NYCHA’s Embrace of RAD Program Brings a Mix of Praise and Worry

Rehabbing this Far Rockaway housing complex is a huge undertaking. NYCHA is betting that the RAD program can make it happen, and it seems to be paying off.

A child rides her bike outside of Ocean Bay (Bayside) Apartments in Far Rockaway, the first housing project in New York City to take part in the RAD program, as well as the largest RAD-funded project in the country.
Ocean Bay (Bayside) Apartments in Far Rockaway has the distinction of being the first housing project in New York City to take part in the RAD program, as well as being the largest RAD-funded project in the country. Photo by Amir Khafagy

During a steamy, mosquito-infested summer afternoon in an isolated corner of the city far from the glitz and glamour of Times Square, Shyniece English and two friends fold clothes in their new basement laundry room while they joke to pass the time. English, who has lived at the Ocean Bay (Bayside) Apartments in Far Rockaway for the last four years, says she enjoys some of the new luxuries in her building, like the laundry room, the new kitchen in her apartment, and the security cameras placed in the hallways. She, like many of the residents who call Ocean Bay home, feel that the improvements and repairs have been a long time coming.

“After years of NYCHA [the New York Housing Authority] not fixing nothing, all the upgrades are nice,” says English.

The repairs have been needed for some time, says Patricia Simon, executive director of the Ocean Bay Community Development Corporation. “I’ve been out here for 13 years. These repairs go back before that. [NYCHA has] just not been able to . . . get the money needed to do these capital repairs.”

Now that’s all changed thanks to the Rental Assistance Demonstration program, better known as RAD, a HUD program has been reshaping the way public housing works.

Initially launched in 2012 under the Obama administration and now expanded under the Trump administration, RAD relies on public-private partnerships to rehabilitate the nation’s aging housing stock.

In 2016, NYCHA handed over management responsibilities for Ocean Bay to the private management firm Wavecrest in partnership with MDG Design + Construction. Rehabbing Ocean Bay is a mammoth undertaking, and NYCHA is betting that RAD can make it work. And for the most part it seems to be paying off. Wavecrest and MDG began improvements in January 2017; they are expected to be completed within three years.  The plethora of work includes the installation of new surveillance systems and flood walls to protect the complex from the ocean that surrounds it, but the most significant of the upgrades is the state-of-the-art boiler system that was installed in each building. Prior to the new system, Ocean Bay’s heating system was centralized to one power plant. If the power plant failed, the entire complex lost heat and the residents would be left to suffer through the bitterly cold Rockaway winter until the plant was fixed. With the new boiler system in place, each building is autonomously heated. For the first time, residents have access to their own individual thermostats to control the heat in their apartments. 

“We completely decentralized the complex’s heating system with our new boilers” said Jason Schwartz, chief executive officer of Platinum Energy. “Our work was able to be completed in 20 months when NYCHA couldn’t even start.”

A First in New York City

Ocean Bay has the distinction of being the first housing project in New York City to take part in the RAD program, as well as being the largest RAD-funded project in the country with a price tag of $560 million. RAD has become so popular that Congress has recently expanded the units that are eligible for RAD conversion from 225,000 units to 455,000 units, effectively transferring 38 percent of the nation’s public housing stock into the invisible hands of the market.

Ocean Bay is one of about a dozen public housing complexes concentrated along the narrow and isolated Rockaway peninsula. Comprising a collection of 24 imposing, WPA-style brick buildings and housing nearly 4,000 New Yorkers, Ocean Bay stands as a living monument to a bygone era of federally funded public works projects. When you visit the complex you see adults laughing and playing dominoes as they sit on benches watching children play. Kids ride their bikes between the buildings that form wide canyons for them to explore. “It’s not perfect, but we live in a community. We have to watch each other’s back,” says a 20-year resident of Ocean Bay who did not want to be identified. The massive complex is a joyous reminder of all that is right with public housing, but also what can go wrong when the government is no longer committed to funding it.

Master builder Robert Moses built Ocean Bay sometime in the early 1960s when he served as the head of the Mayor’s Committee of Slum Clearance. Under Moses, the Rockaways soon transformed from a middle-class resort community into the ideal destination for the city to warehouse its poor and destitute. Mental facilities, nursing homes, and drug rehab centers soon began to pop up all over Rockaway because of its isolation and depressed property values. To fill the new public housing complexes, the city sent thousands of poor Black and brown New Yorkers to live in the extreme margins of the city. The city’s policy was basically out of sight out of mind.

Given to that isolation, much of the peninsula’s public housing was left to decay as the complexes began to wither from the daily assault of bitter saltwater Atlantic winds that lashed at the buildings’ brick covered facade. During Hurricane Sandy in 2012, Ocean Bay suffered the brute wrath of the ocean as a surge of water flooded the buildings’ ground floors, destroying everything in its path including the complex’s central heating plant. In the days and weeks after the storm, the bitter irony of Ocean Bay’s name became ever so apparent. For weeks residents had to live  without heat or power as most of the peninsula sat in darkness because of Sandy.  Mold began to grow throughout the parts of the buildings that were flooded and residents had to rely on the regularly unreliable temporary boiler system NYCHA installed just to get by. After decades of neglect by NYCHA as well as the damages the buildings sustained during Sandy, any improvements are warmly welcomed. 

“It’s about time they fixed up things,” says Angel, a 22-year-old resident. “Before the new management, everything was falling apart.” She described how her bathroom ceiling began to be colonized by mold because of water that was leaking from the apartment above.    

Hurricane Sandy is partly the reason why NYCHA selected Ocean Bay as the first RAD recipient. The complex was eligible for $194.4 million in FEMA aid, and with RAD and FEMA funding, NYCHA was able to raise $560 million in financing from federal, state, city, and private investors. Most of the private financing came from Goldman Sachs, Signature Bank, Cathay Bank, Citi, and Nationwide Insurance. In exchange for that financing, NYCHA created a joint venture with MDG Design and Construction, Wavecrest Management, Catholic Charities of Brooklyn and Queens, and Ocean Bay CDC to oversee the development. NYCHA still retains ownership of the land.

As with all RAD conversions, residents were offered a housing choice voucher if they chose to move out. Wavecrest Management declined to say whether any Ocean Bay residents decided to take up the offer to leave.  

Nonetheless, not everyone was happy with the plan. “One way or the other, you want to kick us out,” longtime resident Juan Acencio said during a RAD community informational session in 2016. “You haven’t been concerned with the people who don’t want to participate in this program.” 

To try to ease fears, NYCHA and Wavecrest held monthly community meetings that explain the program step by step, as well as give residents updated information on the completion status of the renovations. They also have formed tenant-working groups that actively seek to engage residents in the decision-making process through management-tenant collaboration. Also, NYCHA has made sure to win as much local support as it could by partnering with community-based organizations such as Ocean Bay CDC and Catholic Charities of Brooklyn and Queens to provide residents with social services and workforce development. “This project truly allows us to uphold our commitment to providing those in need with access to much-needed social services,” says Monsignor Alfred LoPinto, president and CEO of Catholic Charities Brooklyn and Queens.

The RAD Program — A Different Approach

The RAD program represents a seismic shift in the federal government’s approach to funding public housing. What makes RAD so different from HOPE VI, a housing policy that permanently displaced thousands of low-income Americans, is that instead of demolishing public housing, the idea is for public housing authorities to relinquish control of managing the buildings to private management companies. Currently, city housing authorities such as NYCHA are barred from seeking private investment on their own, but through RAD, the private management firms can tap into private-sector resources to rehab decaying public housing stock. The RAD program is lucrative because it allows NYCHA to seek out private capital investments to rehabilitate its aging housing stock without having to borrow money directly because it can outsource all the work to the private sector. In exchange, developers are incentivized with tax credits and subsidies. With no help from the federal government in sight because of persistent cuts to public housing by the Trump administration, the RAD program is one of the only avenues available to cash-strapped NYCHA.

All that access to private capital comes with a catch. Developments that are renovated through RAD lose their public housing designation and the units are converted into project-based Section 8 contracts. That means HUD will no longer provide RAD buildings with direct funding for public housing, and the units will no longer be reserved as public housing. As HUD continues to cut funding for public housing, it will force more housing authorities to apply for RAD funding to keep their buildings in shape, resulting in more public-private funding.

Tenants in RAD conversions receive vouchers they can use to stay in their homes or to move out of public housing altogether. Management is under no obligation to fill vacancies with new Section 8 tenants right away. If a unit has been vacant for two years at the time of the application, housing authorities and the developer can demolish the unit without replacing it.

RAD is touted by HUD officials as the best solution to public housing’s backlog of capital needs, but some activists and public housing residents across the nation don’t agree. “Public housing should be fully funded by the government,” said Gabriel Strachota, lead organizer with Community Voices Heard, a grassroots organization that advocates for public housing residents. “If public housing residents were valued, and if public housing was valued we would see the political will to fully fund public housing before we begin to look for outside funding.”

Some fear RAD may open up the door to privatization of public assets. Although the housing authority has retained ownership of the land, the management company is responsible for the day-to-day operation of the development. Aware that “privatization” is a dirty word, NYCHA and Wavecrest have also gone on a PR offensive to make sure RAD isn’t equated with privatization. “It’s not privatization at all. The fact is we wouldn’t be here [Ocean Bay] in the first place if we didn’t have community support,” said Susan Camerata, CFO of Wavecrest Management. (Editor’s Note: Privatization is not the same thing as lack of community support. It has to do with the transfer of public assets into private hands.)

However, RAD does come with some protections: guaranteed lease renewals, the right to return to renovated units, and a commitment to restrict rent to no more than 30 percent of the household’s income. Unfortunately, there is lax federal oversight of the program. As the program stands, every city is free to make its own rules as to how it implements RAD. There’s very little input from HUD. This has caused an uneven roll out of the program, which has had varying degrees of successes across the country.  During a RAD conversion in Hopewell, Virginia, for example, residents filed multiple civil rights complaints with HUD, claiming that the local housing authority illegally discriminated against families with children and disabilities by barring them from returning to their homes.

Although RAD has bipartisan support in Congress, not every elected official is a cheerleader for the program. “I have long expressed concerns that the conversion of public housing, under RAD, will risk the long-term affordability of this important housing resource,” said Rep. Maxine Waters, D-California, in response to a recent Government Accountability Office (GAO) assessment that concluded that HUD was insufficiently overseeing the program.  

The lack of sufficient oversight is also a common critique housing advocates have of RAD. “We’ve seen a number of problems, such as tenants being improperly discouraged from returning, owners or developers not accommodating people with disabilities, or the new construction not being suited to family needs,” said Brenda Castañeda, an attorney at Virginia-based Legal Aid Justice. “The RAD process could clearly benefit from active HUD oversight, as the GAO suggests.”

On the surface it seems that much of the upgrades have significantly improved the quality of life of Ocean Bay’s residents. Improvements such as new kitchens, renovated apartments, and increased security have all given residents an overdue feeling of relief from the decades of decay and despair. Some residents have even been upgraded to larger apartments. “I love my new home and I love the change,” says Fatou, a mother of three and an immigrant from Guinea. “Before the changes my family didn’t feel safe. Now things are better because the kids can go out and play. Before we lived in a one bedroom but now I live in a four bedroom. What can I complain about?”       

But not all of the residents are as celebratory. The more skeptical residents are taking all the change with a grain of salt.

“All the renovations are great, the laundry is great,” English says, “but half the time some of the machines aren’t working and our building’s water is constantly being turned off for repairs.”

Her friend Tatiyana agrees. “It’s all cosmetic . . . It feels like they are turning us into a gated community.”

Wavecrest’s Camerata doesn’t agree. “I don’t think a new heating system is cosmetic. . . . What we have done in Ocean Bay has changed peoples lives for the better.”

A yellow out of order sign blocks an elevator at the Ocean Bay Apartments complex.
An elevator is out of order at the Ocean Bay Apartments complex. Photo by Amir Khafagy

Ocean Bay is abuzz with construction activity, which is itself a concern for many residents. Every building is undergoing some kind of upgrade with scaffolding covering most of the facade.  You can see holes in the ceilings and garbage littered in front of doorways serves as a buffet for the seagulls. In some of the buildings, elevators are sealed off with “Out of Order” signs. Carol, a lifelong resident, said that the elevator in her building has been out for the last three months.

“I live in the sixth floor and so many elderly [residents] live in my building. How are they [supposed to] walk up and down those stairs every day?” she asked. “All this construction is harassment. I might take my voucher and move somewhere else.”

Other residents shared Carol’s concerns. “It feels like they are doing too much in one time,” says Angela, who has lived in the complex for the last 12 years. “And with all they have been doing they haven’t changed much. Still slow on fixing things and we still got to pay our rent.”

Camerata says Wavecrest understands tenants’ frustration and that they are making their best efforts to reduce resident discomfort. “We have thousands of residents and not everyone is going to be happy,” Camerata says. “But the reality is that we have tremendous support from the residents. We offer to relocate families who are inconvenienced. Not everyone chooses to relocate.” 

The changes that have been occurring in Ocean Bay are considered positive enough that Mayor Bill de Blasio plans to expand the RAD program to nearly 2,400 apartments across 21 public housing developments. While touring Ocean Bay this past April, the mayor held up the complex as model that should be emulated. “What I have seen today is an example of the shape of things to come,” he said, “what we’re going to be doing more and more in NYCHA developments around this city. What you’re seeing here is one of the trailblazer places—one of the places where the model of change is being developed.”

Still, as public officials rush to embrace private-sector funds under RAD, there are many questions remaining on what effects RAD will have on the long-term affordability of the city’s public housing stock. Some Baltimore residents suggest being cautious. In Baltimore, some residents in RAD conversions were given eviction notices soon after the renovations were complete.  “We’ve been at a number of residential information meetings that [the Housing Authority] organized, and they’ve yelled at residents who have tried to ask questions about long-term affordability and said it was inappropriate for them to even ask those questions,” says Jessica Lewis, an organizer at the Right to Housing Alliance, an advocacy group led by low-income Baltimore residents.

“The best way to keep public housing affordable is to keep it public,” says Gabriel Strachot from Community Voices Heard. “We have called on the city and the state to commit to $2 billion in funding. They can choose to fully fund public housing but they chose not to.”   

At Ocean Bay, after the sun began to set on evening and the ocean breeze began to cool down the pavement, English contemplated what good the new investment will bring if all the issues the complex’s residents had to deal with before the RAD conversion persist.

“We’re still dealing with the police. We’re still [dealing] with drugs and no jobs. What we really need is investment in our community, not just our homes.”

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