NYC Comptroller Audit Finds that Evictions in NYCHA’s PACT Properties Take Place at a Significantly Higher Rate than Traditional...

NYC Comptroller Audit Finds that Evictions in NYCHA's PACT Properties Take Place at a Significantly Higher Rate than Traditional NYCHA Developments

New York, NY - In a new audit recommended by his Office's New York City Housing Authority (NYCHA) Resident Audit Committee, New York City Comptroller Brad Lander found that eviction rates for Permanent Affordability Commitment Together (PACT) properties were significantly higher than rates at traditional NYCHA developments. After the pandemic eviction moratorium expired, filing and execution of evictions increased across all rental housing. However, these occurred at faster rates in PACT developments, matching the rates of private rental housing more closely than that of traditional NYCHA units.

The audit also found that NYCHA failed to ensure that PACT operators followed standard operating procedures for pre-eviction outreach and tenant protections. Moreover, the rates of eviction filings and executions varied significantly across PACT managers.

Comptroller Lander's NYCHA Resident Audit Committee, established in 2022, recommended this audit. Resident engagement included a series of roundtables and listening sessions, surveys of more than 1,000 residents across 44 developments in all five boroughs, and the establishment of the first-ever resident audit committee. The committee, which was created to incorporate resident voices and experiences into the oversight and accountability process to deliver change at NYCHA, voted to recommend two audit topics for the Comptroller's Audit Bureau: (1) the recently-released audit on NYCHA's oversight of repair vendors, and (2) this audit comparing eviction rates in PACT developments with those in traditional NYCHA developments.

The audit also provides NYCHA residents with more detailed information as they consider options for their future, including entry in the PACT program or transfer to the newly created Public Housing Preservation Trust. Both options were established to provide additional resources for rehabilitation and repairs, given NYCHA's nearly $80 billion capital backlog and the lack of federal capital funding to address it, or to remain as traditional public housing.

"NYCHA residents deserve genuine input into decisions about their future, and clear information about their options," said New York City Comptroller Brad Lander. "That's why we created the NYCHA Resident Audit Committee and followed their recommendation to conduct this audit. Given the massive repair needs, likelihood of funding cuts over the next four years and everyday living conditions that so many residents are facing, NYCHA residents need multiple pathways to comprehensive rehabilitation. Residents can choose to enter the new Preservation Trust, work with a PACT partner or stay in the Section 9 program and keep pushing for a comprehensive modernization, like the one I was proud to fight for and win for Gowanus and Wyckoff Houses in Brooklyn. But they can only do that if they have clear, accurate information about each potential pathway, which many residents told us they don't have. This audit provides valuable information - both for NYCHA to better oversee the PACT program, and for residents to be empowered to make decisions about the future of their housing."

Background

Federal disinvestment over decades has contributed to a deterioration of New York City's public housing, with current capital needs estimated to be nearly $80 billion. Residents regularly live without heat and hot water, experience elevator outages and are exposed to mold and lead. Declines in federal funding are likely to continue in the Trump Administration. During Trump's first term, he proposed eliminating the U.S. Department of Housing and Urban Development's (HUD) Public Housing Capital Fund for infrastructure upgrades and reducing Operating Funds by 37%.

The Rental Assistance Demonstration (RAD) program, established by HUD in 2011, allows public housing authorities such as NYCHA to convert the federal subsidy supporting developments from the public housing program to the Housing Choice Voucher (Section 8) Program, in order to access new funding sources in the form of debt and equity to make capital improvements to preserve and rehabilitate public housing. NYCHA's RAD program is known as PACT.

According to the City's Fiscal Year 2024 Mayor's Management Report, NYCHA has converted 87 developments to PACT, with 23,312 units housing 41,475 residents. NYCHA's stated goal is to convert 62,000 units to PACT by 2028.

Actual and Projected NYCHA Conventional Public Housing and PACT Units

After identifying developments that have the highest capital needs and operating challenges, NYCHA approaches resident leaders to gauge their interest in participating in the PACT Program. If resident leaders are interested, NYCHA then proceeds with resident engagement. No formal vote of residents is required for conversion to PACT, as is required by New York State law for conversion to the Public Housing Preservation Trust, which was created in 2022 and authorized to provide rehabilitation for up to 25,000 units. Several developments have voted to enter the Trust, beginning with Nostrand Houses; however, none have yet been transferred to Trust operations. This audit therefore could not compare eviction rates in Trust developments.

Findings

• PACT property managers evict tenants at higher rates than traditional NYCHA developments. Filing and execution of evictions increased after the pandemic eviction moratorium expired across all rental housing, but at a faster rate in PACT developments, which rates now match citywide rental housing more closely than traditional NYCHA units.

Evictions Executed, by Housing Type

Eviction Filings, by Housing Type

• Eviction rates again varied dramatically among PACT Property Managers, ranging from 0% to 1.11%. C+C Management had an eviction rate of 1.11%, which is almost twice the Citywide rate. The remaining PACT Property Managers had eviction rates which were lower than the Citywide rate, but which significantly exceeded the NYCHA conventional development rate.
• NYCHA did not ensure that PACT Property Managers developed standard operating procedures for each of their sites covering pre-eviction outreach, eviction notices and filings, and evictions. The only guidance provided to Property Managers is NYCHA's Housing Stability and Retention Guidelines, which are deficient. Specifically, the Guidelines do not provide guidance or set parameters for non-payment thresholds to initiate formal rent demand, and as a result, practices vary considerably between PACT Property Managers. Each Property Manager establishes its own minimum threshold for non-payment of rent, which is expressed as a minimum dollar amount or the number of months of rental arrears.
• PACT Property Managers failed to perform adequate outreach, including making a minimum of two attempts to contact residents at risk of eviction, informing residents they may qualify for financial assistance, using on-site social service providers to engage with residents, or entering into repayment agreements.
• PACT Property Managers did not report all eviction and pre-eviction activity, and NYCHA Asset Managers did not adequately review reports to ensure accuracy. As a result, NYCHA was unable to ensure that PACT Property Managers made the minimum required outreach efforts or attempted to connect tenants to resources.

Auditors acknowledge that NYCHA has taken some important steps to better include residents in the process. If residents choose to participate in PACT, NYCHA representatives meet with them to explain what the PACT Program is and to discuss community needs and priorities as part of the PACT community planning and engagement process. NYCHA consults with the residents to select PACT Project Teams. Beginning in 2021, Resident Review Committees were formed to participate in the Project Team selection process. Along with NYCHA, the Resident Review Committee interviews PACT Teams and determines which team is best suited to meet the community's needs. After the conversion to PACT, NYCHA works with the residents and selected PACT Project Teams to prepare detailed rehabilitation, property management, and social services plans. Previously, NYCHA was solely responsible for reviewing and selecting Project Teams.

The audit made several recommendations including that NYCHA track the performance of PACT property managers on issues such as compliance with set guidelines on eviction proceedings and improve internal processes to ensure effective oversight and tracking of pre-eviction outreach conducted by PACT property managers.

Read the full audit report on NYCHA's eviction processes here.

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