NYCHA’s Strategies for Meeting Public Housing Capital Repair Needs Face Serious Obstacles

A recently published research brief from the Furman Center, NYCHA’s Road Ahead: Capital and Operating Budget Needs, Shortfalls, and Plans, reviewed how the New York City Housing Authority (NYCHA) plans to address its massive public housing repair needs in the coming years and identified a number of serious potential challenges. 

In a 2017 Physical Needs Assessment, engineering consultants estimated the cost of repairing and replacing necessary building systems within NYCHA’s public housing over five years to be $31.8 billion, a dramatic increase from the 2011 five-year estimate of $16.5 billion. NYCHA reports that it expects only $6.4 billion in funding from federal, state, and city governments over the next five years. On average, the agency’s 316 developments and 2,351 residential buildings were built 58 years ago, and many are in need of significant rehabilitation or replacement. A history of underfunding has led to deferred maintenance and capital investment that has significantly exacerbated capital needs. In addition, a January 2019 agreement with the federal government requires NYCHA to immediately begin remediating lead in its apartments.

NYCHA outlined a three-part strategy for generating capital funds for rehabilitation and repair. The first component of the strategy, “PACT-to-Preserve,” would convert 62,000 units to private management under the Rental Assistance Demonstration (RAD), with NYCHA retaining land ownership and subsidizing rents with HUD Section 8 Project-Based Rental Assistance and Tenant Protection Vouchers. This conversion would allow NYCHA to seek private lending for the properties, generating $12.8 billion. The second component, “Build-to-Preserve,” would ground-lease NYCHA land to developers for in-fill, mixed-income properties to raise another $2 billion. The third, “Transfer-to-Preserve,” would sell transferable development rights, including “air rights” above NYCHA properties, to owners of properties adjacent to NYCHA sites that are underbuilt relative to allowed zoning, bringing the agency an estimated $1 billion.

The brief’s authors identify several key hurdles that could impede this plan. The first part of NYCHA’s plan may require Congress to lift the cap on the number of RAD conversions allowed across the country (currently capped at 455,000 units) and authorize new Tenant Protection Vouchers. The level of federal subsidy paid for RAD units with Tenant Protection Vouchers would not be sufficient to cover necessary repairs. Second, NYCHA may not be able to obtain the necessary bond financing for rehabilitation work of properties converted to Section 8. Third, it is not clear whether the market for in-fill development or air rights will generate the funds projected.

These obstacles are compounded by the likelihood of lengthy lawsuits. The Manhattan Borough president has sued NYCHA over in-fill development, arguing that developments should be forced to go through the much lengthier Uniform Land Use Review Procedures to gain zoning approvals. The City would also have to amend rules to allow NYCHA to sell air rights to non-adjacent lots for NYCHA to meet its revenue projections. In light of the difficulties these plans face, the authors call for a major increase in government support and private investment.

NYCHA’s Road Ahead: Capital and Operating Budget Needs, Shortfalls, and Plansis available at: