Shola Olatoye, the chairwoman and chief executive officer of the New York City Housing Authority under Mayor Bill de Blasio, said today that partnerships with private real estate interests may be the future for the cash-strapped agency.
Speaking at a hearing of the City Council’s Committee on Public Housing, Ms. Olatoye indicated that the housing authority could look to selling stakes in its 2,563 buildings across the city in order to fill its infamous budget deficits, in the absence of federal funding streams. She said a recent deal in which the housing authority formed a limited liability company with two private developers to co-own and manage six of its non-project properties in order to qualify for $465 million in loans and tax abatements could prove to be a model for arrangements going forward—as could the ongoing programs of rezonings and monetary incentives the city has used to encourage builders to construct below market-cost apartments.
“We don’t know what the future holds. But I think it would be irresponsible for us to not take advantage of tools that, frankly this city has utilized and pioneered to create thousands of affordable housing units,” she said.
Although the public housing head said that Gov. Andrew Cuomo’s recent commitment to fund public housing was an optimistic omen, she noted that President Barack Obama’s funding streams for the Department of Housing and Urban Development amount to little more than a trickle into NYCHA.
“Federal funding from HUD is not coming the way that we would need it to be,” she said. “We know the need is far greater than that.”
She argued that deals like the LLC arrangement, which paid for sorely needed renovations, are the only alternative to what committee chairman Ritchie Torres called “demolition by neglect.”
“We have to fully utilize, with diligence and the responsibility that’s been entrusted with us, to ensure that, I think to use the chairman’s reference, to not let these buildings sort of fall into disrepair just by indecision and neglect,” she said. “So we have to take advantage of, whether it’s this type of transaction–though it was very unique, because these were the last remaining such properties–or others.”
She acknowledged, however, that such partnerships would have to be negotiated and monitored carefully.
“Now we need to do that in a way that’s transparent, in a way that upholds, at least, the priorities of this administration, and that is something that I make a commitment to do moving forward,” she said.