Maintain-and-repair rather than raze-and-rebuild has long been New York City’s approach to affordable housing, but in the face of a steady decline in public housing—a loss of 10,000 units a year nationwide since 1995—NYCHA has maintained its stock just barely.

Now with grievous financial shortfalls, NYCHA is struggling to uphold commitments to affordability and resist calls for demolition or privatization. The strategic plan for 2011–2015 combines administrative creativity and new income streams to upgrade the 334 developments housing over 400,000 New Yorkers.

NYCHA’s revenue sources, comprised of HUD subsidies and residents’ rent, have been insufficient to keep buildings in adequate repair; there is currently a three-year backlog in requests. Recurrent trouble spots include elevator breakdowns, thriving rodent colonies, sewage spillovers, and plumbing backups. “I’d rather sleep in the park,” said Damaris Reyes, executive director of Good Old Lower East Side (GOLES), which conducted a resident survey.

Part of the problem, Reyes notes, involves NYCHA’s centralized call center for repair requests and scheduling, which has performed poorly in coordinating visits logically (plastering before painting, for example), and alienated many residents, particularly Chinese speakers, from building management. Another problem has been a lowball/ snowball cycle: The construction procurement process prevents many skilled contractors from bidding, and the resulting shoddy work requires repeated attention, with small problems postponed until they become larger. Further problems arise when buildings get flimsy new components and sporadic service.

Under the Mixed-Finance Modernization Plan, a one-time opportunity blending American Recovery and Reinvestment Act funds, private investment, and tax-exempt bonds, the agency is federalizing 21 developments that state and city government built after World War II but stopped supporting in 1995. An administrative quirk left these buildings distinct from NYCHA’s 313 federally funded developments, and accounts for roughly $90 million of NYCHA’s $150 million annual deficit. There’s an unambiguous villain in this matter: single-term Sen. Lauch Faircloth (R-NC), whose 1998 Faircloth Amendment to the Quality Housing and Work Responsibility Act blocked HUD support for construction or inclusion of new public housing. It froze the number of federal units, and defined transfer of “the 21” to federal responsibility as a prohibited addition.

With federal, state, and city funding for these units zeroed out, NYCHA has maintained them only by sharing HUD subsidies meant for its federal units, “robbing Peter to pay Paul,” as NYCHA’s General Manager Michael Kelly put it. The Recovery Act, however, exempts its funds from the Faircloth prohibitions. In the first phase of federalization, investment through a special public/private partnership including Citi Community Capital and the nonprofit Housing Partnership Development Corporation will generate $400 million to rehabilitate the 21 developments. The second phase aims to merge them into “one NYCHA” of 334 federally funded units.

Despite charges that federalization is a step toward privatization, Kelly said that NYCHA remains the general partner in control, with caretakers and managers retained, union rules intact, and no tenants displaced or rights diminished. “Most importantly, we built in a model that preserves the public housing; it will not fall into the threat of foreclosure,” Kelly said.

A plan is in place to raise rents on the 27 percent of occupants who can afford higher payments within the legal ceiling of 30 percent of income. Expanded commercial opportunities on NYCHA sites, like the Harlem Children’s Zone on the West 129th Street superblock, represent another revenue stream. “What we’re looking at is a much more aggressive public-private partnership,” Kelly said, “and to use the value of our real estate to attract developers and builders who would be interested in working with us to add additional housing and community amenities on our sites.” Mixed-use strategies for restoring the urban grid, he adds, allow for more systematic expansion of retail and housing than the towers-in-a-park model.

Urbanists tend to agree that public housing is an expression of civic values and a sound taxpayer investment in hard times. Still, the appointment of banker John Rhea, not a housing specialist, as NYCHA’s chairman does little to assuage residents’ fears that short-term financial considerations will preclude long-range capital investment, or that the Preservation, Enhancement and Transition of Rental Assistance Act, a draft HUD proposal to leverage private funds without compromising public ownership, will not be an opening for part-owners with foreclosure risks. Heated debates on that bill underscore the inextricability of local concerns from national agendas.