How Unions Can Solve the Housing Crisis

The labor movement once built thousands of low-cost co-op apartments for working class New Yorkers. It could do so again.

Erik Forman September 24, 2018

Government and labor leaders break ground on Co-op City in 1966, the largest of several cooperative housing developments planned and built by organized labor in the 20th century. (Image Via The Kheel Center/Provided By Sam Weiss-Henry Levi, 1966)

DR. JAMES PETER WAR­BASSE OPINED in the jour­nal Co-oper­a­tion, Once the peo­ple of New York City lived in their own hous­es, but those days have gone. … The hous­es are owned by land­lords who con­duct them, not for the pur­pose of domi­cil­ing the peo­ple in health and com­fort, but for the sin­gle pur­pose of mak­ing mon­ey out of ten­ants.” That was in 1919.

The working class needs housing now more than ever. Labor can build it again.

A cen­tu­ry lat­er, things have gone from bad to worse. A quar­ter of U.S. house­holds pay more than half their income in rent. In New York City, home­less­ness has hit record levels.

Most activists can reel off a list of demands to address the hous­ing cri­sis: rent con­trol, com­mu­ni­ty land trusts, afford­able hous­ing devel­op­ment. But one of the most effec­tive strate­gies has been for­got­ten. A cen­tu­ry ago, the labor move­ment in New York City planned and exe­cut­ed a blunt­ly prac­ti­cal solu­tion to the prob­lem of hous­ing: Build it.

Today, more than 100,000 New York­ers live in apart­ments built by the labor move­ment between 1926 and 1974, most­ly through an orga­ni­za­tion called the Unit­ed Hous­ing Foun­da­tion. Rough­ly 40,000 still-afford­able coop­er­a­tive hous­ing units — Amal­ga­mat­ed Hous­es, Con­course Vil­lage and Co-op City in the Bronx; Penn South in the heart of Man­hat­tan; 1199 Plaza in East Harlem; Rochdale Vil­lage and Electch­ester in Queens; Amal­ga­mat­ed War­basse in Brook­lyn — stand as mon­u­ments to what an orga­nized work­ing class can achieve. This hous­ing pro­vides a bul­wark against gen­tri­fi­ca­tion and a blue­print for end­ing the hous­ing cri­sis. Let’s look at how it all got start­ed, how it came to an end and what it would take for labor to build again.

RAD­I­CAL BEGINNINGS

The sto­ry begins in 1916 in Brooklyn’s Sun­set Park, where immi­grant work­ers from Fin­land found them­selves over­charged for sub­par hous­ing. Mem­bers of the Brook­lyn Finnish Social­ist Club fig­ured out they could build high­er qual­i­ty hous­ing for less than it would cost to rent from a land­lord. Six­teen fam­i­lies came togeth­er to form the Finnish Home Build­ing Asso­ci­a­tion. Their first con­struc­tion project was financed by equi­ty con­tri­bu­tions of $500 each from six fam­i­lies, com­rade loans” total­ing $12,000 from neigh­bor­hood res­i­dents and a $25,000 bank loan.

The first build­ing, named Alku (Finnish for begin­ning”), was com­plet­ed that year. With­in a decade, there were almost 30 Finnish-owned co-op build­ings in Sun­set Park, with car­ry­ing costs (a month­ly main­te­nance fee paid by each house­hold) around half the rent of sim­i­lar apart­ments in pri­vate­ly owned build­ings. Mem­bers were for­bid­den from sell­ing their units at a prof­it to ensure last­ing afford­abil­i­ty. In a pat­tern that would be repeat­ed for decades to come, the hous­ing co-ops became part of a local co-op ecosys­tem that includ­ed a restau­rant, bak­ery and gro­cery store.

This mod­el of afford­able hous­ing coop­er­a­tive was so new that state law had no legal clas­si­fi­ca­tion for it until the 1920s. Alku soon inspired a wave of lim­it­ed-equi­ty coop­er­a­tive devel­op­ment by oth­er rad­i­cal work­er organizations.

In 1925, a Yid­dish Com­mu­nist group called Unit­ed Work­ers began plan­ning a hous­ing coop­er­a­tive in the Bronx. They raised mon­ey through bond sales adver­tised in the rad­i­cal Yid­dish dai­ly Mor­gen Frei­heit (“Free­dom Tomor­row”) and were able to buy an emp­ty tract of land next to Bronx Park. Ten­ants were recruit­ed from the gen­er­al pub­lic. The Unit­ed Work­ers Coop­er­a­tive Colony, known as The Coops” (rhymes with soups”), opened in 1927 and rapid­ly added a sec­ond build­ing for a total of 2,000 res­i­dents. The neo-Tudor gar­den apart­ment build­ing, encir­cling a cen­tral court­yard, was an escape from the suf­fo­cat­ing win­dow­less­ness of Low­er East Side ten­e­ments — and it was afford­able. It was as much a polit­i­cal project as an eco­nom­ic one, with a 20,000-volume library, reg­u­lar cul­tur­al and polit­i­cal pro­gram­ming, and involve­ment in the broad­er com­mu­ni­ty through a net­work of co-op busi­ness­es, polit­i­cal sup­port for local ten­ants and work­ers, and attempts at racial integration.

The Coops inspired oth­er Jew­ish left orga­ni­za­tions to launch sim­i­lar projects, turn­ing the Bronx into a became a hub for exper­i­ments in work­ing class coop­er­a­tive hous­ing. The Arbeit­er Ring (Workmen’s Cir­cle) launched Shalom Ale­ichem hous­es across the park, fol­lowed by the Far­band Hous­es, built by the Yidish­er Nat­sy­onaler Arbeter Far­band (Jew­ish Nation­al Work­ers Alliance). And soon, a more pow­er­ful backer would help the co-op move­ment scale up across the city: labor unions.

HOUSE OF LABOR

The bulk of the 40,000+ units of lim­it­ed-equi­ty coop­er­a­tive hous­ing spon­sored by the labor move­ment in New York City orig­i­nat­ed with an immi­grant gar­ment work­er-turned-union orga­niz­er named Abra­ham Kazan.

Kazan was a true believ­er. In the 1960s, after he had com­plet­ed tens of thou­sands of units of hous­ing, Gov. Nel­son Rock­e­feller told him in pass­ing he would have done well if he had gone into busi­ness. Kazan replied, I am a coop­er­a­tor, inter­est­ed only in build­ing the coop­er­a­tive commonwealth.”

Kazan immi­grat­ed to the Unit­ed States in 1904 at age 15 to escape anti-Semi­tism in the Ukraine, and was influ­enced by anar­chist ideas and a stint on a pro­to-Kib­butz in New Jer­sey. After help­ing orga­nize a small strike at his job as a gar­ment work­er, he even­tu­al­ly went on staff with the Inter­na­tion­al Ladies’ Gar­ment Work­ers’ Union (ILGWU) and lat­er the Amal­ga­mat­ed Cloth­ing Work­ers of Amer­i­ca. As a union staffer, he began pro­mot­ing coop­er­a­tives. His first suc­cess­ful project was a con­sumer co-op busi­ness that pro­vid­ed 7,000 union mem­bers with sug­ar and mat­zo dur­ing World War I. He soon began dream­ing of build­ing housing.

Gath­er­ing rank-and-file gar­ment work­ers and a hand­ful of low-lev­el union staffers, Kazan incor­po­rat­ed the group as ACW Cor­po­ra­tion,” using the union’s ini­tials to give the impres­sion we had a Big Broth­er behind us in this effort” — though they lacked the union’s for­mal backing.

It took the pos­si­bil­i­ty of gov­ern­ment sup­port for Amal­ga­mat­ed to throw its weight behind co-oper­a­tive hous­ing. In 1926 New York state passed the Lim­it­ed Div­i­dend Hous­ing Com­pa­nies Law, grant­i­ng con­dem­na­tion rights and local tax abate­ments to hous­ing com­pa­nies that lim­it­ed prof­its and restrict­ed rents to afford­able levels.

The ACW Cor­po­ra­tion drew up plans to devel­op a 303-unit coop­er­a­tive in the Bronx. It sold shares to future res­i­dents at $500 each (about three months’ pay for a union work­er). The union-owned Amal­ga­mat­ed Bank agreed to loan each res­i­dent up to 50 per­cent of the cost of their equi­ty stake, and the Met­ro­pol­i­tan Life Insur­ance Com­pa­ny pro­vid­ed a $1.2 mil­lion mort­gage. The Jew­ish Dai­ly For­ward also helped secure financ­ing and pro­vid­ed short-term loans to cov­er cost overruns.

Ground was bro­ken Thanks­giv­ing Day 1926, and the first res­i­dents moved in the fol­low­ing Novem­ber. By ear­ly 1928, the Amal­ga­mat­ed Hous­es were ful­ly occu­pied. The coop­er­a­tors (as co-op res­i­dents were called) soon launched a coop­er­a­tive gro­cery store, milk deliv­ery ser­vice and even a bus ser­vice to bring work­ers to the sub­way. In the decades that fol­lowed, the hous­ing coop­er­a­tive grew to around 1,500 units. . The Great Depres­sion wiped out many New York City coop­er­a­tives, but Amal­ga­mat­ed coop­er­a­tors’ will­ing­ness to help sup­port their neigh­bors — com­bined with cagey nego­ti­a­tions with cred­i­tors — helped them sur­vive. Kazan’s mod­el worked.

Soon more unions fol­lowed. In 1949, IBEW Local 3 Pres­i­dent Har­ry Van Ars­dale Jr. began plan­ning a coop­er­a­tive hous­ing devel­op­ment called Electch­ester in Queens. Union mem­bers pro­vid­ed the labor, some paid and some vol­un­teer. Over 17 years, Electch­ester expand­ed to 38 build­ings with around 2,500 units of hous­ing. Van Ars­dale him­self lived there. It became a social and cul­tur­al hub for the Local, with a bowl­ing alley, audi­to­ri­um, movie the­ater, cock­tail bar, cof­fee shop, shop­ping cen­ter, library and a host of clubs and social organizations.

To pop­u­lar­ize coop­er­a­tive devel­op­ment with oth­er unions and car­ry out projects on a larg­er scale, Kazan cre­at­ed the Unit­ed Hous­ing Foun­da­tion (UHF) in 1951, a coali­tion of orga­ni­za­tions and indi­vid­u­als that includ­ed 19 unions. UHF was to be fund­ed by a mod­est 1 per­cent fee on the cost of build­ing each devel­op­ment. To car­ry out the actu­al con­struc­tion work, Kazan cre­at­ed a sec­ond orga­ni­za­tion to act as gen­er­al con­trac­tor, Com­mu­ni­ty Ser­vices Inc., which built the hous­ing and pro­vid­ed tech­ni­cal assistance.

The hous­ing units were open to any work­er, union or not, so long as they were below a lim­it on income., Appli­cants had to show up and wait in line on the day appli­ca­tions were accepted.

As the post­war era pro­gressed, the stars would align for an unprece­dent­ed expan­sion of labor’s coop­er­a­tives, boost­ed by main­stream polit­i­cal sup­port. But the patron­age of New York City’s polit­i­cal class came with strings attached.

We have wiped out the sweat­shop; we return to wipe out the slum,” intoned ILGWU Pres­i­dent David Dubin­sky at the ground­break­ing cer­e­mo­ny of the East Riv­er Hous­es in 1953, fund­ed in part by his union. The brand-new red- brick tow­ers loomed above the dilap­i­dat­ed low-rise ten­e­ments of the Low­er East Side. This was where the par­ents and grand­par­ents of so many New York City union­ists had toiled doing gar­ment work. Dubinsky’s gen­er­a­tion saw it as their duty to erad­i­cate exploita­tion from the blocks where they grew up.

In return­ing to wipe out the slum, these prodi­gal sons found unlike­ly allies in New York’s rul­ing class. Slum clear­ance poli­cies made land avail­able, and in 1955, labor helped pass the Lim­it­ed-Prof­it Hous­ing Com­pa­nies Act, bet­ter known as the Mitchell-Lama pro­gram. It pro­vid­ed low-inter­est mort­gages and tax abate­ments for lim­it­ed- equi­ty coop­er­a­tives and afford­able rentals. Over 100,000 units of hous­ing would be built under the pro­gram. More than half were coop­er­a­tives, the major­i­ty of which were built by Kazan’s UHF.

Polit­i­cal sup­port was forth­com­ing in part because labor’s coop­er­a­tives fit with­in the urban renew­al” par­a­digm chart­ed out by men like Parks Com­mis­sion­er Robert Moses. In the post­war era, polit­i­cal elites across the U.S. recon­fig­ured cities to force new pat­terns of mass con­sump­tion (car and home own­er­ship) and racial seg­re­ga­tion. The fed­er­al gov­ern­ment pro­vid­ed guar­an­tees for home loans to whites, facil­i­tat­ing white flight. Awash with fed­er­al sub­si­dies and tax breaks, Moses and oth­ers used their pow­ers under slum clear­ance” laws to bull­doze neigh­bor­hoods to build high­ways and high-rise hous­ing. They cre­at­ed a racial­ized hier­ar­chy of urban hous­ing: pub­lic hous­ing for the poor (most­ly peo­ple of col­or), coop­er­a­tive hous­ing for mid­dle-income work­ers (most­ly white), and pri­vate-mar­ket lux­u­ry for the white rul­ing class.

UHF part­nered with Moses on two projects that result­ed in dis­place­ment of slum res­i­dents: Coop­er­a­tive Vil­lage on the Low­er East Side and Penn South in Mid­town Man­hat­tan. At Coop­er­a­tive Vil­lage, UHF took steps to mit­i­gate dis­place­ment by giv­ing pri­or­i­ty to the neighborhood’s orig­i­nal res­i­dents. At East Riv­er Hous­es, part of Coop­er­a­tive vil­lage, 974 of 1,672 units were filled by peo­ple from Low­er East Side slums. But crit­ics observed that the cost of co-ops was out of reach for many who lived in the neigh­bor­hoods and that the plan­ning process had exclud­ed them. UHF resolved to stop build­ing on slum clear­ance sites.

Per­haps seek­ing to redeem them­selves, in the ear­ly 1960s Moses and UHF set out to cre­ate the largest racial­ly inte­grat­ed com­mu­ni­ty in the world. Rochdale Vil­lage, locat­ed in the mid­dle of the large black com­mu­ni­ty of Jamaica, Queens, was to be built with­out dis­place­ment. Telling­ly, UHF wor­ried it would not be able to attract enough whites to live in a major­i­ty black neigh­bor­hood — appar­ent­ly with­out ask­ing how Jamaica’s pre­dom­i­nate­ly black res­i­dents would feel.

But, most like­ly because the base of the co-op move­ment was most­ly white, it was far more chal­leng­ing to recruit peo­ple of col­or. The orig­i­nal res­i­dents of Rochdale Vil­lage were about 85 per­cent white (pre­dom­i­nant­ly Jew­ish) and 15 per­cent black. Despite the uneven mix, it was cel­e­brat­ed in 1966 as a rare mod­el of racial inte­gra­tion. But suc­cess was short-lived.

Racial ten­sions flared in 1968, when black pow­er activists on the local school board in Ocean Hill-Brownsville attempt­ed to replace mem­bers of the major­i­ty-Jew­ish Unit­ed Fed­er­a­tion of Teach­ers (UFT) with teach­ers select­ed to advance an Afro-cen­tric cur­ricu­lum. The UFT launched a city-wide strike and the con­flict got ugly, rend­ing the alliance between African Amer­i­cans and Jews that had fig­ured heav­i­ly in the civ­il rights move­ment. With­in a few years, the Jew­ish major­i­ty moved out, and the co-op became a major­i­ty black insti­tu­tion, as it remains today.

By the mid-1960s, with a mix of union pen­sion funds, state fund­ing and equi­ty con­tri­bu­tions from work­ers, UHF had built tens of thou­sands of units of high-qual­i­ty hous­ing, per­ma­nent­ly chang­ing the city sky­line. But the move­ment had enemies.

Fred Trump, Don­ald Trump’s father, was wor­ried that the low-cost, high-qual­i­ty devel­op­ments that UHF built would under­cut the high rents he was charg­ing as a land­lord, and want­ed state sub­si­dies for his own projects. He pulled strings and greased palms to pre­vent the City Plan­ning Com­mis­sion from grant­i­ng UHF a site on Coney Island for the Amal­ga­mat­ed War­basse development.

Trump suc­ceed­ed in get­ting the UHF site cut in half and took the half clos­er to the beach for him­self. It was a har­bin­ger of things to come.

Co-op City vs. Trump City

Even as com­pe­ti­tion from pri­vate devel­op­ers inten­si­fied, UHF remained the go-to enti­ty for large-scale coop­er­a­tive hous­ing. The orga­ni­za­tion had devel­oped such a strong rep­u­ta­tion that Gov. Nel­son Rock­e­feller was lob­by­ing it to build on the gigan­tic site of the defunct Free­dom-land amuse­ment park in the North­east Bronx.

In 1965, UHF and Rock­e­feller unveiled a plan to build the largest hous­ing coop­er­a­tive in his­to­ry: 15,382 units in 35 high-ris­es and 236 town hous­es, all union-built. The pro­ject­ed cost of Co-op City” was $259 mil­lion, financed through a $32 mil­lion invest­ment through sales of shares ($450 per room) to coop­er­a­tive res­i­dents, with the bal­ance financed by a low-inter­est loan under Mitchell-Lama. In 1965, UHF pro­ject­ed that car­ry­ing charges would come to about $25 per room per month.

By 1968, the first build­ings were com­plete and fam­i­lies began to move in. As one res­i­dent rem­i­nisced, We thought this was Shangri-La.”

But the ground was shift­ing beneath their feet — lit­er­al­ly and fig­u­ra­tive­ly. Con­struc­tion was delayed when the marshy site began to set­tle. Mas­sive infla­tion and ris­ing inter­est rates began increas­ing con­struc­tion costs. By com­ple­tion in 1972, the total cost over­ran by around $80 mil­lion and month­ly charges were at $31 per room.

The res­i­dents fought the increase, and filed a fed­er­al law­suit against UHF in 1972 claim­ing secu­ri­ties fraud. As the case slow­ly wound its way through the courts, the coop­er­a­tors resort­ed to more rad­i­cal tac­tics. In 1975, with car­ry­ing charges hit­ting $53, they launched the largest rent strike in his­to­ry. Over 12,000 Co-op City house­holds par­tic­i­pat­ed, with­hold­ing mil­lions of dol­lars in car­ry­ing charges, col­lect­ing the checks in garbage bags. Seek­ing to extri­cate itself from the quag­mire, UHF passed the devel­op­ment over to the state. The state post­poned car­ry­ing charge increas­es after 13 months of strike, and even­tu­al­ly pro­vid­ed support.

Co-op City remains one of the most afford­able places to live in New York City, but the rent strike all but destroyed UHF. Kazan had passed away in 1971, leav­ing UHF with­out the vision­ary lead­er­ship that had guid­ed it from the start. And the city was becom­ing more hos­tile to work­ing-class interests.

Since World War II, New York City’s labor move­ment had won some­thing approach­ing social democ­ra­cy at a munic­i­pal lev­el. The city gov­ern­ment spon­sored a minia­ture wel­fare state, com­plete with free high­er edu­ca­tion at the City Uni­ver­si­ty of New York, an afford­able and func­tion­al sub­way sys­tem, con­trolled rents and more. But as dein­dus­tri­al­iza­tion and white flight hol­lowed out the city’s tax base, the munic­i­pal gov­ern­ment turned to the pri­vate bond mar­ket and the fed­er­al gov­ern­ment to cov­er a mount­ing deficit. This assis­tance gave an open­ing for ene­mies of labor on Wall Street and in the fed­er­al gov­ern­ment to attack.

In 1975, Wall Street orches­trat­ed a cap­i­tal strike, block­ing the city’s access to bond mar­kets and forc­ing it to hand over con­trol of its bud­get to an Emer­gency Finan­cial Con­trol Board made up of cor­po­rate and bank­ing elites. Imple­ment­ing a shock treat­ment” of aus­ter­i­ty that echoed poli­cies of Chilean dic­ta­tor Augus­to Pinochet, the board imposed tuition at the City Uni­ver­si­ty of New York, laid off thou­sands of pub­lic ser­vants, hiked the sub­way fare and attempt­ed to do away with rent control.

Under this dic­ta­tor­ship of cap­i­tal, back­ing loans to the labor move­ment for coop­er­a­tive devel­op­ment was out of the ques­tion. The role of gov­ern­ment would now be to woo the glob­al rich with tax cuts and lux­u­ry devel­op­ments. Emblem­at­ic of this shift, even as Co-op City was fight­ing for state sup­port, the city grant­ed a young Don­ald Trump an unprece­dent­ed 40-year tax abate­ment to turn the Com­modore Hotel into a Hyatt. As his­to­ri­an Joshua Free­man put it, New York City was now Trump City.

TO BUILD AGAIN

The ensu­ing decades saw more of the same, and today a new addi­tion to Trump City is under con­struc­tion: Hud­son Yards, a lux­u­ry devel­op­ment meant to cre­ate invest­ment prop­er­ties for the glob­al rich. Its tow­ers stand in stark con­trast to the near­by Penn South, union-built with city sup­port so that gar­ment work­ers could walk to work. Hud­son Yards has received a 19-year tax abate­ment and is being fund­ed in part by up to $3 bil­lion in city-issued bonds. If the devel­op­ment is not prof­itable, the city has agreed to pay the inter­est to bond­hold­ers out of tax rev­enue. In oth­er words, while the city fails to guar­an­tee hous­ing for the work­ing class, it guar­an­tees prof­its for the ultra-rich.

Pre­dictably, the devel­op­ers are seek­ing to build as much as pos­si­ble with nonunion labor, pro­vok­ing a show­down with New York City’s build­ing trades. Tagged as the #Count­MeIn move­ment, a drum­beat of job actions is inten­si­fy­ing at Hud­son Yards, with week­ly pick­ets and the begin­nings of a guer­ril­la war of walk­outs and slow­downs. Sad­ly, the trades are divid­ed. The Unit­ed Broth­er­hood of Car­pen­ters invest­ed in the con­struc­tion of one of the lux­u­ry tow­ers, and the union does not sup­port the protests — though increas­ing­ly rank-and-file car­pen­ters are join­ing the movement.

There is deep irony in union funds build­ing nonunion hous­ing that most work­ers will be unable to afford. Labor is quite lit­er­al­ly invest­ing in its own destruction.

It doesn’t need to be this way. Most of the nec­es­sary con­di­tions for unions to devel­op hous­ing are in place. The city is seek­ing afford­able hous­ing devel­op­ers for parcels of land across the bor­oughs. Financ­ing is avail­able through Low Income Hous­ing Tax Cred­its and union pen­sion funds invest­ed in the AFL-CIO Hous­ing Invest­ment Trust. And the state still grants tax abate­ments for afford­able hous­ing developments.

The 40,000 units of hous­ing built by UHF are the embers of a vision that once fired the labor move­ment: Build for human need, not for prof­it. The work­ing class needs hous­ing now more than ever. Labor can build it again.

Erik For­man has been active in the labor move­ment for over a decade as a rank-and-file orga­niz­er, at the fore­front of cam­paigns to union­ize the U.S. fast food indus­try. He cur­rent­ly works as a labor edu­ca­tor in New York City and is pur­su­ing a Ph.D. in cul­tur­al anthro­pol­o­gy at the Grad­u­ate Cen­ter of the City Uni­ver­si­ty of New York. Fol­low him at twit​ter​.com/​_​e​r​i​k​f​orman.
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