public housing

City Spends $3M for Public Housing Advice it Already Paid $10M For

Housing Secretary Ben Carson announces deal with Mayor Bill de Blasio to have a new federal monitor overseeing NYCHA, on Jan. 31, 2019.
Housing Secretary Ben Carson announces deal with Mayor Bill de Blasio to have a new federal monitor overseeing NYCHA, on Jan. 31, 2019. Photo: Ben Fractenberg/THE CITY

Sign up for “THE CITY Scoop,” our daily newsletter where we send you stories like this first thing in the morning.

The city spent $3 million for a consultant’s report on how to overhaul the troubled public housing system — a document that echoes key recommendations from another consultant that cost taxpayers $10 million in 2012.

The report by KPMG LLP, released Monday, includes a call to shift responsibility for apartment upkeep from NYCHA headquarters to housing developments. That’s remarkably similar to the advice Boston Consulting Group offered seven years ago, a review by THE CITY found.

Mayor Bill de Blasio hired KPMG in May as part of an agreement signed in January with U.S. Department of Housing and Urban Development Secretary Benjamin Carson to settle a complaint filed by federal prosecutors charging NYCHA covered up squalid conditions in thousands of apartments.

KPMG was charged with proposing organizational reforms.

That’s essentially the mission Boston Consulting Group was hired for in 2012 when John Rhea, then-Mayor Mike Bloomberg’s appointee as NYCHA’s chairperspon, enlisted the firm to do a similar drill-down on the authority’s structural flaws.

Deja Vu All Over Again

THE CITY’s examination of the reports from both consultants revealed multiple moments of déjà vu.

KPMG’s 700-page report, filed with NYCHA, prosecutors, HUD and an independent monitor appointed as part of the agreement, set out to “document the current state structure of the organization, benchmark the structure and identify challenges and opportunities for improvement for NYCHA’s current operating model.”

Photo: Will Welch/THE CITY

Boston Consulting Group’s 109-page report, released in August 2012, stated the firm had “perform[ed] a comprehensive current state assessment of NYCHA’s central services and borough office support functions” and “recommend[ed] improvements based on its assessment with the goal of improving and enhancing the efficiency and effectiveness of NYCHA’s current business model.”

KPMG warned that NYCHA’s departments “operate in silos with wide variations in process execution.”

Boston Consulting Group called NYCHA’s system a “reactive, siloed operating model.”

Who’s in Charge?

A central recommendation in both reports focuses on who should be directly in charge of ensuring apartment conditions are up to code and that NYCHA’s 400,000 tenants have a safe, healthy place to live.

When Rhea arrived as NYCHA chair in 2009, he centralized the system of apartment repairs, requiring that requests for fixes be routed through a main call center. He moved responsibility for budgeting these fixes from the development managers — who’d handled these tasks for decades — into central headquarters.

In its 2012 report, Boston Consulting Group rejected that approach, suggesting “shifting more responsibility for property management from central offices to property-level.”

Fast-forward to 2019.

In its report, KPMG called for givingmore direct responsibility for resourcing and budgeting decisions to the property manager.” The firm also suggested “instituting provisions of property-based management services” that would “foster more localized control and accountability.”

Photo: Will Welch/THE CITY

Back in 2012, Boston Consulting Group noted NYCHA had problems coordinating its system of tackling big-ticket capital projects — jobs such as roof replacements or boiler upgrades — with handling specific apartment fixes.

The firm suggested that NYCHA “introduce [a] proactive integrated asset management model with operations.”

On Monday, KPMG made the same observation, recommending that “NYCHA should invest in the opportunity for developing and maintaining a NYCHA-wide asset management policy…and improve prioritization and integration with capital planning.”

Rebranding NYCHA

KPMG did make some recommendations Boston Consulting Group did not address.

KPMG, for instance, noted that under NYCHA’s bylaws, the chairperson is also the CEO with responsibility for day-to-day decision making. KPMG suggested removing that responsibility — allowing the chair to focus on overall governance and handing the CEO job to the general manager, who already performs those duties.

Overall, KPMG’s findings are extremely familiar to tenants who live in public housing and to the officials  — including Manhattan U.S. Attorney’s civil division and multiple local politicians — who’ve been criticizing NYCHA’s mismanagement for years.

The report cited “a lack of clarity as to who is responsible and accountable for what” — leading to “a lot of unnecessary rework and handoffs for a disjointed experience.”

The report even suggested “rebranding” NYCHA, which has been broadly criticized for its false claims that it performed all required lead paint inspections during years when more than 1,100 children living in public housing registered alarming levels of lead in their blood.

Photo: Will Welch/THE CITY

KPMG said an image makeover was necessary to “reestablish public perception and reflect the organization that NYCHA is striving to become – one that has integrity and accountability.”

The release of the recommendations triggers a six-month process that requires the federal monitor, Bart Schwartz, and NYCHA management to “collaboratively” craft a new plan — and submit it to Manhattan U.S. Attorney Geoffrey Berman, Carson and de Blasio by late May.

If NYCHA and Schwartz can’t agree on a plan, the monitor can submit his own version. NYCHA can appeal to HUD and prosecutors, who have the final say.

The January 2019 agreement states that after consultation with the prosecutor and HUD, the new plan “shall be considered final.” At that point, NYCHA must report back every 60 days to the monitor, HUD and prosecutors on progress until the plan is fully in effect.

Want to republish this story? See our republication guidelines.

SUPPORT THE CITY

You just finished reading another story from THE CITY.

We need your help to make THE CITY all it can be.

Please consider joining us as a member today.

DONATE TODAY!