New York City Housing Authority chair Gregory Russ hailed Albany’s approval of a new organization called the NYC Public Housing Preservation Trust as a cure for NYCHA’s many ills. Last summer, he predicted the trust would be up and running by early 2023.

Nine months later, the trust is in the Twilight Zone. There’s currently no plan to test it out at any of the city’s housing developments — and nobody to run it if there was.

A nine-member board that is supposed to oversee the trust has yet to materialize. As chair and CEO of NYCHA, Russ was empowered to sit on the trust’s board and to appoint four of its members. But Russ resigned as CEO in September, then stepped down as chair in February.

Neither Russ nor his replacement as interim CEO, Lisa Bova-Hiatt, has named anyone to the trust board. Mayor Eric Adams gets to fill the other four slots, but has yet to name a single appointee.

NYCHA has struggled for years to find ways to fund upgrades to the 320 developments it owns across the city, where tenants have for decades endured toxic mold, pervasive lead paint, busted elevators and heat outages in the depths of winter.

With an estimated $40 billion needed to address all the necessary improvements and no big fixes coming from the federal government, Russ turned to a new, untested method of financing he believed could turn the ship around.

For the first time, the trust allows NYCHA to float bonds, raising potentially billions of dollars for repairs. Tenants are given a vote on whether or not to adopt the trust’s funding mechanisms at their specific developments. And Albany’s approval was also required to make the whole thing work.

The original proposal called for placing 110,000 of NYCHA’s 175,000 units in the trust, a plan lawmakers rejected as too much too soon. But on June 2 the legislature passed bills creating the trust, which would fund upgrades to 25,000 apartments, and Gov. Kathy Hochul signed it into law on June 16, following aggressive lobbying from Adams.

The mayor held a press conference at the Sheepshead Bay/Nostrand Houses in Brooklyn to crow about the measure’s passage as “a powerful and significant moment of change.” In his State of the City speech in January, he brought it up again, stating, “We got the NYCHA Trust passed, unlocking billions of dollars for long overdue renovations.”

In a July 14 discussion run by the CityLaw program at New York Law School, then NYCHA Chair Russ said he was “hoping to have a first meeting of the trust board” by the end of 2022, adding that “if we can get the board established, I think we could start to hold [tenant] elections” in early 2023.

But the year came and went — and Russ stepped down as CEO in September without making any appointments to the board. Bova-Hiatt, who took on the interim CEO role that month, has yet to do so. Adams, meanwhile, has yet to name a permanent NYCHA CEO or to announce any of his appointments to the trust’s board.

NYCHA Chair Gregory Russ spoke at the Woodside Houses, Aug. 2, 2022. Credit: Ben Fractenberg/THE CITY

Charles Lutvak, a spokesperson for Adams, declined to provide any information on when the mayor expects to name a new NYCHA chair or the four members of the trust board, stating, “We do not comment on pending appointments, and no appointment is confirmed until it is formally announced.”

Despite Russ’ timeline, Lutvak insisted, “The Trust is moving forward on time.”

On Monday NYCHA spokesperson Barbara Brancaccio declined to answer THE CITY’s questions about the status of the chair or the yet-to-be-created trust board. She noted a letter sent to tenants in December stating that by early 2023, NYCHA would “begin identifying an initial list of developments where resident votes will be held in accordance with the voting procedures.”

The developments targeted for a Preservation Trust vote would be picked “based on several factors, including the physical needs of the developments as well as continued dialogue with residents, resident leaders and advocates.”

As of this week, the list remains a work in progress.

Last week, when some advocates purporting to speak for tenants at Riis Houses on the Lower East Side claimed a vote on the trust was imminent at that development, NYCHA responded: “There is no vote scheduled on the Public Housing Preservation Trust at Riis Houses or any other NYCHA development.”

Trust Not Trusted

The chair of the City Council’s public housing committee, Alexa Aviles (D-Brooklyn), chastised the housing authority for putting all its eggs in one preservation trust basket, telling THE CITY, “I’ve expressed my dismay before with NYCHA’s focus on the Preservation Trust to the exclusion of much else.”

“The agency is facing a funding emergency right now with no Chair and an impending state budget without essential funding commitments secured,” she said, adding that she’ll be questioning NYCHA officials next week during a hearing on Adams’ preliminary budget.

Congressperson Nydia Velázquez told THE CITY that she hasn’t decided yet whether she supports the trust, although she said it was better than the Obama-era program Rental Assistance Demonstration (RAD), which turns over management of public housing to the private sector.

Velàzquez said it was “concerning” that NYCHA is pressing forward with the initiative “without a solid plan for the future of the trust.”

Fences lined a construction site in a Jacob Riis Houses courtyard last September. Credit: Hiram Alejandro Durán/THE CITY

Meanwhile, the city’s Independent Budget Office (IBO) recently raised questions about the trust’s viability.

First, IBO analyst Alec Goodwin noted an important X-factor in determining whether the trust succeeds or fails.

The trust moves apartments out of public housing and into a federal rental subsidy program called Section 8, using “tenant protection vouchers” — and that, Goodwin noted, relies annually on the ups and downs of Congressional support.

Without increases to the voucher program, NYCHA would be unable to obtain a funding stream big enough to back the bonds needed for repairs. The odds of getting that kind of support from Washington “is a major area of uncertainty that the Trust hinges on,” the IBO noted.

The IBO estimated that NYCHA would need $500 million in vouchers to support funding of repairs to all 25,000 apartments it hopes to place in the trust.

That would mean Congress would have to “vastly increase” funding for these vouchers above what it usually allocates for NYCHA, which was $337 million last fiscal year (when Democrats controlled both the House and the Senate), but had typically hovered around $100 million in prior years. With the House under Republican control, it’s anything but certain that would happen.

The IBO also noted that the trust would require a steady stream of rent payments from tenants, a trend that took a wrong turn during the pandemic. While NYCHA has in past years enjoyed a collection rate of about 85%, THE CITY revealed late last year that nearly half of NYCHA’s households are now behind in their payments.

Finally the entire plan requires tenant participation, with at least 20% of households at a development needed to take part in a vote on whether to embrace or reject the trust. Tenants will be able to vote both in-person and online. Typically tenant turnout at in-person NYCHA meetings hovers below 10% and is sometimes as low as 3%.

Last week, though no vote on the trust was scheduled at the Riis Houses, a group calling itself “Rogue” Riis tenants urged residents there to boycott any such vote going forward.