The New York City Housing Authority (NYCHA) recently closed a groundbreaking agreement to create a new public-private partnership under the federal government’s Rental Assistance Demonstration (RAD) to generate funding for desperately needed renovations to the Ocean Bay (Bayside) Development in the Rockaways section of the city. Attorneys from Ballard Spahr represented NYCHA in the historic transaction.

The Permanent Affordability Commitment Together (PACT) program, New York City’s implementation of RAD, is designed to keep families in their homes and improve residents’ quality of life. The Ocean Bay PACT initiative—a collaboration between NYCHA, residents, and community and housing advocates—is the first RAD agreement in New York City. NYCHA will retain ownership of the property, ensuring that almost 1,400 Bayside housing units, which will receive extensive renovations, will stay permanently affordable and guaranteeing the developments can never be privatized.

The Ballard Spahr team for the transaction included Amy M. McClain, Molly R. Bryson, and Courtney E. Hunter, with support from Amy M. Glassman, Saba Ashraf, Charles S. Henck, and Victoria J. Siesta. The team worked closely with the NYCHA’s real estate development team and in-house legal department to handle key legal issues for the transaction.

RAD enables public housing agencies to shift units funded by HUD’s Public Housing program (under Section 9) to a long-term contract under Section 8. By stabilizing federal funding under a long-term contract, RAD attracts new investment to public housing.

The Ocean Bay PACT agreement creates a partnership between NYCHA and RDC Development, which comprises MDG Design + Construction, Wavecrest Management Team, Catholic Charities of Brooklyn and Queens, and Ocean Bay Community Development Corporation.

The development includes 24 buildings and is home to over 3,700 residents. In addition to its age, built in the early 1960s, the Ocean Bay Houses complex was severely damaged during Hurricane Sandy. Reductions in federal funding have also contributed to the need for a large infusion of capital. Needed renovations include roof replacements, complete upgrades of elevator machinery and equipment, new boilers, and heating systems. NYCHA will also work with RDC to install comprehensive security upgrades, including new updated security cameras, interior and exterior lighting, and a new secure entry system. Each unit will have a complete renovation to perform repairs in kitchens and bathrooms.