There are 21 public housing projects that have been on hold in New York City due to lack of funding through the New York City Housing Authority. City officials claim that the housing authority “has been ‘hemorrhaging’ about $1 billion over ten years” making it difficult to keep up with much needed renovations. To get the help needed to rebuild and renovate these public housing projects, the city will be required to sell the projects, in turn receiving a one-time provision based on the federal stimulus plan. To ensure the property is not owed by private parties, the housing authority will retain ownership of the land.

According to Marc Jahr, the current president of the NYC Housing Authority, Citigroup has partnered with an affiliate to purchase 13 of the 21 projects. The projects in question are considered some of the worst, run-down apartments out of the group. Citi is taking on $360 million of the debt and has plans to re-market the rest. In addition, Citi will invest over 200 million dollars of equity into the 13 projects which should result in tax credits of $255 million off their federal tax bills.

All 21 projects were build with city and state funds after the second World War. As time has passed, the city and state stopped subsidizing the projects requiring the housing authority to use federal dollars set aside for other projects to pay for the upkeep. Over the years, the projects have fallen into disrepair making modernization necessary to bring the projects current with the times.

Mayor Michael Bloomberg has stated, “Nothing is going to change except for the better” and reminding people that “No one will be displaced. The land these developments occupy will always be used for public housing and nothing else.”

The renovation of these projects comes at a perfect time when the city’s unemployment rate is exceeds ten percent. With hundreds of renovations needed, this will provide jobs for countless workers. In addition to the repairs needed for the 13 projects that Citigroup is involved with, there are also 8 other projects which will be renovated through the New York City Housing Authority and the New York City Housing Partnership. It is expected that just under 500 million dollars will be issued to the New York City Housing Development in a period of three years in the form of tax-exempt bonds.