Federal Rules Hamper New York's Search For Public Housing Sites

WITH 230,000 people waiting to get into public housing, New York City has found itself in a bind: Its officials claim the Big Apple has practically run out of new sites that meet federal guidelines for funding.

The city is now appealing to the federal government to waive the guidelines limiting the amount of new public housing that can be built in low-income neighborhoods.

It appears the city has met with a sympathetic ear from Henry Cisneros, the secretary of Housing and Urban Development (HUD). In an interview, Mr. Cisneros says, "It may be that in a particular circumstance, such as New York City, which is fundamentally different than other cities, that we might consider waivers so they can get new housing built...."

But he adds that he prefers to "work across a metropolitan area, a county, suburbs to accept well-designed scattered-site housing." Mr. Cisneros also sees no reason to press for major changes in the HUD rules, which, he says, are "rooted in good, sound logic."

New York's quandary has come home to roost in the Upper West Side, long a bastion of liberal activism. The New York City Housing Authority (NYCHA) wants to build a $5 million, 35-unit public housing project on a city-owned parcel of land, taken over earlier by local residents and made into a community park called the DOME Garden.

If the city has not begun the project by Nov. 30, $4.1 million from the federal government will revert to the US Treasury. The city has had the money since 1980 when Congress allocated the funds for public housing. So far the city has considered and rejected 12 different Manhattan sites that did not meet federal guidelines, were too expensive, too small, or on polluted land. Now, the city is considering the 13th site on the community garden where this summer's vegetable crop already has been planted and the environmentally correct compost pile is heaped high.

"This is the only site we researched which complies with HUD standards," says Linda Cappello, director of planning development at NYCHA. Among other rules, HUD requires that federal funds not be spent in communities that have a 65 percent minority population. This rule eliminates such areas as the Lower East Side or Harlem, both heavily populated with minorities seeking public housing. `Something has to give'

Since New York wants to use other allocated federal funds to build 1,300 units, the federal rules will make finding new locations tough. "Something has to give," says Melissa Pavone, assistant director in the NYCHA planning department.

City officials and Rep. Nydia Velazquez (D) of New York made this point on May 6 during Secretary Cisneros's visit to the predominately Hispanic Lower East Side. Pointing to an empty lot, local officials said it could be turned into housing if HUD waived its rules.

The HUD rules place the politicians in a difficult position. Ruth Messinger, Manhattan borough president, says she supports the purpose of the rules - to spread low-income housing among diverse neighborhoods.

"This city agrees with that. It's just that we have many areas with a mix of housing, different price ranges, but are defined by the government as [not eligible for federal funds] where we nevertheless have a willing community, quality sponsors, and builders ready to go in," Ms. Messinger says.

The city's long search for an alternative site tells a story about New York real estate. One potential location is the site of a transit authority substation. To clean up the PCBs and remove the asbestos would cost an estimated $525,000 for a space considered too small for the project. Another spot in Little Italy does not have enough open space. Different city agencies want other potential areas for their own purposes. And at least four of the potential sites don't meet HUD requirements.

All of this led the NYCHA to the DOME Garden site. In 1978, some community activists transformed a vacant, garbage-filled lot into the neighborhood garden. Since an early project was building a geodesic dome, "we became known as those dome kids," says Joel Flax, executive director. Later the group called itself "Developing Opportunities through Meaningful Education" (DOME). Today, it runs nine educational programs for up to 1,200 children and receives funding from foundations and New York City.

Despite DOME's good deeds, there have been five attempts by the city to take back its land. Former Mayor Edward Koch tried to sell the property to private developers. When that failed, he tried to erect low-income housing on the site. That also didn't pan out.

Exactly why the city has failed to get back its land becomes clear at a meeting held by the local Community Board on May 4. A crowd of about 70 garden supporters fill an auditorium on the West Side. `Keep the garden'

After NYCHA's Cappello makes her presentation to the Community Board, DOME's Flax makes an appeal to keep the site. He assures the group that "if it was just a matter of the garden versus low-income housing, I couldn't support the garden." However, he believes there are alternatives open to the NYCHA.

Then, the DOME supporters bring out some young children who ask the board to keep their park. This final plea by the tots helps to sway the community board, which votes to support the garden instead of the housing.

Borough President Messinger, who says she is undecided, has to make a decision to approve or disapprove the new housing within 30 days. Then, two New York City elected boards will examine the project. Finally, if the mayor approves the project, it will start - unless HUD agrees to waive its own rules for an alternative site.