Living Conditions Deteriorate as Privatization of NYC Public Housing Continues

Mei W., Katya Yindra, JK

On December 13, 2,600 public housing residents in Manhattanville, Harlem received notices from the private real estate company ELH Mgmt stating that the company is now the managing agent of their apartments. Since 2016, the New York City Housing Authority (NYCHA) has been selling off its properties to private corporations.

Manhattanville units were scheduled for privatization under the Permanent Affordability Commitment Together (PACT) program in 2022, although implementation was delayed as lease signatures from residents did not reach the required 80% threshold. A resident told The Worker about how they have been pressured to sign the new lease: “What happens is if they don’t terminate your lease, they put you on market rate. So you have to switch over or you could face risk of paying market price.” Last October, NYCHA and ELH gave residents until November to sign the new lease, and on November 12, residents received notices from NYCHA stating that their public housing lease will be terminated in mid-December.

The US Department of Housing and Urban Development (HUD)’s PACT program was developed in 2016 to privatize almost a third of New York City’s public housing—around 62,000 apartments—by 2028. Under PACT, NYCHA continues to own the land and provide subsidies to private landowners who manage rent collection and renovations. PACT is part of the national Rental Assistance Demonstration (RAD) program, which was created in 2011 under the Obama Administration to enable private management of public housing units for the purpose of “preserving and improving public housing properties.”

Over the past two decades, federal funding for public housing has decreased by 35%, and the lack of funding has increasingly deprived public housing units. NYCHA’s chairman Gregory Russ estimates that repairing New York City’s public housing units would cost $40 billion due to decades of delayed and inadequate maintenance. A resident at the newly privatized PACT unit recalled, “Here they just patch everything up. You call ’em, they come, they patch. Problem again. You call ’em, they close your ticket. We had a lead test, and our paint has been chipped off the wall almost a year. They still didn’t repaint the inside of my closet. They fixed my sink seven times. My sink leaks right now as we speak.”

Residents of PACT housing report that conditions have remained the same or, in some cases, have worsened under the management of private real estate companies. PACT managers are exempt from public housing standards on mold, lead paint, heat outages, and infestations. According to the United Front Against Displacement (UFAD), a tenant organization that organizes against rent surges, PACT repairs have left “toxic lead and asbestos dust […] making [residents] live in a fire and death trap.” The resident interviewed by The Worker explained similar experiences of a resident she knows at a PACT apartment in Brooklyn: “She’s already having issues in her house that nobody fixes. Calling, calling for the people to fix it. It’s no different.”

PACT managers are also exempt from adherence to eviction protections, which were created due to prior lawsuits alleging NYCHA’s overcharging of rent. A financial examination by NYC Comptroller Brad Lander published last month reveals that the eviction rate at PACT apartments have tripled during the past year – reaching almost five times the rate of evictions at NYCHA public housing, equivalent to the eviction rate of the city’s private rental housing.

In addition, PACT contracts signed by private landlords that authorize residents to pay income-based rent are temporary, and according to UFAD, many private landlords do not renew these contracts and eventually charge residents market rate, oftentimes even before the contract is expired. UFAD has found that 57% of PACT residents experience rent increases—while the rent of public housing residents is capped at 30% of their income, residents pay up to 40% of their income at privatized units, often in addition to utility fees.

While HUD argues that privatization will increase cash flows from private investors to improve the public housing, according to a HUD report private real estate companies under PACT on average have raised only $0.29 of private financing for every dollar of federal subsidy for maintenance and repairs. This means private investors are largely not placing their capital into the public housing, but instead corporations are privatizing the public housing for future investments.

Despite this, the US government continues to deplete federal funding for public housing and instead increases subsidies for projects to privatize public housing, through which private real estate companies squeeze the poor tenants while reaping the benefits from tax-exempt bonds, low-income housing tax breaks and exemptions from regulations.

Photo: Public housing in NYC.

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