FOR IMMEDIATE RELEASE: December 30, 2016
NYCHA CLOSES FIRST AGREEMENT UNDER PERMANENT AFFORDABILITY COMMITMENT TOGETHER (PACT) PROGRAM IN NYC, ENSURING PERMANENT AFFORDABILITY & BRINGING $325 MILLION FOR REPAIRS BENEFITING OVER 3700 RESIDENTS
PACT is New York City’s implementation of the federal government’s Rental Assistance Demonstration (RAD) program and is a key component of NextGeneration NYCHA — the Authority’s 10 year strategic plan to get NYCHA’s finances in order and improve residents’ quality of life.
Under PACT, permanent affordability is guaranteed, NYCHA retains ownership control, residents maintain same rights.
24 buildings at Ocean Bay Houses will receive extensive renovations and repairs including new roofs, heating systems and security systems through PACT; Development Benefits From $213 Million in Bonds Issued by New York State.
NEW YORK — Today, the New York City Housing Authority (NYCHA) closed a groundbreaking agreement under the Permanent Affordability Commitment Together (PACT) program to bring significant financial resources and desperately needed renovations to the Ocean Bay (Bayside) Development in the Rockaways. PACT is New York City’s implementation of the federal government’s Rental Assistance Demonstration (RAD), which includes a collaboration between NYCHA, residents, community and housing advocates. The Ocean Bay PACT initiative is the first RAD agreement in New York City and will create a new public-private partnership to generate funding to keep families in their homes and improve residents’ quality of life. NYCHA will retain ownership of the property, ensuring the units stay permanently affordable and guaranteeing the developments can never be privatized.
This marks an important milestone in NYCHA’s use of new funding sources, including public-private partnerships to create safe, clean, and connected communities as part of NextGeneration NYCHA, the Authority’s 10 year strategic plan. After decades of federal and state disinvestment, NYCHA faces a severe financial crisis with $17 billion in unmet capital repair needs. This PACT agreement will infuse $325 million for NYCHA to make needed repairs at Ocean Bay including extensive capital improvements such as better heating systems, new roofs and safety upgrades. New York State, through its Homes and Community Renewal (HCR) Housing Finance Agency (HFA), issued more than $213 million in tax-exempt bonds to finance the improvements to the Ocean Bay Apartments complex.
NYCHA Chair and CEO Shola Olatoye said: “Families depend on NYCHA to make necessary repairs and protect public housing for future generations. Through PACT, we will not only fund desperately needed repairs at the Ocean Bay Development, but strengthen and preserve almost 1400 permanently affordable housing units for future generations. This type of innovative partnership presents an opportunity to ensure the long-term affordability and future of our developments.”
“As a proud supporter of the RAD program, I commend NYCHA in the inaugural use of this funding to make the necessary improvements to the Ocean Bay Bayside property,” said US Senator Kirsten Gillibrand. “I look forward to working with NYCHA as they work to improve thousands of properties throughout New York City, and will continue to work with my colleagues in the Senate to ensure that vital programs like RAD continue to be supported.”
“As a former resident of NYC public housing, I know first-hand how truly important RAD is for so many New Yorkers. Through this public-private partnership, 1,400 units in Ocean Bay Apartments will be renovated, improving the living conditions of thousands of my constituents. I will continue to work with NYCHA and local officials to ensure RAD's implementation makes public housing a viable option for New York families who've often felt squeezed by the City's evolving economy. I also congratulate NYCHA on the signing of this contract, as it shows New Yorkers that we are committed to improving public housing in our great city,” said US Representative Gregory Meeks.
RAD is a federal program created under the Obama Administration in 2011. Under RAD, NYCHA, and Public Housing Authorities nationwide, can protect long term affordability of apartments which are in need of renovations and financial support. RAD enables public housing agencies to shift units funded by HUD’s Public Housing program (under Section 9) to a long term contract under Section 8. By stabilizing federal funding under a long-term contract, RAD attracts new investment to public housing. It also ensures developments will be kept permanently affordable, residents retain their public housing rights and the public housing authority retains ownership interest in the property.
State Senator James Sanders Jr. said: “As someone who was literally born in public housing, I know first-hand how critically important these apartments are to thousands of New Yorkers, who need an affordable place to live. I commend NYCHA for its diligence in finding new funding sources to supplement its budget and working with the federal government to facilitate this public-private partnership. Now much needed repairs can be made to the Ocean Bay (Bayside) Development in the Rockaways, allowing many of my constituents to stay in their homes while improving their quality of life.”James S. Rubin, NYS Commissioner for Homes and Community Renewal said: “New York’s public housing stock is an irreplaceable resource for low-income families across the entire state. However, shrinking federal resources have hampered its sustainability over time. This critical investment of $213 million by New York State in NYCHA Ocean Bay properties, combined with HUD’s Rental Assistance Demonstration program, ensures a stable long-term source of public funding that leverages private dollars to make much needed capital upgrades. The challenges we face in modernizing and preserving the State’s public housing are substantial but achievable when we work together. We must pledge ourselves to applying our resources creatively to build, save and renew inclusive communities and the precious public housing that makes those communities livable and affordable for all.”
“The staggering investment in Ocean Bay constitutes the single greatest contribution the State has made to public housing in nearly two decades. To call it historic is hardly an overstatement. The Governor and the State Legislature should have the satisfaction of knowing that their decision will bring to thousands of residents a new standard of decent living, the kind every tenant deserves. I am hopeful that the model of reinvestment that NYCHA is piloting in Ocean Bay--which owes its success to the Rental Assistance Demonstration (RAD) program--will become the new standard for public housing,” said Councilmember and Chair of the Committee on Public Housing Ritchie Torres. “A federal initiative with bipartisan support in Congress, the Rental Assistance Demonstration (RAD) program represents the best hope for preserving public housing in an era of Republican control in Washington. Even though NYCHA has a long and rough road ahead, the State's investment in Ocean Bay offers cause for hope, at a time when hope is most needed.”
"Today marks the beginning of a new chapter for the Ocean Bay Houses," said Councilman Donovan Richards. "For years, residents have complained to our office about deteriorating and crumbling infrastructure due to declining investment in public housing. RAD will finally address these long standing issues, while also creating economic opportunities for local residents in the Rockaways," continued Richards. "I would like to thank HUD Secretary Julian Castro, Governor Andrew Cuomo, Mayor Bill de Blasio, NYCHA Chair Shola Olatoye, and MDG for their commitment to ensuring quality affordable housing is a priority in the Rockaways." ended Richards.
RAD is a federal program which was created under the Obama Administration in 2011. Under RAD, NYCHA, and Public Housing Authorities nationwide, can protect long term affordability of apartments which are in need of renovations and financial support. RAD enables public housing agencies to shift units in from HUD’s Public Housing program (Section 9) to the Housing Choice Voucher program (Section 8). RAD creates a new funding source and also ensures developments will be kept permanently affordable, residents retain their public housing rights and the public housing authority retains ownership interest in the property.
The Ocean Bay PACT agreement creates a partnership between NYCHA and RDC Development, which is comprised of MDG Design + Construction, Wavecrest Management Team, Catholic Charities of Brooklyn and Queens, and Ocean Bay Community Development Corporation. RDC has been granted a long term lease and the day-to-day operations will be managed by Wavecrest under an agreement that will guarantee the units stay affordable and the needed renovations will be completed on an expedited schedule. NYCHA will continue to administer the Section 8 contract, have a role in major decision making and operational oversight at Bayside.
"HUD's New York Office heartily congratulates NYCHA and NYS HCR for closing the first Rental Assistance Demonstration conversion in New York City," said Holly Leicht, HUD Regional Administrator for New York and New Jersey. "HUD's RAD program has catalyzed over $2 billion of investment in public housing across the country, leveraging $9 in outside funding for every $1 of federal investment. We are confident that Ocean Bay will be the first of many NYCHA developments to be transformed through this innovative program."
The development includes 24 buildings and is home to over 3700 residents. In addition to being an older development, built in the early 1960s, Ocean Bay Houses was severely damaged during Hurricane Sandy. As a result of years of needed repairs not being addressed due to reductions in federal funding and hurricane damage, the development has extremely high capital needs. Some of the more notable renovations needed include roof replacements, complete upgrade of elevator machinery and equipment, new boilers and heating systems. In response to safety issues at the development, NYCHA will work with RDC to install comprehensive security upgrades, including new updated security cameras, interior and exterior lighting and a new secure entry system. Quality of life starts inside the four walls of a resident’s apartment and so each unit will have a complete renovation to perform repairs in kitchens and bathrooms that have gone unaddressed for far too long.
"We are thrilled that this New Year will bring needed repairs to NYCHA residents in Ocean Bay through HUD's RAD program,” said Rachel Fee, Executive Director at the New York Housing Conference. “Affordable housing is a public private partnership model that will leverage investment and create local jobs to repair these buildings that suffered great damage during Sandy. Congratulations to NYCHA for putting together a first class team to restore confidence in public housing."
Moving forward, social services at Bayside will include a wide range of tailored programs for residents, such as on-site case management, senior programs, resident organizing, job training and a young adult paid internship program. Additionally, residents will be connected to the extensive network of Catholic Charities offsite services, including mental health services and recovery programs.
These repairs would cost NYCHA an estimated $174 million over the next 20 years to complete. PACT offers a path forward and financial resources to support these repairs and quality of life improvements in a timely manner. The construction and renovations should be complete in just three years.
“Ocean Bay Houses is an example of how through public and private partnership, the state and city can leverage much needed resources to address vital capital and infrastructure repairs in public housing. Diminishing federal funds has made preserving and improving public housing a challenge statewide. Through innovative partnerships, together we can ensure that this important housing resource remains safe, decent and permanently affordable for low-income households," said New York State Senator Elizabeth Little.
The closing of the Ocean Bay agreement concludes a lengthy three-year process which required federal and state approval. NYCHA first submitted an application to HUD in 2013 and was granted state approval this month. Throughout the process, NYCHA has used the PACT process as an opportunity to further engage with residents and community leaders, holding dozens of meetings and coordinating with advocates to discuss PACT, tenants’ rights and other critical issues. At the closing of the agreement today, NYCHA will receive $43 million, ensuring that the Authority ends the year without an operating deficit and enabling it to move closer towards financial stability.
“Enterprise congratulates NYCHA, its residents, and its partners on this innovative project that brings new resources to preserve our city’s public housing,” said Judi Kende, Vice President and New York Market Leader, Enterprise Community Partners, Inc. “As a co-leader of the RAD Roundtable on Resident Rights and Protections, we are proud that resident rights will be protected, and that the properties will get much needed renovations to improve the quality of life while preserving affordability for generations to come.”