Real Estate Weekly
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Why New York brokers should care about public housing

By Karen Heller,
BIOC Commercial Real Estate

Public housing is an integral part of the great New York City housing jigsaw puzzle — one in 12 New Yorkers live in a public housing project.

Before Mayor Bill de Blasio made affordable housing a signature issue of his Administration, the conversation was very different.

Coming from “the projects,” as they have been commonly called, was an uncomfortable discussion. Now, there is widespread support for making sure there is a full range of housing opportunity for New Yorkers at every level of income, racial, ethnic, and religious background.

In that light, the New York City Housing Authority (NYCHA) is taking on its difficult historical reputation, as well as its physical issues.

This includes an apartment shortage so extreme that for every available apartment that exists today, there is at least one family or party waitlisted for an opportunity to live in public housing.
There are more than 400,000 authorized residents, as of Jan. 1, 2015. The turnover rate for calendar year 2014 was 2.8 percent. The vacancy rate of apartments available for occupancy was 0.61 percent as of March 1, 2015.

That basic dynamic is the same in the private sector marketplace. There is historically greater demand than there is available supply. Pricing for the rental and sale of apartments, (and for the land on which to build new apartments), is high because there is significantly greater demand than even the current building boom can balance out.

New York City real estate brokers do no get involved in marketing public housing. For those who are actively vetting new developments, there is the understanding that, to get a building permit for medium and large projects in rezoned areas, there will likely be a trade-off in the form of a percentage of units dedicated to affordable housing.

Real estate agents do not rent or sell these affordable units either. Instead that is handled by private organizations, and by lottery.

So why should we care about public housing? 1 in 12 is a significant number of neighbors. The demographics break down to almost half being working families, and more than 33 percent under the age of 21.

One day, we may be showing real estate to an investor who expresses concern about buying near a NYCHA property, and understanding and facts can dispel misunderstanding and prejudice.

Or we could be showing properties to an impressive and famous client who, by the way, grew up there; like the founder of Starbucks, or the lead musician of the Black Eyed Peas.

At the recent annual luncheon of Women in Housing and Finance (WHF), NYCHA chair and CEO Shola Olatoye reviewed the past, present, and what is being established as “NextGeneration NYCHA.”

The largest landlord in the largest US city is investing in a complete cultural change, creating “a space for the strategic and not just the urgent,” needs of its organization, she told the luncheon.

Among NYCHA’s recent accomplishments and challenges: The organization has gone live online, shortening the time between repair requests and completions; Members of the building complexes, especially young adults, are being empowered as ambassadors to meet with city officials as well as developers; A non-profit/501 C-3 has been established to facilitate financial participation in the well-being of public housing, and three RFP’s are now out to bid for new developments on city land. Underlying city property will be leased, providing a future annuity for the buildings.

And very successful individuals who grew up in an NYCHA community are being sought out as alumni, being given tours of their old apartment, and being asked to step up as future ambassadors.

One member of WHF, who, despite the changing culture requested anonymity, had family that grew up and out of NYCHA housing. She is now a successful executive, and shared that, for her family, it enabled them to stabilize and to move out of public housing.

As Chair Olatoye’s speech and questions wrapped up, this executive said she felt uplifted by what she had heard.

“It was so refreshing to hear that public housing has a future, that it is not just an 81-year-old failed experiment, but instead, to hear the message that NYCHA is open for business.”

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