Layla Law-Gisiko, Layla Law-Gisiko, Aug 31, 2025

NYCHA’s Fulton and Elliott-Chelsea Houses are slated for demolition, but not before a Section 8 conversion lets developers collect market-rate rents on units left unrepaired.

NYCHA buildings in Chelsea, long labeled “obsolete” and “unsanitary” to justify their demolition, allegedly too deteriorated to justify repair, are suddenly sturdy enough to serve as profit centers. Too broken to fix, but not too broken to monetize.

According to NYCHA and Related, starting in the fall, a Related Company subsidiary is going to be gifted six buildings (four in Fulton and two in Elliott-Chelsea) for no financial compensation and with no requirement for improvements. The company will start receiving market-rate rent for the units, paid for by the federal government through the Section 8 subsidy. In Chelsea, the fair-market rent for a 1BR is $4048. Multiply that across six buildings and the math yields $27 million rent-roll a year.

A couple of weeks ago, at a PACT meeting, tenants of the Fulton and Elliott-Chelsea Houses learned, almost by accident, that  six of their buildings will be converted to Section 8 subsidy this fall. No repairs, no improvements, no stabilization are contractually attached to this conversion, just a new entry in the ledger. The buildings will keep their broken elevators, their leaking plumbing, and faulty heating systems, while the rents flow at market-rate. (tenants will continue to pay 30% of their income in rent, HUD will pick up the difference)

When I wrote  The Strange Math of NYCHA Rebuild earlier this summer, I painstakingly described Fulton and Elliott-Chelsea public housing ballooning costs, the bait-and-switch from rehabilitation to demolition, and the complex web of public funding and tax abatements for private profit. We thought we had seen it all.

But it turns out we were only at the beginning.

Under the newly revealed plan, the third-party manager, chosen by Related and Essence, will collect federally subsidized fair-market rent . Related or the subsidiary is not being asked to acquire the buildings, or commit resources towards their improvements. They are simply handed over the keys, and the rent roll. This scheme will last for the rest of the life of the buildings. According to the current timeline, these buildings will come down in three years, amounting to approximately $80 million in rent-roll revenue for the Related offshoot.

This was not presented in earnest consultations. It slipped out in passing, as though it were an administrative detail of no consequence. In  an open letter published this week, tenants have put it bluntly: “This scheme was never disclosed to us until a week ago. It appeared in no public documents, no resident presentations until they decided to spring it on us at a PACT Meeting, and no community meetings. It was hidden because it could not withstand daylight.”

It is a loophole that allows federally-funded revenue to be squeezed from housing already marked for demolition. Families are asked to remain in their decaying apartments, but their homes now double as financial instruments in service of a future they did not choose and do not want.

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Tenants  have enraged: “Not for the families who have lived here for decades. But as a revenue stream to pad developer profits in advance of the proposed demolition.”

This Machiavellian latest chapter may be recorded as the perfect administrative crime: legal, profitable, and indefensible.

Whether elected officials have actually been briefed, or have adopted a position remains unclear. What is certain is that this NYCHA demolition project is less a foundation than a swamp: the longer one stands in it, the deeper it pulls, and the stench will cling long after escape.

Each step of this project has been revealed not through candid disclosure but through small slips, partial truths, the details one only hears in the margins of a meeting. The pattern is by now unmistakable: transparency comes only when there is no longer any way to keep the secret.

Somewhere in Chelsea, tenants are left to endure the final act, living in apartments they love and yet are already counted as gone, mourning the loss of their homes, their lives and memories, while every last publicly-funded dollar is taken by a private developer.

Source: Layla Law-Gisiko