Volume 19 • Issue 10 | July 21- - 27, 2006

Editorial

Don’t renege on rent promise to Knickerbocker tenants

One of the biggest problems with the federal $21-billion, 9/11 community development aid package was that so little of it was used for affordable housing in Lower Manhattan. Much of the $50 million affordable housing fund the governor and mayor announced three years ago — a fraction of one percent of the entire package — still has not been spent, and some of the allocated money may not live up to the promise of preserving affordable apartments.

Knickerbocker Village could become the most outrageous example. Cherry Green Management, Knickerbocker’s owners, are applying for steep rent hikes even though Gov. George Pataki and Mayor Mike Bloomberg announced last year the firm would get $5 million in federal money for capital repairs to keep the aging complex affordable.

“I am proud that … we will be able to provide more affordable housing options and add to Downtown’s thriving residential community,” Pataki said in a statement in June 2005. His Division of Housing and Community Renewal recently suggested approving a rent hike, which would translate into almost $100 more per month in a typical one-bedroom apartment. Many of the 4,000 tenants are elderly people on fixed incomes who don’t have the option of working longer hours to satisfy their landlord’s greed.

Dep. Mayor Dan Doctoroff said last year the $5 million would be enough to keep Knickerbocker affordable permanently. There is little evidence to support that claim, particularly since Cherry Green, in addition to the rent hike application, is fighting in court to leave the Article IV program that keeps the rents at relatively reasonable levels.

Councilmember Alan Gerson was right to say last week that Cherry Green is acting in “bad faith” against tenants and taxpayers by taking a subsidy and going for a rent increase.

It took Doctoroff and the city far too long to come up with the best way to spend the $50 million in affordable housing money controlled by the Lower Manhattan Development Corp. Three years ago, Pataki and Bloomberg announced that the $50 million would go to Tribeca’s Site 5B to build 300 below market apartments. The city rightly halted the plan because it realized it was better to shift more of the money to preserve existing affordable housing rather than pay more to build new apartments.

The plan, announced a year ago, has still not been fully outlined and Knickerbocker is another bad chapter in the long affordable housing book in Lower Manhattan. Real estate executives say the Liberty Bond program encouraged developers to build few affordable apartments Downtown because the tax-free bonds were better than the “80-20” incentives that require 20 percent of the units to be less than market rate. Surplus revenues from Battery Park City, once slated for affordable housing, were diverted to other projects during three city administrations before Bloomberg reversed the policy. The mayor should use the full force of his office to fulfill his promise to Knickerbocker. Pataki should order the D.H.C.R. not to approve a rent hike.

Keeping a promise to vulnerable tenants should be enough of a reason. But it is important to maintain a healthy mix of incomes in our community and to send a message to landlords not to abuse this program.


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