The New York City Housing Authority, which manages the city’s public housing, is set to sell a 50 percent stake in several housing complexes to private developers.
The Wall Street Journal reported the deal with L+M Development Partners and BFC Partners is worth $150 million initially, with another $200 million scheduled to come the city’s way over the next decade and a half. The developers will also spend another $100 million on renovations at Campos Plaza, East 4th Street Rehab, Saratoga Square Houses, Milbank-Frawley Houses, East 120th Street Rehab, and Bronx Chester Houses, the report said.
For the developers, the WSJ explained that they’re likely motivated by the possibility that the units could be converted to market-rate apartments in 30 years, but for now, after investing in upgrades to the apartments they can also pull in federal incentives to make up the difference between the subsidized rents and market rates.
Both the WSJ and the New York Daily News quoted NYCHA representatives citing the agency’s need to find creative ways of addressing its daunting repairs backlog as motivation for the deal, a backlog which the Daily News pegged at $10 billion worth of overdue repairs.
This is not the first time the city has sought to draw private money via its public housing holdings. Late in former Mayor Michael Bloomberg’s administration, the city floated plans to lease land at public housing projects to private developers, who would then build luxury apartment towers. Those efforts fizzled, but after taking office, Mayor Bill de Blasio has also looked for ways to leverage those properties by seeking to redevelop vacant spaces as affordable housing units and, perhaps, retail, as described by NBC New York.