Shaoul, the BSA, DoB and WTF

Went to the Board of Standards and Appeals to see their response to Shaoul's request for a variance to keep the 6th floor expansion that the BSA had ruled illegally built some years ago. Shaoul's attorney made the good point that the Department of Buildings had issued a permit for the expansion, and the BSA didn't rule it illegal until after the expansion had been completed.

The BSA chair wasn't having any of it. She pointed out that the even though the building didn't have a Certificate of Occupancy, the owner had been renting the apartments illegally for years.

In reply, the attorney blamed that on the DoB for not enforcing the law. I was truly impressed with audacity of this legal argument. I really like it. If you place several hundred landlords, say, into a ship and sink it and drown them, it's the fault of the Coast Guard for not stopping you. I'm all for it.

But seriously, this attorney nailed the truth about NYC real estate: the DoB encourages illegal activity at every turn, either by issuing illegal permits (commonly permitting bulkheads that are actually intended for residential use, to skirt the zoning limits on residential space), or by failing to enforce blatantly illegal expansions, demolitions, hazardous endangerments to tenants -- literally whatever and whateverything landlords can think up.

Btw addendum: the BSA didn't rule on Shaoul's request at this hearing. They scheduled another hearing in late June and another in July to finish up. It was pretty clear that the BSA intends to deny him -- a whole bunch of elected officials signed on to a letter asking for a denial. But even if they deny, without enforcement, he'll just continue to flout the law.

Puzzling

It's supposed to be well-established that commodity prices are the inverse of interest rates. Interest rates are as low as they can be and luxury housing prices are high, for example. But the rest of the economy is not wildly inflated. Is liquidity trapped only for the 99%, and not for the luxury economy of the 1%? Anyone know?

Call to action!

Constructing in an occupied building has become one of the most aggressive means of harassing tenants. Shaoul used it often, and Kushner, who recently bought nearly 30 parcels in our neighborhood, informed the community board last month that he intends to construct building expansions wherever he can. 

The case of 515 East 5th Street may become the precedent for all future expansion harassment. Please come to the Board of Standards and Appeals and spread the word. From GOLES:

GOOD OLD LOWER EAST SIDE, INC



TENANT ALERT!

FIGHT ILLEGAL CONSTRUCTION OF ADDITIONAL FLOOR AND PENTHOUSE ON 515 EAST 5TH STREET!

DATE: TUESDAY, MAY 21ST, 2013

TIME: 10:00 AM SHARP!

PLACE: BOARD OF STANDARDS AND APPEALS (BSA)

22 READE STREET, SPECTOR HALL

NEW YORK, NY 10007

(ONE BLOCK FROM CITY HALL)

COME TO THIS IMPORTANT HEARING AND SHOW YOUR OPPOSITION TO LANDLORD’S APPLICATION TO LEGALIZE THE ADDITIONAL FLOOR AND PENTHOUSE WHICH HE BUILT. THIS CONSTRUCTION WAS FOUND ILLEGAL IN BSA DECISIONS IN 2007 AND 2008. NOW THE LANDLORD IS SEEKING TO REVERSE THEM. IF LANDLORD IS ALLOWED TO KEEP THIS ILLEGAL CONSTRUCTION IT WILL SET A PRECEDENT FOR OTHER LANDLORDS TO DO THE SAME LEADING TO DANGEROUS CONSTRUCTION THAT CAN CAUSE DAMAGE TO STRUCTURE OF SUCH OLD TENEMENT BUILDINGS.

FOR MORE INFORMATION CALL GOLES 212-533-2541

Reviewing the 2008 rezoning

Irrational opposition to NO711 takes me back to the EV/LES rezoning. The supporters of the rezoning were as outraged at me back then as I am towards the one person who maintains polemical objections to NO711 -- not because of his polemic, which is at least interesting, sound or not, but because he lied, then supressed the truth and followed with a string of manipulations and distortions. So I wonder if, in pushing my opposition to the rezoning, I was similarly manipulative. What I said about the rezoning back then was: 

1. The rezoning is an overall upzoning. The EIS bore me out -- 53% more development under the rezoning than under the previous zoning. (Harvey Epstein fortunately managed to mitigate the upzoning plan with an IZ application over the avenues.) 

2. The upzoning of sidestreets will turn townhouses overnight into candidates for demolition and luxury redevelopment. That was an accurate prediction.

3. Developers would often choose not to take the Inclusionary Housing bonus. Also an accurate prediction, although the jury remains out with the largest developments upcoming on Mary Help of Christians and the former theater/deli on A between 6th & 7th. 

4. The height caps were too high, which allows for air rights sales, undermining the inclusionary bonus incentive. We're seeing this at play on Norfolk Street, and there will be more. 

5. The LES downzoning would drive hotel development onto the Bowery and into Chinatown. Hotel development has gone crazy on the Bowery and in Chinatown since the rezoning, although it had already begun before 2008. Hotel development would probably have continued regardless of the rezoning, so it's hard to tell how much the rezoning increased it. 

6. If the EV rezoning is implemented, there would be little political will within CB3 to protect Chinatown and the Bowery. I think I was wrong about this. CB3 eventually came around to support the Bower Alliance of Neighbors zoning plan (although CB3 still features on its website its old Bowery study that BAN rejected), and CB3 has shown support for the Chinatown Working Group's zoning efforts despite its amibitious scope. It's taken time, but it's happening. 

7. CB3 did not push hard enough to protect the Bowery. Here I was completely wrong. The city was and is intransigent on the Bowery. When CB3 members told me this, I simply didn't believe them. I wrongly assumed that they were sacrificing the Bowery for the sake of the rest of the EV. Whether they could have tried harder is irrelevant: they saw (and I did not understand at the time) that the city wouldn't budge, so pushing would get nothing but push back and trouble. So, considering the possibilities, I now think that CB3 cannot be faulted at all for the Bowery and its lack of protection, and I was wrong to fault them then. 

(In my defense, the Task Force leadership undermined its credibility by insisting that everyone had to accept the plan immediately and without change otherwise DCP would walk away from the plan. I responded, btw, that DCP had no intention of walking out. I was right about that as well: CB3 never fully approved the plan, insisting on Harvey's and Paul's 11-points of contention to the end, and yet DCP never walked. It was DCP's plan as much as the Task Force's and DCP wanted it at least as much as the Task Force leadership wanted it.) 

8. Under the previous zoning, most development in the EV was contextual; out-of-scale development was mostly south of Houston. That was true. After NY Law School and TNC, there was a lot of redevelopment in the EV, but only two rose above seven stories, one on 12th & C and one on 13th & B, both about 9 stories, one story taller than would be allowed under the rezoning. Just about everything else capped at 6 stories. 

So was I full of manipulations, distortions and absurd arguments? I'd genuinely like the rezoning supporters to explain. I'm sure I see all this still from my own perspective, so I have to rely on them for a more complete assessment.

The Death of New York

Here's the picture of the new New York: the new immigrants to New York are the American wealthy and their adult-age children. The new New York has not prepared for the new with large-scale construction, so these new migrants-of-means will gentrify this city unrecognizably throughout all five boroughs.

One of the few incentives to construct remains rent regulation. New construction is not regulated (unless the developer voluntarily accepts a cross-subsidy). When you read the nearly all economists, left, right or upside down and even the redoubtable Krugman, agree that rent regulations are bad for the housing market, what they mean is regulations across the board, including new construction. None of that holds in NYC. It's just the opposite. Rent regulations actually serve new construction. And deregulation wouldn't increase the market pool either. Regulated renters evicted by deregulation don't generally leave the pool -- they work in the city or have family here. They remain in the metro area, and wherever they go they create a tighter market there, displacing renters and upscaling neighborhoods, creating pressure both upwards and downwards. The result of deregulation is a disruptive game of musical chairs in which at best landlords at the top renovate to update deregulated spaces. (This was studied by, of all groups, Giuliani's arch-conservative Manhattan Institute, concluding that deregulation in Boston didn't lower market rate rents but actually increased market rate rents across the board.) The sum effect is a increase in the aggregate funds available for rent, and all of that goes to the landowner -- little more that a shift from the local economy where the regulated renters were spending, to the landlords. 

The moral is: keep rent regulations and construct luxury housing in upscale neighborhoods to keep the upscale out of ethnic neighborhoods, and hope that other American cites can draw the wealthy away from us. 

Demand for luxury apartments is higher than ever

Luxury apartments are rising higher now to meet increased demand. But "demand" is a gloss for at least three independent economic functions: 1) the quantity of those seeking an apartment relative to the availability of supply, 2) their willingness to part with their disposable income for living space (the "opportunity cost" of space), 3) the sheer quantity of their disposable income. There's a fourth function: a decline in use value that increases the exchange demand -- the willingness of apartment seekers to double up and share a space. Even if that doesn't directly raise prices of luxury apartments, it raises them indirectly. Raising prices down the ladder raises up top as the options narrow. 

The 19th century argument that the cost of living space would always rise as capital expands was definitively disproved in the 1960's and '70's when large swaths of Manhattan saw rental declines, in some places precipitous declines to zero and even below (landlord abandonment or arson, the city giving properties away to residents). This wasn't a shift of capital as with Detroit -- Detroit's experience gave support for Engels' warning that the immobility and economic inflexibility of home ownership for labor would be a curse as capital shifted locations, although in Engels' case he thought it wasn't so much capital shifting as that labor needed mobility to shift so it could sustain a strike by seeking work elsewhere. 

In New York it was a cultural shift to the suburbs partly encouraged by government both by construction of suburbs and of infrastructure to take residents to and from the suburbs. That's why Robert Moses is so much blamed for the bankrupting of NYC. Capital did not shift to the suburbs, leading urban dwellers out of the city; capital was still in the urban center when Moses allowed the tax base to shift to the suburbs, and capital followed. It can't be blamed on the loss of manufacturing base: New York is growing in population and in wealth and tax base, but not in manufacturing. The move to the suburbs was a government-facilitated cultural shift that eventually spiraled the city downward as the eroded tax base undermined services, and middle class flight undermined public education. Explicit race-based programs like red lining and slum clearance closed the coffin. 

The new demand for upscale housing shows distinct reflexes of its distinct functions. The quantity of apartment seekers will gentrify outer boroughs as long as central upscale development lags demand. The price of space will rise as long as the willingness and wealth is there. The draw in New York seems to be its density, safety and convenience. It's a party for the rich. 

So why do all these rich folks come here and why are they willing to pay ever more? Is it the nightlife here? Or that NYC is the chain store capital of the US? Maybe it's just NYU. 

"NO 7-Eleven: resist chains and corporate control" is winning!

7-Eleven Corp has delayed the opening of the 7-Eleven store on 11th Street & Avenue A from May 13 to November 13. That's a half year delay @ $35,000 per month.

Meanwhile NO 7-Eleven is ramping up its resistance. We're planning a demonstration in early June at the 7-Eleven doubledecker "superstore" on 5th Avenue & 23rd Street just across from the Flat Iron Building. Details soon.

An anonymous comment on EV Grieve resonated with me:

If a storefront or piece of land has been vacant because the owner is greedy ... CB 3 support them by approving a bar or lounge or a hotel or luxury housing.

Filling empty stores benefits primarily the landlord. The neighborhood is not desperate for commerce -- we've already got more chain stores than any other neighborhood in the city and a 7-Eleven provides the minimal jobs per square foot. 

So, 7-Eleven Corp and CB3, just leave it there empty. We can deal with that. The landlord? Kushner can think of it as a goodwill gesture to the community. He can afford it. 

Chin, AAFE, development, gentrification and displacement

I posted this originally as a comment at the Villager in response to an article on Margaret Chin's council campaign. 

What troubles me most about Chin is what she's been doing to Chinatown. Despite broad Chinatown protest, Chin supported a Chinatown business improvement district (BID) which will destabilize small property owners, increasing the likelihood of the selling of Chinatown properties and redevelopment that will lead to gentrification and community displacement especially of the low-income community. 

While her association with AAFE and the First American International Bank may be well-intentioned, under city zoning the construction of affordable housing brings 80% market-rate luxury housing, raising real estate values and commercial rents. NYers saw this in Williamsburg -- the community was sold an affordable housing program that resulted in wholesale transformation of the neighborhood. The affordable housing non profits can't back off the city's Inclusionary Zoning program because affordable housing development is their mission and that's what they are funded to do. The result of collusion between upscale development and non profit affordable housing is a net loss of affordable housing, deeper gentrification and low-income community displacement. 

The close relationship created in the law between those non profits and market-rate developers has placed a destructive wedge between community and the non profits that should be protecting those communities. The fault is the city administration's, but the city's gentrification program succeeds by using those non profits. AAFE strongly supported the upzoning of Chrystie Street, Houston Street and Delancey, opening the door to upscale development for the sake of 20% affordable housing, playing the city's game rather than resisting, protesting, refusing and leveraging. 

Supporting NYU development, the demolition and redevelopment of 135 Bowery (for the First American International Bank again), the Chinatown BID and the SoHo BID -- intended or not, it's a constellation of development and upscaling. Chin is a good-hearted, hard-working activist, but she's been caught in a game that is headed in the wrong direction for community. That's why CSWA, a Chinatown labor organization, and a Chinatown small property owners group oppose her. That's an unusual coalition spectrum -- property owners and labor. Says a lot to me.

Incisive comments from the NO 7-Eleven petition

The petition comments have been full of intelligence and succinct eloquence. Of the many brilliant, here are a couple that stood out for me:

From Mark Lepage
Aside from the killing of local businesses and character, and the other pernicious effects of corporate chains, it must be recognized that there is nothing naturally "free market" about this incursion. It is meant to redesign NYC as a massively low-wage, high-rent zone. Locals have every right to resist a backroom-mandated corporate disfiguration of the neighborhoods in which they live and raise their children.

And an exerpt from Adam Weiner:
...While evolutionary change is inevitable and healthy, mass chain invasions as explictly planned (and already executed) by the likes of Subway, 7-11, Starbucks and Dunkin' Donuts have the effect of diminishing the difference between living in New York City and living (much more cheaply!) in the 'burbs....If you want to drive me and many others out of Manhattan or out of New York City entirely, keep on letting the chains have their way with the city.

If only chain stores would drive people away from New York. Rents would decline, the tax base as well, undermining municipal services like transportation and policing, yet more of the entitled who expect services would leave, and soon we'd be back in the '70's when New York had a wild spirit and its people were here, not to file blithely into stores, be served hand and foot and spend money, but to join in the anarchic edginess of it all. If it didn't include the drug addictions and drug trade, it would be perfect. 

But chain stores will not drive the new New Yorker away. They have so much disposable income that lower costs in the suburbs do not register on them at all. They come to the city primarily to party, to socialize with each other in bars, to get laid. In ten years New York bar conversations will begin not with the excessive rents (as today) or crime (as in the '70's and '80's) but complaints about the latest chain store incursion as the downside and cost of living in New York. But it will be a complaint in name only. Underneath it'll be just a pick up line. 

NO 7-Eleven city-wide petition on line!

NO 7-Eleven: resist chains and corporate control has a city-wide petition on line. Take a look at the great comments along with the signatures. 

To the New York City Planning Commission and City Council: Allow community self-determination to resist chain stores.

To: 

The New York City Planning Commission and City Council 

There are over 7,200 chain stores in New York City with more opening every year. 7-Eleven Corp alone is planning to open 100 new stores in Manhattan by 2015. Chain stores raise commercial rents, crowd out our commercial variety, our choices our mom-and-pops and our diversity. They efface our neighborhood character, erase our ethnic roots, erode our community relationships. They leverage wages down and, once cornering their market, leverage prices up. I call on the City Planning Commission and the City Council to amend the city's zoning text to require that no corporate formula store or bank open a new location without approval from the local community board. Such a zoning amendment will not only allow communities to restrict the number and location of chain stores, but also allow community boards to negotiate legally binding stipulations on all elements of chain store character from signage and closing hours to wage scale.

Allow community self-determination on chain stores, franchises and banks.

Sincerely,
[Your name]

http://www.change.org/petitions/to-the-new-york-city-planning-commission-and-city-council-allow-community-self-determination-to-resist-chain-stores?utm_campaign=signature_receipt&utm_medium=email&utm_source=share_petition

The city is your backyard

Bob Holman mentioned yesterday that "NO 7-Eleven" is not a NIMBY issue, unless our backyard is the entire city.

I've been thinking about how NO 7-Eleven is distinct from gentrifying or gentrified neighborhood groups. It's not just that it's a city-wide effort, not just that it's calling for community say in land use for all communities. I think it goes way deeper. Chain stores are an invasion from an inaccessible source. I think that's why I'm puzzled by critics who welcome chains on the ground that it's an expression of the free market. There's nothing "free" about corporate control from afar. 7-Eleven, Walmart, Walgreens, McDonalds -- the whole lot of them -- are the Persians at the Athenian walls, the body snatchers and Big Brother all in one.

We're New Yorkers -- an immigrant, diverse, crazyquilt of communities. We're not the corporate overlords from remote locations and they're not us.

Corporate control from afar

Back in the 18th century, Henry Rutgers, a New York City landowner, contracted to have a house built on one of his lots. He specified that there be no rear house; the lot not covered by the main house should remain a yard. Rear houses couldn't be rented to people of "quality." A rear house would attract riff-raff, and Rutgers thought it more important to keep up the neighborhood than extract a bit more profit from the lot. After all, it was his land, his neighborhood.

A century later, the first apartment buildings, called tenements, were constructed in New York, all in impoverished immigrant neighborhoods. The very first drawings of these show rear tenements. It's a clear indication that the landowner has lost any faith in the neighborhood as a place where he or his associates might consider living. The purpose of the land is no longer use, but exchange, constructed not to live in but to make money from. It's the concurrence of the commodification of space and control of land use from afar. The two are inseparable.

As demand increased at the bottom of the housing market, the quality of the living space declined, to the extent that mid century tenements were unlivable, unhealthy breeding grounds of plagues of cholera and epidemics of tuberculosis. Interior rooms had no windows and multiple families might occupy a mere 300 sq ft space in a mere three tiny rooms.

Eventually government stepped in, but only after the Draft Riots, a working-class, immigrant near revolution with the riots lasting four full days. But the exploitation of housing space continues as fewer and larger landlords buy up more lots in the city, applying their legal resources to evict and harass tenants throughout their properties. As these giant corporate landlords increase their holdings, there will be less accountability and more harassment.

Similarly with city commerce. New York has seen steady increases in chain store proliferation. They limit consumer choices, limit job and entrepreneurial opportunities; they increase commercial rents because they can pay higher rents than any local service or mom and pop. The consequence was particularly evident in Hurricane Sandy when all of downtown lost electricity. The small bodegas and independent pizza shops and small restaurants and bars were all open almost immediately, sometimes giving away perishables. All the chain stores were closed and remained closed until five days later electricity was restored.

Locality is not the solution to all the woes of the world, but corporate control from afar threatens us with increasing disempowerment, loss of choice and identity and undermines community self-determination. Regaining community self-determination is the underlying motive of our group "NO 7-Eleven: resist chains and corporate control."