Preservation Trust Basics FAQ

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Public Housing Preservation Trust: Frequently Asked Questions (FAQs)

Updated June 2022

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Trust Basics

What is the Trust?

The NYC Public Housing Preservation Trust is a new public entity with a publicly appointed nine-member board (including four resident members). It is a public benefit corporation, which is a 100 percent public entity. It will enable NYCHA to completely renovate an initial 25,000 apartments at a faster rate while keeping the properties and workforce fully public and preserving residents’ rights. The Trust’s billions of dollars of investments in comprehensive apartment, building, and grounds improvements will also generate training and job opportunities for NYCHA residents.

The Trust gives residents a true voice in the future of their homes. The updated version of the Trust legislation that passed in June 2022 incorporated feedback from residents that NYCHA gathered over several years. For instance, the legislation enables residents to choose whether or not to move forward with the Trust at their developments and take an active role in overseeing the rehabilitation of their developments.

Why does NYCHA need the Trust?

NYCHA needs the Trust for two reasons:

It will provide more funding. NYCHA can get double the federal subsidy by switching to Section 8 funding, but under current federal rules, this funding can only be obtained through a disposition to another entity. The Trust would be this other entity – a fully public entity that would work in partnership with residents.

It will provide improved procurement rules. In creating the Trust legislation, the State addressed and improved existing procurement rules that contribute significantly to NYCHA’s increased costs, longer construction timelines, and resident frustration.

Why can’t NYCHA do this on its own?

According to federal laws and regulations, NYCHA is not eligible to get Section 8 subsidy by itself. This subsidy can only be accessed if NYCHA enters into ground leases with another entity (i.e., the Trust).

Who will be on the Trust board?

The Trust will have a nine-person publicly appointed board. These board members will include:

Five members either appointed by NYCHA or ex-officio NYCHA:

NYCHA Chief Executive Officer (Chair of the board)

NYCHA Chief Financial Officer

Two NYCHA residents (both nominated by the Citywide Council of Presidents [CCOP]/Resident Advisory Board [RAB])

One member at large

Four members either appointed by the Mayor or ex-officio from the Mayor’s Office

Deputy Mayor for Housing

Two NYCHA residents (one of whom will be nominated by the CCOP)

One employee representative nominated by organizations representing NYCHA/Trust employees

Who will own the properties?

NYCHA will be the owner of the land and buildings. The Trust will have a long-term ground lease with NYCHA, which will be renewed every 99 years.

Who will manage the properties?

NYCHA employees will continue to manage the properties, just as today. There is no private manager or developer. The Trust will contract with NYCHA for the management of the properties.

What will the Trust do? How big will the Trust be?

The Trust will be responsible for arranging the financing and overseeing the renovations in partnership with residents. The Trust will be a small agency of public employees, likely fewer than 50 staff.

How will vacant apartments be filled?

All vacant apartments will continue to be filled from NYCHA’s public housing and Section 8 waitlists of people eligible for low-income housing. Apartments will never go market rate and will always serve low-income families.

Funding And Financing

How will the properties be funded?

The properties will be funded by Section 8. This subsidy is worth roughly double the subsidy NYCHA receives through the current subsidy platform.

How will the Trust be able to use this funding to get capital for upfront renovations?

The Trust will be able to issue bonds using the additional subsidy that Section 8 provides. This is similar to how the government funds other types of capital projects, like libraries, schools, and infrastructure.

If someone moves out, does the property lose that subsidy?

No, the vouchers are project-based and tied to the apartment, so the property does not lose funding. The subsidy is provided by the federal government through automatically renewing 20-year contracts, which is why the funding is far more stable than NYCHA’s current subsidy. Residents who receive project-based Section 8 assistance for at least one year may request a tenant-based Section 8 transfer voucher to transfer out of the development. If someone moves out of the development, with or without continued assistance, it does not affect the subsidy tied to the apartment.

Is the underlying ownership of the land and buildings being pledged as collateral? What happens if there is a default?

State law prohibits pledging the fee ownership of the properties as collateral. It is further codified in State law that low-income rights, protections, and rents must remain in place on these properties. Under no scenario can the buildings be sold, become market rate, or have the resident rights or protections changed.

Resident Rights And Protections

Will residents lose public housing rights as a result of this?

No, residents keep all public housing rights. This is enshrined in the legislation. This includes all of Part 964, the rents capped at 30 percent, the same succession rights, the same ability to organize, and more.

How long do the rights and protections last?

The rights and protections will be in perpetuity, which is specifically enshrined in the legislation. The protections, rights, and use of the property for low-income housing cannot be changed under any circumstances, even if there is a default.

Will there be re-screening? What if existing tenants don’t qualify for Section 8?

There is no re-screening and existing residents will be grandfathered in.

Will all members of the household have the opportunity to get on the lease?

Yes, there is a specific provision that would allow this to occur.

Can residents manage the properties themselves?

Yes. The Trust will have an affirmative obligation to negotiate with any Resident Management Corporations (RMC) that residents form. This means residents have a real right to manage their own properties, if they choose to do so

Updated Legislation And Resident Choice

How was the Trust legislation updated prior to its passage by the State in June 2022?

The legislation that was passed by the State in June 2022 includes over a dozen changes recommended by resident leaders, including three major changes:

Resident Vote: Residents will have the right to vote on the modernization path pursued at their development, including the right to keep the status quo. This is the first time something like this will be put into place nationally.

Resident Role in Vendor Selection: Residents will play a role in determining which vendors are chosen to complete renovation work at their developments.

Resident Q/A Committees: Residents will serve on committees that perform quality assurance checks of work completed by vendors.

Can residents choose to reject all options and keep the status quo?

Yes

What happens if a development chooses to reject all options? Will services be cut?

NYCHA will continue to manage the property and make repairs as before, using its limited resources.

Who can vote?

All tenants of record at a development, not just resident leaders or the resident associations, would be able to vote.

Will a minimum turnout be required?

The legislation requires that a minimum percentage be specified in the voting process requirements, which must be proposed and subject to public comment and public meeting per the law.

Renovations And Temporary Relocation

How much work will be done?

The renovations will be comprehensive modernization of developments. This means addressing all basic environmental health and safety issues, like lead, mold, heating, elevators, pests/waste, as well as other systems work, apartment rehabilitation, and grounds improvements, based on the budget available for the specific property.

Will residents have to temporarily move? Where will they go?

This will depend on the property, but it is likely. If residents must move temporarily, there will be “hospitality” units that will be used on the property or properties in the surrounding area.

How long will residents have to be out of their apartment?

This will depend on the property, but three to six months is likely, depending on the type of work that is being performed.

Will residents have the right to return? Will NYCHA pay for all moving expenses?

Yes and yes. Residents will have the right to return to their property and NYCHA will pay for all moving expenses.

How long will construction take at each development?

This will depend on the property, but three to five years overall is likely.

Procurement

What are the procurement changes?

The Trust can complete capital projects using “best value” selection, which often allows faster, higher-quality work at a lower cost compared to “low bid” selection:

The Trust can use various types of Design-Build and Construction Manager at Risk procurement methods instead of Design-Bid-Build.

These methods are used widely around the country and allow design and construction activities to happen more in parallel, using “best value” selection and often also “guaranteed maximum prices.”

Using these methods can save 1 to 1.5 years and 5 to 10 percent of costs on a large project and improve quality of work.

Difference Between Trust And PACT

How is the Trust different from PACT?

Under the Trust model, properties remain 100 percent public. NYCHA owns, controls, and manages the property. Day-to-day operations and maintenance will be performed by NYCHA’s public employees. There is no private manager or land/building sales.

With PACT, NYCHA continues to be the permanent owner of the buildings and land and residents retain their rights, but a third party performs the capital work and manages the properties. This means that NYCHA no longer performs the capital work or manages the property day-to-day.

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