A Closer Look: NYCHA’s Plan to Build Luxury Housing on the Lower East Side

Editor’s note: the following article originally appeared in the March 2013 issue of The Lo-Down’s print magazine:

Real estate boom times are back on the Lower East Side with a vengeance. Developers are fixated on the few remaining undeveloped parcels sprinkled throughout the densely packed neighborhood unlike any time in the past five years. Properties are rapidly changing hands and prices are escalating. So maybe it shouldn’t come as such a surprise that the beleaguered New York City Housing Authority sees opportunity in its vast land holdings on the LES, the birthplace of public housing.

Still, it was a shock to many last month when word leaked out that the cash-strapped housing authority was hatching a plan to offer up property it owns adjacent to public housing buildings throughout Manhattan, including six on the Lower East Side, for developers to build luxury apartments. Many tenants, who have long feared the demise of this country’s largest public housing system, were outraged and vowed to put up a fight.

“This a travesty,” bellowed tenant activist Aixa Torres at a recent community meeting. “NYCHA, if you want a war you’ve got a war!”

About one-fifth of all apartments in Community District 3 (Lower East Side, East Village and most of Chinatown) are in public housing developments. By any measure, “the projects” loom large in the neighborhood. Five sprawling NYCHA complexes below East Houston Street have more than 1,500 apartments each. Yet in spite of their close proximity to other types of housing, the projects are largely invisible to outsiders, easily overlooked by the larger community. During the current debate, which the Daily News dubbed NYCHA’s “very own Tale of Two Cities,” many people might be tempted to see the luxury plan as “a public housing issue” of concern only to those who live in the developments. But it has quickly become clear that the housing authority proposal is so sweeping and all-encompassing that it is bound to impact the entire neighborhood, from the Brooklyn Bridge to East 14th Street.

In a community with one of the largest concentrations of NYCHA apartments in the city, the plan that Mayor Michael Bloomberg calls a “creative idea” has ignited the next big battle in the Lower East Side’s long-running war over gentrification. It is certain to rekindle a familiar debate over the value of public housing, some pointing to NYCHA’s failings, others pointing out that the existing public housing stock is one of the only things keeping the LES economically and culturally diverse as the neighborhood continues to go upscale.

Here’s what we know, based on sketchy details released to local City Council representatives, tenant leaders and the Daily News, which broke the story Feb. 5, relying on a partial draft of the NYCHA proposal.The housing authority is initially targeting eight apartment complexes, five of them on the Lower East Side: the Smith, Baruch, LaGuardia and Campos Plaza houses and Meltzer Towers, a senior housing complex on East First Street. Two separate development sites have been identified within the Smith complex, for a total of six potential sites on the LES.

Ninety-nine-year leases would be offered on various sites adjacent to public housing, including parking lots, playgrounds and community centers. While 80 percent of the apartments would be market-rate, 20 percent would be reserved for affordable housing. NYCHA leaders told elected officials that the agency would begin asking developers for proposals by the middle of this month, though a delay is a good possibility. On the Lower East Side, more than 1 million square feet of development is slated. Citywide, the plan would open the door for private developers to create about 4,300 new apartments.

The biggest site under consideration is located at the Alfred E. Smith Houses, a 12-building complex stretching along the East River that’s named for the four-term governor, Lower East Side native and staunch advocate of both public housing and open space in underserved communities. NYCHA plans to lease a parking lot along South Street, just to the north of the Brooklyn Bridge that, sources say, could accommodate up to 700,000 square feet for residential development. The second space up for grabs at Smith is a playing field at Robert Wagner Place used by the tenant association for its annual “Family Day” picnic. Another 130,000 square feet is available on a site now used for parking at the LaGuardia Houses, on Madison Street, next to the Little Flower Playground. A parking lot on East Houston Street, now part of the Baruch Houses, is envisioned as a 175,000-square-foot development site.  While an exact breakdown has not been made available, sources say the plan could add more than 2,000 new apartments on the Lower East Side.

For comparison’s sake, consider this: the entire 1.6 million-square-foot Seward Park redevelopment site along Delancey Street, in which developers are now preparing proposals, will create half that number of apartments–1,000–with 500 to be rented at market rate and 500 affordable units. At Seward Park, however, there was a four-year community-driven process to shape the project, and an exhaustive environmental review was conducted to determine the impact on neighborhood infrastructure, schools, transit, air quality and other factors. NYCHA is under no obligation to conduct a review and does not need approval from the local community boards or the City Council. The agency will need the blessing of the federal Department of Housing and Urban Development, and is required to “consult” impacted residents. These provisions are little consolation to many who live in public housing.

Tenants of the Smith Houses came out in droves last month at an emergency meeting to discuss the lease proposal, which NYCHA sees as its best hope of closing a $50 million budget gap and of clearing a backlog of more than 400,000 maintenance requests in its aging buildings. The residents were angry and frustrated not just about the housing authority’s development agenda but also because there has been so little transparency and information. Filling every seat and standing around the edges of the gymnasium, they were greeted by NYCHA board member Margarita Lopez, a familiar face on the Lower East Side. Before being appointed to the housing authority board by Mayor Michael Bloomberg in 2006, the longtime affordable housing advocate represented the neighborhood in the City Council. Lopez’s community roots didn’t count for much that evening.

“I am here to put a stop to the rumors,” she announced, asserting that many of the details in news stories and conveyed to local City Council members were inaccurate. The agency would not be ready to seek proposals from developers this month “or the month after that,” she assured tenants.

“It’s the intention of the [housing authority] board to present to the stakeholders what is to be done and it is a process in which we are going to work together,” she added.

Lopez said some rumors are accurate and some are not, but she was not specific, except on one point: she promised that no resident parking spaces would be lost at the Smith Houses. Responding to fears that the property lease plan is the first step to privatizing NYCHA, Lopez vowed, “Not a single unit of public housing is going to disappear.”

Tenants were unconvinced, and were not shy about telling Lopez so. Maritza Santiago stood face to face with the commissioner, explaining that she had moved to Smith seven years ago after high-rise development came to the Bronx, driving rents up throughout her neighborhood. “A plan will be implemented, you said. What plan?,” she asked. “Will the building be sold?… Somewhere along the line we are going to get pushed out.”

Jonathan Gardenhire, 19, a student at Parsons School of Design and tenant association vice president, said, “I respect you and know what you have done for the LES.”

But noting that mayoral candidates have vowed to replace the NYCHA board, he observed, “you came here and I look at you and you are just covering your ass.”

Local elected officials have a different take on the situation. City Council member Margaret Chin, a lifelong housing activist, believes the proposal might just be in the best interests of her low-income constituents.

“We have actually been encouraging NYCHA to make use of these parcels for many years for affordable housing,” she said. Her goal is to win concessions from the housing authority for more affordable units in the new buildings and for new amenities for public housing tenants. At the state level, Assembly Speaker Sheldon Silver expressed concern “about the possibility of NYCHA residents losing critical amenities such as playgrounds, recreational areas and parking lots.”

Assemblyman Brian Kavanagh also said he is open to the leasing plan because the housing agency’s “financial crisis is real” but added, “I want to make sure there’s a public process that is far more open than what we’ve seen in the past.” Kavanagh said the agency had already committed to holding hearings in impacted communities and he is hopeful NYCHA will agree to study neighborhood impacts on schools, transit and other facilities before moving forward. Community Board 3 and elected officials sent a letter to NYCHA Chairman John Rhea urging him to temporarily halt the land plan until communities can be brought into the process.

Slowing the pace with which NYCHA is proceeding is also the first priority for Good Old Lower East Side, the main advocacy group organizing tenants. The organization’s executive director, Damaris Reyes, is also concerned about the amount of new affordable housing NYCHA is planning, saying 20 percent “would be absurd and would trigger all kinds of reactions in this neighborhood.”

NYCHA’s money woes, due to funding cuts at all levels of government and mismanagement, are obviously the driving force behind the plan. It’s expected to generate $50 million in revenue every year. There are larger concerns, though, about introducing new, more affluent residents to the public housing ecosystem.The entryway to the new luxury tower adjacent to the Smith Houses would reportedly face South Street, away from the projects. A flyer from the Smith tenant association expressed worries about, “the socialization of our community with new residents who have higher economic means,” creating a possible scenario in which public housing “residents would be treated [as] aliens in our homes.”

The Lower East Side is familiar territory for social scientist Dalton Conley, a professor at New York University. He was raised at Masaryk Towers, the low- and middle-income complex adjacent to the Baruch Houses, New York’s largest public housing development. Conley is a proponent of creating more opportunities for public housing residents to break out of the cycle of poverty. He’s skeptical about the NYCHA plan, but sees the potential for creative solutions to some of what ails publicly funded housing.

“Some would argue that mixed-income communities create less social isolation,” but “on balance this plan seems detrimental.”

But he asked, “What if, for example, the funds raised from the luxury housing went into a public trust for NYCHA tenants? Perhaps they could, in effect, become landlords. Who knows? There are all sorts of possibilities.”

Given NYCHA’s financial shortcomings, these kinds of ideas might seem outlandish. Most public housing tenants might be satisfied to have their drafty windows replaced and see security cameras installed.

But Conley made one observation with which just about anyone living on the LES can identify. “I always thought that gentrification would extend right up to Avenue D,” he said. “I never imagined gentrification would have infiltrated the public housing projects themselves.”