Press Release Housing

CBC Recommends Immediate and Dramatic Changes to Address NYCHA's $32 Billion Capital Needs

July 03, 2018

The Citizens Budget Commission (CBC) today released "Stabilizing the Foundations: Transforming NYCHA to Address Its Capital Needs," a comprehensive report detailing the causes of NYCHA's massive $32 billion capital needs and presenting recommendations that should be adopted to mitigate the deterioration, stabilize the system, and improve tenants' quality of life. Without dramatic change, by 2027 90 percent of NYCHA's housing units will have declined to the point at which they are at risk of no longer being cost-effective to repair.

"Rather than continue as the nation's largest landlord, NYCHA should transition to an affordable housing steward employing a full range of strategies," said CBC President Carol Kellermann. "It must tap its underutilized assets, including air rights and potential infill development, and adopt best operational practices in procurement and building maintenance."

Age is a main factor in the deterioration of NYCHA's buildings. More than 90 percent of NYCHA units were built before 1980, and the majority were constructed before 1960. This problem is especially acute in New York City because NYCHA was prohibited or initially refrained from participating in programs such as Moving to Work and the Rental Assistance Demonstration (RAD), federal initiatives that support the conversion of public housing to other subsidies or allow demolition and redevelopment.

In addition to age, CBC found the deterioration of NYCHA's stock is the result of three other factors:

  1. Due to a decline in federal funding and limited City and State support, funding consistently trailed needs, especially since 2002, leaving unaddressed needs to grow;
  2. Inefficiencies due to restrictive federally mandated procurement rules and high-cost operations have increased the time and cost of projects and reduced the impact of capital investment; and
  3. Limited progress has been made toward implementing the innovative strategies, including public-private partnerships and sale of air rights, contained in the Next Generation NYCHA 10-year strategic plan.

Through a combination of cost savings, new revenue, and reductions in need, CBC has identified changes to address an additional $7 billion of NYCHA's capital needs over the next five years. CBC recommends:

  1. Fully integrating NYCHA into the City's affordable housing strategy, including shifting $1 billion in City capital funds to NYCHA;
  2. Transitioning NYCHA from a landlord to an affordable housing steward that manages fewer buildings by rapidly accelerating public-private partnerships and selling selected units;
  3. Leveraging underutilized land assets including air rights and infill development with a higher market rate component to fund repairs and facilitate development; and
  4. Improving operations and construction management through decentralizing property management, modernizing collective bargaining and staffing arrangements, increasing use of private maintenance contracts, and implementing design-build procurement.

For the full report visit "Stabilizing the Foundations: Transforming NYCHA to Address Its Capital Needs."