http://www.nyobserver.com/20060220/20060220_Michael_Calderone_pageone_featurebox.asp
New Townhouse Standard: $20M
Whats the Matter, Buddy?
Dont You Have the Scratch?
By Michael Calderone
Even in the Upper East Side real-estate market, where already-astronomical
prices continue to climb each year, there are standouts.
And this coming year, one new group of them is being closely watched over
closed-circuit TV in Manhattans real-estate star-chamber: the 15 Upper
East Side townhouses presently on the market for more than $20 million.
Sellers like Chinese mogulette Yue-Sai Kan, soda-pop heir Matthew Bronfman,
dirty photog Bob Guccione and banker-socialite movie producers Jacqui Safra
and Jean Doumanian are in on the act, as is Upper East Side newcomer and
house-hondler Janna Bullock.
Theyre hoping to get some serious capital out of huge houses made by
people with names like Cass Gilbert, Stanford White, John H. Duncan and
Trowbridge, Colt & Livingston.
Already buying in is Carnegie Hill refugee Woody Allen. Whos next?
Its not just a question for the inveterate Peeping Toms of Manhattan real
estate. According to a recent study, the $20 million townhouse contributes
significantly to the apparent health of the Manhattan real-estate market.
And in real estate, as in so many other New York pursuits, appearance has a
way of becoming reality.
Last year, there were 261 sales of one- to three-family homes in Manhattan,
and just six of those fell within the $20-million-or-more category (with
prices ranging from $20 million to $40 million).
However, while only accounting for 2.3 percent of the entire townhouse
market, these six deals had quite an effect, according to the 2005
Manhattan Townhouse Sales Report compiled by luxury broker George van der
Ploeg of Prudential Douglas Elliman.
The high end had incredible growth over $20 million, said Mr. van der
Ploeg. A couple sales over $20 million can skew the numberseven more so
in the townhouse market, because it is a small pool.
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NY Times, February 17, 2006
Welfare Agencies Seek Foster Children's Assets
By ERIK ECKHOLM
GREENSBORO, N.C. In 2004, at the age of 14 and at his own desperate
request, John G. became a ward of North Carolina.
His mother abandoned him for crack when he was 3, and his adoptive father
died of cancer a year later. A succession of guardians beat him, made him
sell drugs and refused to buy him toys.
When he finally arrived at a county-financed group residence, he was
wearing outgrown clothes. On the plus side, he was receiving Social
Security survivor benefits and he held title to a modest house, willed to
him by the adoptive father 10 years earlier and an asset that might give
him traction, or at least a place to live, when he "ages out" of foster
care at 18.
Now, the fate of the house and the insistence of Guilford County
officials on taking all of John's Social Security benefits to help pay for
his foster care are at the center of a legal battle with potential
repercussions around the country.
The dispute is the latest in a continuing struggle between children's
advocates and money-starved welfare agencies. They are wrestling over the
proper use of more than $100 million in Social Security benefits that the
states are taking on behalf of foster children with disabilities or a dead
or disabled natural parent.
Determined to extract as much federal aid for social programs as the law
will permit, some state welfare agencies even hire private companies,
working for contingency fees, to help them reap more federal money by
identifying foster children who are eligible for Social Security benefits.
The money is then routinely used to help offset the cost of foster care.
Advocates for children question the wholesale takeover of money, accusing
agencies of repaying themselves for care they are obligated to provide and
of failing to use the windfall to meet children's individual needs, whether
extra tutoring or counseling or, as in John's case, something more unusual.
Guilford County officials refused to release any of John's money, even when
they learned that his last guardian had stopped making the $221 monthly
mortgage payments on his house and that he faced its imminent loss. A local
court has ordered the county to make payments for now, but the county has
appealed and said it might appeal to the United States Supreme Court if
necessary.
For John, who as a foster child may not be fully identified, it was clear
as he visited the house recently that it represented not just money but
also a precious link to his troubled past and an unknown future.
"This is my childhood," John, now 15, said as he climbed through a broken
window to explore the boarded-up structure for the first time since he fled
it two years ago. On the floor of the bedroom, he found a brown teddy bear
and clung to it, saying softly, "My mother gave this to me before she left."
John has no idea how he will support himself, but he wants to live in the
house he inherited, a property valued at $80,000. "It will be a good place
to be," he said.
John's court-appointed volunteer protector found out about the threat to
his house and enlisted a Legal Aid lawyer to help him fight for it.
"For the state to pocket a child's money and allow his home to go into
foreclosure just doesn't make sense," said his Legal Aid lawyer, Lewis
Pitts. "No one can say it's in the best interests of the child."
The benefits that states routinely take include both Supplemental Security
Income, or S.S.I., and other Social Security money for children whose
parents have died or are disabled. The payments are often close to $600 a
month, and usually end when children reach 18 or 21.
"The practice is not the result of deliberative policy discussions
regarding how to best serve children in foster care," said Daniel L.
Hatcher, a law professor at the University of Baltimore who is the author
of an article on the subject that is to be published in The Cardozo Law
Review. "It is simply an ad hoc reaction by underfunded state agencies."
"The Social Security benefits are treated as a funding stream," Mr. Hatcher
said, rather than as an opportunity to provide any special services or to
give children savings for the perilous months after they turn 18, when many
fall into crime or homelessness.
A Supreme Court decision in 2003, overturning a decision by courts in
Washington State, affirmed that states could legally use children's Social
Security benefits to offset current "maintenance costs." But it did not
address a deeper question: does that always serve the child's "best
interests," as federal rules require, or the longer-term interests of the
public for that matter?
In the case of John G., a Guilford County district court ruled last Dec. 29
that the state must pay up the mortgage and cover repairs so the house
could be saved for the youth. Reviewing John's rough history and uncertain
prospects, Judge Susan E. Bray declared that "any reasonable person would
see the fiscal wisdom" of helping him keep the property.
The county has appealed to a higher state court, arguing that the state
courts have no jurisdiction over the matter, that the county is legally
entitled to use John's benefits to cover his care and that it has no
responsibility to exhaust public resources so a child can own property.
"The federal regulations say that the funds are to be used for current
needs and expenses," said Lynne Shifton, an assistant county attorney. "His
house payments are not, in our opinion, to meet his current needs."
For now, the county must pay up the arrears on John's house and for needed
repairs. A private group hopes to rent it as a transition home for foster
children until John is able to move in.
State governments around the country stoutly defend their use of foster
children's benefits.
Twenty-six states filed a supporting brief to the Supreme Court in the 2003
Washington case, noting that the practice had been approved by the Social
Security Administration and arguing that barring it "could leave the states
in a position of economic peril."
If states cannot devote money to current care, the brief added, children
will ultimately suffer because the states will not help eligible children
sign up for benefits.
Many advocates for children agree with that point: preserving an incentive
to enroll more children is good for them because the benefits will continue
if the child is adopted or returns to his birth family.
"If you tinker seriously with incentives of the child welfare agency, you
can wind up doing a lot of harm," said Bruce Boyer, director of the child
law clinic at Loyola University in Chicago.
Mr. Boyer led a lawsuit that stopped Illinois from using benefits to cover,
in addition to direct care expenses, the overhead costs of foster agencies.
Mr. Boyer said state governments had an inherent conflict of interest,
serving as creditors trying to recoup the cost of their programs and also
as trustees of children's money. As a first step, he said, agencies should
try harder to find relatives or volunteers to serve as official recipients
of benefits.
A new law in California, passed with the support of advocates for children,
requires counties to evaluate each foster child for Social Security
eligibility. But it also demands new scrutiny of how benefits are used and
modest savings to help aging-out children become independent.
"We are moving toward an individualized system, requiring counties to stop
and think about the child at every stage of the process in choosing a
payee, determining how to spend the money, and accounting for how the funds
are spent," said Angie Schwartz, a lawyer at the National Center for Youth
Law in Oakland, Calif.
During John G.'s recent visit to his house, it became clear that the
property may offer John more than shelter.
Its yard overgrown, its front plastered with a "condemned" poster because
the utilities were cut off, the vacant house is an eyesore in a tidy
cul-de-sac of similar homes, all built by Habitat for Humanity.
But neighbors poured forth with hugs and joy when John showed up
unexpectedly and said that he hoped to move back.
"He's had it real tough, but he's a good kid," said a mother from across
the street.
As he left to return to his foster home he has recently moved from the
group facility to a private home John vowed that he would return to the
house in a few weeks, to mow the lawn.
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