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One community group, Harlem's Action for Community Empowerment (ACE), is pushing for city council hearings on NEP. On March 11, a small group of NEP tenants and legal advocates will meet with Manhattan borough president C. Virginia Fields's office. To 60-year-old Maxine Newman, who has lived in her apartment at 128th Street and Fifth Avenue for 37 years, the issue is simple: "Rudy Giuliani's administration has a problem: poorophobia. NEP is his vehicle to rid the city of the poor."
When Giuliani unveiled NEP in 1994, it was the main component of a three-pronged plan designed to get residential property out of city hands. It is run by the department of Housing Preservation and Development (HPD) and an arm of the Partnership, a powerful nonprofit akin to a chamber of commerce. Through NEP, HPD transfers its buildings to the Partnership, and together they select "entrepreneurs" who get loans, management fees, construction money, and tax credits to take over deteriorated buildings. After several years, the Partnership transfers the property to the entrepreneur.
An abiding faith in the private sector is NEP's foundation, but the program is riven with mistrust from advocates for tenants. City councilmembers Stan Michels and Bill Perkins, both of Harlem, have refused to let buildings into NEP because they say rules are vague and the Partnership too unaccountable to the public. "It's clear that the city doesn't care how it gets out of being a landlord; it just wants out," says Perkins. "They just want to say, 'There were X number of buildings in this neighborhood in our portfolio but now they're not, so we have been successful because we cut it to zero.' Where the buildings went and who went with them is not nearly as relevant to them."
Legal advocates question why some entrepreneurs are selected despite owning or managing buildings that ache for repairs and are laden with tax arrears. And they complain that tenants are given little chance to opt into the Tenant Interim Lease (TIL), one of the city's oldest property disposition programs that allows tenants to turn HPD-owned buildings into low-income co-ops. While TIL is often regarded as the most satisfying option for tenants, it is the administration's least favorite, given City Hall's penchant for privatization and the fact that TIL is a truly demanding route for tenants. Default is a constant threat; a recent audit found TIL buildings owe $15.3 million in back taxes.
Mistrust of NEP is greatest among tenants, many of whom view the program as a scheme to get rid of them. "The manager just wants us to get out of here, that would make him happy," says Newman, who lives in a four-bedroom at 2071 Fifth Avenue. "I'm 60 years old. I should not be worried about this sort of stuff at this point in my life. I should be looking forward to happy, glorious things. Not this."
Francis Syn-Moie, the entrepreneur at Newman's building, says Newman is "free to come back to an apartment appropriate for her family size," but notes that because Newman's daughter lives with her and has an income, she should expect a hike from her $357.50 rent.
Tenant mistrust of landlords in city-owned buildings has been simmering so long, it's almost a matter of habit, and no one argues that changes are not needed. But critics have long claimed that HPD's legendary mismanagement was a political choice: "The city never wanted to be a landlord, and it made sure it wasn't good at it," says ACE director Nia Mason. Ironically, HPD's incompetence bolsters the ideology for a privatization program like NEP. HPD did not return calls.
Wariness stems, too, from NEP's own policies. Some NEP tenants must sign leases that allow landlords to move them from a permanent apartment mid-lease if the owner wants to put a different tenant in that apartment. "It's unconscionable, but we see it all the time," says Epstein. Armstrong of the Partnership says he only recently became aware of the provision and that "We'll work on the language."
Syn-Moie says tenants' skepticism runs so deep because what NEP promises "seems too good to be true. This program takes property that is nothing but an eyesore and makes it viable. These tenants just have to see these apartments get finished to alleviate their fears. . . . If you look at the broad picture, NEP can only add growth and rapid change to the community, and in 20 years, I think the market will have matured a lot for these properties to increase their value." That is exactly what worries Newman."Why do we have to move," she asks,"so someone else can come in?"
For about 65 per cent of NEP tenants, rent is either 30 percent of their income or a market rate, whichever is lower, says Armstrong; most of these tenants are on public assistance. Another 10 percent are new tenants whose income does not exceed 60 percent of the area median, or $29,000 for a family of four; they pay rents ranging from $375 for a studio to $575 for a four-bedroom. The final 25 percent pay market rate, but their income cannot exceed 165 percent of the area median; in this case, $85,000 a year for a family of four. Entrepreneurs sign a regulatory agreement to keep apartments affordable for 30 years, Armstrong says. Rents for the biggest apartments, four bedrooms, top out near $900.