What the Massive NYCHA Corruption Sting Really Reveals

Photo: Brendan McDermid/Reuters

Earlier this week, 70 current and former NYCHA workers were arrested on bribery and extortion charges in a record-setting bust. According to the Department of Justice, these superintendents and other employees working at nearly 100 housing developments in the city were accused of taking kickbacks from contractors — generally ranging from $500 to $2,000 — in exchange for hiring them to do small-scale repairs at their buildings, which were $10,000 jobs or less. While the bribes altogether added up to a relatively small amount — $2 million — it was the largest number of bribery charges that the Department of Justice has ever handed out in a single day. Many NYCHA tenants were unsurprised — as one put it to the New York Times: “That’s how housing works.”

NYCHA’s operations have been under scrutiny over the past few years — in 2019 the authority was placed under a federal monitorship after it falsified lead-paint inspections. And this latest scandal is drumming up calls for the housing authority to reform its no-bid contracting processes. So what does this latest bust mean for NYCHA and its perpetual maintenance woes? We spoke to Nicholas Bloom, urban-policy professor at Hunter College and author of Public Housing That Worked: New York in the Twentieth Century, about the raid and what it shows about the cost of public housing.

Tell me how this system of small-dollar repairs works in NYCHA.

The original concept was to speed up the repairs. They’re small jobs where you wouldn’t force everyone to go through requests-for-proposals and bidding to accelerate repairs. But clearly the reason there was all of that process in place was to prevent pay-to-play instances like this. You had to know you’re going to relax controls.

But an interesting question that’s worth looking into is how successful has this been in speeding up repairs. Did this actually have any of the impact that people hoped? I don’t know. The reason you need all this is because there are so many buildings that have long-standing maintenance issues. If you can’t address the large-scale issues, there’s a lot of short-term fixes, which are beyond what NYCHA maintenance can handle because it’s a bit understaffed as well. So that’s why you have all this small-time contracting going on.

So if some of these bigger capital needs were funded and completed, it would lessen these kinds of patchwork maintenance contracts and thus the potential for corruption. 

Absolutely, because you’ll have lobbies renovated, roofs done, fewer leaks in the building walls, and so you’ll definitely have fewer repair issues. And we can see that with the RAD program [a federal program that unlocks Section 8 funding and allows private operators to renovate public housing]; they’re able to comprehensively renovate places. That’s definitely going to reduce your operating costs and the need for short-term repairs. Whereas in the majority of NYCHA buildings, while they’re able to do some of the big projects — roofs and things like that — they’re way behind on so many other pieces.

Can you contextualize if the raid is, in fact, a big deal — 100 buildings, 70 people — seems like such widespread corruption. 

I would just say that there’s a long tradition of pay-to-play in New York around building services. It’s in the private sector too, and honestly, this is not the first time it’s happened in NYCHA either. I think it’s crucial to send a message that this is not acceptable. And hopefully people get the memo on that. But by having so much need for these constant small-scale things, they’re creating conditions where people will take advantage of the system.

Yeah, it seems like no one was really that surprised, especially tenants. 

I mean, the headline is, Building Super Requires Money to Get a Favored Contract in New York. I don’t think that surprises anyone.

Will this actually affect the day-to-day life of tenants? Is this actually going to help them get repairs? 

None of this is great from a reputational point of view for funding, but what are you going to do? If people have committed crimes, then they have to be prosecuted for it. And again, there’s the question of “Did they do the work?”, which I think is a pretty big question. So if they’re corrupt and they’re not doing the work, then for the lives of residents, it’s a total loss. But it’s hard to imagine, given the enormous $70 billion deficit the housing authorities are facing, that this one way or another will affect people.

Do you see this as part of the bigger effort to clean up operations?

NYCHA is already under a microscope in a sense. So it’s kind of amazing that people would pull this, given the fact that there’s a federal monitor. It’s about restoring confidence and so forth. But politically, I don’t know how this plays. It’s not likely to play very well because then it’s sort of like, “Well, where’s the money going?” and those sorts of questions. Whereas I know for a fact that NYCHA has, over the last decade or more, reformed its large-scale contracting processes and done a pretty good job of actually delivering. From what I understand of those contracts, they’re extraordinarily vetted.

I assume the people who are against public housing will just use this as more ammo to dismantle it.

Well, for those who are against public housing, it’s just another example of why public housing is unworkable. For those who are for it, it’s a little frustrating. I’ll admit that myself as someone who supports it. But the problem is that politically, everyone is still dodging the bullet, whether it’s the governor or the mayor or whoever.

What most people don’t realize is the aging stock problem. Almost all projects were built between 1945 and 1965. We’re talking about 170,000 units. So that entire stock of housing is basically reaching the time where they need comprehensive renovation. While there was money to build this all in one burst, we haven’t seen that kind of funding for public housing since. So how do you essentially rebuild an entire system in a political world where Congress is not going to fund it, and the state and the city have only put up a small amount.

So it still comes down to large-scale funding. 

Yes, I would say the solution is to fund public housing better so that you can do comprehensive renovation. There are some large-scale comprehensive modernization projects underway and there’s the RAD-PACT model where you’re basically resetting buildings so that there are fewer opportunities for this sort of small scale graft. That, to me, is the only solution. Well-funded agencies do a better job of controlling costs and behavior and so forth because they have the funds to maintain the buildings and the operations people feel well-paid and responsible. You can attract talent in a different way. Anything that is well-funded in America, has a good reputation and gets things done. And anything that isn’t — well, you can rearrange everything, but it doesn’t function as well.

What the Massive NYCHA Corruption Sting Really Reveals