Politico: NYCHA announces plan for unfunded apartments

POLITICO NY – Brendan Cheney

The New York City Housing Authority is announcing a plan to transition 4,200 public housing units to Section 8, securing federal funding for the remaining unfunded city and state-built public housing units. The plan would seek a developer to partner with NYCHA to manage the units.

There were roughly 20,000 public housing apartments that were built in New York City by the city or the state but managed by NYCHA, the city housing authority. These units did not qualify for funding under the federal funding formula and the state stopped paying operating costs on the units they built in 1998. The city stopped paying in 2003.

Since the early 2000s these units have essentially been funded by a broader pot of money that was designed to cover the more than 150,000 federally-built units — funding that was insufficient even to cover the federal units. Covering those additional city and state units that do not receive federal dollars has cost NYCHA $23 million a year.

The transition to Section 8 funding gives these city and state units a dedicated funding source and means the existing funding can be dedicated to the intended units.

The new funding arrangement also means a different management structure.

NYCHA will seek a developer partner that will manage the properties, and seek private financing and make repairs. NYCHA says they will maintain control by owning the land and having a ground lease with the developer.

And NYCHA will create a new private entity in partnership with the developer. They said they will maintain a significant stake in the new ownership structure and will oversee major decisions.

The eight developments included in the plan require $640 million in capital repairs including roof replacements and façade repairs, new kitchens and bathrooms, new security features and improvements to outdoor areas. By switching to the different funding source, they can also seek private financing to help make repairs.

NYCHA Chair and CEO Shola Olatoye said in a statement, “Developments will receive extensive repairs and renovations, residents will retain strong tenant rights and permanent affordability will be protected.”

An earlier plan to transition those units required either tenants to volunteer to switch to Section 8 or NYCHA could switch the units after one of the units was vacated. However, not enough tenants volunteered to switch their units and attrition was slow. Only about 4,000 units were switched in this way.

Another roughly 12,000 now receive federal support after qualifying for the switch to public housing funding under a provision in the 2009 Recovery and Resiliency Act.

NYCHA has received preliminary approval to implement the new plan at Baychester and Murphy developments. They said they will hold meetings with residents at these two developments this summer, release a request seeking developers in the fall and select a developer in the winter.

They will begin talking to the residents at the other six developments (344 East 28th Street, Independence, Williams Plaza, Wise Towers, Boulevard and Linden) once HUD has approved those transitions, which they expect between 2017 and 2019.

Residents have been wary of changes like this in the past, including NYCHA’s efforts under the federal Rental Assistance Demonstration program. Tenants worry that the housing is being privatized and are worried about losing some of their current rights and protections.

But NYCHA has said tenants will retain their protections, including all of the Section 8 protections and additional protections consistent with NYCHA’s guidelines under similar conversions.

Councilman Ritchie Torres, the chair of the City Council’s Public Housing Committee, is supportive of the change. “These may be the most important conversions that NYCHA has ever undertaken since federalization,” he told POLITICO New York in an interview.

He said he is satisfied that the affordability protections will remain in place because they are merely changing funding streams, and while he noted that some say the housing isn’t permanently affordable in the same way under the new arrangement, these units aren’t really permanent if they have no funding to sustain them.

“Permanent affordability without funding is a house of cards, destined to collapse,” he said.



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