First Trust Financial Closing Will Bring $607M Modernization of Nostrand Houses

On September 30, NYCHA, the NYC Public Housing Preservation Trust, and partners announced the financial closing for a $607 million comprehensive modernization of Nostrand Houses in Sheepshead Bay, Brooklyn — the first project to reach financial closing through the Trust. 

The milestone follows a historic vote by Nostrand Houses residents in December 2023 to become the first NYCHA development to join the Trust.  

The $607 million investment will address decades of capital needs at Nostrand Houses, fully rehabilitating 1,148 apartments and modernizing building systems across 16 residential buildings for approximately 2,000 residents. Renovations will include new kitchens and bathrooms, upgraded heating and cooling systems, new elevators, improved accessibility, lead and mold remediation, upgraded security systems and other critical improvements.  

“After decades of federal disinvestment, I was proud to sign legislation that promised to unlock additional federal funding that would lead to billions of dollars in renovations for all those who call NYCHA home,” said Governor Kathy Hochul. “Today’s milestone marks a major win for the residents of Nostrand Houses, with thousands of NYCHA residents set to have their homes fully rehabilitated and modernized. This is one way we are working to ensure NYCHA residents have access to the safe, quality, affordable housing they deserve.”  

“The New York City Public Housing Preservation Trust represents a new kind of public partnership, bringing residents together with NYCHA, the Trust, and the City’s housing finance agency to harness the power of our public institutions to deliver the improvements residents deserve. As the first public housing property to reach financial closing through the Trust, Nostrand Houses is both a historic milestone and a proof point for a new model—one that puts residents at the center while preserving public housing for generations of families to come,” said Leila Bozorg, Deputy Mayor for Housing and Planning. 

“Reaching our first financial closing is a defining milestone for the Trust and, most importantly, for the residents of Nostrand Houses who placed their trust in this new model a little over two and a half years ago,” said Vlada Kenniff, President of the New York City Public Housing Preservation Trust. “This $607 million investment gives us the resources to deliver the modernization residents have been waiting for while keeping Nostrand fully public and preserving resident rights and affordability. We are grateful to our residents and partners who helped us reach this moment, and we are excited to move into construction and turn years of planning and partnership into lasting improvements for the Nostrand community.”  

“This first financial closing for the Public Housing Preservation Trust marks a major milestone in the work NYCHA and our partners have undertaken to stand up the Trust, and for delivering on the vision that Nostrand Houses residents set when they became the first to vote to join it,” said NYCHA Chief Executive Officer Lisa Bova-Hiatt. “Through years of planning, partnership, and resident engagement, we have worked to build the framework needed to unlock critical investment while preserving public ownership and permanent affordability through the Trust. With hundreds of millions of dollars of investment in Nostrand Houses, more than 2,000 residents will see decades of capital needs addressed through fully renovated apartments and modernized building systems. This closing demonstrates what the Trust can achieve when residents, NYCHA, and public and private partners come together around a shared vision. We look forward to continuing this work alongside Nostrand Houses residents as construction gets underway this fall.” 

“Today’s first closing through the Trust represents the culmination of a years-long effort to deploy new and innovative solutions that will preserve New York City’s public housing stock for generations to come,” said NYC Housing Development Corporation President Eric Enderlin. “We look forward to working with NYCHA to bring comprehensive renovations and major capital improvements to the more than 2,000 residents of the Nostrand Houses.”   

The Trust allows Nostrand Houses to access greater and more flexible federal funding than traditional Section 9 housing while keeping the development 100 percent public and preserving residents’ rights, including permanently affordable rents. NYCHA will also continue to manage the property. 

Created by legislation sponsored by State Senator Julia Salazar and then-Assembly Member Steven Cymbrowitz and signed into law by Governor Kathy Hochul in June 2022, the Public Housing Preservation Trust is a fully public entity designed to unlock billions of dollars in federal funding for comprehensive renovations at NYCHA developments. 

The financing closed September 29 and brings together partners from the public, private, and labor sectors. The U.S. Department of Housing and Urban Development (HUD), the New York City Office of Management and Budget (OMB), and the New York City Housing Development Corporation (HDC) supported the project. Merchants Capital, Nixon Peabody, and the AFL-CIO Housing Investment Trust provided financing and subsidy, with the Building and Construction Trades Council of Greater New York serving as labor partner.  

Paired with a long-term ground lease between NYCHA and the Trust, the conversion unlocks a federal operating subsidy worth approximately twice what NYCHA currently receives for the development. 

Nostrand Houses Upgrades 

Following the financial closing, Nostrand Houses will undergo extensive renovations to individual apartments and building-wide systems.  

Every kitchen and bathroom will be renovated down to the wall structure, with new finishes, fixtures, and plumbing components. Apartments will receive new appliances, quartz countertops, durable scratch-resistant flooring, energy-efficient double-pane windows, and new intercom systems.  

Living spaces will receive new window heat pump systems for resident-controlled heating and cooling, as well as dedicated laundry hookups. Renovated apartments will be remediated for lead and mold-related hazards, with mold-resistant materials and paint finishes incorporated into construction. 

All 16 buildings will receive comprehensive upgrades to heating and domestic hot water infrastructure, electrical wiring and plumbing, along with new elevators.  

Accessibility will be significantly enhanced, with 81 apartments upgraded for residents with mobility needs and 48 apartments upgraded for residents with visual or hearing impairments.  

Security improvements will include upgraded access-control systems, expanded CCTV coverage, and an on-site security guard. 

Nostrand Houses will continue to be managed by NYCHA, with enhanced resources to support day-to-day operations and resident services. A new on-site property management office will provide a dedicated location for property management and maintenance operations, with more than 40 staff members. 

Kings Bay Y, selected in coordination with residents, will provide social services, including individualized case management, resource navigation, housing stability support, and crisis intervention. Programs will also support physical and mental health, youth development, family support, senior programming, and workforce development.  

The Trust is also partnering with NYC Kids RISE to establish the Nostrand Houses Community Scholarship, marking the first recurring investment by a public housing entity in children’s NYC Scholarship Accounts. 

Under the program, the Trust will contribute $100 annually to the accounts of children living in Nostrand Houses through high school graduation to support future college and career training. 

Residents Shaped the Modernization Plan 

Nostrand Houses was the first development to vote to join the Trust in December 2023. Since then, the Nostrand Houses Modernization Plan has been shaped by years of resident engagement, including surveys, visioning sessions, community meetings, design workshops, and a dedicated Construction Council that continues to guide the renovation.  

Residents have helped set project priorities, reviewed a model apartment, and selected interior design packages for their homes. 

Additional Public Housing Preservation Trust Projects 

Developments that vote to join the Trust are converted to Section 8, allowing them to receive greater federal funding while maintaining resident rights, including permanently affordable rents, automatic lease renewal, succession rights for household members, and funding for resident associations.  

In addition to Nostrand Houses, three NYCHA developments – Bronx River Addition, Unity Towers, and Hylan Houses – have voted to join the Trust, with additional elections ongoing.  

Under the Trust legislation, no development can enter the Trust without an affirmative resident vote. 

“We are incredibly proud to see Nostrand close as the first Public Housing Preservation Trust project. This new tool for NYCHA is truly a collaborative process, starting with residents and remaining resident-centered in its delivery,” said NYCHA Chief Real Estate Officer Heather Beck. “Congratulations to our residents, the Public Housing Preservation Trust, our City partners, and the many teams at NYCHA who helped get to this historic milestone!”

“As a Nostrand Houses resident, I’m proud to see our community reach this milestone,” said Miriam Rodriguez, Trust Board Member and Nostrand Houses resident. “Residents have helped shape these plans from the beginning, and now we are one step closer to seeing the improvements we’ve been waiting for become a reality.”