NYCHA bonds-’n’-banks deal means millions for projects


By Albert Amateau 

Mayor Bloomberg, Governor Paterson and HUD Secretary Shaun Donovan came to Rutgers Houses on the Lower East Side on Monday, along with a score of state and city officials, to celebrate final approval of complex legislation to provide a combination of public and private money to 21 New York City Housing Authority projects that received almost no funding for several years.

Officials declared that the transaction, made possible by last year’s federal Recovery and Reinvestment Act — the economic stimulus package — along with state and city enabling legislation, will make NYCHA eligible for an immediate $400 million in federal funds, plus an estimated $65 million to $75 million in federal money each year forever.

It will mean capital improvements in the 21 buildings, with 20,139 apartments, including the Rutgers Houses at Rutgers and Madison Sts., the Chelsea Addition in the Elliott-Chelsea Houses and the  unnamed housing project at 344 First Ave., across from Bellevue Hospital. In addition to the 21 developments directly affected by the program, the rest of the authority’s 334 housing developments, containing 178,556 apartments, will benefit indirectly.

Part of that indirect benefit will result from the yearly contribution that would help relieve NYCHA’s annual operating deficit, officials said.

“Capital improvements on elevators, brick work, roofs will begin in the next few weeks,” said John Rhea, NYCHA chairperson, adding that the immediate improvements would provide employment for 400 workers.

Rhea and Donovan signed the final papers on Monday, just before the public ceremony in the crowded Rutgers Houses community room. The process was completed just in time. Federal, state and city officials, who began collaborating on the program a year ago, had until March 16 to close on the deal, Rhea noted.

“This is the single most important development in the preservation of public housing in New York City,” said Donovan, the former city commissioner of Housing Preservation and Development before President Obama appointed him secretary of Housing and Urban Development. Donovan and Paterson paid tribute to Obama for the stimulus program, which they said saved the nation from economic meltdown.

“We’re investing in public housing,” said Bloomberg, noting that other cities have been defunding public housing projects.

The action allows NYCHA to use $108 million provided this year in federal stimulus funds, plus $423 million last year, according to HUD. In February, HUD approved the housing authority’s proposal to enter two public-private financing programs, which called for the city to issue private-market bonds to add to federal funds to accelerate work in the 21 projects. One of the funding programs calls for Citibank to invest $209 million in low-interest housing tax credits available to investors in affordable housing. In addition, New York State will provide $42 million to the program.

While Citibank and the private investors will have an interest in the buildings, the land on which they sit will always belong to the city and cannot be used for anything but public housing, the mayor said. 

The agreement specifies that all 21 developments remain public housing and that residents retain all rights and protections as public housing tenants, Rhea said.

Nevertheless, since the process began, there have been fears that the transaction could threaten NYCHA buildings with privatization. City councilmember Rosie Mendez voiced those fears the day before the signing, and was quoted in the daily press as saying, “Talk to me in 30 years… . If they’re still public housing I’ll say I’m glad I was proven wrong.” 

Mendez was at the Monday event but did not make reference to her concern. Her office did not respond to a phone call later from The Villager for further comment.

Rhea said that fears that rents — now averaging less that $500 a month — would rise to market rate are unfounded. The bank and bond investors will not receive profits from rent, but will benefit from tax credits available for investment in affordable housing, he said.

The 21 projects directly affected by the program were built between 1949 and 1978 with state and city funds. They were maintained and operated for nearly a decade with no federal funds — while state and city funding dwindled — until 1995, when they were included in NYCHA’s federal projects. That meant, however, that federal money for all NYCHA projects had to be spread thinner to cover the 21 projects without state and city subsidies.

Assembly Speaker Sheldon Silver and State Senate Majority Leader John Sampson, who gave crucial support to the legislation, and State Senator Daniel Squadron and Vito Lopez, chairperson of the Assembly’s Housing Committee, who sponsored the bill, all said they were proud to have participated in the historic transaction. 

Silver, whose district includes the Rutgers Houses, recalled that he was raised two blocks from the location. 

“Everything important that I learned, I learned in those two blocks,” Silver said.

U.S. Senator Chuck Schumer and Congressmember Nydia Velazquez recalled lobbying for federal help for the projects 10 years ago. 

Council Speaker Christine Quinn said she welcomed the help that the program promises for her district. 

“Chelsea Houses are always talking about elevator problems,” she said. “Today’s announcement is a real example of what happens when everyone pulls together.”

In addition to Rutgers Houses, Chelsea Houses and 344 First Ave., the 21 projects include Amsterdam Addition, at 205 W. 63rd St.; Drew-Hamilton, at 410 W. 145th St.; Manhattanville, at 549 W. 126th St.; and Wise Towers, 124 W. 91st St., all in Manhattan.

Seven projects in Brooklyn, five in the Bronx and one in Staten Island are also among the projects in the package.