The tenure of the city’s most embattled bureaucrat came to merciful end Tuesday, when New York City Housing Authority Chairwoman Shola Olatoye announced she would quit her job after months of turmoil.
Her departure was politically inevitable after scandals involving falsely certified lead paint inspections and faulty boilers that left thousands without heat, her allies conceded.
“She saw an opening where the conversation wasn’t centered around her personally, narrative had shifted to the institution, so maybe that was a good time for her to gracefully bow out,” said National Action Network’s Kirsten Foy, a friend who supported Olatoye’s hiring. “The administration did not want her to leave. The mayor has invested heavily in supporting her.”
New York City Mayor Bill de Blasio hired Olatoye four years ago to right the beleaguered agency that was running a $77 million budget deficit and needed $18 billion to fix its crumbling complexes when she started.
But two errors proved insurmountable and her dismissal was inevitable, political observers say.
First, Department of Investigation Commissioner Mark Peters bore down on NYCHA’s failure to conduct mandatory lead paint inspections in apartments despite assuring federal housing officials the work had been done. The investigations had sprung from a 2016 federal inquiry into lead inspections, and several staffers have resigned in response.
City Council members excoriated Olatoye in a December Council hearing for approving the federal paperwork while she blamed underlings for passing along incorrect information.
Olatoye might have survived if she reacted with more contrition and accepted responsibility, political observers say.
Soon she had larger problems.
Boilers, some of which date back to the 1940s, failed during a January blizzard, leaving 3,000 tenants without heat and gas just as the agency lost 100 heating technicians. By the end of the winter, 323,098 public housing residents – more than four out of every five NYCHA tenants – had gone without heat for a period of time, according to Housing Authority figures obtained by the City Council.
Again Olatoye sat before a Council hearing in February and refused to apologize.
De Blasio continued to stand by her despite the false lead test certifications and the authority’s slow pace to fix broken boilers. And he doubled down saying it would take two years to make the necessary repairs.
But the damage to Olatoye’s reputation appeared fatal.
“The buck stops with you at the top,” said Queens Councilman Donovan Richards, an Olatoye supporter. “Even if your staff gave you misinformation, unfortunately your name is on the door and it stops with you at the top no matter who has done what at the bottom.”
By now government leaders outside City Hall had begun to pay attention – and wield NYCHA’s management mistakes as a cudgel to whack the mayor.
Gov. Andrew Cuomo, eager to shift attention from the breakdown another complex bureaucracy that he controlled in an election year, toured pest-infested public housing units and apologized on NYCHA’s behalf to tenants. And Cuomo dropped $250 million for NYCHA repairs into the state budget along with jamming a state monitor to oversee agency spending.
At the same time, federal Housing and Urban Development officials, eager to manage something beyond their secretary’s tastes in office furniture, began requiring that NYCHA obtain approval from HUD for any capital expenditures.
Two weeks later, Olatoye was gone. The climate had become “untenable” for all stakeholders involved, housing insiders said.
“Every group, residents, labor, politicians, everyone was asking for a change for their own different reasons,” said Kevin Norman, housing division director at Teamsters Local 237, the union that represents many NYCHA repair workers. “I would find it hard to read it in the paper being accused of what she was accused of.”
At a press conference at the Ocean Bay Bayside Apartments announcing her departure, Olatoye claimed she chose to leave once she finished negotiations with federal investigators and HUD over lead inspections and NYCHA expenses – even though the mayor asked her to stay.
“I’ve delivered a path forward that is building on the work that we’ve done thus far,” she said. “This was my choice and I think it was really – it was really important to me to leave when I felt that I had done the work that I had been asked to do.”
De Blasio named 80-year-old Stanley Brezenoff as the authority’s interim chairman. But the mayor had kind words for Olatoye.
“I believe that despite what was happening in the public atmosphere, she was continuing to do crucial and important work,” de Blasio said. “She came to the point of making a decision personally and professionally – I respect that.”
A Koch administration standby who last stabilized the Health and Hospitals Corporation as its interim CEO in 2016, Brezenoff has the respect of the de Blasio administration and much of the public sector.
But he isn’t a permanent solution. Finding a new leader will be more difficult than replacing an aging boiler.
“If I were offered the job I would run as far away from it as I can," Richards said. “No matter who sits in this seat, they’re taking on decades of mismanagement. You can’t do it in four years.”
And turnover among the agency’s middle management could delay repairs from getting done.
“Residents are frustrated every time there’s turnover because work is put on pause so new managers can get up to speed,” Norman said. “Especially when there’s no institutional knowledge, then people become disadvantaged.”
During her tenure, Olatoye successfully balanced NYCHA's operating budget, making changes that led to more revenue collected from rent and curbing administrative expenses, while benefitting from increased city and federal subsidies. And politicians have praised her efforts to haul in millions in FEMA aid to fix apartments damaged during Hurricane Sandy.
But the cost to overhaul NYCHA’s aging housing stock in 326 developments rose 50 percent from 2011 and now approaches $25 billion. Some council sources believe the need could be as high as $27 billion — roughly similar to the MTA’s current five-year capital plan.
Even though the state committed $350 million, the feds added another $800 million, de Blasio spent $3.7 billion since his swearing in, and the Council is floating another $3.4 billion in this year’s city budget, it may take decades until NYCHA’s problems are resolved.
Otherwise workers will continue to make piecemeal repairs with the resources they have.
“You do end up going back to apartments over and over again for complex issues like plumbing behind walls,” Norman said. “It is better to do it all at once and do it right.”