New York City Housing Authority: Can Anyone Do Socialism Better?

Readers of this blog know that you don’t have to travel to Venezuela or North Korea to watch socialism failing. Right here in New York City, we have the New York City Housing Authority (NYCHA), run in a classic socialist model consisting of public ownership, most costs covered by taxpayer subsidies, and absolutely no one who ever gets an extra nickel in their paycheck for keeping the place from falling apart. Result: costs go up and up and up, and the place is falling apart. For a few of my previous posts about NYCHA, see here, here and here.

In February 2017 I asked the eternal question, “Which Will Collapse First: North Korea Or The New York City Housing Authority?” Close to two years later, they’re still running neck and neck.

If you’re wondering if NYCHA is really falling apart, the daily newspapers will give you plenty of evidence. As just one example, here’s a report from ABC News on November 24, headline “NYCHA tenants living without heat fed up, want answers.” Excerpt:

The tenants in the Grant Houses in Harlem are suffering, and it is not even winter yet. They have frigid tap water and cold, dead radiators. "I have a right to expect heat, I have a right to expect hot water. If I have a complaint, I expect for it to be repaired," says resident Barbara Stevens. Tenants are outraged, and they're not alone. At one time or another last month, tens of thousands of apartments in the city's public housing system were without heat, hot water or both - and thousands more in the past few days alone. Comptroller Stringer is demanding answers. "This is a citywide disgrace!" he said.

Perhaps we should point out to Ms. Stevens that she erred in throwing in her lot with the socialists. But no heat in a New York City winter is rather harsh.

Then, just on Tuesday this week, our outgoing “Public Advocate” Letitia James (she’s now been elected Attorney General for the State, and will assume that office on January 1) came out with her annual report called the Worst Landlords Watchlist. Winning the number one spot as “worst landlord of the year” for 2018: NYCHA! From the New York Post, December 19:

Outgoing Public Advocate Letitia James took a parting shot at the de Blasio administration on Wednesday by dubbing the city’s Housing Authority the worst landlord of the year. . . . “The [list] has been an invaluable tool to hold bad landlords accountable and improve living conditions for countless New Yorkers,” said James. “But for too long, the most glaring example of this ill treatment has been at the hands of the city itself — and this year, we are finally putting NYCHA on notice. New Yorkers deserve better and it is long past time that NYCHA clean up its act.”

Can we stop for a moment to take note of this? The great academic geniuses and social reformers of the 1930s and 1940s thought they had discovered, in socialist-model public housing, the magic solution to the filthy slums and substandard housing of their day. Eighty years later, there is pretty much no place in New York any more that you could fairly call a slum — with the glaring exception of the NYCHA projects, where the perverse incentives of socialism have gradually but inexorably destroyed the place from the inside. What was supposed to be the very best housing available for people of modest means is now the very worst — all at multi-billions of dollars per year of taxpayer expense.

So what is the answer? The federal prosecutors of the Southern District of New York think they have it. On June 11 they filed a civil Complaint with the federal court, alleging a long list of failures by NYCHA, including various defaults in NYCHA’s contract with HUD, as well as failure to maintain “decent, safe and sanitary” conditions as required by HUD regulations, in everything from lead paint to heat to hot water to rodents, and on and on. (The Complaint is available behind paywall on the government’s PACER system.) On the same day the prosecutors and NYCHA entered into a “Consent Decree” to provide for the solution, and thereupon asked the assigned judge, William Pauley, to approve the decree. Under the proposed decree, the court is to appoint a “monitor” for NYCHA, to be supervised by the court, and the monitor would then take charge of bringing NYCHA up to snuff. Into this process New York City agreed to throw an incremental $3 billion for needed repairs. (However, the City itself has estimated that the total of needed repairs is actually more in the range of $30 billion than $3 billion.)

In other words, the proposed solution is to continue the socialist model, with the exact same employees running the place, and the exact same perverse incentives, but with a different guy in charge. Can they give us any reason why this might work any better than what has happened so far? From Judge Pauley’s decision:

The Proposed Consent Decree contemplates the future development and implementation of frameworks to assist NYCHA in achieving compliance with the requirements [to meet health and safety standards].

Got that? The reason that socialism has failed so far has been that they haven’t “developed and implemented” the right “frameworks.” This time, they are finally going to get it right! Sure.

Judge Pauley held a hearing in September, and then issued his Opinion on November 14 (also available on the PACER system). He declined the invitation to take over control of NYCHA, and sent the parties back to the drawing board. The most recent news is that HUD Secretary Ben Carson has now given NYCHA a January 31 deadline to reach a new deal on how to proceed, failing which there may be a federal takeover or a federal receiver of some sort for NYCHA. The basic concept remains the same: we’ll continue the socialist model, but put a new guy in charge. The idea being that NYCHA has failed so far because the wrong people have been implementing socialism incorrectly, but everything will work as soon as we put the right people in charge. Good luck with that.

Meanwhile, out there in the private housing market, the Post had a story on December 19 about the “hottest NYC neighborhoods for 2019.” The list includes middle and lower middle class enclaves like Fordham in the Bronx, Sheepshead Bay in Brooklyn, and the Lower East Side in Manhattan. The Post quotes a real estate broker in the Bronx:

Citi Habitats agent Jose Borges, who has a number of Bronx listings, [said] “What I’m noticing is that when properties are surrendered by legacy tenants, they are being gut-renovated and brought up to a higher standard,” he says.

Could it really be as easy as that? No federal monitors, no judicial supervision, no HUD takeover, no multi-billion dollar subsidies, and somehow the properties get “gut-renovated.” But if the landlord can get a good tenant in place, the rent goes right into his pocket. Do they even teach any more in school how this works?