TESTIMONY OF NEW YORK CITY COMPTROLLER SCOTT M. STRINGER EXAMINING THE NEED FOR CONTRACTING ACCOUNTABILITY AND TRANSPARENCY AT THE NEW YORK CITY HOUSING AUTHORITY BEFORE MEMBERS OF THE COMMITTEE ON PUBLIC HOUSING AND THE COMMITTEE ON CONTRACTS OF THE NEW YORK CITY COUNCIL

Good morning.

WASHINGTON, D.C. – October 2, 2015 – (RealEstateRama) — I want to thank Chairman Torres for calling this hearing on the New York City Housing Authority, and for inviting me to testify. And I want to thank members of the Committee on Public Housing and the Committee on Contracts for being here.

As we gather today, our city is confronting a crisis in homelessness and affordability – even amid the great prosperity of our times. All across our city, we see cranes building gleaming towers to the sky – and that’s a good thing.

But we also see too many families getting left behind – in run-down shelters, and too often in NYCHA developments that have become a symbol of urban decay.

The contrasts weren’t always so extreme.

When I was a kid in Washington Heights, there wasn’t much difference between Hillside Avenue or Dyckman Houses – we were all just families striving to get ahead. For many, moving into NYCHA was a ticket to the middle class, and that’s the way it was meant to be.

As Mayor La Guardia proclaimed in 1938 as he pressed his case for creating NYCHA: “Down with hovels. Down with disease. Down with fire traps. Let in the sky. A new day is dawning!”

Instead of that new day, NYCHA has become a collection of broken windows, mold and roofs that never get fixed, like at King Houses.

So I am here today because Chairman Torres understands this – he understands we’ve got to have a discussion about real, fundamental reform. The reason this hearing is so important is because it speaks to accountability and transparency – something that has been lacking at NYCHA for decades.

Year after year, we get plan after plan, promising on paper how the Agency is going to improve. But over and over, those promises are broken. Take a look back:

• In 2006, NYCHA unveiled the plan to preserve public housing and nothing changed.

• In 2011, it was plan NYCHA, a roadmap for preservation and nothing changed.

• In 2012, the authority spent millions on a report by the Boston Consulting Group and nothing changed.

• And earlier this year, the administration unveiled NextGen — which declared “we can’t solve today’s problems with yesterday’s solutions.”

But that is precisely what NextGen offers. In fact, only six of NextGen’s 26 strategies didn’t appear in NYCHA’s earlier plans or in the Boston Consulting Group’s recommendations.

That’s right — twenty of NextGen’s 26 strategies and objectives are essentially identical to those that appeared in one or more previous plans. So you can forgive NYCHA residents for hearing NextGen and thinking ‘OldGen’.

My office has conducted six audits of today’s NYCHA and revealed a litany of problems, including:

• The Agency’s failure to secure nearly $700 million in federal funds that could have been used for critical operations and improvements including replacing windows and boilers.

• We dug into NYCHA’s mismanagement of vacant apartments and found units kept off the rolls for years – 80 apartments vacant for more than a decade, and an additional 161 vacant three to ten years.

• We exposed NYCHA’s scandalous inventory system, where we found the mysterious “X-Men” signing out materials from one warehouse in the Bronx.

• Most recently, we looked at NYCHA’s maintenance and repairs program and found a backlog of 55,000 requests.

• We also found that NYCHA took an average of 370 days – more than a year – to fix critical safety violations.

I know our audits upset some people in city government.  But as we all know, sunshine always disrupts the darkness. So the real question that Councilman Torres is trying to answer is – how do we finally break the cycle of dysfunction at NYCHA?

Here’s what I believe must happen:

First, it’s time for NYCHA to be treated like every other agency when it comes to budgeting, because for too long they’ve flown under the radar. Right now, the agency provides –

• No quarterly reports of their planned budget

• No actuals, cash flows or headcounts.

• And no four year financial plan.

This is Budgeting 101 at other agencies and NYCHA should be providing all of that.

Second, NYCHA should release its physical needs assessment, a critical document that should be tied to its capital plan.

The needs assessment is like an X-ray of every building in the system, showing exactly where roofs, boilers and other critical systems are in need of repair. Yet for years, NYCHA has hidden this document in a drawer, where no one can see it. An updated version is due next year, in 2016.

NYCHA should commit today to releasing the needs assessment, now and in the future.

Next, NYCHA needs to lift the lid on all maintenance and repair records, and release information about mold, peeling paint and other problems by building. I’ve called on them to create NYCHA-stat, which like the NYPD’s CompStat would track work orders in real time, and post information online for all to see.

Under our plan, repair requests for each building would be organized by the four major work order types. And they would provide weekly, monthly, and yearly comparisons.

The key is to make sure it’s not just another transparency tool, but a management tool. The whole point is to have managers held accountable for failings in their area, just like CompStat did for the NYPD.

Understand something – the police today can tell you in real time where every misdemeanor, every jay-walking ticket is issued at every NYCHA development. So the police can know your business at NYCHA, but the repairman can’t?

NYCHA will no doubt testify that they are more transparent than ever, but they’ve got miles to go. The Agency’s metrics page only allows residents to see some information on certain work orders, and not others.  Likewise, their new MyNYCHA app allows individuals to track their own work orders, but not to see the big picture within their building.

Imagine if CompStat ran like that – it would be like letting you track crimes committed only against yourself, without ever seeing what’s happening in your community.

Today I would add a new priority to the agenda – an idea from Councilman Torres that ties everything together, an idea that is so sensible, I wish I had thought of it first.
We have a transparency tool in my office that could provide a new window into NYCHA and its spending. It’s called Checkbook, and it’s a website that shows contracting and spending, in real time, at every agency.

In Checkbook, you can see exchanges of money between NYCHA and other City agencies. But how NYCHA spends the vast bulk of its money, and with whom, remains all but invisible.

We need to change that, now. And there is precedent.

Just last year, the New York City Economic Development Corporation – which like NYCHA is technically not a city agency – agreed to integrate its contract information into checkbook.The agency placed over $1 billion in spending into the system, and agreed to update it regularly.

So today, with Councilman Torres and the rest of the Council, I hope we can make a unified call for NYCHA to wake up and join Checkbook.What we cannot do is support the status quo, or listen to the apologists who insist that all is well.

Look, many of us are near the halfway point in our terms. And if we are going to move the needle on real change, the time to act is now. We need to stand up and do what no Administration has been able to do for decades, and that is to provide meaningful reform for the parents, grand-parents and children who call NYCHA home.

And let me stress — I look forward to partnering with NYCHA’s chairwoman — Shola Olatoye. She is already working with my office to reform the Agency’s inventory system in line with our audit. And we need to make sure that she has all the tools she needs to realize the true “Next Generation” at NYCHA.

Because remember, this is not about brick and mortar. This is about people’s lives, and ultimately preserving the single greatest source of affordable housing in our City.

That’s what La Guardia was fighting for when he called for a new day in 1938. He was demanding sunlight for all. Fairness for all. Decent living conditions for all. And that’s what we should continue to fight for today.