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November 3, 2009 @ 3:43 pm

Part Two of Our Back Story on Independence Plaza

From Seth Miller:

As we know, the city didn’t bother to enforce the J-51 law at Independence Plaza North, under which every apartment should have been registered as stabilized before HPD permitted the development to leave Mitchell Lama. Instead, nearly two years after IPN left the Mitchell Lama program, after numerous in-person meetings between HPD’s commissioner and Gluck’s lawyers (to which the tenants were not invited), HPD accepted back Gluck’s repayment of the post-Mitchell Lama J-51 benefits, giving Gluck a fig leaf to defend against what had by then become the tenants’ lawsuit for rent stabilized status. Part of the logic here is that, to Bloomberg, it is better to have the federal taxpayer pay for vouchers that protect only the poorest tenants, while the landlord gets market rents, than for the City to actually enforce a law that mandates affordable rents for everyone.

Our Follow Up:

We discovered long after the negotiations had ended that HPD held several meetings with Gluck or his lawyers. Martin Siroka, one of Gluck’s lawyers, was a former HPD lawyer. Here is one such episode.

Unbeknownst to the tenants, before the negotiations with Gluck even took place, Julie Walpert, the assistant commissioner for Mitchell-Lama, froze the waiting list for incoming tenants as well as the internal transfer lists. Walpert simply overrode the federal regulations that required Gluck to continue renting the apartments and making internal transfers to eligible tenants for as long as the complex was in the program. Rather than get too deeply into the weeds on it, suffice to say that this had an important adverse effect on the tenants’ position and gave Gluck a great economic benefit.

With the obvious purpose of rationalizing her unusual action, Walpert wrote a formal letter to Siroka in which she explained that she was freezing the lists for the benefit of the tenants.

Here is an excerpt from her December 19, 2003 letter to Siroka:
As you know, HPD does not permit a Mitchell-Lama housing company to stop renting apartments even when a buyout is imminent. However, the federal government only provides a waiver for up to one year for tenants who are over-housed to receive the enhanced voucher. Therefore, since HPD wants to ensure that the maximum number of tenants receives this voucher, HPD will waive its requirement to immediately rent up all available apartments. The sole purpose of this waiver is to accommodate the maximum number of moves and to avoid displacement of income-eligible tenants…

The freeze meant that there would be no incoming tenants who would get apartments at Mitchell-Lama rents. Nor would tenants who were entitled to transfers to larger apartments because of increased family size get them. Why give them larger apartments or allow new, non-voucher tenants to move into Independence Plaza? Once he was out of the program Gluck would get market rents for all voucher tenants and rent the vacant apartments at market rents. Only the already occupied, non-voucher apartments would bring him less than market rents.

Gluck had made a concession during the negotiations that he would pay the difference in rent for tenants who couldn’t transfer down to smaller apartments within the one-year period. He made it with knowledge that there would be no such tenants.

Walpert’s letter to Siroka said that she wanted him to know – not us – that she was freezing the lists for our benefit: we are making this exception as an accommodation to the tenants living at the development so that they are not displaced as a result of a federal policy…

The rationale was a sham. If tenants on the internal transfer list who qualified for larger apartments had been allowed to move up, as federal regulations required, those who had to move down could have occupied the apartments they vacated. In addition, Walpert knew that a substantial number of apartments were already vacant (we had complained in writing that the owner was illegally warehousing apartments) and that many other tenants were being evicted for having paid cash under the table to the previous management for getting into the apartments. HPD had known about them for years and Gluck had been given a list. (We offered to produce the management employee who had received the cash and called for an investigation before the transfer to Gluck. The request was denied.)

When all the vacant apartments were added up, it was clear that there was no need to freeze the lists. Had we known about the deal that Walpert and Siroka cooked up, they would not have been able to go forward with it. That’s why we didn’t know about it. And I had thanked Gluck for the concession and made one of my own. It was one of the many sleazy things we had to deal with when dealing with HPD generally and Walpert specifically.

The political principle embedded in that episode and in so many others that we had experienced on the way to these negotiations is: Not about us without us. Unless the reason is compelling, whenever a politician or bureaucrat professes to be doing something for, or negotiating on behalf of, tenants or other constituents, the fact that the alleged beneficiaries aren’t invited to attend, comment, or in this case even know about the meeting means that something else is going on. Walpert’s decision and her memorandum to Siroka written to protect herself was just bullshit.

– Neil Fabricant

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Filed under Housing, Independence Plaza: A Tenant's Tale

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