Despite corruption investigations focused on real estate, de Blasio moves forward on NYCHA infill plan

Three real estate developers were chosen to build 489 affordable housing units at three NYCHA sites in Brooklyn and The Bronx.

A gated parking lot at the Mill Brook Houses in Mott Haven, The Bronx, as seen on Monday, 17 August 2015.  New York City Housing Authority CEO Shola Olatoye has said that spaces identified for its controversial infill plan can be developed by private real estate interests based on the rationale that the sites were "strewn with trash" and not in use.  However, the condition of this Mill Brook Houses parking lot was in use and relatively well-kept, except for discards that are typically wind-blown from city sidewalks.  Source :  Louis Flores/Progress Queens

A gated parking lot at the Mill Brook Houses in Mott Haven, The Bronx, as seen on Monday, 17 August 2015.  New York City Housing Authority CEO Shola Olatoye has said that spaces identified for its controversial infill plan can be developed by private real estate interests based on the rationale that the sites were "strewn with trash" and not in use.  However, the condition of this Mill Brook Houses parking lot was in use and relatively well-kept, except for discards that are typically wind-blown from city sidewalks.  Source :  Louis Flores/Progress Queens

By LOUIS FLORES

The de Blasio administration on Wednesday leaked advance information about the next phase of its plans to continue to privatise city real property at the New York City Housing Authority, or NYCHA.

BFC Partners was selected to develop 145 new units in what is now green space at the Ingersoll Houses in Fort Greene, Brooklyn ; Dunn Development was selected to develop 188 new units at what is now a parking lot at the Van Dyke Houses in Brownsville, Brooklyn ; and West Side Federation for Senior and Supportive Housing was selected to develop 156 new units in what is now a parking lot at the Mill Brook Houses in Mott Haven, The Bronx.

Selection of the developers to construct new buildings of affordable apartments were made by officials at NYCHA, the New York City Department of Housing and Preservation Development, and the New York City Housing Development Corporation, according to one-sheets distributed by NYCHA to the press.

The new affordable housing units will be offered to residents, who earn income that ranges from 20 to 60 per cent. of area median income, or AMI, but the one-sheets indicate that tenants’ earnings will be heavy skewing at 60 per cent. of AMI for couples. The effective AMI percentage is higher for individuals.

At the project to be developed by BFC Partners, for example, 100 per cent. of tenants to whom the affordable apartments will be marketed in Fort Greene, Brooklyn, will be seniors, and earnings will be capped at $43,500 per year for a family of two, or $38,100 for an individual.

Because Fort Greene is a rapidly gentrifying neighborhood and because the ceilings on annual income are capped at a percentage of AMI, as Fort Greene continues to attract wealthier residents, the moving cap for qualified tenants will allow the manager of the new apartment building at Ingersoll Houses to attract higher-earning tenants, thereby defeating the need to provide targeted housing for individuals, who earn the least in society.

Like with a 2014 sale of project-based, Section 8 housing developments by NYCHA, no information about the ownership structure for the new apartment buildings was released by the municipal housing authority. In apparent response to past criticism that de Blasio administration housing officials have awarded ownership and development rights to politically-connected developers in an opaque process, NYCHA released a one-sheet providing a glimpse of nominal threshold requirements and selection criteria, but critical information about how the bidders were graded was not released.

Civic activists have charged that the de Blasio administration has bestowed official acts related to land use based on the appearance of a “pay to play” culture. Such a charge was made by activists, who demonstrated on the steps of City Hall on Wednesday, according to a report of the demonstration published by The New York Daily News.

The anti-corruption activists, working under the umbrella group, New Yorkers for a Human Scale City, produced a 25-page report, and they cited as examples of troubling real estate transactions the disposition by NYCHA of the Section 8 properties and the de Blasio administration’s approval of the sale of the Brooklyn Heights branch of the Brooklyn Public Library.

BFC Partners, which was selected as an investor in the consortium that bought into a portfolio of the Section 8 properties, was also selected to develop a building at the Ingersoll Houses. Gary Rodney, the president of the municipal Housing Development Corporation and whose agency helped to select the new round of developers, was a former official at BFC Partners. BFC is headed by Donald Capoccia, who is a member of the advisory board of a real estate think tank at New York University where Deputy Mayor Alicia Glen was a former director.*

Another politically-connected real estate developer, L+M Development Partners, was selected to invest in the consortium that bought into a portfolio of the Section 8 properties. L+M Development is headed by Ronald Moelis, who is a friend of Mayor de Blasio's. According to information obtained by Progress Queens from a source, Federal investigators are examining whether any of these developers received preferential treatment from de Blasio administration housing officials.

Both Mr. Capoccia and Mr. Moelis are members of the board of governors of the Real Estate Board of New York.

In response to past criticism about the lack of transparency into how developers have been selected by NYCHA for its privatisation plan, officials with each of the offices of Comptroller Scott Stringer (D-New York City), New York City Department of Investigation Commissioner Mark Peters, and State Attorney General Eric Schneiderman (D-New York) have not answered requests made by Progress Queens about questions raised by actions by NYCHA that included the fact that NYCHA had sidestepped the requirement of Section 197-c of the City Charter that governs the disposition of city real property.

A request made by Progress Queens to interview NYCHA CEO Shola Olatoye for this report was not answered by the NYCHA press office.

The advance leaking to The New York Times of the the latest plans for NYCHA followed similar advance leaking last week to The New York Times of plans by Mayor Bill de Blasio (D-New York City) to restructure the municipal hospital system, known as Health + Hospitals. The restructuring plan for Health + Hospitals also includes provisions that would call for the privatisation of city real property by the municipal hospital system.

Allowing the pro-privatisation bias by The New York Times to first frame the administration’s plans for NYCHA and Health + Hospitals exerts great influence on public opinion. Often, these exclusive reports by The New York Times are repeated by other news outlets, including by news readers on the radio stations 93.9 FM WNYC and 1010 AM WINS. Furthermore, even the way The New York Times modifies the description of affordable housing can at times be hostile. In a report filed by Mireya Navarro, the new affordable housing at NYCHA were described as “lower-rent buildings,” which approaches the slang use of the term, “low rent,” which, in turn, is used to describe objects that have little worth or value.

Mayor de Blasio’s efforts to vest ownership or development interests in strategic city real property owned by NYCHA into the hands of developers and private real estate investors come at a time when several City, State, and Federal corruption investigations are examining how his administration’s official acts have appeared to deliberately benefit real estate developers. Elevating the priority of transferring NYCHA real property to private business interests also come in the face of unfinished Federal investigations into lead poisoning and possible financial fraud by the municipal housing authority.

The construction of the 489 units of affordable housing will count toward Mayor de Blasio’s stated goal to construct 80,000 units of new affordable housing units over ten years, even as it now appears that he may only serve four years as mayor.

Since a critical tax abatement program was not renewed as a consequence of conditions set by last year's State budget, the role of that tax abatement program in underpinning the success of Mayor de Blasio’s affordable housing initiative has been completely eliminated, forcing the administration’s hand at increasing the disposition of city real property in order for Mayor de Blasio to make incremental progress toward his affordable housing goal.

The de Blasio administration’s plan for NYCHA include the construction of 50 to 60 affordable housing buildings and 30 to 40 market-rate buildings. This plan in known as the infill plan, because construction will take place on undeveloped spaces already part of NYCHA’s public housing developments. When the market-rate housing aspect was first announced by former Mayor Michael Bloomberg (R-New York City), the plan was subjected to immense criticism, a lawsuit, and then withdrawn, only to be embraced by Mayor de Blasio as part of his suite of developer-friendly land use policies that are now the subject of the reported Federal corruption investigation. Despite tenants' resistance to the infill plan, NYCHA CEO Olatoye has insisted that she plans to keep finding ways for developers to purchase private interests in NYCHA's properties.

The constant focus on the disposition of NYCHA real property also comes as the de Blasio administration has been faulted by a U.S. District Court judge for having failed to comply with a court-supervised settlement agreement to timely perform mold abatement at the city’s housing developments. Instead of focusing on improving the living conditions at NYCHA’s existing housing developments, Mayor de Blasio and NYCHA CEO Olatoye appear obsessed with creating new apartment buildings that will only serve to make the disparities in living conditions that much greater between NYCHA residents.

Because of the NYCHA’s failures to comply with a consent agreement calling for the abatement of mold from its housing developments, U.S. District Court Judge William Pauley appointed Francis McGovern, a Duke University School of Law professor, who has extensive experience in mass tort litigation, to serve as a special master over NYCHA in Court proceedings in a class-action mold abatement case.

(*) Correction : Mr. Capoccia is a member of the advisory board of the NYU think tank, not its founder.

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