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Private developers get keys to public housing

With a looming deficit and growing backlog of maintenance repairs, the New York City Housing Authority (NYCHA) has officially announced its plans for private development at two public housing sites.

The effort is part of the agency’s ten-year investment plan, “NextGen NYCHA.”

“While this is certainly the most attention-grabbing component, it’s really one part of an effort to save the housing authority, reinvest in developments across the authority, and increase affordable housing,” said NYCHA chair and CEO Shola Olatoye in a radio segment on WNYC’s Brian Lehrer Show Sept. 10.

Wycliff Gardens

The two sites that were chosen are Wyckoff Gardens in Boerum Hill, and Holmes Towers on the Upper East Side.

The plan will create around 1,000 housing units, half of which will be affordable units and half will be market-rate.

Olatoye said the agency chose the sites based on various criteria, including the capital needs the already existing buildings had, ability to actually construct a building on the property, and ability to leverage nearby public investment.

“We are trying to do more than just build buildings, but really reconnect neighborhoods and build on ongoing investments,” said Olatoye.

NYCHA, the largest housing authority in the country with more than 400,000 tenants, has been in financial trouble for years, following a decline in state and federal funding. The agency currently has $17 billion in capital debt.

The idea of private development on public housing properties started during the Bloomberg administration when then-chairman John Rhea announced that NYCHA was looking to lease out vacant lots, parking lots, or administrative buildings to condo developers in an effort to raise millions for the cash-strapped agency.


The idea was part of a larger plan that NYCHA launched to re-haul a backlog of maintenance repairs that have languished in the system. With the plan, the agency was seeking to bring in $50 million annually from developers who would build luxury high-rises on leased land in the middle of city housing projects.

“This innovative plan to generate hundreds of millions of dollars of value will allow the New York City Housing Authority to re-invest in public housing, where we badly need to make up for the devastating decline in Congressional funding,” a NYCHA spokesperson told Real Estate Weekly in 2013.

At the time, NYCHA said the land will yield approximately 4,000 apartment units, 20 percent of which would be affordable for low-income residents, in eight different developments around the city, including the Upper East Side, Upper West Side, the Lower East Side and Lower Manhattan.

However, the plan had many critics, and at one point faced a lawsuit from several hundred NYCHA tenants, prepared by The Urban Justice Center and the New York Environmental Law and Justice Project. That suit was eventually dropped in March of last year.

Some current NYCHA tenants have voiced their concerns over the plan in the media, and questions have arisen about why the agency doesn’t just build more public housing units, and the possibility of taking away green space with the addition of new buildings on the public housing sites.

Despite the backlash, NYCHA’s chair and CEO insists that the plan is crucial to the future financial health of the agency. “Let’s not forget why we’re doing this,” said Olatoye.


“The housing authority is at a critical point in its 80-year history. We’ve projected if the status quo continues, we’ll see a $425 million operating deficit. What it means for residents is leaky kitchens, roofs, doors that don’t work — also we have a $17 billion capital need. I said billion with a ‘b.’ We have some major, major financial challenges and we recognize what that means for daily quality of life for residents is something we don’t want to stand and have to do something and that’s what we need to do.”

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