Gentrifying Public Housing Estates: The Profit Motive is Sharper than Bureaucracy

By Brian J Pape, AIA

New York City Housing Authority (NYCHA) is the city’s biggest landlord, and if any of the city’s other landlords had the track record of broken heating and plumbing, mold, lead poisoning, cockroach infestations, and rodent attacks on sleeping infants, they would deserve to be jailed. But this city no longer has the tax fund-ability to build and maintain housing for those who can pay no rent or very, very little. 

NYC Mayor Bill de Blasio has tweeted, “Don’t believe the rumors and misinformation: this administration would never replace an old building until brand new apartments at NYCHA rents were ready for every single resident. No one in Chelsea’s Fulton Houses should stay awake tonight worrying about losing their home.”

As reported in October’s issue of WestView News, The Robert Fulton Houses are facing a radical change: The city is proposing to use the Rental Assistance Demonstration Program (RAD) (see also the sidebar “Primer”) to improve on the aging NYCHA project. Activists’ demands for full funding for housing have hit a brick wall. The five-year capital need at the four Chelsea NYCHA estates is more than $344 million; the 20-year capital need is almost $500 million.

Under the NYCHA 2.0 proposal, a new apartment tower would be built on vacant ground, and when complete, NYCHA residents in two buildings would be relocated to it so that more redevelopment could continue on the site. The Fulton and Chelsea-Elliott Houses have $168 million each in backlogs alone, which averages about $166,000 per unit. 

The Fulton Houses site is an 11-building, ca. 1965, complex that abuts the High Line, many new condos, luxury hotels, and prominent art galleries in Chelsea just north of the Meatpacking District in the West Village. Fulton’s 944 apartments charge an average rent of $660/month, protected by a federal policy that caps tenants’ rents at 30 percent of their income. Together with the nearby Chelsea-Elliott housing developments, they have about 3,000 residents, although there is no accurate or current count because NYCHA doesn’t know how many infants and children reside there.

NYCHA Chair, CEO, and General Manager, Gregory Russ, emphatically stated, “There’s consistent underfunding of capital by a whole chain of administrations. I think it’s particularly egregious that in the president’s [Trump’s] proposed budget they zeroed out the capital [for public housing].” 

Looking west on 18th Street, Fulton House buildings are on both sides of the street in the foreground, and new private apartment towers rise in the background. Credit: BJ Pape, AIA.

Given Congress’s refusal to adequately fund public housing and the $32 billion needed for backlogged repairs, supporters say RAD is the best available option to preserve the affordable units lest they become too uninhabitable for anyone to live in at all. 

Mr. Russ was interviewed by NBC I-Team’s Chris Glorioso one month into his new job as NYCHA Chair, facing multiple massive challenges including $32 billion in unfunded repairs, a tough federal monitor, and a lead scandal plaguing the authority. He discussed how they will close the funding gap, including partial privatization of some buildings. “RAD brings private investment and private capital,” Russ said. “We need that.” 

When he led the public housing agency in Cambridge, Massachusetts, Russ transferred all the city’s public housing units to its RAD program, and he worked on similar transfers when he had the job in Minneapolis.

RAD works by transferring public housing units to the private leaseholder as Section 8 housing so that developers and housing authorities can tap into a broader range of subsidies and financing tools to rehabilitate and manage the units. This is an experiment using private entrepreneurship and government money to try to solve the problem of housing the permanently poor. They add tax abatement and the sale of air rights, and I would suppose any other benefit that does not actually cost the city hard cash. But developers still have to anticipate the variables in a changing market.

But why aren’t those subsidies and financing tools available for the public sector, backed by the federal government?

Alicia Glen was the Deputy Mayor for Housing and Economic Development for over five years, overseeing the troubled public housing authority, the implementation of a new ferry system, investments into public land to spur business development, and the rezoning of East Midtown.

According to a article written by Glen, she expressed excitement about the “NYCHA 2.0” plan the administration announced at the end of last year, which includes a more aggressive program to build new housing on underused NYCHA land—housing that will be a mix of 75 percent market-rate and 25 percent affordable housing, with the proceeds from leases to developers / private landlords going toward other NYCHA repairs. “Housing owned by the public sector also creates intense pressure on localities to prioritize their lowest-income and most vulnerable residents in distributing this public resource. As a result, developments are often 100 percent occupied by very low-income residents, perpetuating economic segregation and the stigma that all too often is associated with living in public housing. We know mixed-use buildings and mixed-income neighborhoods produce better health, education, and economic outcomes. That is why fully funding RAD is a far better approach than just increasing funding for public housing in its past and present form.” 

Fulton House estate is in the white dashed lines, with the development sites highlighted. The green box on West 17th Street is an open lot for possible new construction, and two orange boxes on 16th Street and 19th Street are for potential redevelopment construction after the first tower is complete. Image Credit: NYCHA2.0/

Glen believes “Investing in strong public-private partnerships will improve the lives of public housing residents and is a proven model for providing quality affordable housing in this country. Abstract promises of ‘permanent’ government funding and less bureaucracy ‘down the line’ are hard to believe based on the effect our political past, and present, have had on public housing in this country.”

In a article she is quoted: “I think most people felt really positive about the city. I continue to think the mayor’s position and our position was that you have to link density to more equitable growth and you have to buy into the notion of growth.”

In a related article, Ben Carson, Secretary of Housing and Urban Development (HUD), was quoted saying that he loves RAD, an Obama-era federal initiative that has gone largely under the radar. He said he’s “very encouraged” by RAD’s early results and “looks forward to working with Congress to expand this worthy program.” 

All public housing tenants should technically be able to return to the new “private” units if they want to, though housing advocates fear that the RAD statute has loopholes that could prevent this goal from being realized. Jessica Casella, a staff attorney with the National Housing Law Project, said that her organization documented many kinds of tenant RAD issues over the past few years. She also admitted that there are many places where nobody really knows how these conversions are going. “One of our major concerns is the level and quality of oversight by HUD,” said Casella. “I think HUD has put its emphasis on getting properties to closing, and much less effort in making sure that after deals are finalized, the transitions go smoothly.”

Kathryn Garcia, former Interim Chairwoman at NYCHA, said NYCHA will soon introduce the Connected Communities Guidebook, a publication that embodies the principles, guidelines, and goals of the initiative. Connected Communities / NYCHA 2.0 is an initiative in the Capital Projects Division of NYCHA, to better connect residents to surrounding neighborhoods through the design of the physical environment by using land-use planning, ground-floor activation, open-space improvements, programming, and resiliency efforts. In other efforts toward a smooth transition, Director Rudy Murillo in the Office of Emergency Management brought on 12 new field coordinators to address emergency incidents on NYCHA property; Jay Flaherty started recently as the new Quality Assurance Officer; and Brian Honan was promoted to Vice President of Intergovernmental Relations, having successfully advocated for significant state investment in NYCHA for the first time in almost 20 years.

We can only hope this initiative is implemented more productively than the rest of NYCHA’s programs to date.

Brian J. Pape is a LEED-AP “Green” Architect consulting in private practice, serves on the Manhattan District 2 Community Board, is Co-chair of the American Institute of Architects NY Design for Aging Committee, and is Architecture Editor. 

Leave a Reply