NYCHA Chairman Rhea Grilled By State Lawmakers

Members of the State Assembly grilled NYCHA Chairman John Rhea Friday concerning the public housing agency’s controversial plan to build market-rate housing alongside existing low income developments on the Lower East Side and elsewhere in Manhattan.  Details of the plan, which the New York City Housing Authority promised to finally make public this week, have been seeping out in news reports and during vague briefings for tenants in impacted buildings for the past month.

In an appearance before the Assembly’s housing committee, Rhea said the plan to lease parcels in eight developments  – five of them on the LES – would help make up for the federal government’s disinvestment in public housing (NYCHA has lost a total of $2.3 billion from Washington in the past decade). “Every penny” earned from the leases “will be used for capital improvements” in NYCHA’s aging buildings, he promised.  Highlighting the urgency of the funding crisis, he warned, “NYCHA is at risk.”

Rhea and Fred Harris, who leads NYCHA’s real estate division, were questioned by Assembly members Keith Wright (housing committee chair), Brian Kavanagh (who represents affected developments Baruch and Campos Plaza on the LES) and Linda Rosenthal, who represents the Upper West Side. They told the lawmakers that requests for proposals (RFP’s) would be out by the end of next month.  Wright asked, “why are we rushing into this?”  Rhea responded, saying “the time to act is now,” adding that he’s the guy held responsible when a tenant’s ceiling collapses or a boiler fails.  He argued that the leasing plan, which has been discussed publicly for at least six years, is only theoretical until the RFP is released.  Once it’s made public, he argued, tenants, elected officials and advocates can start having a real conversation about a tangible plan.

NYCHA dos not need approval from state or city elected officials to lease the properties, although the federal Department of Housing must sign off.  The agency is required to demonstrate that there’s been adequate “tenant engagement” about the plan, and there’s already criticism that it’s failing in this regard. “NYCHA has a problem with communication,” Rosenthal asserted, pointing out that neither residents nor lawmakers have received detailed written descriptions of the proposal. Rhea promised the project descriptions would be posted this week on NYCHA’s web site.  He also said public meetings have been held at 5 out of 8 affected developments. The lawmakers were not impressed, Rosenthal complaining, “collecting sign-in sheets does not mean there has been engagement.”

NYCHA Commissioner Margarita Lopez has led information sessions for residents of Campos Plaza (a development location on East 12th Street) and the LaGuardia Houses on Madison Street.  Snippets of informations have been revealed at each session. During the LaGuardia meeting last week, for example, officials reveled for the first time that two parking lots there – not just one – are being targeted for development.  During a slide show presentation, they indicated the total square footage of the buildings envisioned but did not specify, for instance,  how high developers would be allowed to build or clarify whether ground floor retail would be accommodated in the new projects.

Kavanagh said flyers announcing the meetings at Campos Plaza and Baruch were incredibly vague and failed to state that the proposal would lead to new buildings on NYCHA property.  A spot check before the Campos meeting showed very few tenants knew they were taking place.  He pointed out that as of Friday afternoon, as the hearing was ongoing, the vast majority of tenants were unaware of the Monday event.  Last month, elected officials sent a letter to Rhea requesting a meeting to discuss the property leasing plan.  “Can we expect a response?” Kavanagh asked.  Rhea indicated he was amenable to meeting with the lawmakers and promised a reply by today.

At other points during the hearing, the legislators sought more information about the new affordable housing to be built as part of the plan. NYCHA intends to designate 20% of the units as permanently affordable. The apartments would be available to applicants earning up to 60% of Area Median Income (AMI).  Left to their own devices, some fear developers will rent to applicants on the upper-end of the scale.  In order to qualify, a family of four could not have a household income of more than around $50,000/year, while the average NYCHA family earns $24,000/year.   “Most NYCHA tenants,” Kavanagh said, “could not afford the affordable housing,” adding, “we need an incentive for developers to select lower income residents.”

The lawmakers pointed out that many developers prefer “80/20” buildings with some affordable housing because they receive generous tax breaks.  Given the enormous value of the property NYCHA is pedaling, they suggested, developers should be compelled to go above 20%.  Rhea disagreed, saying “raising the cap is a bad idea for public housing residents.”  He said increasing the affordability levels by just 10% would force NYCHA to forfeit $150 million in revenue, meaning the agency would have less money for improvements and repairs in its existing buildings.

We’ll be on hand for tonight’s meeting at the Baruch Houses. It’s being held at Bard High School, 535 East Houston at 6:30 p.m.