The ABC’s Of Rethinking Public Housing: A (Modest) Proposal For New York City And Beyond
OK, so: you know about public housing in New York, right? Where it all came from? Le Ville Radieuse, Section 8, Urban Renewal? You probably know how it’s all run right now by the New York City Housing Association — hereafter “the NYCHA.” — and I bet you have heard about how the general sentiment of those engaging with the NYCHA is that it sucks. To wit: it’s a horrid bureaucracy that puts putative Section 8 movers-in onto waiting lists for years and years, arbitrarily, without providing any feedback other than “keep waiting”. And: it wastes unbelievable amounts of money and misallocates innumerate resources–to a degree that surpasses mere shameful incompetence and physically imperils the residents, who get trapped in unserviced elevators, or robbed right in front of underpaid non-union security staff… &c.
Really, you can’t take more than a topical glance at the NYCHA, and Section 8 in general (hereafter “S8”) to see serious systemic problems in need of immediate redress. And so here, without further ado, is my modest New York public housing proposal, devised in reaction to what I have seen.
I propose that the NYCHA incorporates a new subsidiary banking entity: the New York City Housing Bank (hereafter “the NYCHB”) and summarily and unconditionally transfers all NYCHA Section 8 title property to this new bank.
The NYCHB then funds itself by selling mortgage futures. Now, you may be thinking something like: Wait, mortgage futures?! Fuck. Not this shit again… But wait but so on what exactly are they selling contracts? The futures, in this case, are simple arrangements — there aren’t any baroque Lehmanesque nonsense instruments, or any of that other 2008 Möebius-strip Ponzi shit. They will sell straightforward unbundled futures on Section 16 Mortgages, of which they will be the sole legal purveyor.
Section 16, see, is the new public-housing hotness — it’s the omnibus law that will enable the new form of deeded housing stock, upon which this endeavor is based. “Section 16” (hereafter “S16”) is just the working title, there may be other sections or things that it should be called — that’s Mr. Cuomo’s personal assistants’ call, most likely — but the point is that S16 will eventually replace S8 as the legal underpinnings of public housing. In a nutshell, the way S16 works is:
Each and every tower in the PJs becomes a co-op building, independently owned and collectively operated by its residents.
If you’re broke and you’re in need of subsidized housing, you apply to the New York Housing Authority–that part works like it does now. But: instead of getting an S8 nominal lease after tons of bureaucratic nonsense, you get an actual fucking title on a newly-rechristened S16 apartment unit. This rollout is incremental: S8 lessees will coexist with S16 titleholders for about a generation – a time during which:
The NYCHB incorporates a venture capital unit called New York City Housing Capital, or NYCHC.
The NYCHC is the monkey wrench in the Brazillian public-housing bureaucracy, the enfant terrible of the investment-property romper room — they are the disruptor. Its purpose is to detach from the staid mothership of the NYCHB and descend deep into private sector, down to the LLC levels of the tech-startup space, where it will commence incubation of highly iterative development teams, focusing on bootstrapping disruptive civil-engineering tools.
The goal of these incubations is to yield some kind of crazy next-gen suite of robo-Norman-Foster modular systems that can enable the current physical S8 housing infrastructure to:
- become un-shitty, and then
- become awesome enough to be desriable.
See, the NYCHC-funded incubators produce export grade tech: they sell what they come up with back to the private sector, who pay for it without the tax incentives that the S16 co-op corps get. Because, see THIS TECH IS SO AWESOME IT MAKES PRIVATE LANDLORDS WANT TO GO S16. It not only sells, it’s compelling enough to get building corps hot for adopting S16 just for the aforementioned tax breaks. Which they can actually do that — “go S16”, that is (more on this in a bit).
An S16 co-op corps’ voting members consist of the actual residents of the S16 building, plus the co-op “Nerds-In-Residence” staff — maybe 6 to 12 (or whatever) technical advisory staff members. So yeah, maybe you’re an entrepeneurial polymath who maybe just dropped out of Silicon Valley High; maybe you need to pay off some steep M.Arch, MUP, or MFA loans; in either case: you want one of these residencies. Those accepted into the highly competitive Nerds-In-Residence S16 program get a grade-A, industry-competitive, government-scale-exempt salary, plus the usual high-gloss startup-y benefits — but the real prize, in leu of startup-work stock options, is the equity options you in the building you are personally working on.
Equity options grant you, the budding genius techie, the rarified right to buy into the co-op; unless you qualify for an S16 election slot (which is to say, you are poor as a motherfucker) there is NO OTHER WAY IN. Frankly, if you are either one of those aforementioned archetypal startup-founder types — a dropout CEO who reads Hacker News, or a Master of Something with hundreds of thousands of dollars worth of Sallie Mae debt — you probably do qualify for a poverty option, haha.
But: instead of jumping into the abbatoir of the American tech startup landscape, working yourself to the bone over an ephemeral product, all the while praying that an unbutchered equity payoff eventually makes its way back to you — the NYCHC offers an equally compelling and unique recipe for success: you are given the keys to a special place to live, offered to few and revokable by none. You and your teammates are then granted:
- the power to remake this new home as you see fit,
- the mandate to use the most powerful technology,
- the paycheck to keep you in the game and follow through.
So now, city-wide, S8 complexes become populated with new co-op enterprises: locally owned and run under the guidance of entrepeneurs, designers, and engineers — and they are all in direct competition with their neighbors.
This is the fun part, and how it works out might go like this: let’s say that one day, the board of an S16 building corp in the freshly renovated Neighborhood Formerly Known As The Marcy Projects just up and unilateraly decrees that it’s “no dogs allowed” on, like, the entire premises.
Fine, OK, but so in reaction, the board of the building across the street smells a pro-dog investment opportunity: they move to immediately raze their large adjacent playground (which they own, but all the area kids play on). In its stead, the pro-dog corp constructs an elaborate destination dog park… whose design includes a substantial food-truck-style retail-park space allowing local vendors a place to provide various and sundry for-profit dog-related services. They call Sundays “Doggie Days”, heavily advertise on the subway, and take a cut of the action–profiting noteworthily from the entire venture.
But so: now, rather than whining about how they lost a community playground to the NYCHA, and then dragging everyone in a five-mile radius through whatever the laborious, bullshit-laden arbitration-y government bureaucratic process mandated by the occurence of such an act of whining…instead, the dog-free building’s co-op board has their Nerds-In-Training squad cook up a new playground for their residents, on their roof. They pay for the playground out of their cut from sales of the new turnkey guardrailing/active-monitoring/anti-pidgeon-shit Saf-T-Kids™ roof-playground product suite–a venture that their co-op corporation developed as an offshoot from the rooftop playground design work, and subsequently brought to market in the general private sector consumer space.
So now instead of disputes and court dates and fees and settlements and recriminations and bullshit, everyone gets what they want and also gets really paid in the process, because the buildings are owned by their residents, and lead by people who enjoy solving problems for a living. It’s still a conflict, but it’s Twitter Versus Facebook instead of Bloods Versus Crips, so to speak.
Or maybe instead it’s Jets Versus Sharks, I don’t know, but you get it.
Physically, this will inevitably allow for the creative re-use of the copious unused spaces — green areas, roofs, airspace, basements, etc — which the non-utilization of which S8 buildings are totally notorous. Logistically, order is maintained by the byzantine NYCHA bueaucracy, which is re-tooled to safeguard the people of the new S16, and their property: their mortgages have to be protected against Wall Streeters who will inevitably try to buy them and turn them into some kind of 2007-style quadruple-bundled derivative instruments. In addition to, you know, police-y shit like keeping crackheads out of the elevators (which they supposedly do now), running the lottery that will replace the obscene waiting-list system currently in place… much of which will sunset as the co-ops shoulder more and more of the administration burden. Like e.g. when an S8 residence transitions X percent of the way to co-op ownership, the corp become responsible for their allotment of NYCHA police forces’ salaries/benefits/infrastucture/etc — and if they privatize security, maybe they have to guarantee S16 buy-ins for any laid-off cops in either their building or any other, haha!
The NYCHA works with the co-op boards to keep vulture investors out, while maintaining a secondary market for S16ers whose mortgages have “vested”, which happens after some percentage of the mortgage “strike price” award has earned out from nominal payments (in leu of the nominal rent S8ers currently pay). S16ers won’t vest for a looong time if they pay the minimum, which will be keyed to whatever the rent is keyed to now — it’s like being given a house with a lein on it already. But even then, they still have far-reaching ownership privilidges over their space, and they can transfer the property to another qualified S16 purchaser for profit… minus a very large (but very tax-deductable!) percentage, as a fee to the NYCHB. “Vested” owners get extra voting shares in the co-op and don’t have to cough up to the NYCHB if they transfer title.
Now, The NYCHB has a hard line to walk. They have to serve both the NYCHA (a giant ur-bureaucracy) and the S16 co-op corps (a mob of newly-minted private for-profit companies with special status) as their primary clients, while also being a functional bank, and everything that comes with that — like working with the IRS and the fucking Federal Reserve; plus the unendingly batshit-crazy NYC housing market is in the mix, as is Wall Street and its attendant douchebaggy hall-of-mirrors.
WHICH IS WHY: The NYCHC stays competitive in the private sector by NOT dealing with the NYCHB. After they’ve been funded, they are split off completely and are not legally beholden to the NYCHA/B in any way beyond their cash dealings. They are a private company; their priviledges are expressly written into the model codebase on top of which the bylaws of the S16 building corporations are drawn — and NOT into any federal, state, or local laws. The NYCHC board is made up of Paul Graham, Elon Musk, Biz Stone, Bethany Johns, Johnny Ive, Sir Norman Foster, Elizabeth Warren, Tobias Frere-Jones, Tracy Morgan, one of David Remnick’s cats, and whoever the equivalent of “Crazy Eyes” is in the jail where they keep Bernie Madoff.
The Housing Capitalists are totally awesome and badass and do whatever the fuck they want but they are NOT government, they are here to make a buck and be cool while doing their fucking jobs — as it so happens, said fucking jobs are to collectively fix the mess that is public housing.
If it works out as well as it should, NYCHC’s “Phase 2” business objective will be to make a growth opportunity out of franchising the whole A/B/C operation to other cities around the world.
… which OK, at that point they will probably want to drop the “NYCHC” name – hopefully without changing it to something risible, á la the guy who used to be Ron Artest; comparatively, the NYCHB should be run by Jack Donaghy.
… Or someone like that; someone to balance out the outlandishly self-assured Peter Thiel-ism that’ll no doubt run rampant amongst NYCHC’s cohorts, yes?
But so anyway — anyway yeah, such a huge divestiture on the part of a government body… it’s nice to think about, is it not? But something will have to happen. I’m not going to pretend that New York public housing is the flash point that it once was, but you shouldn’t fool yourself into thinking it’s not something that’s slowly simmering and building up steam, every day, either.
And consider that large changes of this sort do happen periodically. I mean, I am sure very few people outside the relevant academic and institutional communities would have told you that Urban Renewal was like, a no-brainer — even after the horrorshow that was the American 1970’s in New York.
So yeah. With that all as a caveat: upon whose desk, exactly, do I put this thing? Like to get it started. So I can get the jump on an S16 Nerd Squad application, myself, when the time comes.
If you like these pictures, you can find more like them at my Flickr page, where I have been shooting and posting things of this ilk since 2004.
