The city closed the first financing deal through its Public Housing Preservation Trust this week, unlocking $607 million for a top-to-bottom overhaul of NYCHA’s Nostrand Houses in Brooklyn.
The deal will fund renovations to 1,148 apartments across 16 buildings in Sheepshead Bay, home to roughly 2,000 residents. City officials said the financing closed Sept. 29, with construction expected to begin later this fall.
NYCHA estimates it needs about $78 billion over the next 20 years to repair and upgrade its aging housing stock, according to the authority’s latest update, based on January 2026 data.
Nostrand Houses is the first NYCHA development to reach financial closing through the Trust, which was created in 2022 to bring in more federal funding for major repairs while keeping developments publicly owned and managed.
The legislation allows up to 25,000 NYCHA apartments to enter the Trust, provided residents at each development first vote to do so. The Mamdani administration’s housing plan says it plans to push toward that full target.
Once a development joins, it is converted from the federal Section 9 subsidy program to Section 8, allowing it to draw greater and more flexible federal subsidies while preserving existing tenant rights and permanently affordable rents.
At Nostrand Houses, that conversion is expected to roughly double the federal operating subsidy NYCHA currently receives for the development.
‘If we do this right… this becomes the blueprint’ for NYCHA
NYCHA’s Nostrand Houses Photo by Lloyd Mitchell 
Photo by Lloyd Mitchell
The Trust offers a different route from NYCHA’s PACT program, which also taps Section 8 funding but brings in private firms to manage developments and carry out renovations.
State Sen. Julia Salazar, who sponsored the legislation that created the Trust, called Nostrand Houses a “proof of concept” for the model.
“The whole city is watching because Nostrand Houses is the proof of concept,” Salazar said Wednesday. “If we do this right … it becomes the blueprint” for other developments across the city.
Mayor Zohran Mamdani also cast the deal as the beginning of a broader push.
“This is just the beginning of our work to revitalize tens of thousands of NYCHA homes across the city via the Preservation Trust,” Mamdani said.
The planned work includes 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.
The project is expected to take five years and will be completed in six phases. Most temporary relocations will take place on site, though some residents will be moved off site, Deputy Mayor for Housing and Planning Leila Bozorg said.
Residents of Nostrand Houses watch as Mayor Zohran Mamdani and city housing officials announce a $607 million modernization of the Brooklyn NYCHA development. Photo by Lloyd Mitchell
Nostrand Houses residents were the first in the city to vote to join the Trust, approving the move in December 2023. Of 808 residents who participated, 464 voted to join the Trust, while 172 chose to remain under Section 9 and 163 opted for the Permanent Affordability Commitment Together, or PACT, program.
At the time, city officials said the actual repair work would not begin until 2026 as NYCHA completed the subsidy conversion, selected contractors and finalized the scope of work.
Three other developments — Bronx River Addition, Unity Towers and Hylan Houses — have since voted to join the Trust, with more elections underway.
At Bronx River Addition, a 226-apartment senior development in Soundview, NYCHA and the Trust moved forward last year with plans for a roughly $93 million renovation, including new kitchens and bathrooms, replacement heating systems and accessibility upgrades.
The city’s five-year capital plan now includes $5.6 billion for NYCHA, which the Mamdani administration says is the most city capital dedicated to the authority in recent history.