The NYCHA Rethink We Need Now: In this emergency, pursue private partnerships as never before
City politicians may be hoping that the sweltering heat during these dog days of summer will somehow melt away our crisis at NYCHA. If only.
We have failed the 400,000-plus public housing residents who have been subjected to miserable conditions. Many live in mold-infested apartments with crumbling walls and leaky pipes. Testing showed at least 800 children with elevated levels of lead in their blood.
All this is clearly unacceptable, but the practicalities loom larger.
NYCHA currently manages approximately 176,000 apartments in nearly 2,500 buildings in more than 300 developments citywide.
The 130,000 units constructed prior to 1978 (when lead was banned nationwide) may still contain lead. NYCHA apartments also face a backlog of 170,000 open work orders for repairs — over double what the agency can even handle.
Without a cash infusion of $32 billion over the next few years, 90% of its units may deteriorate to a level that would make it impractical to undertake repairs.
Some local leaders question whether NYCHA can even be fixed. But we don’t have that choice.
The 176,000 NYCHA units comprise an important part of the city’s stock of affordable housing. Without them, NYCHA residents who are an integral part of our community could forsake the city altogether or possibly join our growing homeless population.
City Hall has sought to push plans to put a mix of market-rate and affordable housing on underutilized land. It’s a good start, but that plan has faced strong community resistance and does not generate sufficient revenue to truly impact NYCHA’s financial shortfalls.
What to do?
First, we need to move beyond the politics of finger-pointing toward the hard work of solving this crisis. The city already entered into a federal consent decree to account for its failures here. We need to move forward, even as the courts look backward.
Second, we must face the blunt fact that even with the billions it receives from the state and the federal governments and even after the $2.2 billion the city will pay under the consent decree, NYCHA is on the brink of a financial collapse.
It’s time to act, with a far greater sense of urgency, on how the private sector can partner with government to solve this crisis.
Government can structure partnerships that balance proper financial incentives for private developers with appropriate oversight and adequate safeguards that prevent defaults while ensuring minimum standards of living and affordable rents for residents.
Within this structure, we need to continue to pursue all innovative solutions and flexible business models such as privately owned housing subsidized by the public sector (as it was 40 years ago) to constructing taller buildings with varying blends of market-rate and affordable units. Time is simply running out.
We should also look into so-called Opportunity Funds, a new type of investment vehicle just approved by the federal government to drive much-needed capital into distressed communities. Investors can lower taxes by rolling capital gains into these funds and keeping 90% of their holdings in these designated Opportunity Zones for up to ten years. This investment can transform these communities while being advantageous to investors.
And we finally need new management — beyond the appointment of a monitor — empowered to implement a system in which repairs can be completed on a timely basis.
The unions must be at the table as partners who seek to expand the current work schedule to do repairs at all times of the day. And strict competitive bidding must apply to all third-party contracting with outside companies.
On the positive side, we will undoubtedly find expanded workforce opportunities for thousands of painters, plasterers, plumbers, carpenters and electricians needed at NYCHA.
This is an emergency. Let’s not cower from our responsibility.