After Years of Disinvestment, City Public Housing Is Poised to Get U.S. Oversight

NEW YORK — As cities across the United States pulled back from towering public housing developments in the waning decades of the last century, New York City held firm.

Others may have been plagued by mismanagement and corruption, but the nation’s oldest and largest public housing system, the New York City Housing Authority, stood out as a relatively successful example of what was possible: a subsidized housing model borrowed from Europe that still provides 180,000 affordable homes for poor and working-class New Yorkers.

Yet for years, the authority, underfunded and overlooked, has been crumbling. Now it is facing a period of federal oversight and court-mandated spending on repairs that could exceed $1 billion and would stretch over at least the next four years

How did we get here?

The decision by Mayor Bill de Blasio to avoid a legal battle and negotiate a settlement with the U.S. attorney in Manhattan, a process that could be finished as soon as next week, capped months of turmoil at the authority, including the departure of its chairwoman and other top officials amid scandal involving false certifications of lead-paint inspections.

It was that fraudulent paperwork, filed with the U.S. Department of Housing and Urban Development, that appears to have brought scrutiny by the then-U.S. attorney for the Southern District of New York, Preet Bharara, more than two years ago. The investigation grew to include a sweeping examination of conditions in the system’s 2,500 buildings, with many apartments dilapidated and repairs backlogged. Possible lead-paint hazards had gone unchecked for years, since the last term of Mayor Michael R. Bloomberg’s administration.

The failures were compounded by a lack of transparency under de Blasio: The authority did not broadly acknowledge the issues publicly until November 2017, after a report from the city’s Department of Investigation highlighted the problems days after de Blasio’s re-election. But the authority’s chairwoman, Shola Olatoye, had known for months and did not disclose the problems to residents, even as workers were scrambling to make checks and any needed repairs.

Then, in the winter, boilers began failing.

Suddenly television cameras trained their eyes on deteriorating conditions, and soon politicians, including Gov. Andrew Cuomo, swooped in, with scorn for city officials’ promises of assistance to tenants. The state allocated $550 million in capital money and insisted that it be subjected to state-mandated oversight. Cuomo, who once led the federal housing department, said Friday that he would wait to see the terms of the consent decree before deciding how to continue with plans for a state monitor.

However it is overseen, the state’s proposed contribution would only scratch the surface of the authority’s outstanding capital needs, which the city now estimates at well over $20 billion.

The sum is daunting, a deep hole of deferred maintenance. Many compare it, in scope, cost and challenge, to the problems facing the New York City subways. The housing authority, however, suffers from year-upon-year disinvestment by federal authorities, and a long-term cultural shift in American support since the days when Mayor Fiorello H. La Guardia presided over the creation of the city’s housing authority in 1934.

A federal intervention after years of diminishing federal spending struck some as ironic.

“Given the decades of federal disinvestment from NYCHA, the city should be suing the federal government, rather than the other way around,” Ritchie Torres, a Bronx councilman who grew up in public housing, wrote in a letter to City Hall last week.

Stanley Brezenoff, who stepped into the role of interim chairman on Friday, tried to see the bright side. “In most instances, the monitors can be very collaborative. That’s always going to be my hope,” he said in an interview. “There is a big universe of possible need, but there are items that are obviously high priority,” he added, listing lead paint, mold and boilers among them.

American cities struggled with their public housing systems long before New York. In a far more assertive intervention, the federal government took over operations at the scandal-plagued Chicago Housing Authority in the mid-1990s. High-rise towers were leveled there and elsewhere, in places like St. Louis and Baltimore.

The attitude was that these were not very functioning communities, said Lawrence Vale, a professor of urban planning at the Massachusetts Institute of Technology. But even when Chicago pulled back, New York pressed forward with maintenance and improvements.

“It’s disheartening to see that the problems have mounted in New York too,” Vale said.

New York City’s current struggles are in some way a reflection of its historical success relative to other cities. As others moved to public-private partnerships more aggressively, the city kept its more traditional approach — despite a constituency for public housing that was declining in number and political strength nationally.

“NYCHA’s great misfortune is to have outlasted most of its peer housing authorities in the high-rise public housing business,” said Nicholas D. Bloom, a professor at the New York Institute of Technology and a historian of public housing. “New York really stands alone now. And you can see that politically.”

Race also played an important factor in the disinvestment, said Hilary Botein, a professor of public affairs at Baruch College who has taught the history of NYCHA. Where most public housing tenants early on were white, now most are black and Hispanic. “There hasn’t been much of a voice for public housing at all,” she said.

Like others around the country, the New York City Housing Authority is chartered by the state, funded by rents and federal subsidies, but operated by the local city or town where the buildings are. De Blasio, who long ago worked with Cuomo at the federal housing department, names the chair and directs its strategy.

Since taking office, de Blasio has increased the city’s contributions to the authority, seeking to offset declines from the federal government that the city calculates at nearly $3 billion in operating and capital funding since 2001. His administration has also looked at other ways to raise revenue, beginning a program to build market-rate and affordable housing on public housing land, an approach adopted in other cities.

Under Olatoye, the authority began trying to tackle an immense backlog of work orders from what the authority said was a high of almost 600,000 in 2010. On Friday, the authority said it had 161,024 open work orders.

Even with the problems, New Yorkers still line up for public housing.

There are 207,000 on the wait list for NYCHA, officials said, a reflection of the lack of affordable housing, a homelessness crisis and the low turnover of current residents. Still, outrage at the conditions in the aging buildings sparked a group of residents to file suit earlier this year.

All the while, prosecutors from the U.S. attorney’s office were collecting caches of documents from the authority, including those related to lead inspections.

The trouble there began in August 2012 when the city under Bloomberg reached a deal with the federal housing agency to drop the frequency with which it conducted inspections of apartment conditions. But it was during those inspections that the authority made federally mandated checks for lead hazards like peeling or chipping paint.

It just suddenly stopped checking but continued to submit paperwork saying it had.

The lack of compliance was not discovered until the middle of 2015, officials have said. By October of that year, federal prosecutors contacted the authority as part of what is known as a false claims inquiry, according to a person who reviewed the notification. The public did not learn of the problem for two more years. The city has said it has seen no uptick in cases of lead poisoning in children, and instead pointed to long-term declines.

Still, the U.S. attorney’s office is poised to enter into a consent decree with the city and impose a court-appointed monitor on NYCHA. In the 1990s, the city entered into a similar sort of settlement with the federal government, admitting that it discriminated against minorities in some developments.

This time, the agreement would compel new city spending to make repairs that have long been neglected in part because of lack of federal funding, according to two people familiar with its contours. “I go back a long ways, there have been a lot of consent decrees over the years,” Brezenoff said. “We all have to make it clear that the city’s making resources available is not a rationale for further withdrawal by the federal and state governments.”