De Blasio embraces public-private management of housing authority amid funding shortfall, federal oversight

By Sally Goldenberg

06/25/2018 05:49 PM EDT

Mayor Bill de Blasio announced progress Monday on refurbishing dilapidated public housing units through public-private partnerships — a tool he is beginning to embrace as he awaits the assignment of a federal monitor to oversee repairs throughout the deteriorating developments.

He rolled out plans to expand by 2,400 units the Rental Assistance Demonstration program, which allows the housing authority to convert funding for the apartments to Section 8 and turn over the maintenance of them to private property managers. Those apartments are part of a previously established goal of 15,000 homes.

But city officials have yet to determine how to finance them locally.

“This public-private partnership is an idea whose time has come — a way to bring new resources in and really make a difference,” de Blasio said in his remarks Monday, after touring renovated apartments in the New York City Housing Authority’s Campos Plaza on the Lower East Side, and saying he was “blown away” by the transformation.

The 2,400 homes are spread across 21 developments in Brooklyn and Manhattan and need a combined $400 million in upgrades.

A spokeswoman for the housing authority said the department of Housing and Urban Development has given its approval, but city officials still have to formally apply to the federal government. Officials also have to decide what local financing mechanism to use to raise the funds for the deals.

Deputy Mayor for Housing and Economic Development Alicia Glen recently discouraged the housing authority from using tax-exempt bonds that she relies on for the city’s affordable housing program, several sources familiar with the issue said.

Takisia Whites, NYCHA’s executive vice president for real estate, said applying for the bonding authority, which is controlled by both the state and the city Housing Development Corporation, is an option. But she acknowledged it is a finite resource used for the city’s plan to build and preserve 300,000 homes over 12 years and said the housing authority is looking for other options, including the state’s portion of tax-free bonds and federal loans.

“We don’t want to rule out any financing stream. Certainly bond cap has been used in a number of our programs to date, and it’s one that’s being considered, but we are looking at conventional financing options as well just to open up the pool,” she said during the mayor’s press conference.

The 2,400 units financed through the program house an estimated 5,300 people, who the mayor said will continue paying no more than 30 percent of their income in rent. Their buildings will receive new kitchens, bathrooms, windows, elevators, boilers and roofs by 2023, city officials said.

“It’s like we live in a hotel. Everything is revamped and it is remarkable,” said DeReese Huff, a Campos resident who introduced the mayor on Monday. “Best of all, our homes will remain affordable and we will continue to get the necessary repairs we need.”

Some of the repairs needed throughout the city’s public housing stock will also be covered by the $1 billion the city will have to pay over four years — the result of a consent decree de Blasio signed this month in the wake of a federal investigation that found housing authority employees stopped conducting required lead paint inspections and lying about it.

The housing authority will begin to select development teams this fall and renovations are expected to begin next year.

The announcement is part of a broader goal, laid out three years ago in a long-term plan for the housing authority, of fixing and preserving 15,000 apartments through this public-private partnership. Another 5,000 apartments would be renovated through a similar financing mechanism, de Blasio announced.

He also announced his administration has picked a team — MBD Community Housing Corporation, Camber Property Group and L+M Development Partners — to oversee $800 million in renovations for 700 apartments at Baychester and Murphy Houses in the Bronx, where funding has been scarce for decades.

Work on those units will begin this fall.

De Blasio cast the program, which his administration was slow to embrace, as the saving grace for an under-funded housing authority that needs at least $25 billion in capital repairs according to recent estimates.

“This is all about fairness. I’ve said many times this is single biggest source of affordable housing in this city,” he said. “To protect what New York City is all about, we have to protect NYCHA.”

Asked why this wasn’t done sooner, he replied, “Damn good question. I ask myself the same question. … I don’t know why this wasn’t tried earlier, ’cause it’s a great idea.”

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