Volume 19 Issue 42 | March 2 - 8, 2007

State may switch teams in Knickerbocker fight

By Chris Bragg

With a new governor, the state’s housing agency has reportedly abandoned landlords at Knickerbocker Village who want to privatize the rent-controlled complex. In a battle between landlords and tenants, the Lower East Side tenants are now one large step closer to ensuring they have affordable housing.
The New York State Division of Housing and Community Renewal, which had been backing the privatization of Knickerbocker Village, had until recently vowed to stand beside Knickerbocker Village landlords. But D.H.C.R. reportedly has changed course and will now not join landlords in appealing an August ruling by the State Supreme Court, which held that Knickerbocker Village cannot leave the Article IV middle income housing program.

“Finally, someone realized after reading the judge’s decision that our position was correct,” said Jacques Rose, the tenants’ attorney who was told of the D.H.C.R. decision last week. D.H.C.R. officials declined to comment, but Assembly Speaker Sheldon Silver, who had been pressing the tenants’ case, also praised the victory in a statement issued to Downtown Express.

“Knickerbocker Village, one of the few remaining housing complexes under Article IV protection, is part of our legacy and we must work collaboratively to guarantee that it remains a resource for generations to come…I look forward to working with the new administration and leadership at D.H.C.R. as we turn the page and move forward in a positive direction,” Silver said.

D.H.C.R.’s leadership has changed since it said it would appeal the Supreme Court decision last August. Gov. Eliot Spitzer, elected in November, has replaced commissioner Judith A. Calogero with Deborah Van Amerongen.

Knickerbocker Village Inc., the limited dividend housing company which is seeking to privatize the 12-building low-income housing complex at Monroe, Cherry and Catherine Sts., declined to comment on the matter.

Bob Wilson, one of the leaders of the Knickerbocker tenants, said the D.H.C.R.’s decision severely weakens management’s efforts to privatize, since D.H.C.R. oversees the complex. “Going up against the state is not easy. They’re huge,” said Wilson. “Now that we’ve been told they’re withdrawing, everything changes.”

While there’s still a chance that the management of Knickerbocker Village will continue with litigation, Wilson said he’s not overly worried now that the state isn’t backing them. “This just about — but not quite — concludes litigation,” he said. He said the owners will now have to argue that the state wants Knickerbocker Village privatized — without support from the organization that oversees low-income housing. “It’s going to have them in a very strange position.”

The management of Knickerbocker Village wants to operate the housing complex without the rent limits that have been in place since it opened in 1936. Base rent for each apartment in the 1,590-apartment complex is under $1,000 per month. Article IV, which was enacted in 1926, has no provision for landlords to buy out of the program, unlike Mitchell-Lama, which was enacted three decades later.

Knickerbocker Village has argued that it’s unfair for the rent controls to last indefinitely. They’ve been trying to leave the Article IV program since 2003. Tenants fear their rent would triple if the complex were privatized.

In Jan. 2006, the D.H.C.R. approved a request by Knickerbocker Village Inc. to become a private entity called Cherry Green Corp. Calogero, the D.H.C.R.’s executive at the time, wrote that the tenant’s argument “that a limited dividend housing company, constructed prior to 1962 must remain under such use seemingly forever, runs counter to the structure of this and every affordable housing program.”

But a State Supreme Court judge ruled last August that while D.H.C.R. could dissolve Knickerbocker Village Inc., because Knickerbocker Village was constructed before 1962, D.H.C.R. did not have the authority to transfer it to anyone besides a municipality or another limited dividend company under Article IV.

Wilson, who came to live in Knickerbocker Village with his parents in 1944, said it was ultimately political changes in Albany that led to this particular tenant victory. “I chalk this up as a huge plus for Spitzer,” he said. “If anyone wanted clear proof of him and [Attorney General Andrew] Cuomo, and their commitment to affordable housing — what else can you ask?”

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