FOR IMMEDIATE RELEASE: June 16, 2016
CONTACT: Media@nycha.nyc.gov | (212) 306-3322
NYCHA CHAIR ADDRESSES CRAIN’S BUSINESS BREAKFAST FORUM ON INNOVATION
“Innovation by Design: NextGeneration NYCHA”
Chair Olatoye Notes Progress, Frames Challenges at NYCHA
NEW YORK—Today, the New York City Housing Authority (NYCHA) Chair & CEO Shola Olatoye delivered remarks, entitled “Innovation by Design: NextGeneration NYCHA,” at the Crain’s Business Breakfast Forum. Chair Olatoye discussed the progress made at NYCHA over the past two years, the challenges NYCHA still faces, and the importance of public housing to the future of New York City:
Good morning! Thank you, Jill, for that gracious introduction. It’s lovely to be with you all this morning. I see this not only as an opportunity to talk about my job as the head of the country’s largest housing authority, but also to talk to New Yorkers about why public housing matters to the future of New York City. And why it needs your support.
At its founding in 1934, the New York City Housing Authority (NYCHA) was a grand and sweeping experiment by reformers and progressives disillusioned with the private market’s response to the City’s housing crisis after the Depression. During the early to mid 20th century, NYCHA stood out from the rest of the country because its founders built high-quality housing for working people, secured political and public support, allocated a variety of public funding sources, provided a range of community and social services, made bold urban design and architectural statements, and, for its time, sought racial integration of its developments. NYCHA embodied innovation of the era.
Fast forward to the present.
Those New Deal era principles no longer hold. The underpinnings of the financial model that is public housing have radically eroded. Our population has gotten older and poorer. What were once considered bold urban design and architectural statements are now buildings derided as islands that breed separateness, despair and isolation. Shifting financial priorities have left public housing, like so much of our social service safety net, in tatters. While the funding and the population we serve have changed dramatically, NYCHA’s operating model has largely remained frozen in time. We run our properties from 8am-4pm as if property management is a tidy business that stops on the clock. We largely communicate with the 9,000 (out of our 11,000) employees who are in our 328 developments via paper – as half of them do not have NYCHA-issued email. We organize the day with a noon and afternoon muster – yes, muster, a WWII-era Navy daily meeting where “orders” are given.
We don’t have to look far for examples of what happens when organizations fail to continuously change and innovate. Look at Chicago, Atlanta, and San Francisco’s housing authorities. The public housing landscape in those and other cities has drastically changed – and in some cases has essentially disappeared.
One year ago, Mayor de Blasio and I released NextGenerationNYCHA. It starts with a simple premise: everyone deserves to live in a safe, clean and connected community. Our 10-year strategic plan seeks to preserve this City’s largest stock of affordable rental housing for the low-income and working New Yorkers of today and tomorrow.
So, what’s the big idea? Certainly, we must do the basics better, but frankly, that won’t be enough. We have to innovate. What is innovation in the context of such daunting challenges? We must chart a path toward sustainability. Let me share a few examples of how we are innovating at NYCHA:
We are decentralizing management and pushing resources to the frontline. This is already bearing fruit. In just one year, we’ve seen the time it takes to get basic repairs go from 21 days to less than 7 for basic maintenance. By the end of 2016, 86,000 units (out of our 178,000) will be part of our then-named OPMOM program, now rebranded as NextGeneration Operations. We’re investing in and retraining our property managers so they, not central office staff miles away, can be the local COOs of their development. We’re also going digital. Staff now manage work tickets with hundreds of pieces of paper and hundreds of hours devoted to data entry. By the end of 2016, all 3,500 maintenance and skilled trade workers will have handhelds, which will increase individual productivity and allow our customers, our residents, to sign off on quality repairs. Think FedEx.
We’re a landlord and we have underutilized assets. We will leverage those assets – thoughtfully – to support the administration’s broad affordable housing goals to meet the housing needs of vulnerable populations like seniors. We will also use select parcels to raise much-needed capital dollars for NYCHA buildings. We will release our NextGen Neighborhoods RFP for developer partners by the end of June to build 50 percent affordable and 50 percent market-rate housing in the Boerum Hill and Upper East Side neighborhoods.
We’re also preparing to submit what will be the country’s largest application to HUD to preserve 15,000 units and deliver more than $3 billion in capital repairs via an innovative Obama administration initiative, the Rental Assistance Demonstration program. We are calling it PACT – Permanently Affordable Commitment Together.
We can no longer sustain the well-intentioned but costly model of providing direct social services to the 1 out of every 14 New Yorkers whom we house. We right-sized this part of our organization, going from 400-plus employees to less than 300 by integrating staff with other City agencies that provide direct services. We, instead, reoriented ourselves toward a partnership model. Our federal requirement to get residents jobs must adapt to the new economy. One such innovative partner is C4Q (Coalition for Queens). They connect youth and adults to technology by teaching code. One of its graduates last year, Moawia Eldeeb, originally from Egypt, who lived in the Queensbridge Houses, our largest development, secured a $1.8 million venture capital investment in his startup, SmartSpot, a simulated fitness gym buddy, if you will.
We also launched the Fund for Public Housing last year, which seeks to raise private funds to seed, leverage and attract innovative partnerships to connect residents to real opportunity. Our founding individual alumni donor, Jeff Levine, is with us today. Thank you, Jeff, for being an early adopter!
There’s no magic bullet, but we’ve seen a lot of “nevers” happen in the past two years. We improved our processes for collecting rent, retrained staff, removed barriers for residents to pay electronically, and we remind residents that their rent is due. We saw an increase of 2 percent, or about $18 million, in 2015. The City forgave approximately $100 million in annual payments that were a drain on our resources. The Mayor has also invested more than $570 million in both capital and operating into NYCHA. The State committed to $100 million in capital funds. We’ve reclaimed more than 35,000 square feet of long-dormant commercial spaces, installing 13 new commercial tenants (one of them being the NYPL, who will move from an unappealing, tiny 500-square-foot space to a 3,400-square-foot, newly refurbished location at the Harlem River Houses). And for two years in row, we project to have a balanced budget.
NextGen is a 10-year plan. So, let me paint a picture for you:
It’s 2025, our customers, our residents, New Yorkers, can once again say they live in safe and clean housing. They wait no more than 72 hours for basic repairs and receive consistent and courteous customer service. Through our other NextGen strategies, we’ve reduced our now-$17 billion capital need to under $10 billion. The organization’s finances have stabilized with reoccurring net revenues and healthy reserves. We are now an attractive investment for municipal bond holders.
Last month, David Brooks wrote a column called “In Defense of Big Love.” He said, “Big love involves thinking in sweeping historical terms….Big love involves politics, and thus compromise, competition and messiness…Before the country can achieve great things it has to relearn the ability to desire big things.”
So, will we do it New York? Will we once again lead the country in preserving a bedrock that has been a pathway for millions of New Yorkers to the working and middle classes? I am fundamentally a hopeful person. It will be messy and sometimes unnecessarily complicated. It demands that all levels of government support it, not simply attack it. It must aggressively court private investment and individual donors not simply for new capital sources but for new circles of support, partnership and innovation. Our great City is supported by the men and women who work and live in NYCHA, the more than $7 billion annually that we put into the economy and the diversity that fuels the life-beat of the City. Let’s do the basics better and chart a path together that is audacious and utterly New York.
About Crain’s Business Breakfast Forum:
Crain’s New York Business hosts a monthly Breakfast Forum, providing executives, business leaders, elected officials and other innovators an opportunity to discuss their fields of expertise. Today’s breakfast was moderated by Erik Engquist, Crain’s Assistant Managing Editor, and Ben Max, Executive Editor at Gotham Gazette.