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The city is involved in building about 125 homes a year, but it demolishes more than 600.

Key players, such as Common Council President James W. Pitts and Joseph W. Ryan, commissioner of strategic planning, agree that the emphasis belongs on rehabilitation, but they disagree on how to do it.

Ryan is trying to reorganize the use of up to $3.4 million in federal funds geared to the poverty level. But Pitts contends Ryan's approach expands chances for patronage and makes neighborhoods that need the most help vulnerable to demolition.

Ryan said that the millions the city will receive this fiscal year for demolition will not come anywhere near eliminating derelict houses.

"We cannot do all the demolitions," he said.

The city now has a demolition list of 535 structures, and Ryan said the number will grow with additional foreclosures and federally subsidized houses that become derelict.

"Safe to say, we're probably going to be around 800 to 1,000 this year," he said. "Do we really want to tear down every single one?"

Ryan said time has come to focus on saving housing that remains fairly sound.

Ryan's staff is working with community organizations involved in housing on a centralized program. It would add a level between community groups and city officials to deal with neighborhood applications to repair homes before the applications go to the strategic planning staff.

"The issue is can it be done better in-house in City Hall or in the community," Pitts argued. "I come down on the side of the community."

Creating a "shadow government" to control block grant money, as was done in the 1970s, puts too much control in the hands of City Hall and too much emphasis on patronage, Pitts said.

"If you go back to the Griffin administration, you see shadow government was established and circumvented community-based organizations," Pitts said, referring to the tenure of Mayor James D. Griffin. "You had more consideration for politics than neighborhood development."

In at least four of the 19 agencies invited to submit proposals, the executive director or top official works for the city, including two on the strategic planning staff.

Council members, who have expressed reservations about Ryan's call to consolidate the loan process, also have favored rehabilitation. Masten Council Member Byron W. Brown said his district already has begun using housing dollars more effectively.

In recent year, an increasing number of in vacant lots have left as gaps after buildings were demolished, University Council Member Betty Jean Grant said.

"We want to rehab as quickly as possible," Grant said. "What we don't want to see is scattered site demolition."

Niagara Council Member Nicholas Bonifacio said he was delighted by Ryan's list showing distribution of revolving loans. In each of the last three years, West Side Neighborhood Housing Services handled more than 40 percent of the city's total loans.

Many residents of the Connecticut Street neighborhood are low income and propably qualify to borrow at low interest, and the West Side agency helps them with the paperwork, Bonifacio said.

"The West Side NHS is doing a good job," he said.

When loan applications were frozen earlier this year, the West Side agency put on a push and processed 27 under the deadline. West Side Neighborhood Housing Services is one of a handful of agencies operating a revolving loan fund.

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