With little fanfare, the impossible just happened at the Hope Gardens public housing project in Bushwick: the management got fired. Repairs to the project’s high rises and townhouses had been delayed, and, per an official notice, “cost-saving measures to curb ballooning controllable operating expenses” hadn’t been adopted. Such lack of foresight constitutes a typical day for NYCHA, where, on a single day last week, elevator outages affected 15,000 residents. But NYCHA doesn’t administer Hope Gardens. The project’s private developer, PennRose Development, calls the shots, and PennRose chose to dismiss the property manager, Pinnacle City Living.

The firing was possible only because Hope Gardens is one of 61 complexes converted to private management through the federal Rental Assistance Demonstration (RAD) program, started by the Obama administration.

Left-wing city council members, slow to learn of the management change, slammed it. “It’s an uphill battle to get oversight if any of these companies decide to not meet expectations,” Councilmember Sandy Nurse, whose district includes the project, told WNYC’s David Brand (who first reported Pinnacle’s dismissal). Socialist New York state senator Julia Salazar went further: “It’s even less accountability when it’s private management than the public housing authority,” she said.

That’s exactly backward. It was oversight by a private operator worried about its property not being properly maintained that led to the change—something that could not have happened if NYCHA’s own employees were still in charge. Unlike the public authority, PennRose faces serious accountability and risk. Federal inspectors could put a halt to the housing vouchers that constitute its financial lifeline. Its reputation and chances for getting future contracts could suffer as well.

Another private RAD developer puts it this way: “Property management is hard, especially with public housing. Private management allows you to boot an ineffective manager.” To its credit, even NYCHA gets it: its executive vice president Jonathan Gouveia told WNYC: “It’s interesting that when we do the thing they say they want us to do, they criticize it.”

NYCHA has allowed some $80 billion in necessary repairs to pile up, thus becoming the city’s largest slumlord. Turning to private management has been its best decision in years.

That’s not stopping progressives from criticizing privatization. They’re even trying to keep NYCHA’s union labor on the job as a new wave of state aid flows to the authority through the state’s new PACT (Permanent Affordability Commitment Together) program, which calls for tenants to vote on whether they want NYCHA to continue or private management to take over. The alleged risks of privatization helped convince a majority of tenants at the Nostrand Houses in Brooklyn to opt for NYCHA. Another tenant vote is underway at the Bronx River Houses, which needs $66 million in repairs. It’s a two-stage vote: the first will decide whether to switch from federal support to income provided by housing vouchers, which allows for new financing; if tenants choose to make that switch, a second vote would determine whether a private developer or NYCHA will be responsible for the repairs that “voucherizing” makes possible. The 199 Bronx River residents, all seniors, can vote from April 2 through April 11.

Progressive groups, such as Community Voices Heard (which receives federal funds, thanks to Senator Chuck Schumer), have taken the position that NYCHA just needs more money. They have nothing to say about NYCHA’s management problems, including recent corruption indictments. The group has reached out to Bronx River tenants, though it claims that these efforts are neutral about the vote itself. Its mission includes “preserving public housing.” The group’s leaders should tour Baychester Houses in the Bronx, one of the first of the city’s RAD-style projects, to get a glimpse of how effective the switch to private management has been.

Resistance to the privatization effort resembles pushback against charter schools, which progressives portray as a threat to, rather than an improvement upon, city-run schools. Like private housing managers, charters face accountability from their authorizers. Of 352 charter schools authorized in New York State, 52 have been shut down for poor performance.

New York City public housing has plenty of problems besides physical conditions. Crime in the projects is disproportionately high. The rules encourage long-term dependency; the average tenant has lived in NYCHA housing for more than 20 years. Nearly 30 percent of the tenants are “over-housed”—meaning they have empty bedrooms—at a time when family shelters are packed. Enlightened NYCHA management would try to address these issues.

But turning to outside management is one thing that NYCHA is doing right. Privatizing public services does not mean that they will be reserved for the undeserving or will line the pockets of corporations. Instead, it’s a route to efficiency—and accountability.

Photo: Busà Photography/Moment via Getty Images


City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).

Further Reading

Up Next