NYCHA Calls Privatization Model the ‘Best Option’ for Public Housing
Public housing tenants and supporters gathered to pack the court on Nov. 5 in an effort to block NYCHA from demolishing the FEC Houses in Chelsea. Photos/Steve Wishnia
Editor’s Note: Judge David B. Cohen issued a ruling after this story was published. In it, he denied the residents’ request for a temporary restraining order, saying the buildings would not be demolished before the Dec. 4 hearing on their suit. “The alleged irreparable harm is the planned demolition of the buildings at issue,” he wrote. “However, respondents confirmed at oral argument that demolition cannot and will not happen until all of the residents have vacated the buildings, which has not yet occurred.”
By Steve Wishnia
Tenants in three Chelsea public housing buildings slated to be demolished argued Nov. 5 for a court order to stop the New York City Housing Authority [NYCHA] from trying to evict them or pressuring them to sign new leases accepting relocation.
Their lawyer, Visnja Vujica, argued in State Supreme Court that NYCHA had acted beyond the scope of its authority in setting up the relocate-and-demolish deal with developer The Related Companies, and that the current tenants—particularly those in the Chelsea Addition senior-housing building—would be irreparably harmed if they were forced to move twice in three years.
Under the deal, the Fulton and Elliott-Chelsea Houses, two NYCHA developments between Ninth and Tenth avenues that contain 2,056 apartments, would be gradually demolished over the next 15 years. The land would be leased to a Related subsidiary, and the tenants would be moved into the new buildings as they are completed. Their leases would be switched to the federal project-based Section 8 program, in which the government subsidizes rents for tenants in privately owned buildings. Related would also construct about 2,500 luxury apartments and about 1,000 so-called “affordable” units.
“They’re trying to scare you. They’re going to keep coming. They want us gone. We’re going to have to stand up and fight. If they take our house, they’re going to take out everyone.”
NYCHA lawyer Elizabeth Knauer told the court that it had selected Chelsea Addition and two conjoined buildings in the Fulton Houses as the first to be demolished because they were the smallest, and thus would require the fewest tenants to be moved into vacant NYCHA apartments temporarily, while waiting for the first new Section 8 building to be finished.
About 110 tenants in those three buildings received notices on Oct. 26 telling them they had to move.
“A lot of the tenants say they can’t handle two moves,” Vujica told the court. Most of the about 35 residents in the courtroom were elderly, with several in walkers or wheelchairs. The new apartments would not be available for at least three years.
“This is kind of a morbid thought, but I don’t know how many will still be alive,” Vujica said later in the hearing.
FEC tenants and supporters gather at State Supreme Court on Nov. 5 to wage a legal challenge to NYCHA’s demolition plan in Chelsea.
Judge David B. Cohen was skeptical about the tenants’ irreparable-harm claim, noting that the only affidavit they had filed was from Elliott-Chelsea tenant-association leader Renee Keitt, who said some disabled tenants had told her that they couldn’t get their walkers into the temporary apartments they had been offered. The judge termed that “hearsay.”
He scheduled another hearing on the case for Dec. 4. If he issues a temporary restraining order, it would apply until then. NYCHA plans to close the ground-lease deal in December, after which, Vujica said, tenants would no longer have the right to challenge their relocation individually, because NYCHA would no longer be the owner.
The “beyond the scope” claim turns mainly on legal semantics of the state Public Housing Law. It states that the purpose of public housing is “the construction of new housing facilities…at a cost which will permit monthly rentals which persons of low income can afford to pay.” Section 150 of the law says that any “plan or project” must be approved by both the local legislative body and the planning commission, after public hearings are held.
NYCHA, Vujica argued, did not follow proper procedures because it did not go through that approvals process. It has broad authority to build publicly owned low-income housing, she said, but not privately owned housing.
“Demolition is specifically named” in the law’s definition of a “plan,” she added.
NYCHA’s argument
NYCHA’s argument is that given the long drought in federal and state funding for public housing, the best way to improve conditions at Fulton and Elliott-Chelsea was by having a private partner and building more units. “It sounds like a win-win-win,” Judge Cohen said.
Knauer argued that the plan did not have to go through public-approval procedures, because Section 150’s definition of a “plan” applied only to new developments. Related’s plans, she contended, didn’t count, because they were a one-to-one replacement of existing apartments, and the new luxury and “affordable” buildings would not be a part of a public-housing project, but on land leased by a private partner in the Permanent Affordability Commitment Together (PACT) program.
Elliott-Chelsea Tenant Association leader Renee Keitt addresses supporters outside court earlier this week.
It’s important to approve this model, Knauer told the court, because it’s the “best option” for aging buildings. If every replacement were subject to public approval, she said, the process could be “captured by typical NIMBYism,” with neighbors blocking it because they want public housing to go away.
She told the court that none of the new buildings would be seniors-only, but that tenants relocated from Chelsea Addition would have a “senior-only environment,” though she wasn’t sure how that would be done.
The plaintiffs’ argument that NYCHA doesn’t have authority to let a PACT partner build non-low-income housing is wrong, she concluded, because it has authority to do anything necessary to secure federal and state funding, and the main purpose of PACT was to attract federal funding available through Section 8.
‘A land grab’
Converting the buildings from public housing to Section 8 would be a hefty pot of federal funds for Related’s management company. In the program, an elderly person getting $2,000 a month from Social Security would pay 30% of their income for rent, or $600. The federal government then pays the landlord the difference between that and the “fair market rent” for the area.
“Public-housing funds normally go from the federal Department of Housing and Urban Development to NYCHA, but in the Related deal, ‘it’s being diverted. It’s going from the federal government to private companies.’”
At 2025 rates, that rent for a studio apartment would be $3,310 a month in Elliott-Chelsea and $3,560 in the Fulton Houses.
Public-housing funds normally go from the federal Department of Housing and Urban Development to NYCHA, Elliott-Chelsea resident Celines Miranda told Work-Bites, but in the Related deal, “it’s being diverted. It’s going from the federal government to private companies.”
“They’re tearing down the best building,” said Elliott-Chelsea resident Jane Rao. Chelsea Addition, built in 1968, is the newest building in the development, which was built in 1947 and 1964. The Fulton Houses opened in 1965.
“They’re trying to scare you. They’re going to keep coming. They want us gone,” Renee Keitt told the crowd. “We’re going to have to stand up and fight. If they take our house, they’re going to take out everyone.”
Longtime Fulton Houses resident George Weaver says the Related deal “should not have happened.” The buildings need repairs, he continued, but local elected officials “betrayed us” to support a “land grab.”
NYCHA originally planned to rehabilitate the buildings, but later said its 2017 projection of the cost was grossly underestimated. In 2023, it decided that privatizing and rebuilding them was the only financially viable way to make repairs. Judge Cohen, questioning Knauer, wondered why there was such a “dramatic switch.”
Weaver contends that NYCHA could do repairs such as getting rid of mold on the walls. But the city administration wanted to get rid of the poor and working-class residents, who are mostly black, Latino, and Asian.
“There’s nothing really wrong with these buildings,” he told Work-Bites. “The demographics have changed.”
Public housing tenants and advocates plan to protest outside the Hudson Yards offices of Related Companies on Saturday, Nov. 8. Demonstrators will begin assembling outside the Fulton Houses on W. 17th Street between 9th and 10th Avenues; Hudson Guild located at 441 W. 26th Street; and the Amsterdam and Amsterdam Addition located at 240 W. 65th Street at noon before proceeding to 30 Hudson Yards (10th Ave. & 33rd St) for the 2 p.m. rally.
To find out more about the event call (929) 634-9768 or (646) 960-4884. Or click here.