New York City's public housing authority is operating on a $77 million budget deficit. That's not counting the $18 billion dollars it needs to repair its decrepit housing stock. In order to raise revenue that's not coming from the state or the federal government anytime soon [PDF], NYCHA is selling a 50% stake in 900 apartments to L+M Development Partners Inc. and BFC Partner for $150 million, plus $100 million in revenue over 15 years and another $100 million in renovations.
“We have to think about supporting those units differently,” Shola Olatoye, the NYCHA chairwoman told the Wall Street Journal.
“Talk to HUD. What our primary funder is pushing is encouraging housing authorities to think strategically about how they manage their property for the benefit of their residents because the federal money is just not there."
The NYCHA complexes affected by the deal are Section 8 units in the Bronx, Brooklyn, and Manhattan, including Campos Plaza and East 4th Street Rehab.
After the apartments are renovated (at a cost of $80,000 a unit), the developers would be able to receive the difference between the NYCHA rent and the market-rate rent from the federal government; in addition to receiving tax credits, after 30 years, the developers will be allowed to turn the apartments into market-rate units, though the details of the deal apparently allow NYCHA to make the final decision.
“NYCHA is in control here,” a city spokesperson ominously told the Daily News.
Councilmember Rosie Mendez, who represents the residents of the Campos Houses and East 4th Street Rehab, put it this way: “I view it as a road to privatization."