The New York City Housing Authority uses the Rental Assistance Demonstration (RAD) program and the Permanent Affordability Commitment Together (PACT) initiative to convert public housing units to Section 8 funding and leverage private capital for building renovations. This page covers CBC’s work on capital financing strategies, the New York City Public Housing Preservation Trust, property management reforms, labor productivity, and rent collection efforts.
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The State and City should seek to streamline the process as much as possible and not introduce additional steps that could delay the renovation process.
The City and State will need to tap additional sources of financing to help close future PACT and Preservation Trust deals.
NYCHA will need to raise additional sources of capital through infill development and phased redevelopment, where feasible, to support its capital program.
Key Data
In March 2024, CBC reported that more than 20,000 units had converted to Section 8 under PACT, with another 20,000 units in the planning pipeline.
In September 2023, CBC noted that interest rates on loans funding PACT projects increased nearly 50% since 2020, rising from approximately 4.5% to 6.5%, while construction costs rose 25% to 30% since 2021.
As of September 2023, the City's Fiscal Year 2024 Executive Budget Capital Commitment Plan included $1.5 billion in City capital subsidies for future PACT projects through fiscal year 2026.
In March 2023, CBC highlighted that the average cost to operate NYCHA's public housing was nearly $1,500 per unit per month, which was 80% higher than the cost to operate buildings converted to Section 8 under RAD/PACT.
New York City's public housing authority requires modernization to reduce operational costs and accelerate necessary repairs for residents. This can be achieved by leveraging programs like RAD/PACT and the Preservation Trust to unlock essential capital for building improvements.
Recommendations related to NYCHA RAD/PACT
The next mayor should modernize NYCHA to cut costs, speed up repairs, and quickly unlock capital through RAD/PACT and the Preservation Trust.
NYCHA faces a persistent operating budget gap of $791 million and massive capital needs totaling $60 billion, with nearly one-third of its units now costing less to build new than to repair. To address these challenges, the authority must prioritize the expansion of PACT and the Preservation Trust while simultaneously overhauling management and labor practices to improve efficiency.
Recommendations related to NYCHA RAD/PACT
NYCHA must fix or replace deteriorating buildings by utilizing PACT and the Preservation Trust.
The agency should improve management effectiveness and efficiency, while publicly tracking progress and impact.
NYCHA needs to negotiate savings, boost productivity, and modernize property management through collective bargaining.
The authority must overhaul the rent collection process to address revenue shortfalls.
Key Data
$60 billion
— Total five-year capital needs for NYCHA developments.
$791 million
— The gap between public housing expenses and core operating income in 2023.
$511 million
— Federal capital funds diverted in 2022 and 2023 to fill the operating budget gap.
46.5 percent
— Share of households behind on their rent in October 2023.
$1.5 billion
— Total personnel costs for NYCHA in 2023.
$760 per unit per month
— Labor costs in 2023 on a per-unit basis.
The New York City Housing Authority faces a massive $60 billion five-year capital need, with nearly one-third of its apartments nearing or exceeding the cost of new construction. While the Permanent Affordability Commitment Together (PACT) program has successfully addressed $10 billion in needs, the city and state must identify additional funding sources and streamline renovation processes to bridge the widening gap between available resources and required repairs.
Recommendations related to NYCHA RAD/PACT
The State and City should seek to streamline the process as much as possible and not introduce additional steps that could delay the renovation process.
The City and State will need to tap additional sources of financing to help close future PACT and Preservation Trust deals.
NYCHA will need to raise additional sources of capital through infill development and phased redevelopment, where feasible, to support its capital program.
Key Data
$60 billion
— Total five-year investment needs for NYCHA, which is more than double the 2017 estimate.
$78 billion
— Total twenty-year investment needs for NYCHA, up from $45 billion estimated in 2017.
$10 billion
— Capital needs addressed by NYCHA since 2017, largely through the PACT program.
30,000
— Number of residents who benefit from improved living conditions and quality of life thanks to PACT renovations.
$1.5 billion
— City capital subsidies included in the Fiscal Year 2024 Executive Budget for future PACT projects through fiscal year 2026.
10 percent
— Average annual rate of inflation for unaddressed needs since 2017.
Kathryn Garcia serves as Director of State Operations and Infrastructure, where she oversees over 70 state agencies and authorities, including the MTA and Port Authority. Kathryn has over 14 years of government experience delivering services that New Yorkers rely on every day. Previously, she served as the Commissioner of the…
During the pandemic, the New York City Housing Authority's rent collection rate fell below 65 percent, resulting in over $450 million in arrears. To secure its financial and physical future, the authority must implement a plan to restore rent collection while utilizing the Rental Assistance Demonstration and the Preservation Trust to address its capital needs.
Recommendations related to NYCHA RAD/PACT
NYCHA should fix its deteriorating buildings through the Rental Assistance Demonstration (RAD) and the Preservation Trust, improve property management, and increase productivity through collective bargaining changes in its labor agreements.
The New York City Housing Authority faces a structural budget gap driven by rising operating costs, deferred maintenance, and a record-low rent collection rate of 64 percent. To achieve solvency, the authority must implement structural reforms, including expanding the use of the Rental Assistance Demonstration (RAD) program and the Preservation Trust to address deteriorating building conditions.
Recommendations related to NYCHA RAD/PACT
Fix deteriorating buildings through the RAD program and the Preservation Trust.
Improve property management.
Boost rent collections.
Negotiate savings and increased productivity through collective bargaining.
Key Data
64 percent
— The rent collection rate fell to an all-time low in December 2022.
$1,500
— The average cost to operate NYCHA public housing per unit per month.
$454 million
— The amount of unpaid rent accrued by NYCHA households as of December 2022.
$789 million
— The amount of non-operating sources used to balance the 2022 budget, representing 28 percent of the total revenue budget.
$152 million
— The total overtime spending in 2022, which increased by 3 percent despite efforts to reduce it.
$211 million
— The amount remaining in reserves at the end of 2022, representing less than one month of expenses in cash on hand.
NYCHA's RAD/PACT program has successfully financed $3.2 billion in capital improvements for thousands of residents, but the remaining 110,000 public housing units require the passage of the proposed Preservation Trust legislation to secure necessary funding. Without this legislative action and federal support, the physical conditions of the remaining housing stock will continue to deteriorate rapidly.
Recommendations related to NYCHA RAD/PACT
The best hope for preserving these 110,000 units is the passage of the proposed Preservation Trust legislation (S6999A/A7805).
The Council should join NYCHA and City Hall in lobbying for State and federal actions needed to pass the Trust.
The only path to stable operations, improved physical conditions, and preserving public housing requires comprehensive renovations funded through a combination of RAD/PACT and the Preservation Trust.
Key Data
$3.2 billion
— Financed in capital improvements through RAD conversions.
14,742 units
— Completed or in the process of being renovated as of February 2022.
62,000 units
— The maximum number of units NYCHA can convert under its federal cap.
110,000 units
— Remaining public housing units that would remain in the Section 9 program without the Preservation Trust.
400,000 residents
— Number of people living in NYCHA housing who deserve safe, secure, and habitable living conditions.
The New York City Housing Authority faces significant financial instability, with operating costs outpacing revenues and a declining rent collection rate that threatens its budget. To achieve long-term stability and necessary capital improvements, the authority must pursue comprehensive renovations through the Preservation Trust and PACT, while simultaneously improving labor productivity and management efficiency.
Recommendations related to NYCHA RAD/PACT
The City and State should approve the Preservation Trust, which has the potential to generate much needed capital investment and to deliver significant operating savings and productivity improvements.
NYCHA needs to implement labor productivity increases, which would bring operating costs in line with industry benchmarks and maximize the potential benefits of the Preservation Trust.
NYCHA, in collaboration with its federal monitor, HUD, and labor, needs to redouble efforts to boost productivity and bring operating costs closer to peer housing authorities and private property managers.
Key Data
$2.7 billion
— Public housing operating expenses in the 2022 adopted budget.
$1,300
— Monthly operating cost per unit projected for 2022.
70 percent
— Rent collection rate as of January 2022.
$1.2 billion
— Total spent on HUD settlement agreement action plans since 2018.
35 percent
— Reduction in operating reserves due to actual and planned use in 2021 and 2022.
NYCHA faces over $40 billion in capital needs, which the city is addressing through increased capital funding and the expansion of the Permanent Affordability Commitment Together (PACT) program to convert properties to more flexible voucher models. To ensure long-term viability and effective spending, the city and state must implement procurement reforms, improve property management operations, and establish a Preservation Trust to raise revenue for repairs.
Recommendations related to NYCHA RAD/PACT
State lawmakers should act swiftly to grant NYCHA authorization to use construction manager-build or construction manager-at risk procurement methods.
NYCHA’s federal monitor, along with NYCHA and the City, should strongly advocate for HUD to grant waivers from restrictive federal public housing procurement rules.
City and State lawmakers should create the Preservation Trust, as it will provide NYCHA with additional options to finance needed capital investment.
NYCHA must implement the real changes outlined in its Blueprint for Change, including new organizational structures, quality controls, staffing plans, and accountability measures to operate like a modern property management organization.
Key Data
$40 billion
— Total capital needs facing NYCHA due to years of underinvestment, mismanagement, and cost inflation.
62,000 units
— Goal for the number of units NYCHA aims to renovate under the PACT program by 2028.
$4.6 billion
— Planned capital commitments for NYCHA in the Fiscal Year 2022 Adopted Capital Commitment Plan through fiscal year 2031.
$300 million
— City capital funding included in the Department of Housing Preservation and Development’s capital plan for PACT projects.
39 percent
— Amount by which NYCHA's per-unit operating costs were higher than private sector costs in 2015.
$2.8 billion
— Funding allocated in the Capital Commitment Plan specifically for building improvements.
New York City Housing Authority capital needs exceed $40 billion due to years of underinvestment, necessitating a shift from traditional federal funding to more flexible alternatives like the Rental Assistance Demonstration (RAD) program, known locally as Permanent Affordability Commitment Together (PACT). The incoming administration should support these conversion efforts, advocate for state legislation to improve operations, and lobby for the federal funding and authorization required to implement these plans.
Recommendations related to NYCHA RAD/PACT
The Administration should support NYCHA's efforts to convert public housing properties from traditional federal Section 9 capital and operating subsidy programs to more lucrative and flexible alternatives under the federal Rental Assistance Demonstration (RAD) program.
The Administration should advocate for State legislation to improve operations and reform procurement rules for the New York City Housing Authority.
The Administration should lobby for federal funding and authorization to implement the New York City Housing Authority's operational transformation plan.
Key Data
$40 billion
— Capital needs at the New York City Housing Authority due to years of underinvestment, cost inflation, and costs for lead abatement.
NYCHA faces a precarious financial future as it struggles with declining rent collection, rising operating costs, and a massive $40 billion backlog of repair needs. To address these challenges, the agency is relying on one-time federal aid and pursuing conversions to Section 8 funding through the Rental Assistance Demonstration program to manage lead abatement and other capital improvements.
Key Data
$40 billion
— The total repair needs identified in NYCHA's physical needs assessment, which the agency and the City cannot fund on their own.
$2.8 billion
— The estimated cost over 20 years to remediate and ultimately abate properties with lead paint.
483,000
— The number of outstanding work orders in December 2020, representing a 40 percent increase from the previous year.
$152 million
— The estimated cost of NYCHA's pandemic response efforts in 2020, including additional expenses and lost revenue.
$111 million
— The total amount of tenant accounts receivable at the end of 2019.
$138 million
— The amount of new revenue needed each year to fund in-unit lead remediation and abatement work.
The proposed New York City Public Housing Preservation Trust aims to address NYCHA's immense capital needs by transferring units to a new funding stream, but its success depends on operational reforms and avoiding restrictive labor mandates. Without flexibility to implement cost-effective management and procurement strategies, the Trust risks repeating the inefficiencies that have historically plagued public housing operations.
Recommendations related to NYCHA RAD/PACT
The Trust legislation should be structured with enough flexibility so that the most cost-effective approaches and tools are available.
The Trust should publish detailed, timely data on both its past financial performance and its budget outlook to ensure financial transparency and accountability.
Policymakers should remove provisions like Wicks Law and the Scaffold Law from the Trust legislation, as they increase the cost and complexity of public projects.
The Trust should allow for the transfer of maintenance and operations of renovated buildings to contractors if it proves more cost-effective or efficient.
The Trust should avoid mandates that require NYCHA to retain staff in their current roles, which limits flexibility and operational efficiency.
Key Data
110,000
— Number of units of deeply affordable housing the Trust aims to preserve.
The New York City Housing Authority's "NYCHA 2.0" plan aims to address a $32 billion capital need through public-private partnerships and development rights sales, but progress remains tenuous due to funding gaps and regulatory hurdles. Success depends on securing additional federal, state, and city support, alongside necessary labor reforms to manage the authority's significant repair backlog.
Recommendations related to NYCHA RAD/PACT
Congress will need to increase or remove the cap on RAD conversions if NYCHA is to convert additional units in the future.
NYCHA’s federal monitor should work with the new Chair to identify changes to federal laws and regulations that would support NYCHA’s turnaround efforts.
Achieving efficient and effective property management requires collective bargaining reforms.
NYCHA’s ability to convert additional properties beyond its current pipeline will require additional financial support from the City and State.
NYCHA will need to rely on additional funding sources to accelerate the pace of its RAD conversions.
Key Data
$32 billion
— NYCHA's five-year capital need.
$12.8 billion
— Funding generated from accelerating the pace of public-private partnerships under the PACT program.
62,000 units
— The long-term goal for PACT conversions by 2028.
$2.1 billion
— Amount of tax-exempt private activity bonds authorized for New York State in 2019.
$450 million
— State capital funding that was appropriated in 2016 and 2017 but has not yet been released to NYCHA.
$101 million
— Amount included in the City’s Adopted Budget for Fiscal Year 2020 for collective bargaining-related costs.
NYCHA's proposal to expand its Permanent Affordability Commitment Together (PACT) initiative by 62,000 units represents a significant step toward addressing the agency's $32 billion capital funding gap. To further stabilize the system, the housing authority requires additional resources, operational flexibility, and continued efforts to increase revenue through public-private partnerships.
Recommendations related to NYCHA RAD/PACT
NYCHA should take full advantage of public-private partnerships through PACT, including the Rental Assistance Demonstration (RAD) program, as part of a comprehensive strategy for addressing its capital needs.
Elected officials and labor leaders should take additional action to give NYCHA the resources and flexibility it needs to stabilize the system.
NYCHA's management must continue to pursue every opportunity to raise revenue and improve operations.
Key Data
62,000
— Number of units NYCHA proposes to add to its Permanent Affordability Commitment Together (PACT) initiative.
$32 billion
— Total capital need of the New York City Housing Authority.
The New York City Housing Authority faces $32 billion in capital needs, with nearly all properties requiring substantial rehabilitation to avoid further deterioration. To address this crisis, the city should integrate public housing into its broader affordable housing strategy, leverage underutilized land assets, and transition to a model that utilizes public-private partnerships like the Rental Assistance Demonstration program.
Recommendations related to NYCHA RAD/PACT
The City should fully integrate NYCHA into its affordable housing strategy to ensure it receives a fair share of capital investment.
NYCHA should transition from being a landlord to an affordable housing steward by taking full advantage of public-private partnerships through the Rental Assistance Demonstration program.
NYCHA should leverage underutilized land assets to fund repairs and facilitate development.
NYCHA should improve operations and construction management to ensure the long-term viability of its units.
Key Data
$32 billion
— Total capital needs for the New York City Housing Authority.
$181,000
— Average cost per unit for substantial rehabilitation of properties.
90 percent
— Portion of NYCHA’s 176,000 units that could deteriorate to the point of being no longer cost effective to repair by 2027.
58 million square feet
— Amount of development rights controlled by NYCHA across the city.
$300 million to $600 million
— Goal set by NextGen NYCHA for raising funds from mixed income infill development.
$1.5 billion
— Potential funding that could be raised by selling 10 percent of NYCHA’s air rights.
The New York City Housing Authority faces a $32 billion capital funding gap, with 90 percent of its housing units at risk of severe deterioration by 2027 without significant intervention. To address this, the authority should integrate into the city's broader affordable housing strategy, expand public-private partnerships to convert units to Section 8 funding, and leverage underutilized land for development.
Recommendations related to NYCHA RAD/PACT
The City should fully integrate NYCHA into the City’s affordable housing strategy to better serve extremely and very low-income households.
NYCHA should transition to an affordable housing steward that manages fewer buildings by transferring senior housing to nonprofits and selling small, inefficient buildings.
NYCHA should increase the pace of public-private partnerships to convert public housing units to the more stable Section 8 funding stream to address capital needs.
NYCHA should tap underutilized land assets to fund repairs and facilitate redevelopment by selling air rights and allowing infill development.
NYCHA should improve operations and construction management to lower costs by decentralizing property management and using more flexible procurement arrangements.
Key Data
$32 billion
— Quantified capital needs of NYCHA over the next five years.
90 percent
— Portion of NYCHA’s housing units at risk of deteriorating past the point of cost-effective repair by 2027.
31 percent
— Funding coverage of capital needs for the 2007-2011 period.
11 percent
— Funding coverage of capital needs for the 2012-2017 period.
39 percent
— Amount by which NYCHA’s costs of operations are higher than those of other landlords operating rent-stabilized buildings.
$1.5 billion
— Potential revenue from selling 10 percent of NYCHA’s air rights.
The New York City Housing Authority faces a massive capital funding gap, with needs likely exceeding $25 billion due to aging infrastructure and years of underinvestment. To address this shortfall, the authority is increasingly utilizing alternative strategies, such as the Rental Assistance Demonstration (RAD) program, to convert units to project-based rental vouchers and leverage private funding for necessary rehabilitations.
Key Data
$25 billion
— Likely capital needs identified in the forthcoming Physical Needs Assessment, dwarfing available resources.
$16.5 billion
— Total cost of capital improvements identified in the 2011 Physical Needs Assessment.
$253 million
— Amount raised in tax-exempt bonds and LIHTC equity through the Rental Assistance Demonstration (RAD) program for the Ocean Bay development.
$105 million
— Amount of FEMA disaster relief funding combined with RAD funds to rehabilitate the Ocean Bay development.
$3 billion
— Estimated damage to the NYCHA system caused by Superstorm Sandy.
$2.4 billion
— Total value of the 2012-2016 five-year capital plan, which covered only 15 percent of the identified $16.5 billion need.
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