NYCHA Hires Private 'Slumlord' to Run Public Housing
Wavecrest Management's new tenants at a NYCHA project in Queens are happy — so far. But Bronx tenants and activists who've known the company longer? Not so much.
The New York City Housing Authority has hired a private property manager with a questionable reputation to manage two large public-housing developments under a federal program to raise money for much-needed repairs.
Wavecrest Management has two contracts to operate nearly 2500 NYCHA units in an unprecedented effort by the de Blasio administration to leverage private dollars to save the deteriorating housing stock.
The Richmond Hill-based company currently manages nearly 400 private buildings across the city, most of which have received subsidies from city, state, or federal agencies.
Tenants, housing lawyers and condo-owners in the Bronx, where Wavecrest manages over 160 buildings, told WNYC the company had a reputation for mismanagement, not responding to tenant complaints and filing hundreds of eviction cases in housing court. A WNYC investigation found a disturbing pattern of unaddressed building violations and slow response times to complaints.
City records list nearly 6,000 open building and housing violations, over 500 of which are immediately hazardous, according to a WNYC analysis in collaboration with JustFix.nyc, a technology non-profit that analyzes housing data to help tenants.
The city’s embattled housing authority, home to over 400,000 New Yorkers, needs $32 billion to repair conditions that include lead paint, mold, vermin, leaky roofs and pipes, defective elevators and broken heating systems.
Last week, the city reached a deal with the Department of Housing and Urban Development (HUD) to accept greater control by the federal government. But with no additional federal funds for NYCHA, which has been starved of federal and state funds for over two decades, the de Blasio administration has turned to the private sector for support.
The plan involves using federal programs like Rental Assistance Demonstration (RAD) to convert 62,000 units of public housing — a third of NYCHA’s stock — into privately-managed Section 8 properties. Under these deals, NYCHA still owns the land, but the private companies will own a 50 percent stake in the buildings. They can then leverage the properties to borrow private capital to fund the repairs, repaying the loans with revenue from the rent.
“It’s the only medicine that Washington has to offer to public housing authorities like NYCHA, where a history of underfunding has ended up creating abysmal living conditions for residents,” said Vic Bach, senior housing policy analyst at the Community Service Society of New York.
In 2016, the city partnered with a company called RDC Development for a conversion at the Ocean Bay (Bayside) project in the Rockaways, a 24-building complex damaged by superstorm Sandy.
RDC is a joint venture between Wavecrest and a contractor called MDG Design and Construction. The Ocean Bay project was the city’s first RAD conversion — and the largest one in the country. The repairs there are well underway and have already been completed in many of the buildings.
“Everything is new in these buildings, they’re doing a good job,” said Virginia MIles, who’s lived in the complex for 33 years.
“We don’t got no complaint," said Daniel Allen, a resident for 12 years. "We’re living like human beings now.”
RDC’s second contract for a RAD conversion was announced last year. RDC’s new contract, finalized just over two months ago, puts Wavecrest in charge of the Betances Houses in the Bronx.
Giselle Gavin, president of the Betances Residents Association, said the tenants are eagerly awaiting the promised improvements, but also have concerns.
“None of us really like privatization because we always think that with privatization we will be ostracized from our homes, and a lot of us have been living here for decades,” she said.
The city also announced selections of developers and property managers for two other sets of sites in the Bronx and Brooklyn.
The housing authority told WNYC the companies were selected by competitive bid based on their experience and capacity to handle projects of this size. City and state agencies say Wavecrest has a reputation for rehabilitating some of the city’s oldest and worst-kept buildings.
While some of those buildings still have well over 200 open housing violations, WNYC also found problems at Wavecrest-managed properties built in the past two decades, such as the building at 951 Hoe Avenue in the Longwood section of the Bronx.
The bedbug infestation in Shakwana Tucker’s two-bedroom apartment is so severe that she, her two sisters, three young nephews and a niece have stopped sleeping in the apartment. Over the past year, she said, she’s had to throw out four mattresses, two baby rockers and a couch.
“I don’t want anybody to come here no more because they are just dropping from the ceiling,” Tucker said as she displayed her expansive collection of bed-bug sprays and a bloody trail of squashed bed bugs near the heater. “It makes no sense.”
Her older sister Ebony was nursing her one-month old baby in the apartment. “You want your house looking nice,” she said. “But then you find out your kids are getting bites all over the place, even the baby.”
Andrea L. Reid has lived across the hall for 12 years. She says she’s had rats in the apartment and still has yellowing cracks running the length of her ceiling. When it rains, water drips into her apartment.
“They don’t want to hire anybody to come in apartments and fix stuff, they don’t want to spend the money. To me, it’s like a slumlord,” she said.
The building is part of a Bloomberg-era affordable-housing complex that was built by the Atlantic Development Group in 2005. It has 100 open building violations, including mold, a defective vestibule door and broken windows, according to city records.
In an email to WNYC, Wavecrest’s Chief Financial Officer, Susan Camerata, acknowledged that the number of complaints and the response time were “unacceptable” and blamed the problems on the previous superintendent, who was terminated in December. Camerata said they’ve done a lot of work since then and the violations would shortly be cleared from the record.
Tomaris de Jesus, his wife, and two-year old daughter Anastasia live in Boricua Village on East 163rd Street, another Bloomberg-era affordable housing complex, also built by the Atlantic Development Group and managed by Wavecrest.
Their sunny 10th-floor apartment has a terrace — but de Jesus said the terrace door hasn’t closed properly in three years. He’s covered the gap with two sheets of plastic and he uses a belt to hold the door in place on windy days, but there’s still an icy draft.
De Jesus, who runs a small catering business out of his home, says he complained several times to the building management — ever since his wife got pregnant — but to no avail.
He said keeping the one-bedroom apartment warm is a daily challenge and he’s constantly worried about his daughter getting sick. Now he’s taken Wavecrest to court and is hoping for a resolution.
“You’re better off in the projects,” he said. “At least they fix things in the projects. You get results. Here, you get no results.”
Camerata, the Wavecrest executive, acknowledged the gap in the door and said the superintendent and building manager were “coordinating” on the repairs. De Jesus said he would not be dropping his case.
Wavecrest is well known in housing court. The company’s lawyers file hundreds of eviction cases every year, the overwhelming majority in the Bronx.
Meaghan Whyte and Andrew Jones, from Mobilization for Justice, a legal services organization for low-income New Yorkers, said the company has a bad reputation among tenants and advocates. Jones said the company has filed cases against tenants who owe “barely anything.”
“My experience is that they tend to just file a lot of cases on flimsy grounds,” he said.
Camerata said Wavecrest only commences legal action for non-payment of rent when a resident owes more than two months of rent. She said eviction is “the last resort.”
But the company has had problems not only with renters, but also with homeowners who hired Wavecrest to manage their buildings. The company managed the Melrose Court Condominiums, an affordable complex built by the Procida Companies in the early 1990s, for over a decade. But in 2015, the newly-formed condo board fired them.
Condo owner and former board member Lisette Nieves said Wavecrest had not informed residents that the complex had over $1 million in unpaid water bills. She said the owners discovered the problem only when the city placed a lien on their property.
“I really believe what would have happened is our property would have gone up on this lien sale and somebody would have bought it — if not Wavecrest themselves, because they were the only ones who knew what was going on,” Nieves said. “They did not tell us. They were irresponsible.”
The residents — most of them first-time homeowners — organized themselves, created a new board and worked with local lawmakers, including then-State Senator Ruben Diaz, Assemblyman Michael Blake and Rep. Jose Serrano. They hired a lawyer to get the lien dropped, and organized a payment plan with the city.
Camerata, the Wavecrest executive, said the company notified the condo board and the board was “fully aware of the water obligations.” She said Wavecrest had “no authority … to engage with unit owners directly.”
But Aaron Carr, the founder of the Housing Rights Initiative, who worked for Assemblyman Blake at the time, described Wavecrest’s failure to inform residents as “mismanagement.”
Carr said he supports the RAD program, but he thinks the city should select its partners more carefully.
“It really wouldn’t have required much in the way of due diligence for the city to know that Wavecrest is undeserving of its partnership and undeserving or our tax dollars,” he said.
Dan Kass, the co-founder of JustFix.nyc, which analyzed public data for WNYC, said almost half of the open housing violations in Wavecrest-managed buildings have gone unaddressed for over a year, and there’s been a 50 percent increase in new violations from 2015 to 2018. The data, he said, shows a “clear pattern of neglect for basic tenant needs” and a “need for greater oversight and code enforcement.”
Camerata, from Wavecrest, said Ocean Bay and Betances now have live-in superintendents and site offices to promptly address any concerns residents may have.
NYCHA spokeswoman Jasmine Blake said Wavecrest was selected after an “extensive background check” by the NYCHA inspector general at the Department of Investigation.
“All property management companies at some point incur violations, receive tenant complaints, and are involved in lawsuits,” she said. NYCHA also has the power to remove a managing agent for “poor performance,” she added.
A spokeswoman for Mayor de Blasio said the city is selecting solid companies and will keep a close eye on their work.
“The proof this works is in the testimonies of the Ocean Bay residents who get repairs quickly, and have brand-new everything in their homes,” said the spokeswoman, Olivia Lapeyrolerie. “We pick good partners, and hold them to high standards. We won’t stand for anything less.”
WNYC's Cindy Rodriguez contributed to this report.