On the QT Home Page


Everything You Always Suspected--
Like That Officer Next Door.

Carola Von Hoffmannstahl-Solomonoff
Publisher and Editor


to On The QT #19, second in a frequently asked questions (FAQ) series. The last closed with "Is QT secretly published in Jersey City, New Jersey?" Often asked because QT has regularly covered that city and its neighbor, Hoboken.


Jersey City and Hoboken sit on the shore of the Hudson River facing the west side of Manhattan. These are the Hudson County cities people tend to think of when they refer to "The Gold Coast" though the economic impact of the past 20 years ripples throughout the entire county. The nickname arose in the Big 80's when the first of a series of real estate tsunamis swept over the area. Prior to this Jersey City and Hoboken were mired in post industrial doldrums. While blue collar jobs disappeared the underclass grew. Suburban migration, riots in the sixties and early seventies, the rise of the drug culture and the decline of the two parent family took the toll most cities experienced. None the less, many socially cohesive neighborhoods remained throughout Jersey City. And much smaller, mile square Hoboken was still a main street home town.


The 80's real estate boom in Hudson County was the result of an immense spillover from Manhattan, a diaspora of younger professionals forced out of the city by high rents. Who in turn displaced a poorer, more family centered population. In the neighborhoods best served by transportation to NYC, the hardest hit residents were largely Hispanic. Gentrification by any means necessary rolled over them as landlords saw their tenements become potential "charming brownstones on tree lined streets" and real estate values sky rocketed. Hoboken was dubbed "Arson City" as tenement after tenement burned smoking out the poor and clearing the way for gut rehabs. Many of which were helped along by various government backed development loans and tax abatements. Every Renaissance has its price. Some two dozen people burned to death. The Hispanic population in Hoboken shrank to a handful who now mainly reside in public housing projects in the back of the city. The largely middle class newcomers who moved to Hoboken and Jersey City during Reagan's Decade Of Greed were themselves eventually threatened by the coming of wealthier newcomers during Clinton's Decade Of Greed. The 80's arrivals however, proved far more successful at fighting for their survival than had Hoboken's Hispanics.


Despite an entrenched culture of corruption which flowered most fully in mid century political machines, both Jersey City and Hoboken produced notable gadflies and neighborhood activists. Ones who were often treated as prophets unwelcome on home turf and who fought for such things as transparency in government, fiscal accountability, enforcement of housing codes, tenant rights, safe streets and for curbs on the environmental excesses of Hudson County's gangsta developers. By the late 80's, coalitions were forming between these long term trench fighters and the new arrivals. Who by this point owned condos and houses and were angered by property tax inequities (such as abatements granted mushrooming Wall Street back office and bedroom communities) as well as quality of life and environmental issues. And by being locked out of a local political system dominated by a mainly white ethnic, old boy network. One with a record of eye popping corruption and which in Jersey City increasingly owed its political life to the voting power of black Democrats. Black voters got housing projects in return but were carefully kept out of the corridors of power. As with Hispanics in Hoboken, housing for the poorer members of Jersey City's black population is not


Last year, Jersey City elected its first black mayor. Rejecting the chosen successor of reform Republican Bret Schundler who sadly, reformed little. Just added his own layer to the impasto. The job of major reform still waits. As does a sizable underclass. But Hudson County is a much more dynamic place than in the past. The political and economic cards are tossed in the air at a much faster pace. The players increase rapidly. Jersey City is home to an ever growing number of immigrants from the Middle East and from Pakistan and India. Some of the waterfront "bedroom people" show signs of political awakening and the activist core of neighborhood associations, waterfront groups and gadflies have proved to be tenacious and highly sophisticated. Jersey City, Hoboken and the rest of Hudson County are an urban work in progress. Social dynamism is why the Gold Coast has been of interest and is what makes it relevant when considering the future of cities. QT has no secret outpost anywhere on its shimmering shores.


Another FAQ. HUD (The US Department of Housing and Urban Development) though ole, is neither poor nor lil. Though born small (post WWII with a different name) and for a limited purpose, it now resembles Adam Smith's Invisible Hand. In scope if not theoretical impartiality. The HUD hand taketh away cheap private slums and giveth back expensive government bankrolled ones. In run down neighborhoods HUD has been notoriously lax about obtaining an accurate picture of the local rental market, basing its voucher payments on better areas within the same zip code. Therein subsidizing slumlords and saying "why bother" to responsible ones. As HUD inflated median rent levels climb, so does the need for affordable housing. Riding to the rescue, HUD bankrolls developers who don't really build affordable housing, just more units for HUD to subsidize. Making more tenants dependent on HUD. Forcing ones resistant to being subsidized into a shrinking and less competitive private market. Madre de Dios, could it be possible that the housing cure is incubating the illness?


The Housing Fraud Initiative Task Force (nick name Hi-Fi) is a group of federal investigators based in Texas. Their general target is HUD fraud. Their scope, national. Several years ago they started digging into HUD programs, including the community development block grants given cities and counties, single family housing and management of funds at public housing authorities. Their investigation has been mainly focused on six areas of the country which have had a high level of complaints and/or prosecutions. Those areas are northern Texas, northern Illinois, the District of Columbia, Maryland, the Los Angeles area and eastern New York State.


is a HUD program initiated in 1997. A few years later, under then HUD head Andrew Cuomo, it was expanded to include teachers. The program gives both police and teachers major discounts on home purchases in "transitional" neighborhoods. The requirement being residence for at least three years. The theory being that the mere presence of Officer Krupky and Miss Peach would prove inspiring and stabilizing. As widely reported the program was suspended temporarily last year. Over 21 percent of the transactions were found to be bogus. Either the officer/teacher next door was somewhere else collecting rent, or the homes flipped like pancakes, or the transitional nabe was a gated community, or the cop turned out to be a prison guard, or so on and so forth. Hi-Fi, under the supervision of Special Agent Max Eamiguel, was the force behind the bust.


after a mere 4 months suspension, all fraud wormholes in the program were declared plugged by current HUD head Mel Martinez! An amazing turn around time for an agency known for its elephantine nature. As well as for huge -- think billions-- amounts of missing money. And more localized HUD programs with fraud problems have been suspended for much longer periods. No doubt pressure to lift the suspension by relevant unions, the real estate industry and revitalizin' politicians helped speed the return of this "successful" program. Always so described by its advocates despite an absence of verifiable proof of beneficial effect and a detected fraud rate that in the real world would result in a hot potato drop. Or an Enron implosion. If the neighbors of the one in five frauds next door were polled, would they say they felt stabilized and inspired?


The Officer Next Door is just one fairly small, but highly typical example of a HUD program riddled with scams. The police and teachers involved are no more crooked--and sadly, no less-- than the many others who help themselves to HUD. Who know HUD was built to help, but who've forgotten it was built to help the less fortunate. HUD needs a major reconsideration. Not just a cob job, but a major examination of its ever growing mission and of what it has wrought. If entrenched fraud went hand in hand with swell housing for all and booming small cities, one might say oh well. But after half a century of massive expenditure and the growing dependencies of so many communities on the economy of HUD, why do so many slums remain, well, slums? Why do so many cities still crumble? On The QT will continue to frequently ask these questions. And that's a FAQ.


Another One Bites The Dust: The Northeast Corruption Busts Continue/HUD HUD & More HUD/Caligula Meets Babbitt: How Mayor Phil Filled His Time in Waterbury/If Drugs Were Legal Would Only Some Cities Have Drugs?/The Return Of Shining Websites: Lengthy Listings of New and Fabulous Links

"A house is not a home, not unless there's someone living there..."
Dionne Warwick, Burt Bacharach, A House Is Not A Home

"Trailer for sell or rent, rooms to let, 50 cents..."
Roger Miller, King of The Road

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Crumpling HUD bux blowing in the wind.
updated 1/26/2002