FOR IMMEDIATE RELEASE: July 12, 2023
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NYCHA Releases New Physical Needs Assessment Demonstrating 73 Percent Increase In Its Capital Needs, Now Totaling $78.3 Billion
Assessment represents the level of funding required to bring developments to good state of repair and ensure their long-term viability, underscoring the urgent needs of the largest public housing authority in North America
The New York City Housing Authority (NYCHA) today announced the release of a new Physical Needs Assessment (PNA) that estimates a 20-year capital investment need of $78.3 billion for buildings throughout the public housing portfolio — a 73 percent increase compared to a similar assessment in 2017. This figure, up from $45.2 billion five years ago, reflects deteriorating conditions of NYCHA’s infrastructure following decades of federal disinvestment and significant price escalation in the construction sector over the last few years. Approximately 54 percent or $42.1 billion of the 20-year estimate relates to assets requiring replacement immediately or within the next year, and 77 percent or $60.3 billion relates to assets requiring replacement within the next five years. The $78.3 billion 20-year PNA estimate represents the magnitude of capital investment required to comprehensively address the conditions of NYCHA’s aging buildings and campuses to bring them to a good state of repair and ensure their long-term viability.
The findings underscore the extensive needs of NYCHA, the largest public housing authority in North America, and reaffirm the importance of NYCHA’s Permanent Affordability Commitment Together (PACT) program and the new Public Housing Preservation Trust for mobilizing capital investments to preserve or redevelop public housing properties in New York. Through these and other strategies, NYCHA has a plan to address approximately 50 percent of the needs identified in the PNA through large-scale renovations, improving quality of life for residents and offsetting the steep upward trajectory of the Authority’s expenses and shortfalls that will otherwise keep rapidly increasing over time. NYCHA estimates that approximately $38 billion, or just under half of the total physical needs, could be addressed through ongoing and planned capital projects and the current targets of PACT and the Trust. But without investment at a scale only the federal government can provide, NYCHA will not be able to meet 100 percent of physical needs. NYCHA continues to call on federal partners to help reduce this gap, with newly appointed CEO Lisa Bova-Hiatt and Chair Jamie Rubin focused on bringing investment into NYCHA through all available avenues.
“Our administration has been clear since day one that NYCHA residents deserve the same quality of life as every New Yorker, but there is no question the needs at NYCHA are great,” said New York City Mayor Eric Adams. “For the first time in city history, NYCHA was a priority in an administration’s housing plan, and we have been creative and relentless in our efforts to support residents — with new leadership in place and a powerful new tool in the Public Housing Preservation Trust alongside the PACT program, which has renovated homes for tens of thousands of NYCHA residents. While our administration has committed more funding dedicated to affordable housing in New York City history than any other administration, including nearly $10 billion for NYCHA, only the federal government can provide the level of funding needed to overcome decades of disinvestment in the hundreds of thousands of New Yorkers who call public housing home.”
"The importance of a safe, quality home is incalculable and no NYCHA resident should be denied this opportunity due to decades of disinvestment," said Deputy Mayor for Housing, Economic Development, and Workforce Maria Torres-Springer. "While the needs at NYCHA are daunting, our administration will continue to invest in NYCHA residents and properties in order to right the ship. We will execute on proven strategies, advance new, resident-driven solutions such as the Public Housing Preservation Trust, and call on our partners in government to do their part to ensure the dignity and safety that NYCHA residents deserve.”
“The 2023 PNA demonstrates the tremendous magnitude and scale of the needs and challenges of NYCHA, following decades of disinvestment in public housing in New York City and across the country,” said NYCHA CEO Lisa Bova-Hiatt. “Improving conditions for residents remains our top priority, and we continue to utilize every available tool, including PACT and the Public Housing Preservation Trust, to reduce this gap and bring investment into our properties.”
“As NYCHA’s new Chair, understanding the Authority’s finances is job number one,” said NYCHA Chair Jamie Rubin. “While the capital needs of NYCHA are vast, I am committed to working with CEO Lisa Bova-Hiatt and her team to explore all viable options that will help reduce this gap and put the Authority on a better trajectory for the long term.”
“Every day, the Operations Department at NYCHA works diligently to address repair needs and enhance quality of life for New Yorkers in public housing,” said NYCHA Chief Operating Officer Eva Trimble. “While the capital need is undeniably a core challenge in this work, we remain committed to delivering reliable and quality customer service and doing everything we can with our available resources to respond to the concerns of residents.”
“Understanding the age and conditions of our assets is an essential aspect of effectively managing our infrastructure and determining where making capital investments is most critical in light of a limited amount of funding,” said NYCHA Chief Asset & Capital Management Officer Shaan Mavani. “The PNA helps us to assess and track these needs and also informs the way we can plan for and approach future projects.”
Conducted approximately every five years as recommended by the U.S. Department of Housing and Urban Development (HUD), the PNA is a critical resource for effectively evaluating capital investment needs, as well as for identifying, planning, and executing the rehabilitation process. The 2023 PNA focuses on an industry-standard 20-year capital investment outlook for planning major building renovations and builds upon baseline data from various previous analyses by incorporating recent field assessments. The approximately $30 billion increase in total physical needs since 2017 is due to the following factors:
Approximately 2/3 of the increase is due to market price escalation; and
1/3 of the increase is due to additional scope areas included in 2023 that were not included in 2017 (such as lead-based paint and asbestos abatement), the accelerated deterioration of assets, and methodology refinements.
The 20-year PNA estimate also accounts for $3.8 billion of needs addressed through capital projects completed since 2017, as well as $6.5 billion of capital investment needs that would have otherwise existed for NYCHA in 2023 at sites that are already being addressed through the PACT program.
The total costs of renovating apartment interiors, heating and hot water systems, plumbing, and building facades and windows constitute $58 billion, or 74 percent, of the total 20-year physical needs. The remaining 26 percent of the total physical needs includes a range of other building systems and components as well as grounds improvements. Approximately 61 percent of NYCHA apartments have less than $500,000 in total physical needs per unit, while 39 percent have more than $500,000 in physical needs per unit.
Going forward, NYCHA will update the Authority-wide physical needs estimate on an annual basis. This will ensure NYCHA can reflect both increases in needs due to market price escalation or other causes, as well as needs addressed through completed capital projects, PACT conversions, and Trust conversions.
The mounting, unaddressed capital investment needs, paired with significant accumulation of tenant rent arrears and rising operational expenses required to comply with the 2019 HUD Agreement, put NYCHA in a challenging financial position and call into focus the significance of the available tools such as PACT and the Trust for facilitating comprehensive investment.
The PACT program transitions developments from traditional public housing assistance to the more stable, federally funded Project-Based Section 8 program — unlocking funding for designated PACT partners to complete comprehensive repairs. As of April 2023, 138 NYCHA developments and just over 37,000 apartments are in either the engagement or pre-development process, under construction, or have received comprehensive repairs through the PACT program — having driven more than $2 billion to renovate 8,500 apartments across 17 developments in 2022 alone. The Authority is working to convert a total of 62,000 apartments through the PACT program in order to bring the benefits of comprehensive apartment repairs and building upgrades, as well as enhanced property management and social services, to more than 142,000 residents.
The Trust, which was signed into law in June 2022 by Governor Kathy Hochul, is currently being established as a new public entity. Residents of developments selected for a vote will now have the ability to choose the Trust, PACT, or to remain Section 9. The voting procedures were finalized in December 2022, as required by State law, and the first members of the board were appointed in May. The first sites chosen for a vote will be announced in the coming weeks. The Trust legislation currently allows for 25,000 apartments to be comprehensively addressed through this model.
Earlier this month, New York City Mayor Eric Adams appointed Jamie Rubin as Chair of the New York City Housing Authority board and elevated Lisa Bova-Hiatt to be permanent CEO of the Authority. Together, they will work to address NYCHA’s mounting physical needs by advocating for federal funding, and through accessing the most effective tools at their disposal, including PACT and the Trust, which recently held its inaugural board meeting.
About the New York City Housing Authority (NYCHA)
The New York City Housing Authority (NYCHA), the largest public housing authority in North America, was created in 1935 to provide decent, affordable housing for low- and moderate-income New Yorkers. NYCHA is home to 1 in 17 New Yorkers, providing affordable housing to 528,105 authorized residents through public housing and Permanent Affordability Commitment Together (PACT) programs as well as Section 8 housing. NYCHA has 177,569 apartments in 2,411 buildings across 335 conventional public housing and PACT developments. In addition, NYCHA connects residents to critical programs and services from external and internal partners, with a focus on economic opportunity, youth, seniors, and social services. With a housing stock that spans all five boroughs, NYCHA is a city within a city.