Facing a mounting deficit and a backlog of 420,000 repairs, the New York City Housing Authority (NYCHA) is now taking steps to implement a controversial infill strategy that could have a long-lasting impact on the public housing system. In March, after much deliberation, NYCHA officially announced its plan to lease parcels of land in eight Manhattan public housing developments to private developers. For several months, NYCHA officials have held meetings at the proposed sites and their plans have been met with criticism from residents and government representatives.

“The problem with the current way they’re handling the infill development is that they [NYCHA] have been super aggressive, not forthcoming with information, very secretive, and not very sensitive to the fact that it is a huge significant change in the way that they are dealing with public housing,” said Lucy Newman, a staff attorney at The Legal Aid Society, a private, not-for-profit legal services organization that is representing certain tenants of the housing developments in question.

NYCHA Chairman John B. Rhea told members of the New York State Assembly this month that the over-extended agency must “find innovative ways to chart [its] own path” and make up for its significant loss of state and federal funding. In his testimony, he explained to the committee that the agency has lost more than $2.3 billion in the last decade and now is faced with “6 billion dollars in unmet capital needs.”

Last week, NYCHA released more details of its infill plan. The agency has selected a total of 14 parcels of land to lease to developers who would then be responsible for constructing and operating the buildings. The income from these new developments, estimated to be between $30 million and $50 million, would be invested back into public housing improvements. The eight developments, all located in prime areas of Manhattan, stretch from the Lower East Side to 110th Street and include the Douglass Houses, Washington Houses, Carver Houses, Campos Plaza, Meltzer Tower, Baruch Houses, Smith Houses, and LaGuardia Houses.

It is a lucrative deal for developers, who will land a 99-year ground lease plus tax breaks. A document released by Mayor Michael R. Bloomberg’s office entitled NYCHA Infill Public Consultation Strategy states that the developments will result in a total of 4,000 new apartments and possibly some retail space. NYCHA officials say 80 percent of those will be market rate apartments and 20 percent affordable units.

“[NYCHA] is very, very vague about what will be put in those developments. What they call affordable is a very significant issue. Affordable to whom? Who will get priority? And, realistically, how many low-income families will be able to reside in those apartments?” said Newman.

New York State Assembly member Brian Kavanagh, along with other elected officials, wrote a letter to Mayor Bloomberg expressing concern about the approach to the infill development and calling for more transparency. He said that Bloomberg’s response did provide more clarity, but is still insufficient.

“What is positive about this plan is that New York City, unlike many places around the states, is looking to preserve public housing,” said Kavanagh. “Many other cities have dealt with the budgetary shortfalls of public housing by scaling back and this is a creative approach. We are concerned about the way it is being done, but there may very well be a good approach in here.”

While Rhea promises that the land will be leased, not sold, some fear that infill development, especially with a 99-year lease, will ultimately mean the loss of public housing.

“We lose control of that property for really forever because none of us will outlive that lease. That means the property owners will have jurisdiction over the people who move into the projects,” said Gwen Goodwin, a community activist and candidate for city council in District 8. “It is a thinly veiled attempt to seize these properties and make sure this neighborhood is gentrified.”

Goodwin and Newman also suggested that there are other unexplored revenue sources. In 1994, Mayor Rudy Giuliani’s administration decided to merge the New York City Housing Authority Police Department with the New York City Police Department. In spite of the merger, NYCHA still pays $75 million a year to the NYPD for services that advocates say don’t necessarily benefit NYCHA residents. Newman and others believe that this money, which is more than NYCHA would make from the infill development, could pay for improvements.

For now, NYCHA is moving forward with the infill plan. The agency will issue an RFP this spring for the development of these 14 parcels and sign ground leases with developers by November 2014.