The $607 million modernization of Nostrand Houses in Brooklyn has reached financial closing, clearing the way for comprehensive rehabilitation of one of New York City's public housing developments. The project will upgrade 1,148 apartments and building infrastructure serving approximately 2,000 residents in Sheepshead Bay.
The financing closed Sept. 29 and brings the project into the construction phase following the development's selection for the Public Housing Preservation Trust. Nostrand Houses residents voted in December 2023 to become the first NYCHA development to join the Trust.
The modernization will address both apartment interiors and major building systems. Each kitchen and bathroom will undergo full renovation, including new plumbing components, fixtures and finishes. Apartments will also receive new appliances, quartz countertops, durable flooring, energy-efficient double-pane windows and updated intercom systems.
Heating and cooling will be upgraded through resident-controlled window heat pump systems. Dedicated laundry hookups will also be added.
Health and safety work will include lead and mold remediation, with mold-resistant construction materials and finishes incorporated into the renovations.
Across the development's 16 residential buildings, construction will include upgrades to heating and domestic hot water infrastructure, electrical wiring and plumbing. New elevators will also be installed.
Accessibility improvements will cover 81 apartments for residents with mobility needs and 48 apartments for residents with visual or hearing impairments. Security upgrades will include access-control systems, expanded CCTV coverage and an on-site security guard.
The Public Housing Preservation Trust structure allows Nostrand Houses to access increased federal funding while maintaining public ownership. The development will remain 100% public, and NYCHA will continue managing the property.
The financing combines support from the U.S. Department of Housing and Urban Development, New York City Office of Management and Budget and New York City Housing Development Corporation. Merchants Capital, Nixon Peabody and the AFL-CIO Housing Investment Trust are participating in financing and subsidy, while the Building and Construction Trades Council of Greater New York is serving as the labor partner.
A long-term ground lease between NYCHA and the Trust is part of the conversion and enables the development to receive a federal operating subsidy estimated at roughly twice its previous level.
The Trust was established under New York state legislation enacted in 2022. Developments must receive an affirmative resident vote before entering the Trust. Bronx River Addition, Unity Towers and Hylan Houses have subsequently voted to join, while additional elections remain underway.
Resident participation has been incorporated into the Nostrand Houses modernization process through surveys, community meetings, visioning sessions and design workshops. A dedicated Construction Council continues to provide resident input as work moves forward.
Residents have also reviewed a model apartment and participated in selecting interior design packages.
NYCHA will establish a new on-site property management office with more than 40 staff members supporting maintenance and day-to-day operations. Kings Bay Y will provide resident services including case management, housing stability assistance, resource navigation and crisis intervention, along with programs focused on youth, families, seniors, health and workforce development.
The Trust is also partnering with NYC Kids RISE on a community scholarship program. Under the initiative, the Trust will contribute $100 annually to the NYC Scholarship Accounts of children living at Nostrand Houses through high school graduation.
The Nostrand Houses project demonstrates how public housing preservation financing can combine federal funding, public ownership and resident participation to support large-scale rehabilitation. For owners, contractors and housing stakeholders, the project also represents a substantial construction program spanning apartment interiors, building systems, accessibility, security and resident services within an occupied public housing environment.
Construction is expected to begin in fall 2026.
Source: NYC Gov.
