquired most of the land along Broadway between 3333 Broadway and its campus to the south, and is planning a large campus expansion over the next two decades. Dr. Steven Gregory, Associate Professor of Anthropology at Columbia said, “The spirit and even more or less the letter of housing laws and assistance programs are fair and ought to be left as is. The real issues are the documented cases of tenants being harassed, Major Capital Improvement applications [landlords’ applications for government permission to increase rent based on renovation outlays] being inflated, and gentrification.”

Are these benefits—just like my spot in a highly-desirable Princeton neighborhood — bestowed in a fair and consistent manner? The answer, as was the case in my childhood, is often no; however, it is not an easy matter to back away from this sort of intervention, either.

The reasons for this, as well as some of the thinking informing current policy are summarized by David Hershey-Webb, a partner of the law firm Himmelstein McConnell Gribben Donoghue & Joseph and noted housing attorney. He explains that it is not possible to view individuals as disconnected from one another: “the libertarian perspective is an anti-human one. It ignores the fact that, from a moral perspective, we are all part of an interconnected community, whether we choose to see it that way or not,” he said. “The free market is a dangerous myth; it does not allocate resources fairly, and many of the things that makes the economy run, including most of the physical infrastructure of the country, were built by government spending.”

Government spending, this line of thinking goes, is then necessary to help those who were disadvantaged (educationally, financially, neighborhood-wise, etc.), because—in the unequal way society’s wealth and opportunity is passed down from generation to generation — they were deprived of resources and opportunities that others had through no fault of their own, or unfairly.

PRODUCTS OF OUR PAST

The genesis of our political convictions—yours and mine—is a complex, poorly-understood mix of genetics and experiences. Our backgrounds shape us and our personalities are inextricably bound up in where we come from. Ms. Barksdale’s grandmother was a rental agent in this area, and she has lived virtually her entire life in the building. Mr. Eisenberg and Mr. Hartman carry on their fathers’ real estate businesses.

My background growing up in public housing in Princeton shaped me too, but my experiences at 3333 Broadway have pushed me to reconsider even the very benefits that gave me an opportunity to succeed. Obviously, without the housing subsidy, I would have not have had access to the tremendous education and quality of life that Princeton gave me as a child. However, as long as I am the exception, and not the rule, it is hard to view the current system of housing in the United States as anything but uneven, relying on questionable criteria and often promoting dependence and cyclical poverty.

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One Comment

  1. This is a great opinion piece. I love hearing about these issues because I completely agree that there must be something wrong with the system when housing is so expensive that people have to live off of subsidies and that others who are in the same condition are unable to receive the same government support. It seems arbitrary and unfair, but I guess that’s just the way it is right now…

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