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Articles of Interest by Jay B. Itkowitz During his Journalism Career

Rent up or services down?

Long Island Press, August 5, 1974

Tenants - in one way or another - will be hit by the inflation cost increases their landlords are experiencing every day.

Tenants and their elected officials will soon be faced with two choices: rent increases - which few people want - or a reduction of services. Unless the federal government does an about-face and suddenly provides increased housing subsidies, those alternatives will become realities.

That's how the city's top housing official, Roger Starr, the administrator of the city's huge Housing and Development Administration, assesses the city's current housing predicament.

It's not the kind of suggestion likely to win Starr friends among the city's more than two million tenants though it won't hurt his following among the city's landlords. In fact, since Starr's controversial suggestion two weeks ago that tenants might have to do with less heat and other landlord-performed services, tenant's groups have called for his scalp.

Starr delivered his controversial remarks in announcing the formation of the Housing Industry Committee to look into these alternatives and make recommendations to the City Council and State Legislature.

The group is comprised of public officials including Starr and Housing Authority Chairman Joseph Christian, and several leading real estate developers and bankers.

The committee immediately came under fire from a handful of legislators who joined tenants' groups in accusing Starr of harboring an "anti-tenant" bias.

But during an interview with the Press at his spacious office on the top floor of 100 Gold St. in Manhattan, Starr stood his ground unshaken by the outburst of criticism from pro-tenant quarters. He also defended the exclusion of any tenant representation on the committee saying "responsible tenant groups" would be consulted once the recommendations were ready.

Starr believes a reduction in services is the best way to "mitigate future rent increases" in the face of continuing inflation. This year, for instance, operating costs for landlords of rent stabilized apartments jumped 19.2 percent, the largest increase on record since the Bureau of Labor Statistics began annual cost increases for HDA in April 1967. Furthermore, BLS reported increases of 79.8 percent since the studies began.

The cost increases pose serious economic problems, to the city's estimated 300,000 rent stabilized apartments, its 150,000 units of Mitchell-Llama apartments (limited-profit developments where government money was used for the mortgages) and the city's own 100,000 units of public housing.

Starr has also run into flack from Mitchell-Llama tenants who have bitterly opposed rent increases as high as 22 percent over two years. Starr said the increases were necessary to protect the city's $2 billion investment in subsidized apartments.

Moreover, he said the City Housing Authority (HA) operated at a $107 million deficit this past year.

A prime area where reduction of services could dramatically reduce costs is heating and utilities, Starr believes. According to BLS, operating costs in this area alone rose 79.6 percent from April 1973 to April 1974.

And if New York State had followed the federal government's lead last year in lowering the heat to 65 degrees instead of keeping it at 68 degrees, considerable savings would have ensued, he contended. For each one degree reduction the Housing Authority would save $1,200,000 he said.

"The requirement that buildings be heated from 10 p.m. to 6 a.m. is only 10 years old," Starr said. "When that rule was passed Number 6 oil cost 5 ? cents per gallon. Now it is approaching 40 cents per gallon."

"One of the hardest things to get across to citizens," he said, "is that they pay for housing increases and, if not, buildings are going to go broke and be abandoned."

Starr also said savings could be achieved in buildings where utilities are included in the rent by installation of separate meters.

"The average family whose utilities are included in its rent uses far more electric power and gas than in a building where each person has his own meter," he said. According to Starr, nearly half of the city's 150,000 Mitchell-Llama apartments include utilities in the rent.

Fat can also be trimmed in the area of security, he said.

Many Mitchell-Llama buildings have to pay for a guard force as does the Housing Authority, he said.

"The Housing Authority has discovered that in some developments they can get a voluntary police force that extends police service at no cost," he said. It costs the authority $30,000 a year in salary and expenses for each HA police officer, he added.

"If you can use a 10-man police force with 20 auxiliaries instead of a 20-man police force the impact on costs and rents is minimized."

Tenants, particularly in co-ops where costs have forced HDA to drastically increase carrying costs such as Dayton Towers, can reduce increases, he went on, by assuming maintenance chores, etc., "if the board of directors really explains the cost situation." In such instances, he added, tenants are much less likely to litter.

"The whole question of how people treat the buildings where they live has an important effect on the cost," he said.

"If we simply slow down rent increase by this type of intelligent self-help we will be successful," he said.

"How long can people put up with rent increases of 8 ? percent a year?" he asked.

Rising construction and maintenance costs combined with the federal freeze on new housing construction money have forced the Housing and Development Administration to reexamine where the city is going in terms of new housing.

Up until the last year or so city and federal officials have been oriented towards high-rise construction in trying to alleviate the city's chronic shortage of decent housing for low- and moderate-income families.

But now, according to Roger Starr, administrator of the Housing and Development Administration, the city may be moving towards a complete turnaround in housing philosophy - a switch which could have a dramatic impact in Urban Renewal areas such as Jamaica and Arverne.

Starr, taking a cue from private industry, is eyeing three family houses, which have been sprouting up all over Queens, as a solution to the housing problem.

"Three-family houses are the most effective type of construction since World War II," Starr believes. Not only are they cheaper to build, he said, but cheaper to maintain since the owner would do work normally assumed by maintenance men in larger developments.

According to Starr, three-family houses cost about $22,000 a unit compared with $35,000 a unit in high risers.

"Conventional housing has to rent for $125 per room per month," he said. "Middle-income housing should not rent for more than $50 to $55 per room and that is on the high side."

To close the gap between subsidized moderate income and conventional high risers, for instance, Starr said the city, state and federal governments would have to provide subsidies to the tune of $70 per room per month for each unit of moderate-income housing.

For a five-room apartment, that works out to a $350 subsidy per month or $4,200 a year for a new, fire-proof elevator apartment, he said. Since the city is capable of building 10,000 units a year that could work out to $420 million a year for 40 years, the average span of a Mitchell-Llama mortgage, he said.

"We don't think the federal government will provide those kind of subsidies," he said.

As a result, Starr said HDA is considering a pilot project involving Mitchell-Llama money to finance the ownership of three-family houses in the Jamaica urban renewal area. Each three-family unit would cost about $100,000 which would be paid back over the life of a 50-year mortgage.

Starr said he hoped to have "something to show" by the beginning of the new year. If the project works out, Starr said three-family houses might be built on at least some of the six sites slated for high-rise construction in the Arverne urban renewal area.

"Development of three-family houses instead of high risers would preserve the semi-suburban atmosphere of the Rockaways," he said.