New public housing in Chelsea to cost $1.2M per apartment
Crains, AARON ELSTEIN, January 6, 2026
“Developers are ready to demolish a building in Chelsea owned by the New York City Housing Authority and replace it with a 12-story tower that will hold 217 affordable apartments reserved for existing residents.
The expected cost is $1.2 million per apartment.
That’s a hefty figure even in a city where construction is notoriously expensive. For instance, a developer in Greenpoint recently paid $800,000 per apartment to develop a 132-unit building of mostly market-rate units that started leasing in July, while a 122-unit building in Long Island City that opened last year cost $500,000 per apartment, according to credit-rating agency KBRA.
On Thursday, state housing officials will be asked to sign off on plans to raze and rebuild the 7-story NYCHA building at 401-419 W. 19th St., a move that would formally kick off redevelopment at the Fulton and Elliott-Chelsea Houses, a 2,056-apartment, 19-building complex located on prime real estate near the High Line and between Hudson Yards and the Meatpacking District. Under the plan, which is expected to cost at least $2 billion, private real estate firms Related Cos. and Essence Development would replace all public housing and add 1,000 affordable and 2,500 market-rate units to the campus. Civic leaders hope the project will serve as a model for rehabilitating public housing across the city.
In a statement, the housing authority said the project “represents a major step forward in delivering high-quality, sustainable housing for NYCHA residents in Chelsea.”
The price could also impose new financial burdens on NYCHA, even though private developers are handling the project.
It will cost about $260 million to redevelop the public housing building on West 19th Street, according to a document by the New York state Division of Homes and Community Renewal. Related and Essence would contribute $7 million in cash and borrow most of the rest via a mortgage on the property and a $60 million loan from the city that matures in 40 years with a stiff 8% interest rate. NYCHA would purchase the loan over time using proceeds from selling additional development rights to its Chelsea real estate, the document says.
Because interest payments from cash flow are expected to be insufficient to cover debt service, the loan balance is expected to grow and reach more than $140 million after 10 years, according to the document. At that rate of growth, the unpaid balance could exceed $800 million after 40 years. NYCHA could pay down the debt by drawing on cash flow or refinancing the loan, the document said, but that would require accommodating credit markets.”
Read More: Crains