Volume 19 Issue 49 | April 20 - 26, 2007

Downtown Express photo by Jefferson Siegel

Charles Messina on his terrace at Independence Plaza. His rent jumped from less than $1,000 to $3,882 after he made a mistake not reporting his cousin’s $4,000 income last year.

City’s red tape leads to eviction orders, I.P.N. tenants say

By Chris Bragg

When Charles Messina turned in paperwork to renew his middle-income housing subsidy a year ago, he said he made a mistake: Believing the city wanted him to report only his 2005 income, he didn’t report $4,000 his cousin, who lives in the same apartment, had earned in 2006.

Last November, Messina received a letter from city’s Dept. of Housing Preservation and Development, telling him that because of the mistake, his Section 8 housing voucher had been terminated. His rent nearly quadrupled and he and his 5-year-old son can’t afford to live in their Independence Plaza North apartment unless the decision is reversed. Rent on his four-person apartment went from $984 to $3,882 a month.

Messina, a 36-year-old filmmaker who has lived at Independence Plaza North for 10 years, has been fighting to get the subsidy back ever since. But he said he’s run into a series of bureaucratic hurdles along the way. That included being granted a 10-minute hearing with a “person who had no idea” about the case before it was rejected, he said.

“It’s the worst bureaucracy. No one gets back to you, no one answers the phones,” Messina said. “And then they terminate my contract when I make one mistake.”

“It’s really a case of the punishment not fitting the crime,” he added.

Messina is one of a number of tenants at Independence Plaza North (I.P.N.), a 1,345-apartment complex in Tribeca, who have complained of problems with H.P.D., a city agency whose mission is to protect the city’s low-income housing.

The I.P.N. tenant association recently sent a file of 30 cases to Manhattan Borough President Scott Stringer that described lost paperwork, misfiled applications and tenants who were terminated without appeal hearings because they weren’t sent hearing notices.
H.P.D. officials, however, said they are working to correct any errors that might have occurred and that the mistakes are not widespread. “We’re making sure every tenant receives due process and is given appropriate notice to discuss discrepancies,” said Patricia Zafiriadis, H.P.D.’s Assistant Commissioner for Tenants Resources, which oversees the Section 8 program. “If there’s any administrative error, tenants should certainly seek our help.”

She added that tenants receive recertification packets 90 to 120 days before they are due, plenty of time to get the paperwork right. She also said H.P.D. caseworkers come to Independence Plaza to assist tenants with the complex paperwork. And she emphasized that all Section 8 tenants sign a contract stating they will report 100 percent of their income.

Enhanced Section 8 vouchers, which are commonly known as “sticky vouchers” and have higher income limits than normal Section 8 vouchers, protect residents of rent-regulated apartments. The vouchers give tenants federal assistance when a building owner decides to opt out of a rent-assistance program. This occurred several years ago at Independence Plaza.

In 2004, Laurence Gluck bought out of the Mitchell-Lama middle-income rent protection. But in an agreement between tenants and Gluck, about two-thirds of the 3,000 or so residents at I.P.N. remained eligible for the sticky vouchers. The vouchers require residents to pay 30 percent of their income for rent with the rest of the rent covered by federal funding. (The city’s Landlord Assistance Program covered many of the other tenants).

The sticky voucher program at Independence Plaza is administered by H.P.D. Each May, I.P.N.’s Section 8 tenants must submit tax returns, income statements and assets. H.P.D. also requires tenants to report any changes in income or family composition, not only on a yearly basis, but also as those changes arise during the year. Errors can result in termination from the program, as the amount of income reported directly affects the amount of rent tenants pay. I.P.N. currently has a total of 592 apartments with an enhanced Section 8 voucher.

Some tenants who have had their vouchers terminated, like Messina, said it was because of a small, unreported amount of income:  a child’s summer job or college work-study program or a family member’s low-paying or part-time job. H.P.D. often picks up on the errors through a federal database provided by the U.S. Department of Housing and Urban Development, which runs the Section 8 program.

While those tenants acknowledge they have made mistakes, Dan Zittel, who is 56 and lives alone, said he still doesn’t know why he’s lost his Section 8 voucher. He’s lived at I.P.N. since 1994 and was on a waiting list for the building for 10 years before that.

A freelance stage production manager, he said his income statement is complex, including various short-term sources of income but no steady salary. He said H.P.D. didn’t know what to do with the income statement he submitted in May 2006. “They were sort of stumped,” he said. In the following months, he said, he went to the H.P.D. offices at 100 Gold St. several times to clarify problems.
H.P.D. wanted copies of all his short-term contracts, so they could check expiration dates and ensure he wasn’t still being paid for freelance jobs. He remembers one employee who wrote his name, social security and phone number incorrectly several times when he sat with her, giving her the information. “I learned I had to watch everything,” he said.

In November, an H.P.D. employee called and said they needed all of Zittel’s income and tax forms from 2004 and 2005 by the next day, Zittel said. Zittel gathered the information and faxed it to H.P.D. the next morning. He then called to make sure H.P.D. had gotten the pages, only to find out their fax machine had been out of paper when he’d sent the documents. “If I hadn’t called, they weren’t about to call me,” he said. “And they would have penalized me for it.”

But he ended up being penalized anyway. On Dec. 19, 2006, he received a letter that said his Section 8 voucher had been canceled for “failure to disclose all household income.” But he said he’s still never gotten a clear answer as to why his voucher was canceled. “They can’t figure out what my income is, so they terminate me,” he said. “You show up and everything’s fine. Then a couple months later you get a letter, and it’s saying ‘You’re off the list.’”

H.P.D. said its case workers are required to go through an intensive weeklong training when they start the job and also go through a refresher course every two to three years. In addition, for approximately every 6 caseworkers, there is a team leader who oversees the work, officials said.

On Dec. 26, Zittel arrived bright and early at H.P.D. offices to file an appeal of his termination. Zittel is hoping H.P.D. will rule that he underreported his income by mistake and did not do it so he could pay a lower rent. If H.P.D. judges a tenant made an unintended mistake, it can then simply have the tenant pay additional rent and reinstate the voucher.

According to H.P.D. officials, there are two criteria in judging whether an error is intentional, derived from federal Housing and Urban Development regulations. First, is whether the unreported income is greater than $2,500. The second consideration, they said, is the “obligation to report all household income” and the ability of the tenant to clarify why the income was not reported.

But some tenants said there’s no standard for judging the cases. “It’s almost like a mind reading escapade based on circumstantial evidence,” said Ed Rosner, an I.P.N. resident and a retired attorney. “It often turns on who the hearing officer is.”

“We’re talking about situations where people really make a mistake,” added Diane Lapson, president of the I.P.N. tenant association. “The tenant association is not going to defend people trying to cheat the government.”

Tenants have 21 days to appeal their initial termination. They are then are supposed to receive a notice of their hearing date within 30 days. The hearing date, however, can be months after the appeal is filed. Regardless, throughout the entire process, H.P.D. is supposed to continue paying the Section 8 subsidy until the appeal is heard.

In waiting for his appeal, Zittel had to break a contract he’d signed to work as a stage manager in North Carolina because he was concerned about missing his hearing. But it turns out he would have had plenty of time. The North Carolina job was slated to last two-and-a-half months. More than four months later, Zittel still hasn’t had his appeal hearing, which is now scheduled for May 1.

In the meantime, Zittel said he had his Section 8 voucher cut off by H.P.D. in January — even though that’s not supposed to happen. With a substantial portion of his rent missing for January, February and March, due to his voucher being mistakenly cut off, the company that owns Independence Plaza North, Stellar Management, moved to evict Zittel.

After contacting Stringer’s office, Zittel was able to obtain a letter from H.P.D. telling Stellar Management not to evict him until after the May 1 appeal is heard.

“The letter was a nice gesture,” Zittel said, “but if I win the appeal, who’s going to write the checks, who’s going to release the funds? I’m suspicious of the system. It’s these people in the middle level, especially management there, who know what the system is but let things lapse.”

Lapson said she’s noticed a similar pattern. “There’s the step where they put in papers and in the step beyond that something goes wrong very, very often,” she said. She cited a tenant who had three separate case files because of errors by H.P.D. “These kinds of things make you crazy, but this is common,” she said. “H.P.D. is overwhelmed, but the trauma goes on to the tenants.”

Oengus Timpson, a 34-year-old contractor, said his Section 8 voucher was canceled when he switched jobs and H.P.D. believed he had unreported income. When he went to H.P.D. this spring for his appeal, he said he waited from 10:30 a.m. to 5:30 p.m. in the lobby before being told that his caseworker was on a leave of absence. He said he’s been to H.P.D. approximately six times since then and called seven times to try and resolve the situation, but has never gotten to speak with his case worker.

Last Tuesday, Timpson, who has lived at I.P.N. for eight years, received a letter saying his appeal had been denied, because he never showed up for his hearing. “If they check the records, they’ll see that I was down there,” he said.

“Legal advocates across the city hear about big problems [with H.P.D.],” said Ellen Davidson, an attorney who has a wide range of Section 8 clients, “both because of inadvertent error [by a tenant] and in cases where tenants followed the rules and documents are being lost.” Across the city, H.P.D. currently administers 5,344 enhanced Section 8 vouchers, and 28,522 Section 8 vouchers overall.

“If you read the administrative plan, there are lots of protections to make sure people don’t lose housing,” Davidson added. “But with the number of Mitchell-Lamas that are left, there’s a huge increase in the numbers they administer. Tenants in Mitchell-Lama buildings operated a certain way, and things changed immensely.”

Zafiriadis, the H.P.D. official who oversees Section 8, acknowledged that the department’s workload has increased over the past decade, when more landlords began buying out of Mitchell-Lama. “It did expand our operations,” she said “but we also staffed up. It’s a dynamic process.” She said 210 people work in the tenant’s resources division out of about 3000 overall H.P.D. employees.

Since 2004, when Gluck bought out of Mitchell-Lama, tenants have worried about funding for the Section 8 program. But Zafiriadis said funding issues haven’t effected the administration of Section 8 vouchers or H.P.D.’s performance. “Our funding comes on an annual basis from Congress,” she said. “Just like anything else approved through Congress, we’re always prepared for a change.”

Concerns from tenants about Section 8 vouchers have led to action by Manhattan Borough President Scott Stringer and Assembleymember Deborah Glick. Stringer spoke personally with H.P.D. Commissioner Shaun Donovan about the problems and Glick sent Donovan a letter.

“Independence Plaza tenants are nervous, and it is understandable,” said Stringer, in a statement to Downtown Express. “There are systematic issues with the administration of enhanced Section 8 vouchers, and some tenants are not equipped to deal with the bureaucracy.” Stringer also recently met with I.P.N. tenants about the problems.

In her letter, Glick said: “The residents of I.P.N. were promised the ability to stay in their homes after the conversion out of the Mitchell-Lama through Section 8 vouchers.

“However, if qualifying tenants are unable to successfully clear bureaucratic hurdles that are part of the Section 8 recertification process or if the process is so prolonged that tenants who continue to pay their share of the rent are evicted due to non-payment of the subsidy share of the rent, the city will have defaulted on its promise to the tenants of I.P.N.”

Lapson, the head of the tenant association, said she has seen some improvement in H.P.D. since Glick and Stringer contacted Donovan. For instance, she said while it was once nearly impossible to get case workers on the phone from H.P.D.’s main line, the tenant association has now been given specific phone numbers within H.P.D.

Zafiriadis has scheduled a meeting to discuss the issues with Glick and Stringer.

If a tenant loses their appeal with H.P.D., they have four months to file an Article 78 proceeding to request for a state judge to review H.P.D.’s decision. But under H.P.D. policy, tenants who have lost their appeal and then file an Article 78 proceeding do not continue to receive their Section 8 voucher. The Article 78 process can take months, however, and most tenants can’t afford to pay market rent during that time. Stellar Management has moved to evict some of these tenants for non-payment.

That’s one reason the 2005 revelation that Stellar Management, as well as I.P.N.’s previous owners, had been receiving a tax abatement from the city since 1998 is important: Tenants who have had their voucher terminated by H.P.D. said they should be granted a stay of eviction until the case is resolved.

Tenants said landlords receiving the J-51 tax abatement are required to have rent stabilized apartments and cannot charge market rents until tenants and their successors have left I.P.N.

Seth Miller, the attorney who argued the case for the tenants, said tenants would have never agreed to the deal with Stellar Management during the Mitchell-Lama buyout if they had known about the tax abatement. “We’re only doing what H.P.D. should have done on the exit date,” Miller said. “We’re doing the city’s job by pursuing this rent stabilization.”

The tenants pressing the case are awaiting a ruling in New York State Supreme Court. If they win, it could mean that all I.P.N. apartments would become rent-stabilized. Miller said the case would likely be resolved by late May.

Stellar Management representatives did not return phone calls seeking comment.

Messina said that if he ends up losing his voucher he’ll likely move to Brooklyn, unable to pay rent prices in Lower Manhattan. “It’s like a joke,” he said, “that this is the organization that is supposed to preserve housing in New York City when it’s stripping away our subsidy.”

“This is a class struggle,” he added. “This goes way beyond me.”

Zittel said he doesn’t have any money to move if evicted. He said he certainly couldn’t afford to live anywhere Downtown. “I don’t think Robert DeNiro has a room for me,” he said, referring to the Tribeca hotel being built by the actor.

As the Bloomberg administration embarks on an ambitious plan to increase the low-income housing stock in Manhattan over the next 10 years, Lapson said it’s also important to preserve the presence of the tenants who built the neighborhood. “There’s a feeling of sickness going through all these people,” she said.

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