About That Big Effort to Raise Private Money for Public Housing in NYC

Affordable housing in New York City is a huge issue, and no one knows that better than the New York City Housing Authority. Some 270,000 families are on NYCHA's waiting list for housing, and the agency also faces a financial crisis.

Can philanthropy solve this problem? That's the idea behind a newly created nonprofit, the Fund for Public Housing, which has a big goal: raising $200 million over the next three years to improving public housing for over 600,000 residents.

The idea that donors will start writing big checks for "the projects" is not as far-fetched as it seems. After all, who would have thought a few decades ago that public schools and public parks would become top causes of Gotham's rich? But that's exactly what happened, with funders giving hundreds of millions of dollars to both areas over the past 15 years.

If you feel ambivalent about this trend, though, join the club. On the one hand, these fundraising successes stand as inspiring examples of public-private partnerships, not to mention reassuring evidence that the super-rich actually care about a shared civic life. On the other hand, the idea that public institutions can only properly function thanks to the voluntary benevolence of the wealthy is pretty alarming—especially since this situation is likely to worsen as the fiscal screws tighten at both the national and local level. Are we soon going to be passing the hat for the subway system? Or the Federal Aviation Authority?

Whatever the case, the details behind the new Fund for Public Housing are interesting. The driving force behind this effort is Rasmia Kirmani-Frye, who’s an exec at the New York Housing Authority and will be overseeing the new nonprofit.

The timing could hardly be better, amid a growing conversation about how to alleviate poverty and inequality, with many suggesting—from the mayor downward—that New York has become a "tale of two cities." Meanwhile, there are a number of private foundations, corporate funders, and even celebrity donors who have connections to New York’s poverty-stricken neighborhoods. There is no shortage of these kinds of potential donors, as everyone from Lloyd C. Blankfein (the chairman of Goldman Sachs) to rapper Jay-Z grew up in New York City public housing developments.

According to the New York Times, the city's housing system is the largest in the U.S. It includes 328 developments, has $17 million in unmet capital needs, and runs deficits in the tens of millions of dollars each year. Much of this debt is due to decreased federal funding, which underscores another problematic aspect of this fundraising effort: One cause of the problem lies upstream, with federal budgetary priorities, yet the plan is to focus downstream, addressing the symptoms.

We get that. Most donors are more responsive to calls to meet human needs locally than to bankroll national policy work, which can feel abstract. But the crisis in New York public housing underscores a point we made just the other day, which is that fiscal and budgetary policy choices in Washington affect everything that funders care about—and yet most spend far more money cleaning up the messes caused by those choices than trying to ensure better fiscal choices are made in the first place.

The first funder to show its support for the Fund for Public Housing was Deutsche Bank, which kicked in $100,000 for the cause last December. In a statement, Gary Hattem, the president of Deutsche Bank America’s foundation said, “Public housing isn’t an obvious recipient of philanthropy. But when you think about what makes New York City work, public housing is just so essential to the success of families and neighborhoods, and that has too long been unrecognized.”

As for the donors themselves getting recognition when they pitch in for public housing, consider the following statement by New York City Housing Authority’s chairwoman, Shola Olatoya: "Philanthropy often works best when it appeals to human vanity. Is it possible that buildings might be renamed to honor the most magnanimous donors? All options are on the table."

In the old days, New York City public housing projects were named after mayors, governors and abolitionist heroes. Going forward, look for the names of hedge fund guys when you visit the projects. Is that really so terrible? Not as long as more people have a decent place to live—but it does feel like one more step toward a benign plutocracy.

This isn’t the first time that a charity fund for New York City's public housing has come up in high-level discussions, but it is the first time it’s made it this far on a large scale. Affordable housing funding is often snubbed by donors because it’s not as emotional, sexy or personal as other worthy causes. How excited can foundation staff get about funding plumbing repairs, after all? We're sure people asked the some question about paying for lawn maintenance when the Central Park Conservancy was founded in 1980. But the founders of modern parks philanthropy back then had a vision for elevating this cause, and they were right. Kudos to Rasmia Kirmani-Frye for thinking big in a similar fashion.

It will be interesting to see who in the city's winning class is drawn to this effort. One person who's already signed on is tech executive Scott Anderson, who joined the fund’s board of directors because he's excited about the potential to expand digital access to public housing residents.