The New York City Housing Authority was founded years before the Nation passed the U.S. Housing Act, a law that created a framework for local Governments to create public housing agencies. The New Deal promise that housing would be treated as a social good is now under threat of privatisation. Photo Illustration/Progress New York

Feds consulting with de Blasio, as he privatises NYCHA, despite past campaign finance controversies from real estate donors

Bill de Blasio, who faced accusations of undertaking official acts on behalf of his donors, is negotiating the sale of public housing to real estate developers. Andrew Cuomo, also encumbered by real estate donors, gets a pass on saving NYCHA. How the Feds tolerate the corruptive role of money in politics undermines the public good — including public housing.

By Progress New York Staff

The same U.S. Attorney’s Office — which, in March 2017, accused Mayor Bill de Blasio (D-New York City) and his administration of soliciting money from campaign donors, and then undertaking official actions on behalf of the donors and which had seized in April 2014 the records of the now-defunct Moreland Commission to investigate, amongst other purported crimes, the corrupting role of real estate donations in New York politics — is now inexplicably negotiating with the de Blasio administration over the future of public housing in New York City. The Local Government Agency that owns and administers public housing, the New York City Housing Authority, or NYCHA, faces a capital improvement deficit exceeding $32 billion, and NYCHA must now confront the unaffordable dilemma of bringing to an end to each of a lead poisoning crisis, a toxic mold disaster, and a general uninhabitability catastrophe in public housing. After U.S. District Court Judge William Pauley III rejected a pennies on the dollar settlement proposed by the Government, the Nation’s top Federal prosecutor for New York’s southern district, Geoffrey Berman, is now reportedly trying to shore up a second proposed settlement that will please Judge Pauley.

Before U.S. Attorney Berman became the Nation’s top prosecutor in New York’s southern district, he was a partner in the Big Business law firm, Greenberg Traurig, the same law firm that employed former Mayor Rudolph Giuliani (R-New York City) and Borough President Melinda Katz (D-Queens). Because U.S. Attorney Berman lacks political experience and because the U.S. Department of Housing and Urban Development, or HUD, ideologically now opposes the New Deal promise of treating housing as a social good, HUD’s indifference and U.S. Attorney Berman’s political naïveté have been reportedly permitting Mayor de Blasio to limit the City’s financial responsibility during settlement discussions. Such an arrangement may explain, at least in part, why Judge Pauley deemed the first proposed settlement as insufficient.

Although Judge Pauley was able to stop the first proposed settlement due to its inadequacy, there is no legal mechanism in place to prevent U.S. Attorney Berman from making political and economical mistakes that would further disadvantage public housing tenants and potentially rob the City of strategic public assets. Mayor de Blasio’s immediate response to Judge Pauley’s rejection of the first proposed settlement was to ramp up the privatisation of public housing, with no democratic check on his decision. Inexplicably, U.S. Attorney Berman is negotiating with Mayor de Blasio about NYCHA’s future, even after Federal prosecutors had, at one time, investigated real estate donors to Mayor de Blasio’s various political committees. Furthermore, after the de Blasio administration had approved a prior sale of a portfolio of Section 8 buildings by NYCHA to a consortium that included politically-connected donors to Mayor de Blasio, the Internal Revenue Service had reportedly shown interest in that secret transaction, according to information obtained by Progress New York, but it is not know whatever became of that interest. Yet, Federal law enforcement officials have engaged in consultations with the de Blasio administration over a potential new settlement for NYCHA that may involve more such troubling sales. Gov. Andrew Cuomo (D-New York), about to begin his third term in office, has faced investigations of his real estate donors, and he has largely escaped scrutiny for the collapse of public housing on his watch. Meanwhilst, in recent years, the professional class of activists in New York City have responded to Government failure at NYCHA by calling for the resignations of former NYCHA CEO Shola Olatoye and outgoing Deputy Mayor Alicia Glen, but, thus far, no direct challenges have been mounted against each respective top State and City Government executive. Even the newly self-entitled champion of public housing tenants, U.S. Attorney Berman, who said of NYCHA during a speech that “In my view, there is no case of greater size, scope, or impact on our docket,” has become aloof on the subject. He, several of his Assistant U.S. Attorneys, and his press office each refused to answer several communications for this report.

NYCHA’s collapse is every bit a result of neoliberalism’s failure as it is of conservatism’s betrayal of the public interest. Now, because of this political failure, Federal prosecutors are negotiating directly with the poor’s oppressors.

In 2014, the de Blasio administration approved in secret that a cash-strapped NYCHA would sell a portfolio of Section 8 buildings, including 930 Halsey Street and 55 Saratoga Avenue in Brooklyn, into a consortium that included politically-connected real estate developers. According to Google Street View images, the buildings had undergone renovation prior to their sale. Source : Google Street View/Screen Shot/Sept. 2014/Fair Use

Public housing in New York City slid into a state of disrepair due to a combination of factors : the defunding by Washington élites of New Deal and Great Society programmes, the market failure of the unregulated real estate development industry, the consequence of neoliberalism in the Democratic Party, and because the State’s and the City’s budgets have been being influenced by Big Business interests. The Section 8 conversion programme, that is opened the door to the privatisation of NYCHA, was produced during the administration of President Barack Obama (D). The State, which regulates the City’s housing laws, and the City, which is in charge of appointing the Board of Directors at NYCHA, have had their Budgets put under a microscope by an Orwellian-named board of Big Business directors, the Citizens Budget Commission. The CBC, for short, makes sure that the State and the City don’t get carried away with answering the inequalities created by unregulated markets. That mainly looks like blocking any increases of taxes on the wealthy to fight economic inequalities and poverty.

NYCHA has also been mismanaged. NYCHA has become a place where elected officials and their operatives can groom political supporters in exchange for tokenism and patronage. Such an arrangement has largely curtailed the ability of NYCHA tenant leaders from truly advocating for public housing tenants. After public housing tenants were left with no apparatus to exert political pressure on a Government that left them essentially disenfranchised, the Manhattan U.S. Attorney launched in 2016 a two-year investigation into NYCHA’s physical condition standards. Federal prosecutors sued NYCHA to bring about a settlement that would end conditions that created a lead poisoning crisis, toxic mold emergency, and general uninhabitability catastrophe in public housing. In the process, the U.S. Attorney’s Office accused NYCHA of failures and of engaging in deception to hide the true extent of its lead poisoning crisis. But, thus far, Federal prosecutors have refrained from holding the de Blasio administration criminally responsible for permitting the lead poisoning crisis to worsen during his administration.

NYCHA was created in 1934 after 800 delegates representing 750,000 workers endorsed a resolution calling for housing construction and maintenance to be treated as a social good, not unlike public education and public transportation, according to a report published by the New York Times. Mayor de Blasio’s plans to privatise NYCHA, in violation of the public sentiment that informed the creation of NYCHA in the wake of the Great Depression, has thus far been met by muted response amongst New York City’s professional activist class. The campaign of U.S. Rep.-elect Alexandria Ocasio-Cortez (NY-14) and the press office of the New York City Democratic Socialists, which is the local chapter of the Democratic Socialists of America, did not answer press inquiries for this report. According to information obtained by Progress New York, some political forces in New York City are organising for NYCHA to fall into Federal receivership, an outcome, were it come to pass, would also promise some form of privatisation, given the ideology of Washington élites. There may be a way for U.S. Attorney Berman to save NYCHA, according to political tacticians, but first he has to navigate a landscape that would superficially blame the Trump administration for NYCHA’s dilemma instead of holding Mayor de Blasio accountable for how the role of Big Money in his political campaigns have corrupted his housing, public health, and economic policies. For, if NYCHA were to be indiscriminately privatised, then it wouldn’t just be Mayor de Blasio, who would be responsible for the betrayal of the New Deal promise of treating housing as a social good, but it would also be U.S. Attorney Berman, HUD Secretary Benjamin Carson, and U.S. District Judge Pauley. Apart from permitting Mayor de Blasio to privatise NYCHA, Federal officials have already been countenancing sales and leases conducted in secret of NYCHA real property to some of the politically-connected real estate donors to Mayor de Blasio’s various political committees. The élites created the problem at NYCHA, and, ironically, they will determine if public housing has a future in New York City.

New York City Government once treated housing as a social good ; now it espouses pro-business elitism and an indifference to the sufferings of ordinary citizens.

“The irony is that de Blasio ran on a slogan of A Tale of Two Cities,” said Pauline Park, an anti-corruption and LGBT activist who led the campaign for transgender rights law enacted by the New York City Council in 2002, referring to the classic English novel about societal despair and revolution, adding that the Dickensian concepts of rewarding wealthy donors, meanwhilst allowing NYCHA to fall further into disrepair, had become a hallmark of Mayor de Blasio’s administration. Ms. Park said that there was a clear need to raise taxes on the wealthy and on corporations in order to fully fund NYCHA’s restoration, noting that a recent tax reform bill championed by President Donald Trump (R) did the opposite. “Many corporations pay no taxes,” Ms. Park said, adding that corporations like and Wal-Mart were actually subsidised by taxpayers. When asked about Mayor de Blasio’s apparent duplicity on fighting economic inequalities, Ms. Park stated that Mayor “de Blasio has been pushing a false image of himself as a progressive and as a national leader of progressives,” and she noted that Mayor de Blasio’s unfavourability ratings have not reach the lows of then MayorGiuliani in the time before the attacks of 9/11 or of then Mayor Michael Bloomberg (R-New York City) in his final year in office. As a result, Ms. Park said, “As for why there are no yellow vests [protests having an impact] in New York City ? I think de Blasio is heartily disliked by New Yorkers, but he does have a core of supporters.”

Ms. Park declared that Mayor de Blasio enjoys no voter mandate, generally, due to the conditions that led to his 2013 Democratic Party primary win in that year’s mayoral race (the chaos created after former U.S. Rep. Anthony Weiner (NY-09) pulled out, controversial backing by then New York City Councilmember Christine Quinn (D-Chelsea) of a term limits extension and indication that she would reappoint Raymond Kelly as police commissioner, the campaign finance scandal that engulfed the campaign of then New York City Comptroller John Liu (D-New York City), and the refusal by former Comptroller Bill Thompson (D-New York City) to take on police misconduct as a campaign issue), and to the conditions that led to his 2017 reëlection (escaping indictment in the reported Federal corruption investigation into his campaign finance practises). What is more, Ms. Park questioned the existence of any mandate that specifically permitted Mayor de Blasio to sell-off NYCHA. Ms. Park stated that she had no faith in the U.S. Attorney’s Office or in a Federal judge to save NYCHA, and she urged the public to closely follow all public officials “to the extent that they are actively or passively complicit in undermining public housing and public welfare, in general.”

Public housing stock turns out to be critical to the function of society in New York City, particularly since there is a complete market failure to produce housing that is affordable to people earning very low incomes, much less to those living at or below the poverty level, especially since New York City has been experiencing a rapid depletion of rent regulated apartments, according to a 2015 report published by Gothamist. The interest in saving NYCHA is all the more compelling, particularly since three, successive mayoral administrations have spurred gentrification. “A Tale of Two Cities turns out to be a story of Bill de Blasio’s betrayal of the campaign promises he made, instead rewarding the oligarchy of which he is a part ; like Giuliani and Bloomberg, he is a collaborator with the real estate industry in the immiseration and impoverishment of the City,” Ms. Park said.


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