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In the same boat are the majority of their 425 North Side neighbors who are on the waiting list for rehabilitation loans (some may get grants), and perilaps 1,000 others who haven't applied yet probably will need to.
The future is equally in doubt for most of the 150 loan applicants waiting in the Model City renewal area on the South Side, and to hundreds of their neighbors who would apply in the future.
Also in limbo are 85 loans projected in the Seward West neighborhood on Minnehaha Av. S.; a smaller number in the Holmes area on E. Hennepin 45.; and others in scattered renewal projects.
The Hoags still are stunned.
"We had planned to do $1,000 or $1,500 of the work ourselves, to keep the loan payments down to what we could afford,” Mrs. Hoag said.
Added her husband, "Now it becomes a question of whether we do anything at all, whether we move out to the suburbs. Or do we find some way of holding our own, repairing what is absolutely necessary so that no real deterioration begins, like a roof leak?
“And if we do--still, what has happened to the idea behind our urban renewal. that the whole neighborhood is fixed up at once, so we don't get those pockets of blight and dilapidation in every block."
Van F. White, their neighbor at 1718 Thomas Av. N., is equally concernel about the IIoag's misfortune.
To him, the Hoags are exactly the kind of upper-income families the forth Side needs for stability.
"You've got to have a mixture of incomes to have any kind of viable community. We've got people who would have moved out two years ago, if it hadn't been for the idea of fixing up the whole neighborhood and stopping the blight," said White, who is chairman of the Willard-Homewood Organization.
“This was a real blow to us, and it's just absolutely ridiculous. It's like they're trying to force people to live where they don't want to."
White, 47, a North Side native who does job-placement interviewing for the Minnesota Department of Manpower Services, also is a loan applicant who knows his income is too high to qualify now.
This is not to say the North Side's problems would be solved if the freeze were revoked.
"Even at the rate they had been making loan funds available before the freeze." White said, "it was much too slow. It'd take us 15 years to bring all the houses up to a good standard. They might just as well bring the bulldozers in."
The one note of optimism was struck by Robert D. Dronen, executive director of the HRA in downtown Vinneapolis.
All of the $3,500 rehabilitation grants and some of the 3-percent loans still are available to the poor, he noted, and funds to demolish blighted homes or stores are untouched. Only the middle-income homeowners are affected by the freeze.
"Also, our allotment of new loan funds for the current 'action year is apparently not affected by the new freeze, so that we'll still get $1.1 million, which is enough for 175 to 200 rehab loans," Dronen said.
The current "action year" ends April 1, but Dronen said he expects federal approval of the city's budget shortly, perhaps in the next several days.
The City Council has yet to approve the loan budget for the next “action sear" that begins April 1, and it is not clear anyway whether the new freeze applies to these funds.
"Our understanding is that the freeze takes effect July 1, but beyond that we have not yet received any details,” said Lyn Burton, a special assistant in the St. Paul area office of the U.S. Department of Housing and Urban Development.
Housing officials are well aware, of course, that President Nixon's request for community-development revenue sharing will be pending before Congress again this year. The frozen funds, and all usual appropriations for renewal. loans and grants, sewer construction, parkland acquisition, could well wind up as part of that windfall for the cities—with more freedom to spend it and few federal guidelines.
But no one can predict when, or if, Congress will enact the proposal, or what the details will he.
Dronen said that he has asked the HRA staff to develop "a new, local program for rehab loans under revenue-sharing, perhaps with the local banks underwriting it. I don't know that we could repeat the 3-percent interest with a local program. It may be 4 or 5 percent, we'll have to see," he said.
[From the New York Times, Feb. 4, 1973]
U.S. FREEZE CASTS DOUBT ON FUTURE OF 120 PROJECTS
SUSPENSION HITS $ 1-BILLION WORTH OF HOUSING DUE FOR THE 3-STATE AREA
(By Edith Evans Asbury) The future of more than $1-billion worth of housing planned for 34,899 families in the metropolitan area has been placed in doubt by the recently announced freeze of Federal funds for housing subsidies.
Housing officials in New York, New Jersey and Connecticut, interviewed by The New York Times, said more than 120 jeopardized projects were in various stages of planning, with some ready to go up where buildings had already been demolished.
They said $51.4-million a year in subsidies had been expected.
Work on some projects, including those ready to go into construction, has been halted. Other projects are being analyzed to see whether they can be built for high-income families without Federal subsidy. The planning and design of still others is continuing with the hope that the freeze is only temporary.
AUTHORIZED IN 1968
All of the housing was scheduled to be built for families with middle and low incomes with the help of a Federal subsidy known as "236.” The figure refers to the section of the National Housing Act of 1968 authorizing the subsidy.
Section 236 funds had been used to reduce rents below nonsubsidized levels by giving annual payments—that hold mortgage interest down to 1 per cent a Fear-to local and state housing agencies and to lending institutions that provided mortgages to nonprofit, cooperative or limited-dividend sponsors.
Ilousing and Urban Derelopment Secretary George Romney, who has since left office, announced last month that a “hold” would be placed on “236" funds for housing projcets that had not received a “letter of feasibility” before Jan. 5.
The "hold," which also applied to public housing projects not already approved, and to some community development programs, would apply to the Model Cities program June 30, Mr. Romney said. The moratorium was declared to permit “reevaluation" of Federal programs to determine whether they might be administered in a better way, he explained.
Local and state housing officials reacted to the freeze with outrage, disbelief and confusion. Local and national offices of the Housing and Urban Development Department were besieged with inquires, which they were unable to answer, partly because the reins of power were not clearly in anyone's hands.
Mr. Romney's resignation had been announced, but he was still in office. James T. Lynn had been announced as his successor, but he was not yet confirmed. Mr. Lynn was not sworn into office until last Friday.
Federal housing officials in the tristate area were still unable last week to clarify the situation, or give precise information about its impact. Most of the information was obtained by The Times from state and local officials, and the figures are based on their estimates.
In New York State, $40.32-million a year in subsidies were expected for 78 projects to house 25,348 families and to be built at a cost of $903.6-million.
In New Jersey, 40 projects for 8,351 families were to be built at a cost of $205.2 million. The annual subsidy needed was $10.9-million.
In Connecticut, housing for 1,200 families was to have been built at a cost of $1.3-inillion, using "236" funds. The number of projects and amount of subsidr expected could not be learned.
About half of the housing planned in New York State with Federal aid was to hare been built in New York City by four agencies.
The city's Housing and Development Administration planned 23 projects with housing for 5,668 families, at a cost of $232.2-million. The annual Federal subsidy required would be $11.7-million.
Andrew P. Kerr, administrator of the agency, said work on all 23 projects had been halted, pending "clarification" of the freeze.
Ten of the H.D.A. projects were ready to go into the construction stage. The other 13 are in various stages of planning. Four of the projects have 295 units, are for the elderly, six involve rehabilitation to provide 770 apartments, and three, for 657 families, are to be newly constructed.
Two state agencies were planning $245-million worth of housing for 6,879 families in New York City. The Urban Development Corporation needs $9-million a year in “236" funds for its 10 projects for 5,500 families. The State Division of Housing's three projects for 1,379 families need $1.9-million a year.
Edward J. Logue, head of the urban development agency, said he was going ahead with the planning of the projects pending clarification of the freeze. He cut his staff 10 per cent last week.
However, he said in an interview, "We don't consider any of our projects in danger until we are turned down in our efforts to get approval."
Fourteen projects with 2,050 units for the elderly are among the state division's plans.
Charles J. Urstadt, State Commissioner of Housing and Community Renewal, said he was studying the division's other projects upstate and in New York City to see whether it would be feasible to build them without some form of subsidy.
Federally subsidized housing was also planned for 700 New York families in the city and upstate by the National Corporation for Housing Partnerships.
This organization, based in Washington, was formed under the Housing Act of 1968 by 270 large investors, including General Motors, the Ford Motor Company, the Chase Manhattan Bank and the Manufacturers Hanover Trust Company. It forms partnerships with, and provides funds to local sponsors committed to building low- and moderate-income housing.
Robert Tracy, regional director for New York, said the group's three projects, scheduled for Manhattan, Brooklyn and Buffalo, "will not go ahead unless 236 subsidies are restored." The cost of the projects is estimated at $20.7-million, with an annual subsidy of $1.2-million.
In New Jersey, John Renna, executive director of the New Jersey Housing Finance Agency, said there would be no layoffs because, “We still have 18 jobs already funded that will give us enough work for the rest of the year."
The 40 projects placed in doubt are being analyzed, Mr. Renna said, "To see if we can transfer them to other markets." Some might be changed to garden apart. ments and town houses, which are easier to build and less costly, Mr. Renna said, and the possibility of making them condominiums is being explored.
In Connecticut, Hartford, Bridgeport and Stamford have been hardest hit by the freeze, with some of the smaller communities along the Naugatuck Valley feeling the pinch as well.
"We are kind of worried here," Vernon J. Nelson, administrative assistant to the redevelopment director in Bridgeport said. “You take away Federal funds and there's nothing else really available.”
[From the New York Times, Jan. 28, 1973)
FREEZE ON FUNDS SHATTERS A DREAM IN EAST HARLEM
(By Robert E. Tomasson) Mrs. Alice Kornegay stood on East 127th Street between Park and Lexington Avenues and pointed toward the largely vacant block to the north.
"We were all set to build here,” she said with a mixture of anger and frustration, "but now this block may become nothing more than a big garbage dump."
Mrs. Kornegay is president of the Community Association of the East Harlem Triangle, which has spent four years in planning and site preparation for three low-income apartment houses. With realization seemingly a step away, the plans came tumbling down three weeks ago when the Federal Government announced that it was suspending virtually all new commitments of mortgage subsidy funds.
The subsidies—known to housing specialists as “236 money" because the program was set up under Section 236 of the Federal Housing and Urban Development Act of 1968—can make possible rents far below those that would otherwise prevail. In Manhattan, for instance, the program can produce monthly rents of $40 to $45 a room.
The tenant never sees the subsidies, which reduce the builder's mortgage interest, a major factor in the cost of development, to as little as one per cent. Without the subsidies, rents would be so high that the apartments would not be marketable,
In the case of the East Harlem project, for instance, the rents were to range from $159.50 for a one-bedroom apartment to $263 a month for a unit with four bedrooms and two baths. If the buildings were constructed without Federal subsidies, the rent range would probably be from $240 to $395.
While 28 other housing developments throughout the city-all of them in various planning stages—have suffered similar cutoffs, the frustration of the East Harlem group seems especially bitter. Their project was the largest and most nearly complete of any sponsored by a community organization.
"Three sites have been cleared, residents have been relocated and businesses closed,” said Mrs. Kornegay. “The area is a wasteland, and the community has counted on the project for its physical and economic survival."
On Jan. 8, Mrs. Kornegay received a letter from the city's Housing and Development Administration informing her that Federal funds had been earmarked for one of the three buildings. That same day, it was announced that the Federal funds had been cut off, effective two days earlier.
It appears now that even the first building may not be funded. A spokesman for the regional office of the Federal Department of Housing and Urban Development said “there is some doubt" about that, and added : “The other two buildings are definitely out the window."
The freeze applies to any project that had not received by Jan. 6 a “letter of feasibility" indicating initial Federal approval of the completed plans.
Last June, the East Harlem association submitted to the city a voluminous file, the result of a four-day campaign to win city and private financial commitments and to iron out the innumerable details associated with tearing down most of three square blocks and obtaining the money to build two 11-story buildings and one 13-story structure containing a total of 603 apartments and 35,000 square feet of commercial and community space.
The long fight that brought East Harlem to the brink of major housing rehabilitation began in 1961, when the city Planning Commission, urging commercial and industrial renewals, described the triangle area, generally bounded by 125th Street, Park Avenue and the Harlem River, as “one of the most blighted and rundown areas in Harlem-wholly unsuitable for housing."
After many months of repeated objections by a loose coalition of neighborhood groups, the city changed its plans, agreeing to permit housing “on the periphery." In 1964, the Community Association of the East Harlem Triangle was formed and was later granted a Federal tax exemption as a nonprofit service organization. The first funds for the group, permitting it to hire a professional staff and maintain an office, came from an anonymous private grant.
In 1967, the association began receiving money from the city. It used $164,000 to commission an architectural-social study of the area by the Architects' Renewal Committee in Harlem, a group of black professionals active in many pha ses of planning and renewal work.
Since then, the community association has completed work on more than $10-million worth of new and rehabilitated housing. It was a co-sponsor with the Chambers Memorial Church of 179 units of rehabilitated housing on 130th Street between Park and Lexington Avenues, and it is managing supervisor of a 189-unit low-income project that will be turned over to the Housing Authority when complete.
The backbone of the renewal plan, however, was three buildings between Park and Lexington Avenues-a 200-unit structure between 129th and 130th Streets, and 157-unit and 246-unit buildings on the blocks from 126th to 128th Street.
The city acquired the land over the last two years through condemnation, moving out 420 families and 36 businesses. Only about a score of families and 11 businesses remain, according to Mrs. Dorothea Merchant, director of the city's East Harlem Triangle urban renewal office.
The land was to have been sold to the community group for about $500 an apartment, or $300.000. S. J. Kessler & Sons, architects, designed the buildings for a fee of $488,000. The company has received only $10,000 thus far, and the rest of its fee is in doubt, because of the freeze on Federal funds.
The bulk of the construction money, approximately $20-million, was to have been supplied by Dovenmuehle New York, Inc., a mortgage banking company that is a wholly owned subsidiary of the Chase Manhattan Bank. The 40-year mortgage, however, was contingent upon the association's obtaining the Federal subsidy, which over the life of the mortgage would total about $40-million, and mortgage insurance from the Federal Housing Administration.
Charles Benenson, the real estate investor, had indicated his willingness to supply about $2-million in cash, but that commitment was also dependent apo Federal assistance.
Several weeks ago, Mrs. Kornegay joyfully mounted the seat of a bulldozer for a brief, symbolic ceremony to mark the start of the renewal project that seemed just around the corner.
A few days ago, she stood on East 127th Street—a street the Planning Con. mission has ruled would be closed to form a superblock in the project-and surveyed the large tract of cleared land.
"I just don't know what to tell these people,” she said, “they've been waiting so long."
[From the Amsterdam (New York) Recorder, Jan. 19, 1973]
RELEASE OF FEDERAL DEVELOPMENT FUNDS URGED BY GOMULKA
Amsterdam Mayor John P. Gomulka sent the following telegram to President Richard M. Nixon, Senator Jacob K. Javits, Senator James L. Buckles and Congressman Samuel S. Stratton yesterday :
"The curtailment or freeze imposed by the federal administration on housing and community development funds will have serious effects on the lives of all the people in this city which is engaged in a major rebuilding and revitalization program. We strongly urge every effort be made to release impounded funds already approved by Congress in order that we may continue in this effort. We cannot emphasize too strongly what this action can mean to the social and er nomic life of our citizens. Our housing and community development programs hare generated millions of dollars in private and local public funds, providing juis and improving living conditions for the majority of our people."
The mayor's telegram was in response to the recent freezing of federal funds for urban renewal projects and low and middle income housing projects by the Housing and Urban Development Dept.
The downtown urban renewal project has received unofficial word from HID that it will be funded. Frank Gillis, urban renewal director, was told unofficially by S. William Green, HUD region II director, that projects already approved will receive continued funding.
The 75-unit high rise project for the elderly off Division St. has received no official word yet.
Richard Halligan, director of community relations for Amsterdam's urban renewal agency, said Congressman Stratton answered the telegram immediately and promised his support.
[From the Amsterdam (New York) Recorder, Jan. 22, 1973]
EDITORIAL: HIGH RISE INTERWOVEN WITH CITY'S FUTURE When a city is as deeply involved in revitalizing and renewing itself as is Amsterdam, projects become interwoven, each depending either directly or indirectly upon the other.
Amsterdam finds itself in just such a position with regard to the second high rise housing project. While no final determination has been made as yet as to whether this project will get in under the wire of the President's "hold" order on distribution of housing funds, it appears at this writing that the chances of early funding are rather bleak.
Recognition of Amsterdam's dire housing needs for the elderly goes back to 1967 when the federal Department of Housing and Urban Development allocated 150 housing units to Amsterdam. One hundred of these units were built into the first high rise. The carryover of 50 units and approval of 25 new units last year set the stage for the new high rise, and a site in Urban Renewal development area at the southwest corner of Pine and Division was reserved. Bids have been let and were in the process of being approved by the HUD regional office at the time of the President's hold order.
Amsterdam has an outstanding case for approval of this project, if the message can get through to receptive ears. In the first place, there is a demonstrated need. At last report there were 125 names on the waiting list for the new high rise.
The second high rise is closely interwoven with Phase III of our downtown arterial highway system, which, in turn, is interwoven with the construction