NYCHA chief sees Section 8 P3s as a fiscal lifeline

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Public-private partnerships under the federal government’s Section 8 Rental Assistance Demonstration program may provide the embattled New York City Housing Authority with some financial breathing room, its interim chairman said.

“We’re going to RAD because that’s where the money is,” Stanley Brezenoff told members of the City Council’s housing committee Tuesday.

“The more RAD we can do, the better," Brezenoff said. "It is clear that public housing authorities must change the way we do business to survive and thrive. We must be realistic and assume the decades-long trend of federal disinvestment will continue."

NYCHA serves 400,000 residents, or 5% of the city's population, in 175,000 apartments.

Crises have engulfed it of late, including lack of heat in many units throughout the winter, mold and rodent infestation, media reports of staff sex orgies on agency overtime and the forced resignation of Brezenoff’s predecessor, Shola Olatoye, after a city Department of Investigations probe accused Olatoye of lying to federal regulators about lead-paint statistics.

RAD, which Brezenoff called a "groundbreaking" program, enables public housing authorities nationwide to convert a public housing property’s HUD funding to a project-based voucher or project-based rental assistance.

"That is done by creating public-private partnerships, which can access additional funding for repairs by leveraging the Section 8 program," he said. NYCHA's first such venture was the 1,400-unit Ocean Bay Apartments in Far Rockaway, Queens, a $560 million undertaking that involved federal, state, city and private funding.

Brezenoff called it the largest single-site RAD transaction in the country.

"One of RAD's most notable benefits is that it enables us to address all of the development's major repair needs without spending any of NYCHA's capital funding."

On Tuesday, the authority raised its estimate of apartments with possible lead pain to 140,000.

NYCHA has a capital-needs backlog of $32 billion and a shortfall of $24 billion. Fitch Ratings ranks NYCHA maintenance, along with mass transit funding, as "notable spending pressures" on the city.

The watchdog Citizens Budget Commission called on NYCHA to tap underused assets, including air rights and potential infill development, and improve its procurement and building-maintenance practices.

NYCHA is also under federal monitoring, having agreed to a consent degree in June. Federal Judge William Pauley III must still sign off on the monitor.

Brezenoff, who signed off on the consent decree shortly after arriving at NYCHA on June 1, fears monitoring evolving into draconian receivership.

“What I do not want to see is a redundant level of management at great cost that is not value additive,” Brezenoff told council members.

At a Police Athletic League luncheon speech Monday, Geoffrey Berman, the U.S. Attorney for the Southern District of New York in Manhattan, ripped into NYCHA’s leadership.

“The real disaster is the management at NYCHA and its culture of deception,” Berman said. “Mr. Brezenoff should be getting on board with the monitorship he signed off on.”

Council members grilled Brezenoff for several hours about accelerating capital needs, fears that privatization of NYCHA units could lead to gentrification and whether bickering over the monitoring level could hinder the agency.

“Your concern with this monitor as having control of day-to-day operations ... I just can't understand the damage when the damage is currently being done by this authority, day to day" said council member Mark Gjonaj. "This authority is where all the damage is being done, and that includes the deception and the lies and everything else."

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Infrastructure Stanley Brezenoff City of New York, NY New York