CM Banks questions OMB on NYCHA PACT vs Section 9 capital funding balance

Councilmember Banks, followed by Morano.

Thank you, Chair.

Thank you, Speaker.

Good to see you, Director.

When it comes to NYCHA, the executive capital commitment plan includes an additional $500 million in HVD's capital budget for RADPAC NYCHA conversions.

We heard from NYCHA last week that this amount was determined by OMB.

Can you explain how it was determined that $500 million was the appropriate amount for additional funding for PAC?

The plan includes only $90 million additional capital funding for Section 9.

Compared to the $500 million for PAC, what criteria does OMB use to determine

and how to balance investments in NITRA Section 9 versus PAC.

And has the administration considered adding large sums of funding for alternate capital improvement programs such as CompMod, Comprehensive Modernization, and Order Preservation Trusts?

Sure.

Thank you, Council Member.

So I'll start and then I'll turn it over to...

And if you can't answer the question fully, please do it in writing.

Absolutely.

We're happy to follow up with you.

But actually, why don't I turn it over to Tara Barard to talk you through it.

So in terms of the funding that went to Section 8 conversions, the $500 million, we looked at which projects were shovel-ready.

We looked at what the pipeline was in terms of what the agency wanted to do with both PACT as well as TRUST.

Another factor was that the funding for PACT and TRUST kind of falls off in the out years, so we had to make sure to give them another lifeline to keep that pipeline going.

In terms of the total amount of funding that we have for NYCHA, it's well over $5 billion.

And in fact, the money that we have going to Section 9 exceeds what we have going to PACT and TRUST.

So if you look at FY26 to FY30, $2.7 billion going to PACT Trust, $2.8 billion going to NYCHA Section 9.

Well, we're talking about the next fiscal year, which is 2020.

I'm talking about 26 to 2027.

So in 2027, what is the dollar amount that's going into RADPAC?

or privatization compared to what is going into Section 9?

In 2027, there's a billion dollars that's going to Section 8 conversion, but that's split between PACT as well as the trust.

And then there's an additional...

Just repeat, what's the total amount of money?

These are straight questions.

What's the total amount of money that's going into RADPAC for 2027?

Compared to what's going into Section 9?

As I stated, it's a billion dollars going to Section 8 conversion that is split between PACT and trust.

So as NYCHA comes to us with...

And how much is going into Section 9?

$841 million.

Now, the last part of your question, I believe, had to do with CompMod and that alternative strategy.

So generally speaking, that's not a model that we see that can be easily replicated because it does not draw down on additional Section 8 federal resources.

It basically means that NYCHA and the city would have to pick up the full freight of the development cost, and we're trying to do this in a more efficient manner.

Well, the Comp Mod Fund, the city can invest in that fund, am I correct?

Can.

And the city has opted out not to?

I think that we're looking at a whole series of strategies in order to bring down the P&A cost.

Part of that is PACT, part of that is trust, part of that is updates to Section 9.

How much funding has been invested in the preservation trust?

That is within the Section 8 conversion pipeline, so it's going to be a total of $2.8 billion between 26 and 30, combined with PACT.

So how many developments will be converted or get the opportunity to go trust preservation?

We'll have to get back to you.

NYCHA has to tell us about what's going through the pipeline, but we're in the process of closing.