The voices of Urban Institute's researchers and staff
June 13, 2018

New York City’s fall from public housing success represents a broader crisis

June 13, 2018

The New York City Housing Authority (NYCHA) was once considered a positive exception to the public housing problems plaguing the US in the 1980s and 1990s. But that exemplary image was shattered Monday when a federal prosecutor filed a complaint against NYCHA that said the authority covered up housing quality problems and lied to federal officials for years about lead paint and other hazards.

Susan Popkin, an Institute fellow in the Urban Institute’s Metropolitan Housing and Communities Policy Center, spent decades studying public housing transformation in Chicago and other cities. In the following conversation, she discusses what led to New York’s public housing challenges, why similar problems are likely occurring in other cities, and what steps the city, state, and federal government can take to ensure New York’s housing problems don’t get worse.

Were you surprised by these reports of New York City’s public housing quality problems and mismanagement?

Yes. For a long time, New York has been held up as a poster child of a well-managed and highly functioning housing authority. It didn’t get into the same kind of trouble that other housing authorities like Chicago, Atlanta, Baltimore, and DC got into in the 1980s and 1990s. When I started hearing about the kinds of problems people were reporting in New York’s public housing recently, it sounded like Chicago in the 1990s. It’s disheartening to see the city is there now.

What factors contributed to New York’s public housing problems?

Federal disinvestment is clearly a big part of the slide. That disinvestment occurred with the Budget Control Act in 2011, and before that, the Bush administration was gradually squeezing the amount of money going to capital improvements in public housing. Housing authorities are also facing the problem that public housing is old. Most of it was built before 1970. In New York, these are enormously complicated high-rise buildings. Maintaining them takes a lot of money and a lot of work. The more federal money NYCHA lost, the harder it was to keep up with all those demands.

Then you also have the disinvestment from the state and the city. New York is one of the most affluent cities in the world. It’s so wealthy, and so much money has gone into developing many parts of the city. But it’s not investing in its low-income housing at that level. Although the housing authority gets its funding directly from HUD [the US Department of Housing and Urban Development], it also can get supplemental funds from the city.

In addition to disinvestment at the federal, state, and city levels, there were a lot of management shortcuts, too. I don’t know in an agency that large where the lack of oversight was, but clearly there were failures at multiple levels. It’s really distressing that NYCHA was instructing staff to hide quality problems in the homes. There’s a lot of blame to go around.

Will the $1 billion the city committed to public housing over the next four years as part of the settlement in this case (in addition to $3 billion in existing commitments from city, state, and federal levels) help solve its problems?

Given the magnitude of the problems, $1 billion is nothing. The city just had an assessment of NYCHA’s capital improvement needs and found it has a $25 billion backlog. If they can’t come up with the rest of those funds, they’re going to continue in this downward spiral. Congress allocated in the 2018 omnibus the largest increase we’ve seen in years for the federal housing capital improvements, but that wasn’t enough. The city and the state need to step in.

What other tactics can the city use to improve its public housing?

NYCHA was looking at a plan of rental assistance demonstration (RAD) conversion to allow them to convert their properties to project-based section 8 and mortgage them to get funding in the private market. Their plan was to leverage the high value of the land, and that would be a great way to get the funds they need. But tenants are suing to prevent that. There’s a lot of fear of gentrification and of displacing residents. In 2015, Mayor de Blasio had a plan to lease some of the land around public housing complexes to developers to allow them to build mixed-used and high-rise properties there. But there’s been rapid resistance to that plan, too.

There are a lot of reasons for mistrust in public housing authorities, including a history of promises not fulfilled, gentrification, and displacement. People are scared and angry. I can see both sides. The housing authority has no choice but to pursue these options because they’re not going to be able to get the money anywhere else. But residents have legitimate reasons to be scared.

Do you think similar quality problems are occurring in other public housing authorities in the US?

Absolutely. The public housing stock across the country is old. Unless housing authorities are proactive and creative, they’re going to face the same problems. This is happening in small towns all the way up to cities as big as New York. And it’s even harder for small towns to do the RAD conversion and get access to private-market funds.

I can’t say how common the mismanagement is. It’s happened before—where there’s aging properties and a lack of oversight from the Department of Housing and Urban Development; we’ve seen this story before. Then the feds come in when it’s already gotten to a critical point, and sometimes it’s too late to save the housing. But New York now is different from Chicago in the 1990s. We’re talking about 100,000 units in New York public housing versus 25,000 in Chicago in the 1990s. New York has a lot of incentives to fix what they have rather than tear it down.

In addition to more investment, what steps can officials at all levels take to improve public housing?

Make sure there’s real oversight from the city and federal levels. Authorities should be very strategic about who they hire for leadership. They should set performance measures and hold them to it. In Chicago in the 1990s, they put in their A team and sent a huge number of HUD central staff to take over the housing authority. It kicked off the changes in Chicago that led to where it is now. It took them out of the death spiral, and now Chicago has a functional housing authority.

It really matters that there be effective oversight and leadership from HUD. There are experts who are turnaround guys. Bring in that level of expertise, and make sure they address the problems before things get any worse.

Distressed public housing was in the national spotlight in the 1990s, but it isn’t right now. I’d be surprised given the disinvestment at the federal level over the past decade and the age of public housing if there aren’t more places struggling to keep up.

A woman walks through the lobby of a public housing building in Brooklyn on June 11, 2018 in New York City. New York City will pay $2 billion to settle claims of corruption and mismanagement at the nation's largest public housing agency, known as NYCHA. Photo by Spencer Platt/Getty Images.

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