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At-risk housing study echoes cries of industry.

A survey on private-sector housing at-risk for abandonment or foreclosure released last week by one of the New York City's leading non-profits echoes the cries of the real estate industry about the survival ofaffordablehousing.

Last week the Community Service Society of New York unveiled "Housing on the Block: Disinvestment and Abandonment Risks in New York City Neighborhoods," a study of the city's 59 community districts. The reportfinds 7,500 privately-held rental buildings with 140,000 units -- or one in every six buildings -- are in danger of being abandoned or taken from their owners because of unpaid taxes or mortgage foreclosure.

"I think it's something the real estate industry has been saying for a long time, but I think it's important to come from one of the city's most respected non-profits as well," said Marolyn Davenport, vice president/ Governmental Affairs.

The report emphasizes that the stability of these buildings is essential to the vitality of the neighborhoods in which they lie and that "rising costs" and "insufficient revenues" are impeding owners from maintaining their properties.

Contributing factors to the state of rental property cited by the survey include: The downturn in the economy, over-leveraged investments of the 80's made on the basis of projected income, disinvestment by institutional lenders, fewer. tax incentives for rental investment, and increased drug trafficking,

In addition to programs and legislation that will protect tenants, the report recommends a number of initiatives for owners that resemble those the industry has been asking for from the city for some time. They include: More fair and affordable water and sewer fees, increased property tax abatements for landlords whose tenants receive rent increase exemptions, property tax relief measures for owners who comply with all city codes but cannot meet their tax obligation and assistance for "conscientious" owners who cannot afford to adhere to certain Guidelines Board meetings illustrates there are deep problems facing owners, said John Gilbert, president ot me Kent Stabilization Association, said

"This is a group that has been on the 'other side' of private property rights ever since I've been at RSA," Gilbert said.

In response to the survey's findings, Ruben Klein, president of the Bronx Realty Advisory Board, said: "It's about time."

The study, he said, is an "indictment" of the city because a non-profit agency has recognized these causes for abandonment before the city administration.

The findings "should touch the conscience of the city ," said Klein who is also an advisor to the housing court.

"The problem is the city is not looking at anything that is affecting the affordable housing stock," he said.

Water, for example, Klein said, is a public utility and rates should thus be set withthe help ofpublic hearings. Instead, he said, the city has created a water board that mandates rates.

In addition to water, sewer and taxes, there are other costs on the horizon that will further burden distressed property owners, such as lead paint, Davenport said.

Margulies, executive director of Community Housing Improvement Program, said the study was somewhat "ironic." Many of the findings, he said, could have been taken from owner testimony at the Rent Guidelines Board meetings. No one "believes" these facts, he said, when they come from owners.

"It really shows its who says it, not what your saying," he said.

While an overhaul of rent regulation as a solution was absent from the report Margulies said, "They seem to have targeted the problem."

But Margulies said he struggled with the report's overemphasis on non-profit housing groups as an alternative to the private-sector. "That's a self-fulfilling prophecy", he said.

He said he would have liked to have seen more "market-based solutions" in the report.

Sharp Increase

in Problems

The researchers found that troubled privately-held housing was most commort in poorer areas of the city where African American and Latino citizens predominantly reside, such as: Crown Heights and Bedford Stuyvesant Brooklyn; East Tremont, Morisana and Hunts Point in The Bronx, and Harlem.
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Title Annotation:Community Service Society of New York reports results of survey on private-sector housing risking abandonment or foreclosure
Author:Fitzgerald, Therese
Publication:Real Estate Weekly
Date:Apr 7, 1993
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