June 12, 2002

My name is Vivian Williams. I am here representing the Good Old Lower East Side, Inc. We are a community-based organization providing tenant advocacy and economic revitalization services to the residents and merchants of the Lower East Side. We are a member of the Rebuild with a Spotlight on the Poor Coalition. This Coalition comprised of 30 community based organizations was formed to ensure that low-income communities, particularly Chinatown and the Lower East Side, have a voice in the rebuilding process.

We are glad to be here today in front of the New York State Housing Finance Agency which has the stated goal of improving the lives of New Yorkers by providing low cost, flexible financing for the creation and preservation of high quality, affordable multifamily housing. It is also our understanding that the purpose of the Liberty bonds is to help generate private development that serves a public purpose in post-9/11 NYC.

However, when we look at this plan – the stated goals of the New York State Housing Finance Agency and the Liberty Bonds are not being met. Rather, we learn that $100 out of $800 million targeted for affordable housing will be designated for 20 River Terrace. This housing development had private financing and construction and was already underway at the time of the September 11th attacks. The developers of the project (Northwestern Mutual Life Insurance and the Albanese Development Corporation) now claim that the rental market is too weak to go forward with private financing. Yet, at the last LMDC board meeting, Chairman John Whitehead cited a real estate survey that said Battery Park City had a 90% and over occupancy rate as of June.

The "public purpose" the developers claim entitles them to these bonds is that 5% of the units (15 out of 291) will be reserved for families making 150% or below of the Area Median Income for NYC. (The Area Median Income for a family of four is $62,800/year.). So we are talking about reserving these 15 apartments for people who, if they were in a four-person family, would be making $94,200 a year. The prices on the 15 "affordable" units range from studios at $1,649/month to three bedrooms at $2,449/month. By definition, three quarters of the people in NYC can't afford these apartments.

The more usual set-aside for HFA subsidized housing is 80% market rate and 20% affordable. In these cases "affordable" means 50% or less of the Area Median Income. That works out to around $31,400 a year for a family of four. In other words, the usual meaning of the term "affordable" is that most people who live in the area can afford it. And even this is not affordable to many who live in the low-income communities of the Lower East Side and Chinatown.

This project has set aside a quarter of the normal amount of affordable units and is charging three times the usual price for them. By doing this, they claim they are serving a public purpose and so are entitled to take advantage of the cheap financing the Liberty Bonds provide.

Everyday at GOLES we see residents who are in jeopardy of losing their apartments or who are already doubled up or homeless. Each year, we assist thousands of residents fill out applications for Section 8, New York City Housing Authority, or for the limited low-income apartments available through community development corporations. When we see that this plan provides 50 parking spaces and no low-income apartments, we believe that the message is clear: There is no LIBERTY in the Liberty bonds, no “public purpose” in the post September 11^th world, no “affordable” in the New York State Housing Finance Agency’s purpose.

We believe that this project does not provide enough benefits to the general public to deserve Liberty bonds and other subsidies. We believe that the entire $800 million of the Liberty Bonds should be dedicated to developing low and moderate-income housing. We hope that the New York State Housing Finance Agency will look closely at its own mission and realize that funding luxury housing is not the way to recovery for New Yorkers.