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De Blasio Plan to Save NYCHA Would Lease Land to Private Developers

By Jeff Mays | May 20, 2015 5:11pm | Updated on May 22, 2015 5:29pm
 Mayor Bill de Blasio released a 10-year plan Tuesday to help pull NYCHA back from the brink of financial insolvency.
Mayor Bill de Blasio released a 10-year plan Tuesday to help pull NYCHA back from the brink of financial insolvency.
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DNAinfo/Nikhita Venugopal

HARLEM — The city plans to lease New York City Housing Authority open space to developers who would build private housing to help the financially strapped agency get into the black.

Under a 10-year plan released Tuesday by Mayor Bill de Blasio and NYCHA Chairwoman and CEO Shola Olatoye, the agency hopes to earn a surplus of $230 million over the next 10 years — up from a projected $2.5 billion deficit over the same period — by leasing the lots to developers to build both affordable and market-rate housing.

NYCHA currently has $17 billion in unmet capital needs and is in the worst financial shape of it's 80-year-history, de Blasio said. The agency currently only has one month of cash reserves on hand, he said.

"It's clear that if we don't take a fundamentally different path there is a looming danger, which has happened to other housing authorities around the country, of going into federal receivership," said the mayor.

The proposal is part of a plan dubbed NextGeneration NYCHA. The leasing element is similar to a plan by former Mayor Michael Bloomberg to do infill development on "underutilized" NYCHA land. The plan faced wide criticism from NYCHA residents who said they were left out of the planning process.

De Blasio, then public advocate, also criticized Bloomberg's proposal.

De Blasio said his plan is different because the development will create 10,000 units of 100 percent affordable housing.

The rest will be 50 percent affordable and 50 percent market rate, with the affordable portion going to families that make no more than $46,000 per year for a family of three.

Under Bloomberg's plan, the development projects would have had 20 percent affordable housing. De Blasio's proposal is projected to bring in $500 million in revenue every year, city officials said.

"This is a very different plan than was presented in the past," de Blasio said during a press conference at the Johnson Houses community center in East Harlem.

The district, represented by Council Speaker Melissa Mark-Viverito, includes part of The Bronx and has the highest concentration of public housing in the country.

De Blasio said the first development sites will be announced in August. Three complexes are already slated for development: Mill Brook Houses in The Bronx and Ingersoll Houses and Van Dyke Houses in Brooklyn.

In addition to the development plan, the city will help NYCHA streamline its operations:

► NYCHA will transfer 1,000 of its office workers to various positions within city agencies, which will whittle them down through attrition or buyouts. The move is expected to save $90 million per year.

► The agency also plans to modernize its rent collection which currently has a success rate of 74 percent. Olatoye said the agency will allow tenants to make payments more than once a month and change payment due dates to help improve rent collection and bring in $30 million per year.

► Raise the fees on 10,000 parking permit holders to a maximum of $150 per month from approximately $26 per month, bringing in an additional $5 million in revenues.

► NYCHA will close its customer service center and the city's 311 service will now handle calls from residents.

► Approximately 14,000 apartments under NYCHA control will be transferred to other federally funded programs.

"The mayor's plan contains painful choices because there is not a painless way to address a $17 billion capital deficit," said Bronx Councilman Ritchie Torres, chair of the public housing committee.

Other changes already announced include spending $100 million each year for the next three years to fix roofs on NYCHA buildings, which will reduce capital costs by $600 million over the next decade.

NYCHA will spend $3 billion from FEMA to weatherproof and repair Hurricane Sandy damaged complexes near bodies of water.

The city has already eliminated NYCHA's payment in lieu of taxes and fee for police services.

Mark-Viverito said the plan means NYCHA residents will no longer be treated like "second class citizens."

Judi Kende, vice president of Enterprise Community Partners, a non-profit that helps to arrange affordable housing financing, called the plan a step in the right direction.

"The plan outlines a pathway to better living conditions for public housing residents while improving the financial condition of the agency," Kende said in a statement. "Increased efficiency and public-private partnerships will help NYCHA come back from the brink of bankruptcy caused by years of disinvestment."

Some long-time NYCHA residents said they were optimistic about the proposal but wanted to see how the plan would play out first.

"We've been promised so many things in the past that ended up taking a different path," said Willie Mae Lewis, a NYCHA resident board member who is also the former president of the St. Nicholas Houses Residents' Association.

"I don't want to count my blessings before they happen," she said.