On-Demand: CAPstone - Shattering the Tech Ceiling | Part IV - NYCHA

And before that, I spent about 20 years as a senior attorney at the New York City Law Department, where I specialized in real estate acquisition and development. So I've spent pretty much my entire life in public service. I really have a passion for it, and I try to use my previous experiences to confront whatever challenging issues I have. And being the CEO of NYCHA is certainly one of the greatest challenges that I've had in my career thus far.

Candice Meth:That's amazing. Thank you so much, Lisa. And I want to take a moment to introduce myself. I'm delighted to be joining this webinar. My name is Candace Meth, I'm a partner with EisnerAmper. I'm privileged to serve as the national leader of our not-for-profit group practice, and we, as a resident of New York City for 18 years, appreciate everything that NYCHA does, and now as a current resident of Long Island, especially appreciate your service that you did with the impact of Sandy and helping so many of us recover from that. So thank you for that. Want to talk a little bit more about NYCHA and perhaps some of the current goals that are in place.

Lisa Bova-Hiatt:Sure, so it's very interesting. NYCHA is the largest public housing authority in the nation, and just to provide you with a scale, we are larger than the next nine public housing authorities combined. And so we were created in 1935 to provide decent affordable housing for low and moderate income New Yorkers, and we're home to roughly one in 16 New Yorkers. We have over 177,000 apartments, we have 2,000 buildings, and we have 335 housing developments. And what's unique about NYCHA is that our housing developments are located across the five boroughs. Sometimes when people think about public housing they say, "Oh, well, that's on the other side of the tracks." Our public housing is everywhere, in some of the most lovely neighborhoods across the five boroughs.

And we serve about 339,000 residents through our conventional public housing, which is Section Nine. We have about 29,000 residents that are in developments that have been converted through our PACT program, and about 92,000 families through our federal rent subsidy program, which is our Section Eight lease housing program. So we're really a city within a city, and if you looked at NYCHA's population, all of the individuals that we serve, NYCHA would be the 35th largest city in America. What we also do is we connect our residents to opportunities in financial empowerment, business development, career advancement, and educational programs. So we really provide a cross-section of opportunities, not just housing to our residents.

candice Meth:That's amazing. And then with your background in public service and your earlier background in real estate, what was it specifically about NYCHA that drew you to wanting to work there?

Lisa Bova-Hiatt: So I'm a third-generation New Yorker. I have been in New York my entire life. And when you think about the volume of individuals who live in public housing, making sure that affordable housing is decent, safe, sanitary, that it's a place where people feel comfortable living in is so important, and NYCHA is routinely on the worst landlord list. And our goal is to provide decent, sanitary, affordable housing to our residents, and operate as an effective and efficient landlord. And as somebody who's spent my life in New York, going from first as an attorney working at the New York City Law Department, but having an opportunity to work with so many agencies, NYCHA is really New York's greatest challenge. So to have the opportunity to serve our residents, and help transform the agency into what it was when it first started is really just an incredible personal challenge.

Candice Meth:That's amazing.

Diane Wasser:You mentioned early on you were working in New York City, and it seems like you've been in public service to some extent for a large part of your life and career. What really inspired you to devote your career to this type of work?

Lisa Bova-Hiatt:That's such a great question, and I think about it often, and it's funny, Monday was Martin Luther King Day and one of my favorite Martin Luther King quote is, "One of life's greatest questions is, what are you doing to help others?" And I've always had a passion for public service, giving back, working in my community. I volunteer with Habitat for Humanity with my college friends and acquaintances. It's just something that's always been a passion of mine, both my parents were public servants as well. So I think that working for the city, and giving back to the city that I love so much was just a natural extension of that.

Diane Wasser:Certainly. Yeah, it's humbling. Thank you. At a very high level, why is now such an important time for NYCHA?

Lisa Bova-Hiatt:So NYCHA is really at a critical point in its history, in 2019, we signed an agreement with the federal government, and with this other district of New York, and the agreement set forth certain obligations related to what we call the pillar areas, areas where NYCHA really was failing. Lead, mold, heating, or the ability to provide consistent heating, pests and waste, elevators, and HUD inspections. And we are so fortunate to be able to work, both with the City of New York, with HUD, now with our Federal Monitor, to think about creative solutions to solve our problems.

And when you think about just NYCHA's problems in general, it comes down to dollars and cents. So we don't have enough money to do the comprehensive repairs that our buildings need. So we can't really wait for solutions to come to us, so we need to be strategic and proactive in our efforts to utilize any and all of the resources that we have available to us right now. In June, we had the passage of the Public Housing Preservation Trust, and that alongside with our PACT program, and our Comprehensive Modernization Program, those are tools that we can utilize to really rebuild and fix the structural repairs that our buildings so desperately need.

Candice Meth:Absolutely. You mentioned HUD, and the need for the social services. We do a lot of work with HUD, and we work with so many social service organizations that avail themselves of subsidized housing, and are critically reliant on the services and the housing that is provided there. What do you think led up to this moment in time, in terms of where you are now and trying to honor this 2019 agreement?

Lisa Bova-Hiatt:So I think you have to look a little backwards. Since 1998, there's been a tremendous amount of disinvestment in public housing, not just in New York, but across the country. And when you think about the amount of rent that's collected, and our average rent is about $550 a month, and the average income for one of our families is about $25,000 a year. And so with a lack of investment comes a lack of capital repairs. And you miss a couple of capital repair cycles, and you're really in a situation where you can't just fix a leak by painting and plastering, you really have to replace pipes, you have to replace roofs. And we have a $40 billion capital need, and the scale, our size, and our capital need is unparalleled by any other public housing authority in North America.

So when you think about just where we are now, and then coming off of the heels of COVID, we have a huge uptick in tenant arrears. We have increasing utility costs due to higher consumption and global market volatility. We have high overtime, we have the increased expenses because of the decisions that we have made through the HUD agreement, and the commitments that we've made to make certain changes. So we're really in a perfect storm right now. Our tenant arrears are inching closer to about a half a billion dollars. And when you think about the fact that our operating subsidy, or our operating costs, a third of it comes from tenants' rent, you can see really where the disparity is. And HUD expects public housing authorities to collect 200% of the rent that's charged. Right now, and again, I think COVID has a lot to do with it, we're only collecting about 65% over a 12-month period, and that directly impacts NYCHA's ability to repair and maintain our developments.

There was a program across the country, the Emergency Rental Assistance Program, and we submitted about $120 million to the state, applications from about 31,000 of our tenants. But because of the way New York State statute was written, subsidized housing was not prioritized. So that money sort of represents what we're missing., And it really becomes a challenge, because if we don't have the operating dollars, and we're also drawing down on our reserves, it becomes a really precarious financial situation. But what we've done is, we've taken some proactive financial measures in our 2023 budget. We are prioritizing stable funding for our properties, so there's no loss in services there. We've cut down on services in our central office, and really have prioritized anything that has to do with the HUD agreement.

Candice Meth:Absolutely, and we're sensitive to these types of challenges and the difficulties. A lot of those challenges I imagine are national challenges, but are there certain things that are specific to New York that present challenges for NYCHA?

Lisa Bova-Hiatt:So I think every public housing authority has very similar challenges, but NYCHA's greatest challenge is its scale. So when you think about the number of buildings that we have, 2,000 buildings across the entire city. So everything that we do is a challenge. And when you think about just us trying to do simple repairs, we have our skilled trades, we have maintenance workers, but everything needs to be sequenced. We can't have a plaster show up at an apartment before the plumber does. And if he does, then it has a trickle-down effect on other people who are waiting for plumbers and a plaster. So I think NYCHA's size and its scale is really what our challenge is. But the good news is since the HUD agreement in 2019, we have developed a really wonderful relationship with our Federal Monitor, and we've done extensive work on the pillars, including publishing action plans for each part of the agreement.

So what that does is, we now have the roadmap that we didn't have before, which shows certain milestones that we need to hit in order to continue to move forward. But the scale and the scope of the work that we have to do under the pillar agreements far surpasses any undertaking of this kind throughout the nation. So when you think about us trying to look to other public housing authorities to see how they do things, the fact that our developments in Manhattan, or in the Bronx, or in Brooklyn in and of themselves are larger than three and four housing authorities combined, it's really, really a challenge. And so we think about repairs, but we also think about the full scale transformation of how we do business and what our infrastructure looks like.

So for example, yesterday I was at a development in the Bronx, and we were walking through the halls, and we had seen that plastering had been done, clearly there had been plumbing done behind the plastering, but it was still bubbling up. And that's because until we do a comprehensive modernization of the pipes behind the walls... We can plaster, we can do plumbing, little patchwork every week for the rest of our lives, but that's just a waste of time and resources, and it's really not getting to the root cause of the problem. And when you look at the HUD agreement, it really set a standard for addressing the issues across NYCHA, but the mandates that we have take time and money, and that's what we're working on.

Candice Meth:Amazing. And I really do want to encourage our audience to visit the NYCHA website, it's incredible, and to your point, your goals and your pillars are laid out clearly, and it's great to see what's going on. So really, everyone should visit that website if you haven't had a chance to check it out.

Lisa Bova-Hiatt:Thank you.

Diane Wasser:It seems like, especially with the HUD agreement, that there's some roadmap, maybe to get where you need and want to be. Any other solutions that you're contemplating that could possibly also add to that end goal?

Lisa Bova-Hiatt:Absolutely. And it's very funny that there's really a synergy between the work that I did when I was at the Governor's Office of Storm Recovery, and the work that I'm doing here at NYCHA. When I would talk about storm recovery, and just the process that we go through, I would say, we have many tools in our toolbox that we need to use. And one great example is if you're in a storm-ravaged area, and you have somebody who just can't rebuild, well, maybe we keep it as open space, or maybe we sell the property. We buy the property from the homeowner, and we sell the property to somebody who does have the appetite to rebuild, but in a way that is protective of the property of the house. And when I think about NYCHA, we have the HUD agreement, which is really the overarching agreement that takes care of what we're doing for our 2,000 buildings, but we have other tools in our toolbox.

One of the most exciting ones is the Public Housing Preservation Trust. And in June of 2022, the Public Housing Preservation Trust legislation passed, which will allow the authority to unlock significant funding by transferring properties to the more valuable Section Eight subsidy through the public trust. And it also provides procurement relief and voting rules, which allows residents to decide the type of investment in their property. And that's really the first time that a public housing resident has the ability to control their destiny. So we have the trust, and then we have our PACT program. And what our PACT program does is similar to the trust, however, we partner with developers who do the capital improvements for us. And right now, the PACT projects that are in our pipeline are on track to make about $7.5 billion in capital improvements, at about 36,000 apartments that are either in pre-construction, construction, or rehabilitated.

So that's another tool in our toolbox. And then finally, through our city action plan, we have a new Comprehensive Modernization Program that we hope to model as a process for any capital or skill in the future. And what that does is it takes development by development, and we fix entire lines of apartments, whether it's gas, plumbing, and we really rehabilitate the apartment from the inside out. So we have a lot to focus on, and thankfully, at this moment in time, we have a lot of tools in our toolbox, and that's so important. There's no one-size-fits-all approach as we've seen, certainly with storm recovery, certainly here with public housing. So we really need to lean into these creative solutions, and hope that they all catch on.

Candice Meth:Lisa, you've mentioned a lot of the different strategies that are being employed right now, how do you see these strategies directly impacting the over 400,000 New Yorkers who live in this housing? How does it directly improve their lives?

Lisa Bova-Hiatt:Well, it provides them with hope, and a path forward. So if you think about the example that I was just giving about the development that I visited yesterday in the Bronx, I guess it's great to cosmetically fix a leak, but to come out of your elevator and see cracking plaster, or mold, that doesn't provide hope. Seeing plumbers in there cutting out a wall, replacing the pipes so that the leak stops is really what we're aiming for. And these tools are providing us the opportunity to do that.

What's interesting is, when I look at the PACT developments, you walk around, and the residents feel a sense of ownership in their apartments. They want you to come in and see them, as opposed to coming in to show a leaky ceiling, or a leak that keeps recurring. What we want to stop is the reoccurrence of a leak, a hot water issue, a heating issue. But again, unless you're getting to the root cause, you're never going to be able to fix that. I can't stop mold in an apartment if the roof is leaking. So until the roof is fixed, we can't do anything, or we're just doing cosmetic work.

Candice Meth:Absolutely. We often say, it's all about the people, and so to your point, giving people hope and having that sense of pride in where they live is really important.

Lisa Bova-Hiatt:Exactly. When I think about our transformation plan, one of the things that we've really focused on is a culture of service. We are here as public servants to serve our residents, and they deserve, the same way every other individual in New York deserves to live in an apartment that is free from pests, free from waste, free from mold and lead, and asbestos. We'll chip away at it little by little, but our monitor was on NY1 a couple of weeks ago, maybe right before the holidays, and he was saying our lead program is now the gold standard. We are really looking at the way that we handled problems, and implementing creative solutions that get the job done.

And sometimes when you're looking at the amount of apartments where work needs to be done, you have to start somewhere. And I was reading somewhere, they said, "How do you eat an elephant? You take that first bite, one bite at a time." And we are handling this one apartment at a time. So I think we're in really, really good shape. I am incredibly hopeful about the future. We have an amazing executive leadership team, and now we just need to make sure that the changes that we're making are trickling down, from our leadership to our development.

Diane Wasser:Thank you. It's definitely clear you're focused on transformation, and stability, and you've got your toolbox. And you mentioned before, the cash, I'll say, to invest, the capital investment has to come from somewhere, and it's so, so important. What are your tools around that to really make sure you can... I know you can schedule out who needs to come and when, and then when it gets to paying them, how does that pan out?

Lisa Bova-Hiatt:Well, so right now, one of my main focuses is on NYCHA's current budget, increasing rent collections, pursuing rent support from the city and state resources, keeping residents housed, which means preventing evictions and working with residents to continue payments. The State of New York, just through their Office of Temporary and Disability, said that our residents who had applied for ERAP can now avail themselves of rent support from HRA, so they are entitled now to one-shot deals. So we're hoping that will show, or lead to an increase in rent collections. And ensuring that we have sufficient operating funds to deliver immediate and necessary services at our developments, while maintaining efficient, high quality service through our central operations.

Of course, as I previously mentioned, continuing to meet the obligations of our HUD agreement, specifically in our pillar areas, and implementing the transformation plan, and then implementing our capital program. So we have about 250, probably more, capital projects going on around the city at any given moment. That could be replacing gas risers, it could be updating playgrounds, it could be fixing roofs, fixing community centers. And it also includes the comprehensive modernization of two of our developments, which was made possible through city funding, and working within our capital department as well to reduce delays and challenges that have prevented us from spending allocated funds as quickly as possible.

Diane Wasser:Excellent. Thank you. I should bring up that something is missing here, and that's Raul. I wanted to see if anybody could figure that out. We all have Raul in our thoughts. He's fine, but he had a family emergency and was unable to be with us today, and I was just pleased to help him out. And also just a pleasure to be with these lovely women talking about these amazing, amazing thing. So Raul, we're all thinking about you and your family. In previous CAPstone series, CEOs have mentioned transparency, communication, education, a desire to learn, as some key attributes of their success. How do you feel about these, and are there other key leadership and recipes to success that you would add to that list?

Lisa Bova-Hiatt:Oh, absolutely. I mean, I think communication and transparency is absolutely key. When I go out to our developments, the first thing I do if somebody is asking, or telling me that they have a problem, I give them my business card, I ask them to send me an email, and I forward it to the appropriate staff member. I think it's incredibly important for every resident, and for every employee, it goes for employees as well, to make sure that they can reach out to the CEO if they have a problem, or a question, or they see a systemic issue that we're not addressing. Especially since the HUD agreement, we've really leaned into transparency. I think training is also so important, and it's not unique to NYCHA, but I think we see this across all business sectors. Somebody gets a job, they may or may not know how to do it, they may get a promotion, nobody teaches you how to be a manager. Nobody tells you if you have 100 tasks to do, which 50 or which 10 should be the ones that you focus on.

So training and education is so incredibly important, and technology. Technology has really changed the way business operates at NYCHA. During the pandemic, NYCHA relaunched its use of its digital vans, and our digital vans go out and they provide NYCHA residents with tenant re-certification assistance, and they can also act as an internet hotspot for anyone standing outside the vehicle utilizing their own devices. And I think during the pandemic, we saw a lot about the digital divide. We have a lot of development, spot of residents that do not have access to wifi, or consistent wifi, so giving them the ability to have hotspots was super-duper important. This year, NYCHA is kicking off a project to replace its legacy customer relationship management application, and we're going to be replacing it with a cloud-based resident case management system, which will hopefully improve our residents' experience.

We also have kiosks installed in all of our management offices, and so every development, every walk-in center that we have, so residents who don't have access to the internet or own a computer can take advantage of NYCHA's online services, such as paying rent, submitting work orders, and re-certifying income. And I know that I've mentioned it a couple of times, I should make clear that each year tenants are required to re-certify their income, because their rent is tied to the amount of income that they bring in. And during the pandemic, we had a lot of people who saw a steady decline in their income, and they were able to do an interim re-certification, so that they had immediate relief to the rent that they were required to pay to stay in their apartments. The other thing that we've done in collaboration with residents and staff, as well as advocates, we redesigned our online annual recertification process to make the portal more user-friendly, easier to fill out, including simplified language, step-by-step instructions, and simple navigation.

Raul and I always laugh, that we are always on the phone, my mom will say, "How do you send this picture? How do I upload a document?" And the frustration that we all feel, but especially our residents when it wasn't intuitive, how to upload a document, to do this very, very important process. So that was wonderful. And of course, we have My NYCHA app, where they can create, schedule, and manage their work tickets. Work tickets are the way a resident will let us know that there's something going on in their apartment. And we closely monitor work tickets, that's the way we find out whether or not there's a major outage, as opposed to you might be having an issue in your apartment. So if I get one ticket in a building, then we know that it's an isolated incident, if I'm getting 100 tickets in a building, then we really know that there's probably a system-wide or building-wide issue that has to be addressed.

And finally, our IT department is moving our NYCHA call center. We have a very robust call center, where people can call in if they are not app savvy to, again, create, schedule, and manage work tickets. But we're moving our call center technology to the cloud, which will improve wait times to make sure that the response and the time that they spend on the call with us is a much smoother experience.

Candice Meth:Lisa, thank you so much for highlighting the investment in technology, and that's been the underlying theme for our CAPstone series. But the other investments as well, the investments in capital infrastructure, the investments in education, I think it's incredible this city within the city to see everything that's happening right now, and the improvements that are being made. It's very inspiring. Taking a view outside of just NYCHA, for others who wish to pursue this work, what advice would you give them?

Lisa Bova-Hiatt:So that's a great question. If you would've asked me when I started my first career with the City of New York, 28 years later that I would see myself as the CEO of NYCHA, I'm not sure that it's something that I would've envisioned, but there are so many different paths to the same place. So for example, I was a lawyer working for the city, doing very specialized real estate, but after Hurricane Katrina, Mayor Bloomberg decided to train managers on how to run a hurricane shelter in case a hurricane ever hit New York City. So I started doing these trainings, of course I signed up for it because I love just moving outside of my comfort zone a little. But when a hurricane Irene hit, I was like, "Oh my god, I'm in a hurricane shelter. I'm managing it with the custodian of a school. Let's see how this goes." And it really changed the trajectory of my career.

So I think if you have the desire and the mission to serve others, and you have the desire to help create solutions, public services is where you go. You can start by volunteering. As I said earlier, I volunteer with Habitat for Humanity. That started because my college, Villanova, back in 2008, was sponsoring a trip, you had to pay, to go to New Orleans, to work for a week on properties to help people recover. And so I decided that that was going to be my vacation. And I went, I didn't know anyone, but I made lifelong friends on that trip, and it just sort of started building the career. So wasn't only focused on the law, I was building up a portfolio of, "How do I get into construction, and other aspects of real estate?" So I think follow your path, move outside of your comfort zone.

Often, I've spoken about the fact that the job that I had with the New York City Law Department was amazing. It was one of the best experiences of my life, but at some point, I realized that there were no more challenges. If you've been in the same practice area for a long time, okay, the facts are a little different, but the overarching issues are the same. Move outside of your comfort zone, move into the... I know a lot of the people that you deal with are in the public sector, excuse me, non-profits, move to a different non-profit. And I think that you'll eventually wind up where you're supposed to be, and I think that all of my positions in government throughout the last 28 years to this point.

Candice Meth:It's funny that you mentioned that, 'cause Diane and I often talk about the fact that in the early days of trying to come back into the office, once we were allowed after the pandemic, the busiest day we had was the day that we did a volunteer activity where we were stuffing backpacks for needy children. That was the one thing that everyone came to the office 'cause they wanted to be a part of, it was more that than anything else. And so that spirit of volunteerism is alive and well, and it's what motivates so many of us to want to work in this sector. So thank you so much for sharing that.

I want to thank everyone for joining us, and really, a special thank you so much to Lisa for sharing your insights, and just really sharing all the great work that NYCHA is doing. And again, I want to direct everyone to visit that website. Thank you to Diane for stepping in and joining us today, and really, our thoughts are with Raul at the moment, and we hope all as well. And with that, then I'm going to turn it back over to Astrid. Thank you so much.

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