Privatizing Turn

NYCHA began shifting toward privatization in 2016. It was then that Bill de Blasio’s administration — with support from Alicia Glen, a former Goldman Sachs executive who started her own real estate firm after leaving office — released its first plan for NYC public housing, NextGeneration NYCHA, re-released in 2018 as NYCHA 2.0. These plans introduced, refined, and expanded the programs NYCHA and the city could use to address the disrepair and funding deficits affecting public housing. This included adopting the Obama-era federal program Rental Assistance Demonstration (RAD), as well as other tools including “infill” and the selling of air rights. Taken together, their aim was to transfer ownership-like responsibilities and rights for specific aspects of the properties — buildings, land, community resources, air — to private actors.

Such strategies had their limits. Marketing air rights meant the city trying to raise money for public-housing developments by selling the invisible but apparently quantifiable space between where a development’s roof was and where it could be according to zoning regulations. This was never a major strategy, only expected to generate $1 billion in revenue overall. Further, despite the first deal closing in October 2019, and a purported ramping up in 2020, we know of just one other deal being closed, some two years ago.

Infill means the city treating vital community resources such as parking lots, playgrounds, and unbuilt spaces as open land, and selling it to private developers for mixed-income development — again, in the name of addressing the affordable housing crisis. This was a threat also faced by UK council tenants. But in New York, multiyear battles by tenants have seen this strategy fall out of favor politically.

Instead, RAD — partially privatizing public-housing stock to generate revenue — became the dominant strategy. Even though it has faced similarly strong opposition from tenants, the program has expanded rapidly in New York, mirroring its expansion nationally. The program is a now classic public-private partnership arrangement, where NYCHA apartments are turned over to private agencies through ninety-nine-year ground leases, along with significant public subsidies. A very similar strategy was pursued by New Labour in the UK during the 2000s, when it aimed to “transfer” 200,000 council homes a year.

In July 2020, at the end of the first wave of the COVID-19 pandemic in New York, which was twice as deadly for public-housing residents, NYCHA’s then new CEO and chair, Greg Russ, introduced a third plan “to rule them all.” This included an internal reorganization of NYCHA to accommodate the creation of a new quasi-public institution that would take over financial responsibilities for most public housing. The NYCHA trust would be able to borrow money against this collateral, and by converting the subsidy portion of tenants’ rents into Section 8 vouchers — a device specifically designed to facilitate public-private partnerships and private financing. Arguing that NYCHA homes are beyond repair — another familiar tactic in the UK — in essence, the enormous publicly owned wealth of NYCHA and the future rents and legal rights of its tenants would be mortgaged off to raise debt finance, administered by an unelected agency.

In both the US and UK cases, quasi-public nonprofits have played an insidious role in privatizing public housing. They have done so by trading on a fluffy, benevolent image while hiding their essentially undemocratic character. In the UK, housing associations (similar to US public-benefit corporations) have vacuumed up around 2 million former council homes, “transferred” to them on the spurious grounds that they were able to use public and private funds for investment that municipal authorities were denied. These nonprofits have in fact grown fat on the proceeds; the big ones are virtually indistinguishable from private developers, with half their business very much for profit and a patchy record of delivering on promises to tenants.

NYCHA is currently promoting an almost identical policy through its Blueprint for Change and been getting advice from the UK on how to do it. In 2019, the Citizens Housing Planning Council (CHPC) invited UK experts, one of them the Chief Executive of a big Housing Association, to share the “lessons from London” on privatizing council housing. The resulting report, full of inaccuracies and misrepresentation, has been used by NYCHA to promote its Blueprint to tenants.

In short, Blueprint — which would cover all NYCHA homes not slated for RAD — reworks NYCHA from a housing and social service provider to a real estate and asset management company. Moreover, it creates a new bond-granting agency that is promoted as a public institution but lacks oversight and accountability to residents, elected officials, and the general public.

Tenant Groups

While Russ claimed the plan was an innovative solution to decades of federal disinvestment, tenants began organizing opposition. Notably, one resident-led group fighting for the Green New Deal for Public Housing with support from the Movement School and Sunrise Movement pivoted toward halting Blueprint. Today it is known as Save Section 9. Another resident-led group emerged, calling themselves Residents to Preserve Public Housing. Other resident-led groups also began educating and organizing around Blueprint, including the Justice For All Coalition in western Queens. This grassroots, tenant-led movement mirrors a similar mobilization in the UK, under the umbrella alliance Defend Council Housing, that successfully fought off privatization in some key locations, including England’s second city, Birmingham.

The coalescing New York City tenant movement to preserve public housing first flexed its power in December 2020. During the grueling eight-hour hearing on the state legislation to create the NYCHA trust, tenant opposition led some policy experts to alter their testimonies on the fly, and multiple elected officials joined tenants in rejecting the trust. While Russ had hoped the next step would be to introduce legislation to the Housing Committee, it was instead rescinded and sent back to the drawing board.

As in the UK, this episode highlighted unawareness on the part of local elected politicians about the full implications of opening the door of public housing to private financial interests, a lack of knowledge easily exploited by unelected bureaucrats and consultants with a vested interest in privatization.

Conflict continued in spring 2021 with pro–public housing groups organizing multiple events like teach-ins and rallies, while NYCHA orchestrated an expensive media blitz and door-knocking campaign to distribute glossy magazines promoting Blueprint. In June, at the end of the New York state legislative season, another version of Blueprint was introduced with the main difference being that the scale had been reduced to a quarter of the original proposal. After a week of action and demonstrations by residents, the legislation was again withdrawn.

This episode demonstrated that the trust is a key component of the new plan and a key concern for tenants. A shadowy group would take charge of big swathes of land, homes, public money, and rental income — without having to answer directly to tenants and elected politicians.

The deal would also enable the introduction of private management, another risk that former council tenants in the UK have lived to regret and has been a thorn for NYCHA tenants who were part of RAD. Recent resident-led research at Ocean Bay Houses in the Rockaways, where RAD has been in operation, reveals a picture of worst fears confirmed, with continuing disrepair, evictions, and loss of accountability. As a tenant testified at a recent city council hearing on RAD on May 3, “Stop with the lies. . . . There’s been high evictions, some seniors are on pantry lines now, folks who were getting transfers because of domestic violence are not in process any longer . . . . Stop with the lies.”

March on Washington

However, a backlash is underway. Previously, resistance to RAD was largely localized at individual NYCHA developments. But since the announcement of Blueprint, groups have been coalescing under the banner “Save Section 9” and coordinating at a citywide level, forging national and international links with other strong tenant-led groups. On June 13 and 14, public housing defenders will be marching on Washington, with a schedule of lobby meetings with top elected officials and a rally at the doorstep of Congress. The tenants’ demands would restore and retain their buildings in public ownership and chart a course for the future of fully funded, no-strings-attached Section 9 public housing.

The future of NYCHA is key to the future of housing and social policy in the United States. As in the UK, for decades government has been moving away from direct provision of homes for low- and medium-income households toward various forms of state-subsidized but privately operated housing — made possible by the creation of quasi-public institutions that claim to act on behalf of the public without real public input, oversight, or accountability. These bodies become couriers of federal, state, and local subsidy programs, supporting the expansion of private and corporate actors in housing markets. This shift has coincided with a dramatic loss of truly affordable rental homes, while private rents, housing insecurity, and need have soared. Breaking the link of democratic accountability undermines tenants’ power and allows private companies to get rich on public funding and borrowing while politicians shrug off any responsibility.

This process enables hyper-financialized markets by liquidating and “revalorizing” various aspects of the built environment so they can be converted from public ownership to privately owned assets — even while they may be managed by a seemingly public institution.

The NYCHA trust would create an institutional barrier between the interests of investors and the promised commitment to maintain and improve tenants’ homes and services. This means insulating private investors from public scrutiny, even when they are benefiting from government subsidies. Meanwhile, the financial and environmental risk is shifted to tenants and the public. This matrix of vested interests is confirmed by the concerted corporate lobbying operation in support of privatizing public housing.

Even if converting public housing to a financialized asset was capable of improving its short-term physical condition, this would still pose a huge long-term threat to tenants and working-class communities, particularly those of color.

In the UK, this has been graphically illustrated by the fate of the Heygate council housing development in multiethnic southeast London, where 1,214 homes were demolished and replaced with 2,704 new ones. All but eighty-two of these were for the private market, with a nonprofit housing association providing “affordable” homes (defined by having up to 80 percent of market rent) that few of the former population could afford. This has led to large-scale displacement and a wave of other knock-on effects, meticulously chronicled by the local 35% Campaign and demonstrated the socio-physical transformation of the surrounding neighborhood.

Among the many false arguments made for privatization-lite schemes like the Preservation Trust is that they’re innovative. They’re not. Public-private partnerships of this type have been around for at least two decades. They consistently fail to meet the claims made for them because they do not address the underlying contradictions of the housing question under capitalism. Instead, they make housing policy problems for tomorrow while creating new fronts of urban division and inequality.

The hard-won lesson from the UK is the need for a united tenant-led campaign, also involving trade unions, campaigners, and elected politicians prepared to fight against privatization and in favor of direct investment in public housing. Everyone has a part in this battle. The fight for public housing is the fight for the right to the city.