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Squeezed Out in New York City

The apartment building at 47 East Third Street was a renter’s dream.

The tenants in the six-story, 15-unit building lived in rent-stabilized apartments, meaning that they paid far below market-value rents–an uncommon relief from New York’s expensive rental market. At times, the conditions of the building were less than ideal, but at $600 to $1,200 a month, conveniently located near Second Avenue on Manhattan’s Lower East Side, it was hard to complain.

Most of the tenants have lived there for over 20 years, during which time the neighborhood became one of the trendiest spots in the city. High rents and new luxury condominiums sprouted up, bringing with them an influx of new bars, restaurants and shops catering to high-income clientele. Yet 47 East Third Street remained an oasis of affordability in New York’s high-priced rental desert.

But not any longer, if the building’s landlords have their way. Alistair and Catherine Economakis are trying to evict all of the building’s 24 residents, which include two families with young children.

Outrageously, the Economakises are claiming that they want to turn the entire building–with 60 rooms and a whopping 11,575 square feet–into a private home for themselves, their baby and a live-in nanny. They began mass eviction proceedings starting in 2003, and in June of this year were bolstered by an appeals court case that ruled in their favor.

The tenants and their supporters, on the other hand, suspect that the Economakises are just trying to clear them out to convert the apartments into condominiums or market-value rentals–or so that they can sell the building for a much higher price. They recount numerous tales of abuses, violations and harassment aimed at making life difficult and encouraging tenants to leave.

* * *

LANDLORD-TENANT battles like this one have become more and more common in recent years in New York City.

Though the media have been running stories about the housing crisis for months, New York City has had a never-ending housing crisis for years. It has featured rising rents, disappearing government subsidies and, especially, attacks on rent-stabilized tenants. Landlords all over New York have been harassing and evicting tenants in rent-stabilized units with little or no justification in order to convert them into market-rate units–and reap the profits these units bring.

Take Edward Torrence, a 90-year-old man who lived in a rent-stabilized unit in Harlem’s luxurious Lenox Terrace building. A few years ago, as Torrence’s eyesight began to fail, he was unable to see well enough to write his monthly rent check. After his daughter began writing the rent checks for him, the Olnick Organization, which owns Lenox Terrace, initiated eviction procedures against him. Why? Because his daughter’s name was on the check, but not on the apartment lease.

Torrence died in early 2006, before Olnick could successfully evict him. But that hasn’t prevented them from trying to evict other rent-stabilized tenants for equally ridiculous reasons–and from trying to stick Torrence’s family with a bill for $19,000 in legal fees.

The crisis of affordable rental housing started years before the current wave of defaults and foreclosures, as the housing bubble that is now going bust was first inflating. The inflation of the housing bubble, which did allow some working-class people to buy their first homes, also drove up rental prices and destroyed much affordable housing for working-class renters, especially in big cities like New York.

In New York, over two-thirds of all residents rent. The poverty rate also happens to be double that of the rest of the country at about 22 percent. According to the Metropolitan Council on Housing, roughly 400,000 tenant households live either in public housing or in privately owned, subsidized housing in New York City.

Beyond that, there is still a desperate need for more affordable housing. According to the National Low Income Housing Coalition (NLIHC), New York state has the highest percentage (60-63 percent) of extremely low-income households living in severely unaffordable housing.

The NLIHC 2008 Out of Reach report found that the city’s “housing wage” stood at $25.35 per hour, or roughly $52,000 annually. That is what a full-time worker must earn in order to afford a two-bedroom apartment at market rates, paying no more than 30 percent of income on rent. This is more than three times the minimum wage, and a stretch even for many households with two income-earners. This housing wage has increased by 53 percent since 2000, and is unaffordable to a majority of New York renters.

The result? Hundreds of thousands of people are languishing on the waiting lists for public or subsidized housing in New York. Yet the stock of affordable housing is being cut rather than increased.

In 2006, in response to a budget shortfall, the city announced plans to begin collecting fees in public housing for services that were previously free. And a quarter of tenants living in public housing were hit with rent increases as high as 40 percent. This year, the NYC Housing Authority is proposing to hit those same tenants with another increase, this time of 5 to 15 percent. Their crime? Making more than $20,000 a year.

The Section 8 program, which subsidizes rents for low-income families, has been cut so many times that in 2006, the NYC Housing Authority closed their waiting list to anyone who was not a victim of domestic violence.

At that time, the waiting list had over 126,000 people on it. Since 2005, the number of vouchers given out yearly has fallen from 92,000 to 83,000 citywide. People already on the waiting lists for either Section 8 or public housing can expect to wait almost 10 years.

What’s more, many landlords have been weaseling their way out of providing affordable housing. Many have begun refusing to take on new tenants who use Section 8 or the HIV/AIDS Services Administration, which provides housing subsidies for low-income residents with HIV.

Others have tried to use loopholes in the tax law to evict their rent-stabilized tenants, such as a provision that allows landlords to evict if they plan to convert the building into their private residence, as the Economakises are claiming. Between 2002 and 2005, some 44,000 rent-stabilized housing units were deregulated, more than the total for the entire previous decade.

* * *

WHAT THIS means for New Yorkers is that they will never live in a comfortably sized apartment, and will always be paying uncomfortably high rents. And if they’re lucky enough to live in cheap housing, their landlord or the government is probably breathing down their neck to raise the rent or kick them out.

For the poorest, it could mean spending some time on the street. In the 2000s, homelessness rates are well over 50 percent higher than they were in the 1990s, based on the number of people who stay in city shelters.

Another path many take is leaving New York altogether. In a city whose working class is largely made up of people of color, census reports show that 40,000 African-Americans moved out of New York City from 2000 to 2006. Working-class people simply cannot afford to live in the city anymore.

What’s true in New York is also true on a national scale. As of 2005, well over a quarter of U.S. rental households were paying more than 50 percent of their income in rent. There are 2.8 million more poor families in the United States than there are homes for rent that they can afford. Some studies now estimate that it would take annual production of over 250,000 units per year for more than twenty years to meet the affordable housing needs that exist in the U.S.

Yet there is actually enough surplus housing in the U.S. to house all the homeless and most people who need low-income housing. The problem is that the priorities of the free market–the need to make a profit–won’t let this surplus housing be used for people who can’t afford to pay.

In a sane society, one of the first priorities would be to make sure that everyone has a safe, comfortable place to live. But capitalism’s priorities are just the opposite.

Bankers, speculators, and landlords have profited off the housing bubble and rising rents. Ordinary working-class people, on the other hand, have seen nothing but foreclosures and evictions. While Congress sends billions more into the black hole of the Iraq occupation, the Federal Reserve and the U.S. Treasury bail out the banks of their mortgage-related crisis, millions of working-class Americans are literally being left out in the cold.

ZACH ZILL writes for the Socialist Worker.

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