Federal housing chief Ben Carson on Friday threatened to put the New York City's public housing agency in "substantial default" — a technical move and the first step towards a federal takeover — if the housing agency does not come up with a satisfactory plan by January 31 to repair the housing stock.


In a letter to the head of the New York City Housing Authority (NYCHA), Carson, the secretary of Housing and Urban Development (HUD), issued the first concrete sign that the federal government is weighing such a major move, called a receivership.

The threat came a few hours before the midnight deadline for the federal government, the U.S. Attorney's Office, and the city were required to submit paperwork to a federal judge about how they want to fix the city's struggling public housing system.

Late Friday night, the city and the U.S. Attorney's Office's submitted papers to the court asking for 45 days to reach an agreement, requesting to submit a joint status report on a repair plan by January 31.

"We are in the middle of productive conversations with Secretary Carson and the U.S. Attorney to improve the quality of life for the 400,000 New Yorkers who call NYCHA home," the mayor's office said in a statement. "This has been a week of real reform in our efforts to turn NYCHA around after decades of neglect."


The HUD letter came just two days after Mayor Bill de Blasio released a new plan to fix NYCHA, trying to reverse decades of neglect. This one would pay for about $24 billion worth of repairs over the next 10 years. The housing authority says the need is $32 billion.

HUD does not reference the plan, dubbed "NYCHA 2.0," in the letter, but the agency sent out a press release saying it wants to see a NYCHA reform plan that establishes "tangible goals and milestones" by the end-of-January deadline, including increased oversight and ways to properly address lead and mold in housing units.

De Blasio and Carson, who has never visited a public housing development in New York City, met eight days ago for the first time to discuss the city's crumbling public housing. It's not clear if they discussed the possibility of a receivership.

There are some in the Trump administration who think a federal takeover is a good idea. Lynne Patton, the regional administrator for the Federal Housing Department, has been taking to Twitter, blasting the conditions NYCHA tenants face.

She tweeted she favored a federal takeover, saying, "NYCHA has proven time & time again that it neither possesses the capacity, nor integrity, to run or fix itself."

De Blasio, for his part, is opposed to a receivership, arguing they have had mixed results around the United States.

"Let's be clear: Anyone who thinks oversight by anybody but local officials is going to make things better, I urge people to look at the history," the mayor said in a radio interview Friday morning. "These receiverships, at minimum, are a mixed bag. Some of them turned out very poorly. Some of them involve privatization. Some of them involve tearing down public housing in different cities."

Last month, a federal judge rejected a proposed settlement agreement between federal prosecutors and the housing authority that would have given billions of dollars of funding to NYCHA and installed a federal monitor.


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