Last April, on two warm evenings, more than a hundred Fulton and Elliott-Chelsea residents filled public hearings to deliver an unequivocal message, through grief, questions, and defiance, that they opposed NYCHA’s demolition plan, with only two voices offering lukewarm support. Yet NYCHA marches ahead.
In a stunning reversal of public promises and community planning, NYCHA is moving to demolish all 24 buildings across the two campuses in prime Chelsea, and replace them with high-rise towers, without ever putting this full-scale redevelopment project out to bid.
Related Companies and its minority-owned partner Essence Development were awarded the contract in 2021 for a $366 million rehabilitation. They are now managing a $1.9 billion demolition-and-rebuild, with no competitive rebidding process, and no meaningful public oversight.
The plan was never supposed to look like this. In fact, it began with an emphatic promise: “No existing NYCHA buildings in Chelsea will be demolished.” That was the first principle laid out by the Chelsea Working Group, a coalition of tenants, elected officials, and housing experts convened in 2019 to chart a path forward.
The 101-page report became the foundation for a Request for Proposals (RFP) released by NYCHA in 2021. Developers were told: no demolition, no siphoning funds to other sites, and tenants would be full partners. The contract was awarded to Related and its minority-owned partner Essence.
After securing the contract, Related suddenly “discovered” more structural issues, and in early 2023 residents were handed a cryptic survey: “new construction with rezoning for taller buildings in less time”, “new construction within current zoning for shorter buildings in more time”, or “rehabilitation”; the first two both meant total demolition, but of course, the word was never used.
Only 29% bothered to respond, and NYCHA helpfully lumped the demolition answers together to claim 57% support, triumphantly branding the whole charade as a vote.
The project rests on a fragile financial fantasy. NYCHA and Related claims the buildings are beyond repair. Yet just two years prior to the RFP, its own Physical Needs Assessment priced full rehabilitation at $366 million.
The cost of demolition and rebuild has now reached $1.9 billion. That’s more than five times the original rehab plan, and more than double NYCHA’s own repair estimate ($900 million). And because the project was never rebid, the public has no way to know whether the price is fair — or padded.
The money flows mostly from public sources: HUD Section 8 subsidies, tax-exempt bonds, and Low-Income Housing Tax Credits (LIHTC). Related will receive $115 million in annual HUD-guaranteed rent, while operating costs are pegged at just $30 million — leaving a tidy $85 million annual surplus. This surplus is meant to service debt, but in practice, it gives the developer wide latitude for fees, profits, and markups.
And should Related decide the deal no longer works for them? They can walk away at any time for a $2.5 million penalty. That’s not a typo. After demolishing buildings, displacing tenants, and absorbing public subsidies, they could abandon the project for a fee smaller than a luxury condo in Hudson Yards.
Tenants, meanwhile, face years, possibly decades of uncertainty and construction-related disruption. NYCHA’s own environmental review admits the construction will last at least 16 years and produce unmitigable noise impacts on nearby schools. Toxic soil, shadow-casting towers, and architectural segregation (with luxury renters assigned different buildings) — all are baked into the plan.
NYCHA insists that demolition was the only way to raise more money. But under RAD/PACT, both rehabbed and new units receive the same Section 8 rent subsidy from HUD. The rent stream that secures the bonds is the same. No credible financial documentation has been released to show that demolition unlocks more capital. And yet, this $1.9 billion transformation of public housing has been greenlit — quietly, bureaucratically, and without the basic scrutiny a city pothole repair might receive.
This isn’t just bad policy. It’s a cynical erasure of public process — and a warning shot for every public housing community in New York City. If the Chelsea demolition model becomes the blueprint for other NYCHA campuses, we’re staring down a future in which public land becomes luxury development, and tenant voices are repackaged as endorsement after the fact.
The truth is, the public never voted for demolition. Related and NYCHA simply engineered a narrative that made it seem inevitable. But we still have a choice: do we accept demolition as destiny — or do we demand accountability, transparency, and a housing policy that centers people, not profit?
The hole hasn’t been dug yet. And until it is, the fight isn’t over.
Law-Gisiko is the Democratic district leader in Assembly District 75, Part A.
