Conditions for the more than 400,000 low- and moderate-income New Yorkers living in buildings managed by the New York City Housing Authority have worsened to the point that the federal government is considering taking control.
Now, two men from opposite ends of the political spectrum, Mayor Bill de Blasio and Ben Carson, are trying to hammer out a deal to save the housing authority, also known as NYCHA.
De Blasio and Carson, U.S. secretary of Housing and Urban Development, met last week to continue negotiating what sort of oversight would be imposed on the city’s housing authority, which is under scrutiny for years of mismanagement and a dilapidated housing stock in need of $32 billion in repairs.
The mayor, a progressive whose reputation as a champion of affordable housing is at stake, is battling to keep the agency, the largest public housing system in the country, under city control. Carson, a conservative President Donald Trump-appointee who has proposed gutting federal funding for public housing, has said a federal takeover of the agency is on the table.
Here is what the faceoff means for the country’s oldest public housing authority — and its future.
How did it get so bad?
Public housing in New York City began to slide into a state of disrepair about 20 years ago as a result of dwindling federal funding. Maintenance was deferred, capital projects were delayed and a backlog of repairs piled up.
The authority was also mismanaged, and in 2016 the U.S. attorney launched a two-year investigation into the housing authority. In June, federal prosecutors released a scathing, 80-page civil complaint that accused the agency of endangering the health and safety of its tenants as a result of cover-ups, management failures and lapsed lead paint inspections.
Instead of going to trial, NYCHA negotiated a settlement for the appointment of a federal monitor to supervise the agency and the city agreed to invest almost $2 billion in the authority’s deteriorating buildings.
But in November, Judge William H. Pauley III unexpectedly rejected that settlement. He said the agreement did not have strong enough enforcement mechanisms and strongly implied that the federal government take over the authority instead.
The parties — NYCHA and the U.S. Attorney’s Office, which effectively represents the Department of Housing and Urban Development — have until Jan. 31 to submit a new plan to Pauley. If no agreement is reached, Carson threatened to declare NYCHA in “substantial default,” which effectively paves the way for receivership.
So, what is receivership?
Receivership is a last resort that allows the federal government to take control of public housing authorities in dire straits.
When placed in receivership, housing agencies are managed by a receiver: a person, a team of HUD officials or an entity, like a private consulting firm. The receiver could have broad powers to remedy urgent problems, like financial deficiencies and unsanitary living conditions.
The duration of a receivership usually depends on the complexities of the problems and the size of the housing authority, but most tend to last five to nine years.
Public housing systems in other major cities — including Boston, Chicago, Philadelphia and New Orleans — have been placed in receivership.
Is receivership likely to happen?
It is unclear.
De Blasio has vocally opposed receivership and has vowed to not let it happen.
This month, City Hall officials orchestrated a public-relations campaign against receivership, saying it would push “longtime tenants out of their homes.”
The mayor also recently unveiled a new plan to overhaul NYCHA and announced an important labor agreement with the authority’s biggest union. Both deals were widely seen as signals from the city to Pauley and HUD that NYCHA is capable of handling its own affairs without an intervention.
“What’s happened to NYCHA is a major thorn in the mayor’s side,” said Victor Bach, a senior housing policy analyst at the Community Service Society. “Receivership would be an embarrassment to the city and the Housing Authority.”
Carson has said in the past that he would not take over NYCHA. However, this week, he said that although he prefers the city retain control, receivership is an option. Some observers see his new statements as an empty show of strength. Indeed, one person briefed on the negotiations, who preferred to remain anonymous, said HUD was not actually interested in seeing receivership take hold.
“The federal government doesn’t like the idea because they would most likely be compelled to make a substantial investment in NYCHA,” the person said. “And the city doesn’t like it because they would lose day-to-day total control over the housing authority.”
He said both parties “have a similar interest in some type of middle-ground solution.”
Are all receiverships the same?
There are two very different types of receiverships: administrative and judicial.
Under an ordinary administrative receivership, HUD would take over NYCHA and manage the agency’s affairs. There are also two watered-down versions of an administrative receivership in which HUD and NYCHA would enter into a cooperative or court-approved agreement and work together as partners.
But housing experts doubt HUD can manage NYCHA’s gargantuan housing stock, which is larger than the next 11 largest housing authorities combined.
“HUD doesn’t internally have the staff to run a housing authority like NYCHA,” said Joe Shuldiner, a former NYCHA general manager who was appointed as the receiver of the Chicago Housing Authority in 1995.
Under a judicial receivership, a judge would appoint a receiver to take over and they would report directly to the judge. A judicial receiver, backed by the power of the court, could have sweeping authority to rip apart NYCHA’s existing contracts, get around procurement laws and demolish properties, according to housing experts.
“Under a judicial receivership you’re bringing in independent people to assess the agency,” said Edwin Lowndes, executive director of the Kansas City Housing Authority, which was placed in judicial receivership in 1993.
Supporters of a takeover point to a 2003 report from the Government Accountability Office that found, in general, housing authorities placed in receivership showed marked improvements.
Detractors say that receiverships have led to privatization, displacement and disastrous consequences in cities like Cairo and East St. Louis, both in Illinois. Cairo public housing residents were evicted from their homes; in East St. Louis, housing complexes under HUD’s control were cited for violations like windows and doors that did not lock, pest infestation, mold and mildew and fire safety violations.
This article originally appeared in The New York Times.