Boston Consulting Group’s Secretive $10 Million Report on NYCHA Not So Shady After All


The Boston Consulting Group’s $10 million evaluation of the New York City Housing Authority’s central office and infrastructure has all the makings of some good old chunky scandal-soup:

1) The chairman of an already cash-strapped NYCHA signs off on a $10 million contract with a private consulting firm that he used to work for.

2) Once completed, NYCHA refuses to release the firm’s  report on the agency to the very public that paid for it.

3) The City Council and the public get really pissed and demand that NYCHA share the consulting firm’s findings.

4) Months later NYCHA releases a report to the public, except it’s not really the report, it’s a Power-point summary, which amounts to about $93,000 worth of consulting work per slide.

All things considered, skeptics found it difficult to outright slam NYCHA Chairman John Rhea’s BCG-report testimony at yesterday’s City Council hearing for public housing.

That’s probably because the firm’s recommendations on restructuring NYCHA’s central office look pretty good on paper. The findings suggest NYCHA will save $100 million by 2016, and eventually $38 million annually, $27 million of which will be reallocated to bring more front-line staff to housing developments, a portion of the remaining funds will go to the reduction of NYCHA’s budget deficit.

It’s hard to outright slam those projections on paper, for the time being anyway, but the skeptics still had plenty to be skeptical about.

“This is not rocket science,” Ann Valdez, a public housing resident, said in her testimony. “We residents have been saying this for years, but it took NYCHA to spend $10 million to figure this out.”

Rhea quickly dismissed the controversy surrounding his three years as an employee at BCG.

“My employment history is well-documented as a part of my employment with the city,” Rhea said. “It was common knowledge throughout the authority and with my board members of my prior employment with BCG 17 years ago.”

For years, concerned public housing residents have been calling for more staffing at city housing developments, more fiscal efficiency and a more expedient repair, maintenance and supply infrastructure.

“Many of the identified problems we are already too familiar with, long resident waits for repairs [and] inexplicable delays in capital improvements to which the money is already allocated,” Victor Bach, a senior housing analyst for the Community Service Society, said in his testimony.

Bach doesn’t take issue with NYCHA’s decision to secure outside help to thoroughly analyze its well-known problems. He, along with other experts, observers around the City council, are really still unclear about what exactly went into NYCHA’s decision to hire BCG.

“They’ve only released, essentially, the summary report. They have not released any of the background information that went into the report,” Judith Goldiner, law-reform attorney for the Legal Aid Society, said in her testimony. “This committee would want to ask ‘what’s the real report,’ because this is just a summary. What’s the evidence? What’s the data? And, are there more specific recommendations?

Residents and NYCHA-worker union leaders voiced their frustrations with the NYCHA for excluding them from the process of securing BCG’s contract and from the process of accepting and implementing its recommendations.

“No one asked us our opinion before this report was released. We would have given advice for free,” Greg Floyd, president of Local Union 237, said in his testimony.

NYCHA says it hired BCG primarily because of its past work with Atlanta’s city housing authority. Atlanta also paid the firm $10 million, which appears to a bargain for NYCHA considering its operation is far larger than Atlanta’s.


Public Housing residents also expressed concerns that BCG’s recommendation to outsource work at some of its developments to private property management companies. They believe such actions will displace current workers, who are also NYCHA residents, and place public housing developments on the fast-track to complete privatization.

“With [these] proposed private management companies, there would be more severe cuts to the workforce in the name of bottom-line profits,” Valdez said. “Public Housing was not created for private companies to poverty-profiteer off of low-income communities of color.”

Despite evidence of NYCHA’s shortcomings, Bach urged everyone in attendance to be careful about how they characterize the city’s housing authority considering the public housing trends in most other American cities.

“NYCHA has weathered decades of unfavorable shifting of federal and local funding priorities,” Bach said. “Unlike other housing authorities of many large cities it has preserved nearly its entire ailing housing infrastructure without major demolition and redevelopment. All of us should see that NYCHA persists in its public housing mission and continues to provide affordable home for low income New Yorkers.”