How Private Developers Are Tackling NYCHA's $78B Repair Bill  
   
   
 

Faced with a crumbling real estate portfolio, the New York City Housing Authority in 2016 launched the Permanent Affordability Commitment Together program, which brings in private developers to take on the projects by converting NYCHA buildings from Section 9 to Section 8 housing. 

 
 
Courtesy of Katie Prael/Barbara Wagner Communications
 
   
 

In order to tackle a projected $78.3B in needed repairs and replacements over the next two decades, NYCHA leases properties to developers, who must partner with existing NYCHA residents on even the most minuscule aspects of their projects. The idea sparked outrage and controversy as it forced two historical adversaries — landlords and low-income tenants — to build trust and overcome long-held resentment.

And yet, somehow, the program has seemingly become a success.

As of November, eight PACT projects have been delivered spanning 9,500 units, according to a Bisnow analysis of NYCHA data. Those repairs reduced NYCHA’s outstanding repair bill by approximately $1.8B. 

Another 29 projects are in construction or planning stages and are estimated to cover total repair costs of about $11.5B.

“There is a lot of PTSD from residents and resident leaders in not having their needs met, not having resources to have their needs met, and having their needs be deferred for such a long amount of time that there was a psychology of numbness towards any promises that NYCHA would be bringing in the future,” said Naim Brown, Senior Vice President of Place-Based Development for Urbane, which is restoring 15 different campuses with a total of 88 buildings. 

“It was definitely a learning curve to encourage folks to participate in the process and show them, step by step, that the process was real.”

Read the full story here.

— Ciara Long and Sasha Jones

 
   
   
 

Today's Rundown

 
 
  • SL Green sells Madison Avenue building to Jeff Sutton at a Loss. SL Green has sold 690 Madison Ave. to Wharton Properties six months before the loan tied to the property is set to mature, according to a deed filed with the city Wednesday. Read more.

  • SL Green says converting 750 Third Ave. will cost $805M. The REIT unveiled its plan to turn the 35-story office tower at 750 Third Ave. into a 639-unit apartment building at an investor day Monday. Read more.

  • City rents rise as mortgage rates stay high. After a few months of relief for NYC tenants, the average monthly cost to rent an apartment is climbing again as fewer people are able to leave the market and buy their own home. Read more.

  • How Elie Schwartz went from rising real estate star to alleged Fraudster. Bisnow Deputy Managing Editor Ethan Rothstein gives an in-depth look at the rise and fall of the Brooklyn investor and Nightingale Properties CEO, who has been charged with defrauding crowdfunding investors of $54M. Read more.

 
 

What Else Is Happening?

 
 
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Macy’s Expects $275M In Real Estate Sales This Year, Doubling Previous Prediction Macy’s Expects $275M In Real Estate Sales This Year, Doubling Previous Prediction
 
   
 
HUD’s Future May Include Relaxed Standards, Fewer Rules And Expanded Opportunity Zones HUD’s Future May Include Relaxed Standards, Fewer Rules And Expanded Opportunity Zones
 
   
 
Where Norges, Starwood And Other Real Estate Giants Say They Plan To Keep Spending Where Norges, Starwood And Other Real Estate Giants Say They Plan To Keep Spending
 
   
 

The Finish Line

 
 

In case you live under a rock, you probably heard that City of Yes was finally approved last week. The measure has major consequences for zoning — and, as a result, building — across all five boroughs. 

By now, we assume lawyers have been hired and potential assemblages are being pieced together. The big question is: What areas have now been unlocked for developers? 

And, as a bonus, which neighborhoods do you think are most underrated? You better reach out to us before we contact you! 

The New York City Rundown is written by New York Reporters Sasha Jones and Ciara Long and edited by Deputy Managing Editor Ethan Rothstein. We’d love your feedback and news tips: sasha.jones@bisnow.com and ciara.long@bisnow.com.

 
   
 
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