When Rose Johnson bought her new two-family house in the South Bronx five years ago, she went out back to inspect the patch of lawn. She discovered it came with a few free extras: A car bumper, Pampers and old clothes were strewn among more than a couple of boulders.

With the help of her two teenage sons, she removed the debris, but a few weeks later she came home from work to find the pair sitting dejectedly on the front steps. When she asked them what was wrong, they guided her inside her $199,000 townhouse. There she found the first floor awash ankle-deep in water that had seeped through the ceiling from their tenant’s upstairs apartment.

The burst pipe was a harbinger of other problems: a broken boiler, a leaky roof and yet another flood. “We didn’t know what to do,” says Johnson, who had to shell out $700 for a new carpet. “There are so many problems with this house. We just get by day to day.”

Johnson’s tale echoes complaints from many of the 109 South Bronx families that live in West Farms Haven townhouses. Like 5,000 other affordable homes in the Bronx, the project was shepherded by the New York City Housing Partnership, a celebrated Manhattan nonprofit that has turned some of the city’s most forsaken neighborhoods into neo-Levittowns, brimming with suburban brick-and-siding row houses.

In interviews with 134 Partnership homeowners, most of them in the Bronx, City Limits heard similar complaints time and again: leaky roofs; crooked staircases; balky heating systems; improperly soldered pipes that were installed rusty and tied to their beams with telephone wires; and backyards that looked more like junkyards.

In 16 years, the Partnership has earned a national reputation as neighborhood savior, providing relatively inexpensive homeownership opportunities for families with an average income of about $38,000. Over the last four years, the group has been a special favorite of Mayor Rudolph Giuliani: Since he took office, the Partnership has built or started work on $660 million in construction--about a third of which came from city subsidies.

But that Golden Age may be waning. Amid revelations of shoddy construction and ineffectual oversight, critics are questioning the Partnership’s practices--and the wisdom of constructing cheap, cookie-cutter low-rises in housing-starved neighborhoods like the South Bronx.

The problem is a system that has left construction quality and repairs up to hand-picked private contractors, even though each house has been subsidized by as much as $60,000 in city, state and federal money.

“There are government subsidies involved, and the question really is: ‘Should we have oversight?’ Well, we really haven’t in the past.” says the president of the Housing Partnership, Veronica White.

Under pressure from homeowners, who have begun organizing to demand repairs, the Partnership is working out formal design and construction guidelines for the first time. Officials are forcing developers to be more responsive to resident complaints and are planning to hire a full-time staff member to monitor construction on the 1,000 Partnership homes built each year.

But those changes might be just the beginning of a more profound shift. “Sacred cows make the best hamburger meat,” Giuliani remarked last month, while discussing his administration’s decision to pull support for a 500-unit Nehemiah Houses townhouse project in East New York. While he was clearly referring to the Nehemiah project, that philosophy might also apply to the Partnership.

“After 10 or 15 years, maybe you’re talking about the need for new blood,” says a Giuliani administration source.

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Any analysis of the Partnership’s successes and failures must begin with Kathy Wylde, the uber-operator who created an empire out of banker David Rockefeller’s early ‘80s, back-of-the-napkin idea of a public-private project to help working-class minorities become homeowners. Pushing the white-shoe directorate of the New York City Partnership and Chamber of Commerce on the issue of affordable housing, Rockefeller hired Wylde on her reputation as a competent nonprofit administrator. She turned out to be Roberta Moses.

Wylde created an independent system that captured hundreds of millions of dollars in government subsidies and city land while insulating its operations from intrusions by city bureaucrats. “A key element to [Kathy’s] style was to exploit every possible political advantage,” wrote urban planner Charles Orlebeke in his laudatory 1997 history of the Partnership. “[She knows] who is connected to whom in ways that could be orchestrated to gain public agency approval of a particular program or course of action.”

Using Rockefeller’s influence and her own considerable political wiles, Wylde was able to convince politicians, including Mayor Ed Koch, to exempt the Partnership from the city’s onerous bidding, oversight and procurement procedures. It was a set-up that helped spark a massive moderate-income housing boom in communities that had been abandoned by all but the poorest tenants. But critics would later charge that it also shielded her from accountability to her public benefactors.

“The city was always told to butt out,” recalls a former city housing official. “Anytime we had any questions, Kathy would say ‘This is our program. Just pay up.’ We never had any say in terms of the construction or the selection of contracts.”

The structure of the deals reflected Wylde’s desire to keep the city from mucking up the works. The Partnership would select a contractor from its own approved list. At the beginning, the builders were outer-borough homebuilders and general contractors--later, Wylde created a minority builder program. The contractors were given a general budget and free-market latitude in how to build, resulting in a wide range of styles and quality on Partnership jobs.

In a bid to include grassroots groups, Wylde and her staff selected neighborhood nonprofits to act as the Partnership’s sales agents and pre-construction contacts for potential homebuyers. Once those components were in place, Wylde, a one-time community reinvestment officer at Anchor Savings Bank, would assemble the financing from lenders. For the most part, the system worked. She estimates that builders defaulted on their jobs only “eight or nine times” during her tenure--mostly during the city’s building slump 10 years ago.

Management of construction was left up to the builders themselves. Field inspections were conducted by the peripatetic Wylde, who sped from site to site in a beat-up car. “The quality of the construction was always the obligation of the builders,” says Wylde, now head of the Partnership’s New York City Investment Fund, which encourages private-sector development in city neighborhoods. “It was never the responsibility of the Partnership.”

“We had no representation on the sites,” she adds. “We left that up to the homebuilders--they were much better staffed. The goal was to create a process in which the homebuilder would perform. The premise of the program is that if the homebuilder wants to do business with the program, he makes sure everyone’s happy. The process only breaks down if the builder isn’t capable of delivering.”

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In the late ‘80s, Partnership project homeowners at a Bronx site began grumbling about water leaching through their walls. Koch administration housing officials--themselves engaged in the massive rehabilitation of 22,000 rental units--began pressing the Partnership for more oversight and control. Wylde, working her platinum Rolodex, successfully fought the administration off, and her self-styled laissez-faire construction management style has defined the process ever since.

“With the Partnership, you have a view that the market will take care of everything, the construction defects, the size and price of units, everything,” says a longtime executive at the city Department of Housing Preservation and Development (HPD). “It was just amazing. There was never a construction manager on the site anywhere. So how do you hold the builders accountable? [Partnership officials] left themselves wide open by not doing any oversight.”

Wylde’s successor says that too much government interference would have scared away potential contractors. “It’s efficiency versus having government oversight,” argues Veronica White, a rapid-talking Bay Ridge native with a Harvard Law pedigree. “The problem with subsidized housing is, you’re always fighting this tension [over] what’s the appropriate level of government intervention that’s not going to drag the private sector down. Sometimes you go in one direction, sometimes you go in the other.”

However, some of the Partnership’s community sponsors say the nonprofit has been solicitous of contractors at the expense of communities. Michelle Neugebauer, executive director of the nonprofit Cypress Hills Local Development Corporation in East Brooklyn, is one such critic. In the early ‘90s, her organization pressed the Partnership into doing 23 three-family houses on abandoned lots just off Atlantic Avenue.

Soon after the homeowners moved in, the LDC began hearing complaints: Heating systems worked on upper floors but left lower floors freezing, plumbing leaked and ceilings cracked. Residents spent thousands of dollars out of their own pockets to patch up their houses, and it wasn’t long before they started wondering if they had been suckered. The houses, they told her, didn’t seem built to last.

“The Partnership didn’t stay on top of the developer,” Neugebauer says, “and when things went wrong, we were the ones stuck out there. They didn’t have anyone on staff who really checked what kind of materials the contractor used. This was really shitty construction.”

Estimates of the magnitude of construction problems citywide vary widely. White says: “It’s infinitesimal: .01 percent, or something like that.” But one Partnership contractor claims that it’s much larger: “Ten, fifteen percent.” Problems have been reported on at least a dozen sites. Last year, the Village Voice reported widespread flaws at St. Mary’s Homes, developed by a nonprofit run by Father Louis Gigante in the South Bronx.

Because of his experiences with poor monitoring of construction sites in his district, Assemblyman Vito Lopez, a Brooklyn Democrat with close connections to the Giuliani administration, has made an unusual request with regard to an upcoming Partnership project in Williamsburg. He wants the Partnership to pay for an architect to oversee construction.

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There was no such oversight during the construction of the Hiram Rosado and Minford Place developments, 45 townhouses built by Gerson Nieves’ New Rochelle-based Nidus Corporation. Bright and charismatic, Nieves had been a darling of the Partnership, but he made a fatal mistake when he was given the contract in 1992: He contracted 30 houses out to New York Modular, a Brooklyn-based prefab building supplier that went bankrupt halfway through the Rosado job.

Nieves knew disaster had struck when he received the first 10 units in the spring of 1994. They didn’t match the blueprints--or each other--and were so shoddily constructed that he had to make repairs even before they were installed. Luckily for him, the company went out of business before he paid for the remaining 20.

Still, Nieves was in deep trouble. He had to spend $300,000 to repair the modulars--especially their roofs, which he was forced to completely replace in early 1996. “This thing has been a complete nightmare,” he says. “I don’t feel good about it at all.”

Because the project, like all Partnership sites, was a for-profit enterprise, the group didn’t bail Nieves out or bankroll repairs directly. When he ran out of money, the repairs simply stopped, residents charge. “I am so tired,” says Millicent Bowden, a single mother who saved up for 15 years to pay the downpayment on a $162,000 house still beset by numerous problems. “I don’t know what to do anymore.”

When the city’s buildings department inspected the house next door to Bowden’s in 1996, they wrote to the Partnership that the Rosado problems “should be corrected immediately.” The report, Rosado residents say, could aptly describe their own plight: “Staircase wall between first and second floors is not [vertical]; various problems in sewer lines and faucet connections; the eaves are not constructed in an industry type manner; on rear staircase concrete platform is sagging.”

Some small repairs have been made, but the Rosado residents have been locked in a long-standing feud with the Partnership over responsibility for dealing with the larger problems. In January, the Partnership finally agreed to lay out the money to do extensive repairs--if the homeowners signed a release agreeing to limit the amount of damages for which they could sue to one dollar. The residents refused. “That kind of [release] has always been standard,” Wylde says. “If we didn’t do that, they could just keep on suing us.” Partnership sources now say that residents will soon be offered a less stringent version and given money to hire a lawyer to review their options.

The residents at West Farms, who have had to deal with similar problems, refused to sign a release offered to them in November. Their builder, R. Randy Lee, was no novice: He is head of the New York City Builders Association and one of the Partnership’s most experienced developers. But the results have been almost equally frustrating for homeowners.

Frank Rodriguez has had to struggle with fetid sewer line back-ups since moving into his West Farms house six years ago. “The entire first floor was flooded,” Rodriguez says, echoing the complaints of at least six other homeowners. “Feces, urine, you name it, it’s in there.... Our sewers back up four or five times a year. In the middle of the night we hear it coming.”

The Partnership has served as an intermediary between West Farms residents and Lee. But homeowner appeals for help have been answered by occasional repairs from Lee along with homeownership classes and advice to be careful not to stuff too much down the toilet.

Residents say the problem isn’t their plunger management skills, but a cost-cutting design flaw in the septic system. Unlike standard houses, which have their own connections to city sewer lines, many row houses are linked together in group sewer lines. The common connections often get clogged--also a problem in many of the early Nehemiah Houses--ejecting sewage into homes that share the line. Contractors say this type of sewer line reduces the cost of each house by $5,000. The problem is compounded by the city building code, which allows builders to cut costs by installing four-inch pipe instead of the six-inch conduit recommended by many contractors.

The situation has gotten so bad that Rodriguez bought his own $200 sump pump from Home Depot, which he uses to shunt the water out into his yard. A yard where, incidentally, he too had found garbage, bike parts and bricks when he moved in.

“All the houses have the same problems,” says Victor Conforme. “The developer used cheap material.” His two-family Cypress Garden house on Van Siclen Avenue in Brooklyn has suffered from roof leaks and damaged interior surfaces.

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The Partnership seems to recognize the need to take a more active oversight role. When White, a former HPD deputy commissioner, took over as Wylde’s replacement 14 months ago, she began to look into ways of improving the organization’s accountability system. “One of the things we decided was that we would hire a roving construction manager to give unannounced inspections and provide a level of oversight, so that we know if there’s any problems going on,” she says. “That way some of the issues that we might have had in the past will get caught.”

White will also mandate that all contractors track resident comments by computer and dedicate one staff member to keeping track of resident problems so “these complaints don’t get written on some scrap of paper and shoved into a desk drawer.”

Soon after White took the job, Giuliani tapped Richard Roberts, a Partnership booster whose wife works for Wylde at the Investment Fund, for HPD’s top job. After hearing of the trouble with some of the developments, Roberts convened a task force with an eye towards imposing tougher standards on future projects.

A January draft of the task force’s construction criteria obtained by City Limits reads more like a lecture to naughty contractors than a set of technical guidelines, with exhortations like “Rake out debris,” “No stucco!!” and “Provide two coats of paint.” But the regs also contain the first minimum standards for roof pitches and materials--including drywall, insulation and flooring--as well as an outright ban on forced-air heating systems, which have been the subject of many homeowner complaints. Contractors say the city might also require individual sewer link-ups for each new house in order to stem the back-up complaints.

But bigger changes may be in the offing. In March, HPD officials told City Limits that Roberts is considering a shift away from the massive construction of suburban-style townhouses, which would likely divert a significant portion of HPD’s diminishing funding to putting up more conventional high-rise buildings in inner-city neighborhoods. The shift won’t mean halting construction of one- to three-family dwellings, but could signal an end to the near-monopoly of subsidized housing construction funding that the Partnership and the Nehemiah Houses have enjoyed.

“We have to consider other ways of doing things, other people, other sites,” said an administrator close to Roberts. “It’s a good time for us to think of other ways and other models.... We’re not looking to displace anybody or replace anybody, but we need to implement other kinds of models that make the best use of the resources we have.”

Details are sketchy, but officials say they will probably begin funding the construction of four- to seven-story buildings in poor neighborhoods, with ground-floor retail space where appropriate--in line with the Partnership’s existing ANCHOR commercial development initiative. But an HPD official made a point of saying that the agency was undertaking the shift to seek “new blood” in housing development.

“This is something I haven’t heard about,” responds the Partnership’s White.

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These machinations don’t matter much to the residents at Hiram Rosado and West Farms, who have created an increasingly militant homeowners rights movement. A meeting with representatives from Public Advocate Mark Green’s office last May attracted 25 residents. Then word started getting around. More than 150 people showed up last month for a well-publicized gripe session organized by Bronx state Senator David Rosado and attended by representatives from Attorney General Dennis Vacco’s office.

If the mood at the meeting gives any indication of the residents’ future plans, the Partnership will have to do a lot to win back the confidence of homeowners.

“It’s like the Amityville Horror,” says Marie Colvin, who has suffered nearly continuous heating and sewer problems--despite writing a check for $1,446 each month for the mortgage on her West Farms house. “Do you know what kind of house I could have bought in South Carolina or Florida for my $200,000?

“Give me a better house or compensate me.”

Laura Seigle is a Manhattan-based freelancer.