Testimony: Support for the NYC Public Housing Preservation Trust

Testimony of Victor Bach (Community Service Society) and Lucy Newman (Legal Aid Society)

New York State Assembly, Standing Committee on Housing

Hearings on New York City Housing Authority's Blueprint For Change

Overview

The Community Service Society (CSS) and the Legal Aid Society want to register our support for the NYC Public Housing Preservation Trust (PT) in concept and as a comprehensive approach to preserving our city’s public housing. Among its advantages, the PT promises to:

• Restore decent resident living conditions across all NYCHA developments.
• Keep public housing in the public domain, without resorting to the privatization of ownership and management now occurring under the NYCHA PACT/RAD program. The PT, a public benefit corporation, will assume ownership under a long-term NYCHA lease. (The issuance of bonds by the PT is not a form of privatization—otherwise all of public housing and city/state infrastructure could be considered “privatized.”) And, by and large, NYCHA will be contracted by the PT to continue to be responsible for property management operations.
• Make use of an existing HUD program, Section 18 Disposition, that provides a rich rent subsidy stream—through Tenant Protection Vouchers (TPVs)—that is needed to stabilize the more distressed NYCHA developments.
• Allow for a more efficient, effective approach to capital improvement projects than NYCHA is able to achieve under federal law and regulations.

Some of our major concerns about the PT Blueprint are:

• Whether TPVs will be available from HUD in sufficient numbers (for 110,000 units) over the next decade to meet NYCHA’s need.  Additions to the HUD budget are likely to be required.
• The rehabilitation standards for PT conversions (meeting federal and local codes) are lower than those under the PACT/RAD conversions (meeting the 20-year capital need).
• Whether all current public housing resident rights and protections will be sustained under the PT.
• Whether there are adequate procedures and mechanisms to assure PT transparency, accountability, and meaningful engagement with residents and the concerned public.
• Whether and how the PT will monitor and report on ongoing conditions in its developments.

Comments on the Draft Legislation

Our comments focus on the NYCHA draft legislation to create the PT, which we understand is to be introduced in the Assembly.  With respect to the legislation, our major concerns are:

There are only minimal procedures and mechanisms that assure PT transparency, accountability, and meaningful engagement with respect to residents and the concerned public.

The PT creates another entity, another layer of decision-making initiative that presents a challenge to residents. Given already widespread distrust of a characteristically opaque NYCHA, the PT must be as open and transparent as possible.

All that is required under HUD Section 18 Disposition is consultation with affected residents, with the jurisdiction-wide resident body (Citywide Council of Presidents—CCOP), with the Resident Advisory Board (RAB), and with appropriate elected officials. Consultations can simply be single meetings at which the PT engages the audience on its plans. Following these consultations, only the formal approval of NYCHA and the mayor are required to submit a Section 18 application to HUD.

There are no provisions for public hearings at the development or the citywide level to obtain comment and feedback on PT conversion plans. Nor is there a requirement for a PT Draft Annual Plan, a review and comment period, and a required public hearing, as required under federal law for public housing authorities. (The legislation makes clear the PT is a public benefit corporation, not a housing authority.) It is unclear whether the required PT audit and annual reports (S 622) will be made public, and whether they will be subject to open review and comment. We recommend these requirements be embedded in the PT legislation.

S 603.2 of the draft bill calls for “regular meetings” of the PT Board. Are they open meetings? Do they allow for public comment and testimony? We recommend that PT Board meetings should be required to be open and allow for public input.

S 609.14 specifies that any change in PT rules and regulations may call for “a public hearing, if  any." We recommend that a public hearing be required, unless the change is an emergency measure.

We recommend that that the legislation require a public hearing on PT plans be held at each development scheduled for conversion, preferably on-site to facilitate attendance by directly affected residents.

Differential rehabilitation standards for NYCHA conversions?

NYCHA is now in a decade-long process of leasing and converting 62,000 units to private ownership and management under its PACT/RAD program, using the HUD Rental Assistance Demonstration Program (RAD).Under RAD, federal law and regulations require that rehabilitation meet “the 20-year capital need.”

The PT promises to “stabilize” the remaining 110,000 units over the next decade, but under different rehab standards. S608 of the draft bill specifies that PT improvements must comply with “applicable sanitary and building laws and regulations.” That can mean a lower standard for PT conversions.

We recommend consideration be given to requiring higher rehabilitation standards for PT conversions, standards that are comparable to those under PACT/RAD.

Are resident rights and protections under PT conversions consistent with those afforded public housing residents?

S 607 of the draft bill specifies that residents in PT-converted buildings will have “protections consistent with those afforded a public housing resident.” While continued funding of resident associations under HUD 964 Tenant Participation regulations is assured, it is unclear whether the whole body of the 964 regulations will be sustained, including guidelines for forming and maintaining resident associations and the right to form Resident Management Corporations.

Are continued rights afforded to all residents in PT-converted developments, or only those public housing residents who were living there prior to conversion?  There is some confusion about succession rights: whether the rights under public housing will be the same for Section 18 Tenant Protection Vouchers?

Will residents in PT-converted buildings maintain the right to participate in CCOP and the Resident Advisory Board, the right to an Annual Plan, with review period and a required public hearing? Will PT residents and conventional public housing residents be co-equal participants in CCOP and the RAB?

We recommend the legislation specify all resident rights and protections that will be carried along as PT conversions take place.

Contracting “other entities” for property management?

One of the main purposes of the PT is to keep public housing in the public domain as developments are stabilized and restored.  Yet S 604.9 allows the PT to contract “other entities” than NYCHA for property management operations.  It is unclear under what circumstances or conditions the PT should be allowed to contract other entities. We recommend the legislation limit and specify the conditions under which the PT can contract other entities. We also recommend that in those cases PT should give preference to nonprofit, mission-oriented organizations.

Relocation of residents under PT conversions

S 607.2(b) of the draft legislation specifies that residents relocated as rehabilitation proceeds “may return.” Under the NYCHA PACT/RAD program all residents on the original NYCHA lease are assured the right to return without further rescreening. We recommend the stronger PACT/RAD provision be adopted.

Caps on Resident Rents

Higher income, more upwardly mobile resident households in PT conversions may have to pay a disproportionately high rent if they are held to the federal affordability standard: out-of-pocket rents at 30 percent of household income. S 607.2(g) gives the PT the discretion to determine rent in those cases where the out-of-pocket rent exceeds the owner’s rent.  We recommend, for the purposes of fairness and retaining upwardly mobile residents, that all PT rent charges be required to be capped at the owner’s rent.

Should the PT be subject to zoning regulations and ULURP (Urban Land Use Review Process)?

HNYCHA is subject to such regulations, if at all. We recommend the qualification “if at all” be deleted. In all cases ULURP should be used as required by law.

How will the PT monitor and report on ongoing conditions in developments it has converted and developments in its conversion pipeline?

There is no provision in the bill that requires the PT to monitor living conditions in its conversion pipeline and in developments that have already been converted. Like any landlord, NYCHA and the PT are required to comply with local housing and health codes. It is important that the PT, residents, and the concerned public have current information on living conditions in NYCHA developments, both those already PT-converted and those in the PT conversion pipeline. Monitoring living conditions is crucial to making transparent how well the PT has succeeded in stabilizing converted developments and the challenges it faces in the rest of the pipeline. To accomplish this, we recommend the bill require: (1) Cyclical inspections of all NYCHA developments and PT-converted developments every 5 years to assess outstanding violations, and (2) Removal of NYCHA’s current exemption and any potential exemption of the PT from having violations recorded in the public data bases maintained by HPD and the Department of Buildings.

Oversight Powers?

The bill specifies that the PT is chartered by the state as a public benefit corporation, not as a housing authority. It is unclear where state oversight of the PT, if any, will reside. Will the federal monitor retain oversight for PT-converted developments? Will the NYC Council will have the same oversight powers concerning the PT that is has with respect to NYCHA? We recommend the bill specify where oversight of the PT will reside.

Independent Technical Assistance to Residents?

The creation of the PT poses new challenges for NYCHA resident organizations and leaders in dealing with plans driven by a new entity.  Given those challenges, and the prevailing resident distrust of NYCHA, it is critical that residents have access to independent technical assistance from qualified resource organizations. We recommend that the legislation include provisions for funding independent technical assistance to residents affected by PT conversion plans.

Thank you for the opportunity to comment and testify.

Victor Bach is a Senior Housing Policy Analyst at the Community Service Society (CSS), a  non-profit anti-poverty organization based in New York City that—over its 175-year history—works to improve conditions and opportunities for low-income New Yorkers.

Lucy Newman is a Staff Attorney in the Law Reform Unit of The Legal Aid Society, the nation’s oldest and largest non-profit legal services organization. The Society is an indispensable component of the legal, social, and economic fabric of New York City.

Issues Covered

Affordable Housing