One Year After Tenants Approved an Affordability Plan

Westview At Risk: Fears and "Cautious Optimism"

Updated 48 weeks ago David Stone

Two things are significantly different when you look at Island House and Westview. The first is external appearances; the second and most important is, although both were born from a Mitchell-Lama seed, only Island House exited with a successful affordability plan, in 2012, while Westview flirts with a cold exit to market rate housing.

Non-identical twins, Island House (foreground) and Westview
Non-identical twins, Island House (foreground) and Westview
© David Stone / Roosevelt Island Daily

Island House has 400 units, Westview 361. They share a common sponsor/owner.

Hard to believe, but they once shared a task force guiding them away from Mitchell-Lama's protective umbrella. Philosophical differences brought the rift.

"The tenants associations, and the culture of the tenancies have been different," Island House leader Frank Farance says. "The WVIH Task Force split because, essentially, Island House tenants were doing all the tenant advocacy work for Westview's tenants, including M-L Budget-Rent Determination hearings."

Former Common Council President Frank Farance worked with the Island House task force.
Former Common Council President Frank Farance worked with the Island House task force.

But there was more.

For years, calendars flipped through month after month without rent increases. Finally, the NYS Department of Housing and Community Renewal mandated a nearly 15% across the board rent increase, according to Island House/Westview Owner/Sponsor David Hirschhorn.

Island House's task force looked at the pending rise rationally, considering increases New York City's rent stabilization reviews okayed during the period, agreed - however reluctantly - that it was fair and bit the bullet.

Westview's task force sued.

"Over the next couple years, Westview sued sued DHCR in an Article 78 on rent increase (of which DHCR had administrative discretion authority), and anyone else ... Westview lost all of them and racked up (big) legal bills," Farance recalls.

"It went nowhere," a second source confirmed with a bewildered shake of his head.

Island House Moves On

Working cooperatively and productively with the building's owner, the Island House task force edged near migration out of Mitchell-Lama through 2010.

But things changed.

Outside looking in - Westview in the light and Island House
Outside looking in - Westview in the light and Island House
© David Stone / Roosevelt Island Daily

In 2010, RIOC President Steve Shane was fired by the Board in a maneuver engineered by the Maple Tree Group to secure windfall profits for Rivercross tenants, at the expense of the rest of the Island.

That was good for Rivercross because the next RIOC President, Leslie Torres, quickly signed off on a deal Shane resisted.

"It was bad for Island House and Westview, and set us back, delaying things at least a year or so."

Explains Farance, "Another difference in Island House vs. Westview was that Island House was able to clearly articulate our main/primary desires for maintaining affordable housing, even over tenants getting higher profits."  

Articulating a moral argument, not a profit-maximizing argument, Island House did well with City and State representatives in pushing their agreement through.

"We got to the 99-yard line, and then in January 2011, Andrew Cuomo became Governor, and it required a huge huge huge effort to push it over the 1-yard line.  

"Not only did Cuomo have ambivalence about this privatization and affordability plan, you had Matt Katz, Rivercross, the WIRE, and Maple Tree Group advocating for interests that, effectively, were in opposition to completing the Island House deal.

"However, we completed it."

Meanwhile, Back at Westview

"As you know, almost a year ago to the day, the Westview task force, the owner and DHCR all agreed on a final affordability plan," David Hirschhorn wrote in an email, responding to our request for a meeting.

"So elusive was reaching that point that the actual name of the document was Westview Affordability Plan Dated September 1, 2016 – FINAL."

We also invited RIOC's President/CEO Susan Rosenthal to discuss. She did not respond.

A Vibrant Community? Westview residents might feel left out.
A Vibrant Community? Westview residents might feel left out.
© David Stone / Roosevelt Island Daily

"That deal was then overwhelmingly ratified by the tenants at large and was supposed to close quickly. Yet a year later, here we are," Hirschhorn concluded.

It was the second time Hirschhorn thought he had a deal to move ahead with an affordability plan, only to have it vaporize.

This time, the agreement finally got as far as RIOC but got knocked around in an unexpectedly rocky reception when presented at a Real Estate Committee meeting ahead of a planned presentation to the full Board.

This took Island House tenants and Hirschhorn by surprise because, as we confirmed with multiple sources, it’s the same deal as RIOC agreed to in Island House.

Westview seems to be treated differently than, not just Island House, but especially Rivercross and Southtown.

Not only did the Committee, along with Rosenthal, waffle but Westview resident and then Common Council Vice-President Sherie Helstien jumped in to attack the plan her neighbors approved overwhelmingly, calling it "a sham" and threatening an appeal to the Attorney General.

The plan which residents and owner were set to see put into play derailed.

It's not well known, but negotiations between RIOC and Hirschhorn, then, ended as negotiations were handed over to DHCR, an Albany-centric agency overseen by Governor Andrew Cuomo, with virtually no community input except Helstien's to consider.

Westview Affordability At Risk

As the approved plan for Westview's graceful exit from Mitchell-Lama gathers bureaucratic dust, a year later, in Albany, its fate detached from local resident input, risk increases by the day.

Westview Affordability Plan Dated September 1, 2016 – FINAL has several moving parts. All must mesh to make it equitable for all major parties: RIOC, the owner and tenants.

The rest of the Island is invested too because any result will reverberate for years to come in terms of lease extensions, how the community is structured demographically and how traditions are honored or discarded.

Of the three main players, the tenants are, by far, the most vulnerable but, ironically, have the least authority to do anything about it.

The gears must all turn in sequence and be aligned to continue yielding affordable housing into the foreseeable future. Right now, the state of the deal is such that the gears are locked, the plan stuck.

Gumming up the works, according to sources, are lease payments DHCR is trying to get for RIOC. If costs are too high to allow both affordable housing and a fair profit, it's a losing proposition across the board that will never be executed.

Hirschhorn, frustrated but not discouraged, is "cautiously optimistic" about getting a final plan signed, but that may say more about his personal resilience than it does about reality.

As Farance loudly warned, the reality is that Hirschhorn can take legal steps to remove Westview from Mitchell-Lama at any time, and the longer DHCR/RIOC delays, the greater grows that risk.

State Assembly Member Rebecca Seawright arranged an informational meeting with Senior Mortgage Banker Samuel Ward at Westview.
State Assembly Member Rebecca Seawright arranged an informational meeting with Senior Mortgage Banker Samuel Ward at Westview.
Photo courtesy: Office of Rebecca Seawright

Changing economic conditions make the agreement less attractive in relationship to a simple exit to market rate housing with each passing day. Such a catastrophic event is something no one appears to want, yet its likelihood is increasing.

As they say, "It's complicated," and this time, it really is.

And urgent, too.

A straightforward exit from Mitchell-Lama into market rate housing, which is much more likely than it was a year ago, is the worst case scenario for Westview's tenants and the future of affordable housing on Roosevelt Island.

Farance explains why.

Much of the escalating risk is "out of control of Westview tenants, the Owner/Sponsor, RIOC and DHCR." 

Consider getting a mortgage:

"Interest rates are going up, which has a profoundly negative affect on tenant affordability. The tenants in Westview (just like Island House) have had decades of M-L regulation, e.g., annual income affidavits.

"If the price/interest-rates, which translate into monthly housing costs, start to creep above 120% of present rents, then the deal collapses for those tenants because they can't get mortgages.

"It's not like another real-estate transaction," he continues, "where one can add a 'co-signer' to the mortgage or suddenly 'discover' more income (with decades of income affidavits) because, and especially so in this case, there can't be any loopholes to allow outsiders to become owners of these discounted affordable rate apartments.  

"Any co-signer would have all the mortgage liability, yet none of the assets, i.e., any ownership claim to the apartment. And since the financial meltdown of 2007-2008, lending is much more regulated so even getting cash for a downpayment is questioned and scrutinized."  

Farance sounds an alarm for the future of Westview when he summarizes:

"The Longer RIOC delays this, it will make it impossible for some significant portion of tenants and the deal falls through."

The main sticking point bending in the direction of disaster, Farance fears: "RIOC President Susan Rosenthal is blinded by the potential success of some new Southtown Building. Meanwhile, she is about to lose affordable housing in Westview and at large enough scale to exceed any gains she had in Southtown.

"Southtown can wait. Westview cannot."

A Ray of Sunlight

Rebecca Seawright speaking at Manhattan Marymount College
Rebecca Seawright speaking at Manhattan Marymount College
Photo courtesy of the Office of Rebecca Seawright

If you're looking for sunny, not cautious optimism, here's what State Assembly Member Rebecca Seawright told The Daily:

“I am committed to continuing to work toward Westview’s exit from the Mitchell Lama Program in the interest of my constituents. It is my understanding that the negotiations are ongoing, and I have been fighting for an agreement that is fair and equitable for both renters and potential buyers."

That equation must also include RIOC and the owner.

But Seawright, whose staff worked extensively with the Westview task force, has the future firmly in view.

"I look forward to hosting a workshop for renters as soon as the agreement is finalized. As always, my office is a phone call, an email or a visit away."

Conclusion

While the year long stalemate may make Seawright's optimism beyond what's warranted, Hirschhorn seems to have struck the right chord with "cautious optimism."

RIOC/DHCR needs to get on the same page with Westview tenants that, by all accounts, have been treated like their red-headed stepchild.

There's too much at stake for tenants and other residents on Roosevelt Island to excuse months of disengagement while distracted by what France dubs the "bright and shiny objects" of Southtown and elites in Rivercross.

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