NYCHA’s Rehab Push Brought Jobs — Just Not for Its Residents

WHEN HURRICANE SANDY landed in New York City in 2012, it hit public housing hard. The sprawling Red Hook Houses, on the Brooklyn waterfront, lost power for weeks. And the recovery was slow: Major renovations didn’t start until almost five years after the storm. When the federal dollars finally came in, though, they spelled a big economic opportunity — more than $500 million worth.

“I saw the money as an opportunity for the neighborhood to eat,” said Karen Blondel, a longtime resident and tenant advocate at Red Hook Houses. That promise was backed up by a law known as Section 3, which requires a portion of jobs created by federal housing funds to go to low-income local residents.

But that’s not how things played out. “When I looked out the window at the actual workers, none of them live in public housing,” Blondel said, speaking to New York Focus shortly before the 10-year anniversary of Sandy.

Data provided by the New York City Housing Authority (NYCHA) to federal authorities bear out her concern.

Annual reports NYCHA submitted to the US Department of Housing and Urban Development (HUD) from 2016 to 2020 — obtained by New York Focus through a freedom of information request — show that the authority has often missed its Section 3 targets by large margins, particularly when it comes to construction and renovation work.

“To see such a huge job and not see as many people as I thought should have been working or getting training was very disappointing,” Blondel said of the Red Hook restoration.

Until late 2020, Section 3 held that — “to the greatest extent feasible” — at least 30 percent of workers NYCHA hired should be low-income local residents, with public housing tenants getting priority. Similar benchmarks applied to outsourced work: Section 3 specified that at least 10 percent of construction contracts and three percent of non-construction contracts should go to qualifying Section 3 businesses.

A Trump administration rule change in late 2020 loosened those criteria, shifting the benchmark to 25 percent of labor hours for all projects and removing the explicit preference for public housing tenants. But for the period covered by NYCHA’s reports — the most recent the authority was able to provide — the earlier criteria were in place. And NYCHA, in many cases, failed to meet them.

From 2016 to 2020, no more than 0.3 percent of NYCHA construction contracts went to Section 3 businesses in any given year. NYCHA also fell afoul of the targets for direct hiring, despite starting off on a strong foot. In 2016 and 2017, it reported that virtually all the workers it hired for repairs qualified under Section 3. The next year — as overall hiring jumped — the Section 3 share plummeted to just 16 percent. It continued to decline through 2020.

Some tenant leaders say they’re not surprised NYCHA has missed its targets.

“I believe it to be a steady doughnut” — a zero, Manny Martinez, resident council president for South Jamaica Houses, said of the authority’s Section 3 contracting rate. NYCHA’s self-reported figures for construction contracts match that description.

Martinez, 45, has lived in the South Jamaica development nearly his whole life, and feels residents like him have been robbed of economic opportunities they were promised under Section 3. Had NYCHA met its targets, nearly $250 million more in contracts would have gone to local residents over five years, according to New York Focus analysis of the authority’s reports.

“That investment alone … would have made these communities much different than what we currently are,” Martinez said.

New York City Councilmember Alexa Avilés, chair of the council’s public housing committee, said she has heard similar concerns from many residents.

The figures NYCHA reported “are not a surprise, but they are still upsetting,” she said.

“The mandate is right,” Avilés continued. “The public dollars should be supporting the training and hiring of residents of public housing. … There should be real opportunities there that are being squandered.”

NYCHA said it is taking steps to hire more residents, despite a long list of constraints.

“NYCHA is committed to providing employment and training opportunities to public housing residents under the Section 3 initiative and have made several improvements … to meet this goal,” said spokesperson Nekoro Gomes by email. “HUD and the Federal Monitor have both recognized the effort we’ve put in to improving capital project delivery and these measures will serve to improve the capacity of this vital program.”

Gomes highlighted the Section 3 rates NYCHA reported for day-to-day operations and non-construction contracts, which usually met or exceeded the HUD benchmarks.

But “capital” work — meaning one-time renovations or repairs — was by far the biggest source of new jobs, and NYCHA’s reported numbers suggest that efforts to hire within its own community slipped down the list of priorities.

In part, NYCHA’s trouble keeping up with Section 3 reflects another urgent need: an enormous, and mounting, backlog of repairs. Entire developments have gone days or even weeks without heat or hot water; months without cooking gas; and years without remediation of hazardous lead, mold, and asbestos.

“They’re just floundering trying to do what they can to keep the buildings running,” said Iziah Thompson, senior policy analyst at the Community Service Society (CSS). “In the ideal world, you want them to be a provider of housing and a provider of job training. But [they] did the housing part first, I think, and I don’t blame them for focusing on that.”

The sharp drop in NYCHA’s Section 3 hiring rate in 2018 partly reflects a surge in hiring overall, essentially of construction and building trades workers needed to address those long overdue repairs. Between federally funded Sandy recovery efforts and general repairs required under a 2019 agreement with HUD, NYCHA hired thousands of workers.

That may have gotten more repairs done — but rarely by tenants themselves. And jobs remain an equally pressing need for many public housing residents.

NYCHA developments and their surrounding neighborhoods have some of the highest unemployment rates in the city, which in turn faces higher unemployment than the country as a whole. In sections of East New York and the South Bronx where NYCHA developments are most concentrated, census five-year estimates put unemployment at 15 percent or more. The city average is half that.

Map showing NYCHA developments (dark grey) laid over unemployment by census tract (ACS five-year estimate 2017–2021).

Unemployment rates within NYCHA developments may be even higher. CSS’s latest complete survey of public housing residents, conducted in 2021, found that some 22 percent were out of a job, with the highest rates among Black and Latino residents.

If Section 3 had been implemented to its full extent when big federal funds came in, the picture would look much different, said Keith Swiney, president of the Section 3 compliance firm Motivation Inc. and a national expert on the law.

“You’d have residents riding around in Bentleys right now,” Swiney said.

Section 3 had its origins in the Housing and Urban Development Act of 1968, a capstone of the civil rights era. The law sought not only to provide low-income people with decent housing, but to give them jobs building and maintaining those homes — the key goal enshrined in Section 3.

“Public Works, Not Charity: Black Houses, Black Jobs,” read the title of one article about the law, published that summer in Commonweal magazine and reproduced in the congressional record.

Though Section 3 has been tweaked in the decades since, its core principle stands: Housing authorities and developers that receive federal subsidies must make their best efforts to ensure that a portion of the jobs they create go to low-income local residents.