When 20,000 New York City public housing units were built with state and city money between 1950 and 1980, it was considered a feat—the 21 complexes housed some 45,000 people. But beginning in 1995, budget shortfalls forced the city and state to gradually eliminate funding for the complexes’ annual maintenance. The New York City Housing Authority (NYCHA) began diverting federal funds from its other 313 federally subsidized low-income properties to pay for maintenance on the 21 now-unfunded complexes, which resulted in an annual deficit of $80–90 million. “It meant that everyone got less,” says NYCHA general counsel Sonya Kaloyanides.
NYCHA finally found the relief it had spent more than a decade looking for in an obscure provision of the 2009 American Recovery and Reinvestment Act (commonly known as the stimulus act) that allowed public housing authorities to receive federal funds if the transaction uses a combination of public- and private-sector money. In August 2009 NYCHA called on Ballard Spahr real estate and public finance partner Paul Casey, its regular counsel since 2004, to explore a potential deal.
