The New York City Housing Authority has notified federal officials that a pandemic-triggered shortfall in rent collection is threatening its ability to meet a schedule of apartment fixes mandated by a 2019 court-approved agreement, THE CITY has learned.
On Tuesday, NYCHA officials told THE CITY that as of last month, more than 71,000 public housing households were in arrears to the tune of $443 million, way up from the $100 million in arrears that existed when the pandemic struck in March 2020.
The potential setback comes as the federal monitor appointed to oversee the troubled agency released a report card Tuesday trumpeting some successes but also documenting a decidedly mixed record of NYCHA’s ability to fulfill an agreement that is now nearly four years old.
NYCHA and the Department of Housing and Urban Development (HUD) reached the agreement in January 2019 following a damning investigation by the U.S. attorney for New York’s Southern District that found NYCHA officials had lied for years about the scandalous conditions of so many of their 175,000 apartments.
The agreement set timelines for fixing busted boilers and non-functioning elevators, and eradicating toxic mold, poisonous lead paint and vile vermin from NYCHA properties. It was signed by NYCHA officials, then-HUD Secretary Benjamin Carson, the Manhattan U.S. attorney and then-Mayor Bill de Blasio. One of its provisions was the appointment of the federal monitor.
In recent weeks, NYCHA quietly informed monitor Bart Schwartz, HUD and the U.S. attorney that the authority’s ability to meet those deadlines may be imperiled by a serious drop in rental revenue. Overall, rental income pays for about one-third of NYCHA’s operating budget.
“We’ve had discussions with HUD, we’ve had discussions with the monitor, we’ve had discussions with the Southern District,” NYCHA Interim CEO Lisa Bova-Hiatt said in an interview. “We’ve been incredibly transparent and I believe they know that we have the will, we just don’t have the revenue.”
Bova-Hiatt said the costs of the HUD agreement priorities, “and the annual operating costs, have increased steadily over the last three years and without additional revenue, we are going to be unable to continue the pace of investment to address those requirements.
“In other words, it will take us longer to achieve our goals,” she said.
The money crunch is complicated by thousands of applications from NYCHA tenants for reimbursement from the state under the pandemic-related Emergency Rental Assistance Program (ERAP). Under ERAP, public housing residents are at the back of the line for reimbursement. No money from the ERAP fund has been spent on NYCHA tenants’ rent arrears.
“We should have $443 million that we would spend on operations and the HUD pillar areas, and we don’t have that,” said NYCHA Chief Financial Officer Annika Lescott-Martinez. “It’s going to be hard for us to continue the pace of our investment. It’s a financial strain. We’re limited on what we can do and how fast we can do it.”
Aging Boilers, Failing Elevators
On Tuesday Schwartz, the federal monitor, detailed the current pace of reform, releasing a report on NYCHA’s adherence to the timeline spelled out in the original agreement, providing the first in-depth account of where NYCHA management has kept up, and where it has fallen behind.
Schwartz said his team has helped NYCHA improve its use of data to better address apartment conditions and improve life for public housing residents. He called this improved performance a “milestone in NYCHA’s progress in requirements of the HUD agreement.”
But Schwartz also made a point of noting: “The success of the monitorship and NYCHA will continue to be measured by the improvements that residents experience at the development level. Although this report is a testament to NYCHA’s ongoing progress, the agency still has a long way to go.”
The 2019 agreement, for example, sets out goals to replace aging boiler systems that have often crashed during cold spells, forcing residents to shiver through heat outages that sometimes lasted for days.
The agreement requires that NYCHA restore heat within an average of 12 hours. In the previous heating season — Oct. 1, 2021 through May — NYCHA tenants experienced 564 unplanned heating outages, up 100 from the prior heat season. The monitor found that the number of unplanned outages that lasted more than 12 hours was 97, more than twice the 47 unplanned heat outages in the prior season.
Fifteen of these outages lasted between 24 and 48 hours, the monitor noted.
A bright spot was NYCHA’s progress in replacing many of these boilers. The monitor estimates that the authority will likely exceed the goal set in the agreement to replace at least 70 heating systems by the end of this year, and is on track to upgrade as many as 90 systems.
But its progress upgrading its 3,000 constantly failing elevators is another story entirely.
The agreement set a goal to replace 108 elevators by the end of this year, but the monitor found that only eight replacements are expected to be completed by New Year’s Eve.
“NYCHA’s progress in the delivery of new elevators is dire,” says the monitor’s report.
Lead and Mold
The eradication of lead paint that pervades the authority’s buildings — most of which were built before lead was banned in the mid-1970s — was also written into the agreement as a top priority. Ingestion of lead paint can cause serious cognitive defects in young children. More than 1,000 children under 6 years old living in NYCHA have registered unacceptable elevated levels of lead over the last few years.
Here NYCHA has had some success.
NYCHA agreed to abate lead in half its properties by 2029, with a particular priority for units with children under 6 years old. The monitor found that initially NYCHA was inspecting only units where young children lived full time. At the monitor’s suggestion, NYCHA began checking apartments where young children spend 10 or more hours per week, such as a relative or friend’s unit.
As a result, thousands more units have been tested and cleaned. When the agreement was signed in 2019, only 3,000 units had been tested. Through October this year, 24,000 apartments have been checked for lead.
A more daunting challenge has emerged with NYCHA’s promises to attack the problem of mold, an issue that is particularly onerous for tenants who suffer from respiratory illnesses such as asthma.
The agreement requires that NYCHA complete all “simple” mold repairs within seven days and all “complex” mold repairs within 15 days. Overall, the monitor declared NYCHA’s ability to meet these set goals to be “grossly deficient.”
In the first six months of this year, the monitor noted, NYCHA was able to address 23% of “simple” mold repairs within seven days, and a mere 3% of “complex” mold repairs within the required 15 days.
Nevertheless the monitor noted that improvement appears to be taking place on this issue.
This year NYCHA completed the installation of 67,000 new roof fans across multiple developments to improve air circulation in bathrooms and kitchens, aiming to reduce the moisture build-up that stimulates the growth of mold. As a result, the number of mold complaints has dropped “significantly … as the ventilation project progressed.
“NYCHA has struggled with these performance standards since the execution of the Agreement in 2019,” the monitor noted, “but is now taking well-considered steps to improve its performance.”
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