New kitchens, new elevators, and mold remediation are finally coming to Nostrand Houses in Sheepshead Bay, Brooklyn, after the city closed the first-ever financing deal through the New York City Public Housing Preservation Trust. The $607 million deal unlocks a top-to-bottom overhaul for the 16-building, 1,148-apartment complex that is home to roughly 2,000 residents, with construction expected to begin later this fall.
The closing marks the first time any NYCHA development has reached financial closing through the Trust since state lawmakers created the entity in 2022, according to amNewYork. Governor Kathy Hochul signed the legislation establishing the Trust as a state-chartered public benefit corporation on June 16, 2022, authorizing it to convert up to 25,000 NYCHA apartments to Section 8 funding and issue bonds for capital repairs, according to the NY State Senate. State Senator Julia Salazar, who sponsored the bill, called Nostrand Houses a proof of concept for the model and said it could become the blueprint for other developments if implemented correctly.
Mayor Zohran Mamdani said the deal is the beginning of work to revitalize tens of thousands of NYCHA homes. The renovation will bring new kitchens and bathrooms, upgraded heating and cooling systems, new elevators, electrical and plumbing upgrades, lead and mold remediation, accessibility improvements, and expanded security systems to the complex.
How the Project Will Be Staged
Work will proceed two buildings at a time across six phases, with full completion anticipated by spring 2030, per the City Limits report. Temporary relocations will mostly happen on site, though some residents will be moved off site during construction. NYC Deputy Housing Mayor Leila Bozorg noted that relocations are being handled incrementally to minimize disruption, the outlet's report notes.
Getting to this point took nearly three years. Nostrand Houses residents voted in December 2023 to join the Trust, with 808 residents participating across the complex's 1,148 apartments — clearing the 20% turnout threshold of eligible heads of household required under state voting rules for the results to count. Of those who voted, 464 residents chose the Trust, 172 chose to remain under Section 9, and 163 chose NYCHA's separate PACT program, per the same account.
The Trust's Board of Trustees formally approved the design-build team and final work scope for Nostrand Houses on July 8, 2025, according to NYC.gov, setting up this month's financial closing. NYCHA has said actual repair work could not begin until the subsidy conversion, contractor selection, and work-scope finalization were all complete.
A $78 Billion Backlog Behind the Urgency
The push for new financing tools stems from NYCHA's ballooning capital needs. The authority's 20-year capital repair needs surged 73% from $45.3 billion in 2017 to $78.3 billion in its July 2023 Physical Needs Assessment, with more than half of that total required immediately or within a year, according to NYCHA. Based on January 2026 data, NYCHA now estimates it needs about $78 billion over the next 20 years to repair and upgrade its aging housing stock.
The Trust's structure is designed to address that backlog while keeping a key distinction from NYCHA's older PACT program. Both initiatives convert developments from the federal Section 9 subsidy program to Section 8, which allows for greater and more flexible federal subsidies while preserving existing tenant rights and permanently affordable rents. But PACT brings in private firms to manage developments and carry out renovations, whereas the Trust keeps developments 100% publicly owned and retains NYCHA union employees for daily operations and maintenance, according to the NYC Housing Authority. The Nostrand Houses Section 8 conversion is expected to roughly double NYCHA's current federal operating subsidy for the property.
Under the 2022 legislation, every comprehensive modernization project run through the Trust must operate under project labor agreements and enforce prevailing wage requirements for construction workers, a mandate that drew strong backing from unions including the Mason Tenders District Council and Laborers Local 79. The Trust is governed by a nine-member Board of Trustees that includes four NYCHA resident representatives, one NYCHA worker representative, the NYCHA CEO and CFO, the NYC Deputy Mayor for Housing, and an at-large member — a structure meant to preserve public accountability without handing management to private firms.
More Developments Are Already Lining Up
Nostrand Houses won't be alone for long. Bronx River Addition, a 226-apartment senior complex in Soundview, the Bronx, also voted to join the Trust, with a renovation planned at roughly $93 million that includes new kitchens and bathrooms, replacement heating systems, and accessibility upgrades. Unity Towers and Hylan Houses in Brooklyn have likewise voted to join. NYCHA executed a combined $493 million design-build contract covering both Nostrand Houses and Bronx River Addition, according to the NYCHA Journal.
The Trust's first deal is modest next to PACT's scale. By late 2025, PACT had closed financing on 16 developments in a single year — worth $1.6 billion — and reached more than $8.6 billion in cumulative repair investments across converted developments. The Mamdani administration has pointed to the city's five-year capital plan, which includes $5.6 billion for NYCHA, as the most city capital ever dedicated to the authority in recent history, and officials say the administration plans to push toward the Trust's full authorized target of 25,000 apartments.
Every development must still hold its own resident vote before joining the Trust, and whether the Nostrand model can hit its five-year, six-phase timeline while relocating residents largely on site remains to be seen as construction gets underway this fall. Hoodline has covered a parallel $433M facelift tied to Mamdani's broader public housing strategy.
