Are Private Partnerships the Best Way to Rebuild Public Housing?

Supporters of a highly debated initiative to tear down New York’s Fulton and Elliot-Chelsea Houses think so.

The problem of America’s legacy public housing—the million-odd units built by the federal government between the end of the Second World and the early 1970s—represents one of the most challenging issues facing the country’s affordable housing future. Arguably, it is the most challenging: the thousands of structures nationwide, most of them large-scale apartment buildings, have been routinely underfunded for decades, resulting in a maintenance backlog that now tops $70 billion and has left many projects in a state of near-uninhabitability. Government financing to simply demolish and replace them is not likely to materialize any time soon; in any case, most strategies to start over from scratch risk doing further harm to the already fragile and underprivileged communities who inhabit them.

Nowhere has this conundrum proved more daunting than in New York, home to nearly 20 percent of the nation’s publicly-managed housing stock. Only one housing project, Brooklyn’s Prospect Plaza, has ever been demolished in New York’s history, and resident opposition (well founded, given the years of official neglect) has halted countless other proposals in their tracks. And yet, in an unlikely turn, the city is about to roll out perhaps the most ambitious rebuilding initiative in public-housing history. On Manhattan’s West Side, the Fulton and Elliot-Chelsea Houses—17 towers in all, occupying some 13 acres spread across six non-contiguous blocks—are among the most problem-plagued assets in the sprawling portfolio of the New York City Housing Authority (NYCHA). With the agency’s cooperation, a still-novel federal initiative is set to be deployed on a larger and bolder scale than ever before: approved by existing tenants this summer, a plan is now in place to redevelop both complexes with parks, services, and enough apartments to accommodate some 3,000 units of market-rate and affordable housing, while still guaranteeing homes to every one of the projects’ current residents at rents identical to what they’re currently paying.

The future of the proposal is by no means assured; the non-binding tally of tenants who approved it was a less-than-commanding 57 percent, and many are still actively protesting the decision. And yet its progress to date heralds a key turning point for the still extremely contentious idea that public housing can be reinvented with the aid of private capital. The policy that would make it happen in Manhattan is called PACT, a unique public-private partnership led by NYCHA and development companies Essence Development and Related. The former’s Executive Vice President for Real Estate Development Jonathan Gouveia, and Essence’s Managing Principal Jamar Adams; both sides sat down with Dwell to explain how the breakthrough finally came together.

How did each of you first become involved with the Fulton and Elliot-Chelsea proposal, and how did we arrive at the current plan?

JONATHAN GOUVEIA: I was brought on four and a half years ago to restructure NYCHA’s public-private partnerships with an eye to rehabilitating and recapitalizing our portfolio of apartments; so far we have 18,000 apartments citywide that we’ve converted to private management. One of the things I’ve been doing is looking at other strategies to provide more high-quality housing to our residents—looking at opportunities for new construction, either as infill on existing public-housing campuses or rebuilding of public-housing buildings. As relates to Fulton and Elliot-Chelsea, it’s been a long and winding road: I’ve been involved since the beginning, starting with an initial proposal put out in 2018 that got enormous backlash from residents. What we decided to do was put together a working group of residents and officials, and figure out a new plan for these projects. By 2021, the group produced a tentative outline, not dissimilar from the previous one, with comprehensive renovations and enhancements to public spaces. We put out on an RFP [a request for proposals from potential private partners] for that, but once the developers came aboard, things took another twist. The tenants looked at the options that Essence and Related presented, they held a survey, and the decision was to totally rebuild.

JAMAR ADAMS: I knew these buildings: during Covid, I was jogging past them constantly going from downtown to uptown, and I’d say to myself, it would be great to have an opportunity to help improve this community. The RFP from Jonathan and NYCHA came out right after the pandemic. I started working on a response, sitting down with my former employers at Related, and we came up with a proposal; we got the designation in November of 2021. What’s been critical about this project is that it started with community engagement. As we’ve gone along, every detail has been discussed with the tenants: What kind of appliances are going to be in the new buildings? It’ll be stainless steel, because that’s what tenants want. They’re central to those decisions, and as we’ve pivoted from renovating to rebuilding my role has been to keep the community informed about each potential plan, educating residents on the new options available, taking them onsite to tour new construction in buildings elsewhere so they can see what’s possible.

Photo by Leticia Barboza / Courtesy New York City Housing Authority.

Is there a reason that this is happening in Chelsea? Why these projects in particular?

ADAMS: I think it’s probably twofold. The physical condition of the buildings was not great, to put it mildly. Residents have been experiencing electrical outages; heat and water problems; we saw mold in the buildings, in apartments with young kids living in them. It’s sad that in the greatest city in America you have people living like that. And then paired with that you have a phenomenal group of leaders in these projects—on the tenants association boards, especially, acting as a strong resident body that’s clear about what they want. These folks felt more and more empowered by what was happening in the working group: there was a feeling that their voices were being heard, and that produced a certain kind of energy that kept this going.

The new proposal makes use of the federal government’s Rental Assistance Demonstration (RAD) program, which allows housing agencies to partner with developers to rebuild public housing as subsidized housing. You guys are calling the policy Permanent Affordable Commitment Together, or PACT—what makes it different, and how does it avoid some of the privatization concerns that have been leveled at RAD?

GOUVEIA: Basically we’ve gone further in terms of ensuring residents rights and protections, making sure they remain enshrined and expanding them whenever possible. Some of the protections are the same as others across the nation where RAD has been used—rent is capped at 30 percent of household income; children and others have succession rights to the units; people aren’t going to be re-screened when they move into the new apartments. But we layered in other things: grievance rights; funding for tenant association boards; and more protections against eviction, including processes to ensure household retention. The basic elements of these rules are all there, but we made sure they were strengthened. That’s the key to the PACT spirit.

Photo Courtesy of the New York City Housing Authority

For both NYCHA and for Essence, is this a kind of project you want to do again? What do you see as the future of PACT?

GOUVEIA: Residents throughout NYCHA’s portfolio know that their buildings need help. When I’m out in the community, working on other potential PACT projects, the engagement is the same: no matter where you are, we want to hear from you. And what I’m hearing more and more from residents is that they see what’s happening in Chelsea, and they want it to happen for them. Our approach is resident-focused. Other projects might make sense in terms of the characteristics of the building, and we’ll work with residents across the city. If they want to go down that road, that’s where we’ll go.

ADAMS: I feel exactly the same way that Jonathan does—it’s a question of whether people want to do this again. As it happens I grew up in low-income housing in Charlotte, North Carolina. I have no desire to go to lower income residents and tell them how to live. But speaking for Essence, if we have the opportunity to do this again, we would love to be a resource, working with residents and communities, being collaborative and transparent. For too long, people in public housing have been treated like second-class citizens. If we do this right in Chelsea, we have the chance to make people realize that they don’t have to be afraid, that they can get amazing housing while maintaining their rights and not paying more money in rent. That’s what could make the case to every other New Yorker in public housing.

Top Photo by Leticia Barboza / Courtesy New York City Housing Authority.

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