At the Mercy of Uncle Sam

Standing at the front of a public housing community center in East Harlem, Mayor Bill de Blasio held up a copy of the 117-page NextGeneration NYCHA platform last week and heralded it as a “game changer.” He and New York City Housing Authority Chairwoman Shola Olatoye said the 10-year strategy would steer a 178,0000-unit authority beleaguered by years of federal and state “disinvestment” toward financial stability. NYCHA currently has a month’s worth of cash on hand and contends with a $17 billion capital needs shortfall. By NextGeneration’s completion, de Blasio said the authority would have trimmed its capital needs by $4.6 billion and amassed a $200 million surplus. But some $2.95 billion of the capital backlog reductions eyed by the administration are culled, in part, from a federal housing initiative called the Rental Assistance Demonstration program, which is capped and has been governed by waitlists.

First authorized in 2012, RAD allows public housing authorities to covert traditional projects into Section 8 developments. The shift comes with a 15- to 20-year contract for Section 8 funding, which is considered more politically stable than traditional year-to-year public housing funding. The contract alone allows some public housing authorities to leverage private financing for repairs and other capital needs. But for more distressed public authorities, like NYCHA, the contract would be used to market properties to developers interested in partnering with the authority on bonds or loans in exchange for tax breaks and administrative fees. RAD received more interest than it could accommodate with its 60,000-unit cap and created a waitlist. Congress later authorized 180,000 units this fiscal year—enough to accommodate the full queue on a first-come-first-served basis, including one NYCHA development—but leaving future RAD development at the whim of Congress.

The U.S. Department of Housing and Urban Development has approved NYCHA’s plan to convert 1,400 homes in Ocean Bay Apartments – Bayside in the Rockaways into Section 8 housing through RAD, according to HUD’s New York and New Jersey regional administrator Holly Leicht. But that did not stop de Blasio from including additional conversions in NextGeneration. The document describes plans to convert 8,313 units deemed “obsolete”—or more expensive to repair than to replace—into Section 8 via RAD and tenant protection vouchers, which would reduce capital needs by $1.6 billion. It also seeks to use RAD and the HUD-administered vouchers to transition 6,380 units in nontraditional public housing sites scattered throughout the city into Section 8, which would achieve $1.35 billion in capital needs savings.

“All of that is theoretical right now,” Leicht said of the obsolete and scattered site conversions, which she said HUD was eager to work closely with NYCHA on. “If they’re going to want to do a number of new (RAD) ones, we’re going to be looking at a future cap lift to do that.”

Leicht said the use of RAD had attracted bipartisan support. But HUD and other public housing advocates still had “convincing to do” when it comes to permanently securing an appropriation line in the budget. “Since it’s still relatively new, those conversations are going to happen year to year,” she said.

But the novelty of RAD has some tenant advocates concerned the transition may not be as smooth as NYCHA anticipates. Judith Goldiner, the attorney in charge of the Legal Aid Society’s law reform unit, said developers may create their own lists for incoming and prospective tenants, rather than pulling from NYCHA’s central, publicly accessible list with clear-cut rules. She and Victor Bach, senior housing policy analyst at the Community Service Society, said they had not seen evidence to back up NYCHA’s claims that RAD contracts would guarantee all the rights currently enjoyed by public housing tenants, such as the ability to organize and receive funding for such activities and amnesty from eviction in certain situations.

“In public housing, you have the right to not be evicted for a crime that someone else committed. Let’s say your son or daughter does something bad, and you exclude them from your apartment, and they won’t live there, you can’t get evicted. That’s not true in project-based Section 8,” Goldiner said. “(RAD) is essentially project-based Section 8. Contracts expire, and then they go on the market, and people lose—that’s what’s happened in many project-based Section 8 buildings in New York City.”

HUD’s Leicht, however, said the legislation authorizing RAD requires that it mirror the “majority” of the protections given to public housing residents, and that NYCHA could add further mandates. Likewise, the authority said any RAD program it adopts would include “NYCHA retaining control over major decisions, and residents retaining a wide range of rights that equate to the rights they had in public housing.” Both HUD and the authority stressed that RAD requires one contract renewal, and the initiative gives public housing authorities the ability to extend agreements repeatedly.

Contractual obligations aside, New York City Public Housing Chairman Ritchie Torres said some of NYCHA’s housing is so deteriorated that its long-term viability is already severely limited, and RAD could provide a lifeline.

“If the building is in danger of becoming unlivable in 10 years, in what sense is it permanently affordable?” he said. “If I had to choose between 10 years of affordability or 20 years of affordability, I’m going to opt for the latter. But in the case of the latter, you’re going to renew those contracts.”