Press Release

FOR IMMEDIATE RELEASE: July 13, 2017
CONTACT: media@nycha.nyc.gov

NYCHA ANNOUNCES EXPANSION OF PERMANENT AFFORDABILITY COMMITMENT TOGETHER (PACT) PROGRAM TO PROTECT LONG-TERM AFFORDABILITY FOR OVER 4,000 UNFUNDED APARTMENTS

NYCHA’s unfunded unit portfolio includes eight developments with over 4,000 units that receive no public housing funding and need over $640 million for critical repairs.

PACT guarantees long-term affordability, brings the apartments into NYCHA’s project-based Section 8 program and creates a public-private partnership to provide funding for repairs.

Over 12,000 residents will benefit from stable funding and building improvements, including roof replacements, façade repairs, upgraded lighting, and enhanced security features.

NEW YORK–– Today, the New York City Housing Authority (NYCHA) announced an expansion of its Permanent Affordability Commitment Together (PACT) program to protect the Authority’s unfunded unit portfolio of eight developments with over 4,000 apartments that currently receive no public housing funding. Through PACT, all of these units will transfer to NYCHA’s Housing Choice Voucher (Section 8) program and public-private partnerships will provide funds for critical repairs, including roof replacements, façade repairs, and enhanced security features. This will protect the long-term affordability of these apartments.

“PACT is fundamentally about protecting residents’ homes and improving their quality of life,” said NYCHA Chair and CEO Shola Olatoye. “Through PACT, developments will receive extensive repairs and renovations, residents will retain strong tenant rights and permanent affordability will be protected. Public-private partnerships will support the health and future of our residents as we continue to move toward our NextGen NYCHA goal of a safe, clean and connected community.”

Federal disinvestment in public housing has resulted in a severe funding gap and $17 billion in unmet infrastructure needs. To make significant repairs, more effectively manage the unfunded unit portfolio and strategically deploy NYCHA’s limited financial resources, the unfunded unit portfolio will join PACT.

Previously, NYCHA’s PACT program was synonymous with the federal Rental Assistance Demonstration (RAD). PACT now includes both portfolios financed by RAD as well as the unfunded unit portfolio. PACT’s key principles, which apply to both the RAD portfolio and the unfunded unit portfolio, include protecting long-term affordability and guaranteeing strong resident rights.

The unfunded units are not eligible for RAD because they do not receive direct public housing funding. As a result, there is a different financing mechanism for this conversion. This is accomplished by shifting the funding source for these apartments to NYCHA’s Section 8 program, creating a public-private partnership with management and development partners to raise funds, complete badly needed repairs and efficiently oversee day-to-day operations. This PACT strategy is a proven financing model to support these apartments, prevent them from falling into complete disrepair and protect their affordability and residents’ rights. By switching to Section 8, residents will have stable funding without losing important rights.

Like public housing, residents will not pay more than 30 percent of their income toward rent, and they retain the right to a hearing to resolve any grievances. 

Long-term affordability is guaranteed through multiple mechanisms, including the Section 8 contract requires long-term affordability. Additionally, NYCHA intends to enter into a long-term ground lease with private partners who will repair and manage the development. NYCHA plans to continue owning the land, maintaining a significant stake in the ownership structure and overseeing major decisions.

The developments in NYCHA’s unfunded unit portfolio were originally built and funded by City and State subsidies, and they have never been funded directly by HUD. There is no funding awarded for these developments – their operations and infrastructure are paid for out of the federal funding allocated for NYCHA’s traditional public housing portfolio. Operational costs exceed $23 million a year, and their infrastructure repair needs are more than $640 million. While they remain unfunded, the buildings continue to deteriorate.

Currently, when a resident in one of these unfunded developments vacates an apartment in one of these eight developments, the Authority then converts it to Section 8. Through this process, 1,467 units in these developments are already part of Section 8; through PACT, the remaining 4,207 unfunded units will convert to Section 8. Shifting the units to the Section 8 Housing Choice Voucher program will bring new, stable revenue to the developments and allow for substantial improvements to be made to the buildings. Additionally, funding previously diverted to these developments from the rest of NYCHA’s portfolio will now go toward operations and maintenance at NYCHA’s traditional public housing developments.

Community engagement will begin at Baychester and Murphy Houses this summer. The RFP will be released in fall 2017, and developer selection is planned for winter 2018. The remaining six developments will begin community engagement as soon as NYCHA receives HUD approval (expected sometime between 2017 and 2019). The full PACT conversion of these eight developments is expected to be completed by 2026. Residents and community partners will be regularly updated when additional information or approvals are available.

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About the New York City Housing Authority (NYCHA)
NYCHA’s mission is to increase opportunities for low- and moderate-income New Yorkers by providing safe, affordable housing and facilitating access to social and community services. More than 400,000 New Yorkers reside in NYCHA’s 326 public housing developments around the five boroughs, and another 235,000 receive subsidized rental assistance in private homes through the NYCHA-administered Section 8 Leased Housing Program. For more information, visit www.nyc.gov/nycha, and for regular updates on NYCHA news and services, connect with us via www.facebook.com/NYCHA and www.twitter.com/NYCHA.