Mayor Zohran Mamdani's administration has finalized financing for a $607 million renovation of Nostrand Houses, a public housing complex in Brooklyn, a cost that averages out to approximately $528,700 per apartment. The extensive overhaul, which closed financing on Tuesday, is the first project to be completed under the Public Housing Preservation Trust.
The project will include gutting and rebuilding kitchens and bathrooms with modern amenities, replacing all windows, installing new elevators and heating systems, and addressing lead and mold hazards. Additionally, security will be enhanced with expanded camera systems and on-site guards, and 81 units will be retrofitted for residents with mobility needs, with another 48 for those with vision or hearing impairments. A new management office to house more than 40 staff members is also part of the plan.
This initiative marks the first deal under the Public Housing Preservation Trust, an entity designed to allow NYCHA developments to access enhanced federal subsidies through the Section 8 program while remaining publicly owned. Residents of Nostrand Houses voted to join the trust in December 2023, a move officials say will nearly double the federal operating subsidy the complex receives. Vlada Kenniff, President of the Trust, stated that the investment provides the necessary resources for modernization while maintaining public ownership, resident rights, and affordability.
The funding for the project is a mix of city, federal, and private sources, including the Office of Management and Budget, the Housing Development Corporation, Merchants Capital, and the AFL-CIO Housing Investment Trust, with the city's building trades unions acting as labor partners. Construction is scheduled to begin this fall.
The high per-unit cost has drawn criticism from figures in the real estate sector. Jay Martin, head of the Community Housing Improvement Program, questioned the cost-effectiveness, particularly in contrast to the financial pressures faced by private landlords. His remarks on X highlighted the disparity between the investment in public housing and the struggles of rent-stabilized units where rents are not covering operating costs.
The timing of the Nostrand Houses renovation also coincides with Mayor Mamdani's administration implementing a two-year rent freeze for approximately 1 million rent-stabilized apartments. Owners of these properties have voiced concerns about rising operating expenses, including insurance, fuel, and maintenance, which they argue are not being accounted for by the rent freeze.
Mayor Mamdani has prioritized public housing, allocating $5.6 billion in capital funds to NYCHA in his first budget. Three additional developments—Bronx River Addition, Unity Towers, and Hylan Houses—have also voted to join the Public Housing Preservation Trust.