City Will Pay $2 Billion To NYCHA After Probe Finds Officials Deceived Tenants And Regulators

The city has admitted to engaging in widespread neglect and systemic misconduct in managing the New York City Housing Authority, harming residents—including an untold number of children—in the process, while knowingly deceiving both tenants and outside inspectors about the extent of the danger.

On Monday, federal prosecutors filed an 80-page civil complaint accusing NYCHA's management of causing and exacerbating the suffering of "lead-poisoned children; elderly residents without heat in winter; asthma sufferers whose condition is worsened by moldy and pest-infested apartments; and disabled residents without functioning elevators." Their findings are the result of a wide-ranging investigation launched by former U.S. attorney Preet Bharara two years ago.

As a result of that investigation, the city has entered into a contract with the U.S. Attorney's Office for the Southern District of New York, in which the city agreed to provide an additional $1 billion in capital funds to NYCHA over the next four years. Once that amount has been paid out, the city will pay another $200 million annually for at least five years until a judge rules that the problems have been fixed. A court appointed federal monitor will oversee the ongoing work.

“NYCHA’s failure to provide decent, safe, and sanitary housing is simply unacceptable, and illegal,” U.S. Attorney for the Southern District of New York Jeff Berman said at a press conference on Monday. “Children must be protected from toxic lead paint, apartments must be free of mold and pest infestations, and developments must provide adequate heat in winter and elevator service. NYCHA has put its residents at risk. Today’s unprecedented settlement will improve life for the 400,000 residents who call NYCHA home, while ensuring accountability, reform, and oversight at this troubled institution.”

In a statement, Mayor Bill de Blasio also called the settlement a "turning point" for the city's public housing system. "By enshrining in City government my administration's absolute commitment to never turning a blind eye to those in need, this agreement takes a dramatic step to fulfilling our obligation to more than 400,000 New Yorkers who call NYCHA home," the mayor said.

The complaint found that senior NYCHA officials routinely engaged in elaborate cover-ups to avoid regulatory scrutiny, most concerningly downplaying the number of children believed to have been exposed to lead paint. While de Blasio has repeatedly stated that no children were harmed by the city's failure to inspect some apartments for lead, the federal investigation notes that at least 19 children have been lead-poisoned since 2010, and that "there is every reason to believe the true number of children with lead poisoning is materially higher."

Among the authority's other egregious deceptions:

"Turning off water to developments to prevent HUD inspectors from observing leaks; posting 'danger' signs to keep inspectors away from troubled areas; and temporarily hiding improperly stored hazardous materials. NYCHA management even included a document with suggestions for deceiving inspectors in NYCHA's official training materials. This cover-up 'how-to' guide was only removed in Summer 2017, after this Office called its existence to the attention of NYCHA's outside lawyers."

As the senior managers were lying to inspectors about the abysmal conditions in city-run apartments, the authority was also lying to tenants who put in requests to have work done:

In 2012 and 2013, NYCHA made false statements to HUD and the public about its maintenance work order backlog. To fend off concerns by HUD, the media, and local politicians that NYCHA’s large backlog of maintenance work was threatening living conditions at NYCHA, NYCHA began reporting reductions in its backlog, falsely claiming that the reductions resulted from 'improved efficiency.' But in fact much of this reduction resulted not from improved efficiency but from NYCHA’s manipulation of the work order process so that it no longer reflected the work that NYCHA knew needed to be done."

And, more recently:

"In 2015 and 2016, NYCHA made false statements to HUD and the public regarding its lead paint compliance. Press reports in 2015 told the story of a child with dangerously high levels of lead in her blood, and articles in 2016 reported on this Office’s investigation. To deflect the resulting scrutiny, NYCHA falsely told HUD and the public that NYCHA 'complies with Federal, State, and City regulations concerning lead.' But during this entire period, NYCHA was substantially out of compliance with important lead paint regulations."

"When these false statements were made," the report concluded, "senior NYCHA officials knew the true fact—directly contrary to the false statements."

The mayor's office did not respond to a Gothamist inquiry about whether any city officials will be disciplined as a result of the investigation. The embattled NYCHA Chairwoman Shola Olatoye resigned in April, as a result of controversies related to both lead paint and lack of heating.

You can read the full complaint below.

Additional reporting by Cindy Rodriguez.

UPDATE: At a press conference on Monday afternoon, the mayor said that reading the federal complaint made him "angry as all hell," adding that "to know that there were some people in NYCHA that withheld information, tried to deceive the federal government and NYCHA leadership, it disgusted me. It was unacceptable."

Asked whether the investigation's finding that at least 19 children—and likely more—had been lead-poisoned contradicted his previous claim that no children had been harmed as a result of NYCHA's failures, de Blasio called the complaint a "series of allegations."

"I am not changing that statement until I have facts otherwise," the mayor said.