Is the New York City Housing Authority’s (NYCHA) plan to redevelop the Fulton and Chelsea-Elliott Houses, in Manhattan’s Chelsea neighborhood, a good idea? Recently approved by NYCHA’s board, the effort will bring in a developer team to complete a phased demolition and rebuilding of the current 18 buildings, replacing them with six new buildings over the next seven years. Any demolition of its large portfolio has long been resisted by NYCHA, and that is what’s most controversial about this plan.

Built in the 1960s as part of the federal public housing program, Chelsea and Elliot have fallen victim to the slow death of public housing across the nation as the federal government reduced the subsidies it provides to support the program. With rents fixed at 30% of the resident’s income and unable by law to rent to residents who made more than 30% of AMI (Area Median Income), NYCHA had no way to increase the revenue needed to manage and maintain its portfolio of over 170,000 apartments. In recent years, the U.S. Department of Housing and Urban Development (HUD) has relaxed certain regulations, allowing public housing authorities to enter into partnerships with private managers and to utilize funds from “Section 8”—a different federal program originally designed to pay for vouchers for low-income families to use in the private marketplace.

While regular “Section 9” funding was severely curtailed, there was money available in Section 8 that could be applied under these new rules to rehabilitate housing and pay for private management. Known as the RAD program, NYCHA has already successfully completed several of these conversions, and residents seem happy with the results despite some concerns about rising rates of eviction in some cases. RAD conversions have focused on repair and management, not on demolition.

Demolishing public housing is a move that NYCHA has always resisted and undertaken in only a few select cases (for example, Staten Island’s Markham Gardens and Brooklyn’s Hope Gardens). And why would a private developer agree to rehouse, in new buildings, 4,500 residents who earn less than 30% of AMI and only pay 30% of their income in rent? The answer is the hot Manhattan real estate market. Related Companies (famous for the controversial Hudson Yards development) and Essence (founded by a former Related exec) are hardly charitable organizations and are viewed by NYCHA residents with understandable skepticism. What’s in it for the developers is the chance to add an additional 3,500 apartments in the lucrative Manhattan market. This deal may not be available in any other NYCHA development, where the private residential real estate market is less profitable.

So what are the pros and cons? There is no question that NYCHA is unlikely, in the present political climate, to be funded at a level that is needed to restore and manage its large portfolio. Innovative measures must be found, hence RAD.

In the plus column, there will be new buildings with proper insulation and plumbing. The new buildings will adhere to the street wall, as opposed to the “superblock” layout of the current buildings. The new development will include the retail and healthcare facilities that were left out of the austerity program of the original federal funding. The inclusion of market-rate housing will restore the neighborhood to a mixed-income balance. This is an opportunity to build a true urban neighborhood.

In the minus column: Does it really make sense to demolish buildings that could be restored? Demolition is the least sustainable path. It will generate tons of construction waste and require an equal amount of carbon-generating concrete and steel for the new buildings. Would it not be possible to restore the existing buildings and provide the new units as infill? The 3,500 new units will not be affordable to local people, and we all know that “affordable” is such an elastic term that even the subsidized units will be at upmarket prices. Then there is the very real risk that promises to rehouse current residents will not be kept. Much is made of the resident “support” for the new plan. But on closer examination, only 950 of the 4,500 residents responded to the survey, and of those, 60% voted to approve it. 570 votes out 4,500 is hardly an overwhelming endorsement. NYCHA, which will remain the owner of the buildings and responsible for oversight, will need to be diligent to ensure that tenants’ rights are upheld.

This project will be closely watched, but it is not, as some have argued, a model for the future of public housing. There are very few markets like Manhattan’s Chelsea neighborhood that can generate the same levels of market-rate revenue. And while an additional 3,500 units of housing is welcome, these will not serve the working families most in need of affordable housing. It will also make no dent in NYCHA’s massive waiting list.

As I have argued previously on Common Edge, public-private partnerships work in a narrow slice of the housing market. But there is no substitute for a serious government-funded investment in housing affordability, if we are to rescue public housing and resolve the current housing crisis.

Featured image: Chelsea-Elliott Houses in Manhattan. Photo by Roshni Khatri via the NYTimes.