Blaz $23.7B NYCHA fixup
Privatizing repairs & selling ‘air’
Facing the possibility that the Housing Authority will be placed into receivership on his watch, Mayor de Blasio Wednesday announced a new plan he says will raise enough cash to address three-quarters of NYCHA’s $32 billion in needed upgrades.
The plan – the second one proposed by de Blasio’s since he arrived at City Hall in 2014 – would raise $23.7 billion, leaving only an $8.1 billion gap. But it would rely on a steady stream of federal funding from the subsidy-averse Trump administration, millions in state funds promised by Gov. Cuomo and more than $2 billion from the city as part of a consent decree that has been rejected by a federal judge.
“This is the road map for change,” de Blasio said at a press conference at the Hope Gardens development in Bushwick, Brooklyn.
The timing of that announcement and a related labor deal to expand worker hours at developments comes two days before a crucial deadline that will likely determine whether any of these latest plans will have a meaningful effect on the lives of NYCHA’s 400,000 residents.
Manhattan Federal Judge William Pauley has ordered NYCHA, the mayor and federal prosecutors to spell out on Friday how they intend to proceed after he shot down a proposed consent decree they worked out in June. Pauley has not said what he wants the parties to do, but he has twice raised the prospect of receivership.
“We understand in the court process that that’s always a possibility, and we understand that the federal government always has the opportunity to do that administratively, said de Blasio, who opposes receivership. “We look forward to having some kind of common statement for Judge Pauley. Won’t guarantee it until it’s there, but that’s what the discussion is right now.”
A key element of the plan is to address $12.8 billion in needed repairs by turning over to private developers management of 62,000 of the authority’s 176,000 apartments via subsidized programs such as an Obama-era tactic called Rental Assistance Demonstration (RAD). Developers would pay an upfront fee and fix up the apartments, then collect rent from the tenants going forward.
NYCHA would retain ownership of the properties and lease out the buildings for 99 years, but would no longer have to maintain them.
The city Housing Authority would raise another $1 billion by selling off to adjacent property owners some of the 80 million square feet of “air rights” it possesses. These are the rights to build based on the square feet of space above their buildings that could be developed, and the developers would use them to expand the size of their existing properties.
And the authority believes it can raise another $2 billion by allowing developers to build new towers on existing public land that would be 70% market-rate and 30% affordable apartments. That’s similar to a Bloomberg plan with an 80% market rate/20% affordable split de Blasio had criticized when he was public advocate.
The new 70/30 plan replaces one he announced in spring 2015 de Blasio with a 50% market-rate/50% affordable split. Three years later none of those apartments have been built, and on Wednesday when Deputy Mayor for Housing Alicia Glen was asked if that 50/50 program had been a failure, she replied, “It was” because it didn’t raise enough money.