NYC Public Housing to Lease Land for Mixed-Income Projects

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The New York City Housing Authority plans to offer private developers a chance to build mixed-income towers on underused parcels to stabilize the agency’s finances and create apartments for poor tenants.

Mayor Bill de Blasio, who has vowed to create or save 250,000 below-market housing units by 2025, proposed the idea at an East Harlem housing project Tuesday.

“We are absolutely committed to protecting public housing for the long haul,” he said during a news briefing at the site.

The largest U.S. public housing agency, which has a $3.1 billion annual budget, is in its worst financial shape, with a projected deficit of at least $70 million. It requires about $17 billion for maintenance and repairs in the next 10 years. Federal and state aid has been cut by about $1 billion since 2001, the mayor has said.

“The status quo has forced NYCHA residents to shoulder the burden of billions in disinvestment from the federal and state governments, and live with mold, broken heating, vermin and too many other symptoms of a crumbling Housing Authority,” de Blasio said.

Financial troubles could ultimately lead to federal receivership and threaten the loss of NYCHA’s public housing developments forever, he said.

The mayor’s proposed budget for the fiscal year starting July 1 would excuse the authority from paying the $33 million a year it owes as a substitute for property taxes. Last year, de Blasio exempted the authority from its obligation to pay $70 million a year for police security in its 2,600 buildings, which house more than 400,000 residents.

Double Benefit

The plan to lease parcels would have the double benefit of reaping as much as $200 million over 10 years and more than 10,000 units affordable to low-income residents, the mayor said. Most units would be in buildings occupied 100 percent by low-income tenants, with about 25 percent in mixed-income structures, he said.

De Blasio, who served as a regional director for the U.S. Department of Housing and Urban Development in President Bill Clinton’s administration, presented the leasing idea as part of a comprehensive plan to turn the projected deficit into a $230 million surplus.

Other aspects of the plan include savings through energy efficiency, improved rent collection and higher parking fees. The administration also intends to install $100 million worth of cameras and other security devices in high-crime developments.

Deals between public housing agencies and private developers to build mixed-income projects have been successful in Atlanta and New Orleans, said Judi Kende, a vice president with Enterprise Community Partners Inc., a nonprofit group that arranges financing for affordable housing.

“This is a 16-point plan that can reposition the authority’s finances so that by 2017 it could issue bonds to address some $17 billion in long-term capital needs,” she said.

The plan must overcome opposition from residents and community activists who may resist change, she said.

“As long as it ensures that this housing stock will be affordable in perpetuity, there’s no reason to be concerned about such public-private partnerships,” she said.

Former Mayor Michael Bloomberg in 2013 proposed leasing housing authority land for market-rate apartments while reserving about 20 percent as affordable. That plan drew opposition from de Blasio, who was then a mayoral candidate, and the City Council. The former mayor is the founder and majority owner of Bloomberg News parent Bloomberg LP.

“This is a very different plan than was presented in the past,” de Blasio said.

De Blasio said his plan would require developers of mixed-income projects to reserve at least half the units as affordable to people earning 60 percent of area median income -- about $52,000 for a family of four.

Of the leased-land projects planned, about 3,500 below-market units would be in buildings featuring tenants of varied incomes, and another 10,000 apartments would be located in buildings where 100 percent of residents are low-income, de Blasio said.

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