HUD Jumps — Deep — Into Fray Over New York's Public Housing

The U.S. Department of Housing and Urban Development is giving the New York City Housing Authority until the end of January to prove it has a plan for fixing its crumbling developments.

In a letter, HUD said unless NYCHA can establish specific milestones for fixing health, safety and management problems, the federal government will place the authority in default.

“This would provide to HUD Secretary Ben Carson a wide range of remedies," HUD said in a press release.

Those remedies would include, among other steps, hiring other housing authorities or private companies to manage the city's public housing system, an outright federal takeover, or a repeal of any contracts deemed detrimental to bringing the system up to par, according to a HUD spokesman.

The demand from HUD comes two months after federal Judge William Pauley questioned why HUD, the federal agency responsible for overseeing public housing around the country, wasn't doing more to crackdown on the housing authority.

Pauley made the comments when he rejected a proposed settlement to a lawsuit alleging NYCHA's mismanagement and fraud was forcing residents to live in developments with broken elevators, rodent infestations, toxic mold and lead paint. The lawsuit, filed by the office of the U.S. Attorney for the Southern District of New York, also accused NYCHA of trying to hide the extent of the problem from federal inspectors.

"We are in the middle of productive conversations with Secretary Carson and the US Attorney to improve the quality of life for the 400,000 New Yorkers who call NYCHA home," the Mayor said in a written statement. "We all agree that the best outcome relies upon the City and the federal government working together, and we look forward to continuing discussions."

HUD's letter coincided with a deadline Pauley set for prosecutors and the city to submit status updates on the lawsuit. Both sides requested another 45 days to reach an agreement.

Earlier this week, Mayor Bill de Blasio outlined a plan he said would generate $24 billion for repairs to the housing stock. The plan proposes building market rate housing on NYCHA land and selling air rights to private developers.  

The mayor and his administration have been speaking out against a federal takeover for several weeks, and have repeatedly argued that NYCHA's troubles preceded his administration

“Working people are the backbone of this city," de Blasio said Friday on WNYC’s Brian Lehrer Show. "You let control go somewhere else, all bets are off."