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Feds Force City To Pay Billions In NYCHA Settlements As Remedy To 'Deplorable Conditions'

NEW YORK (CBSNewYork/AP) -- It appears there may finally be a fix for the nation's largest public housing agency.

The federal government is forcing NYCHA to pay billions of dollars to settle claims that it used dirty tricks like building fake walls to hide problems from inspectors and lied about lead paint conditions to mask risks to low-income residents and their children, prosecutors said Monday.

It's an answer to a question so many residents have been asking: why do we have to live like this?

The accusations stemmed from an investigation that found widespread mismanagement at the New York City Housing Authority, known as NYCHA, which has received thousands of complaints each year about broken elevators, insufficient heat, mold and infestations of rats and cockroaches.

"The old ways of doing business at NYCHA are over," U.S. Attorney Geoffrey Berman said at a Manhattan news conference. "For too long these residents have lived in deplorable conditions."

The agency "engaged in a culture of false statements and concealment" when filing reports required to secure federal housing subsidies, he said. "The culture of NYCHA is to blame. The management of NYCHA is to blame."

The city agreed in a consent decree in Manhattan federal court to pay $1 billion over four years and an additional $200 million annually for the following six years. The deal also calls for the appointment of a monitor to oversee the housing authority during the 10-year span of the agreement.

"Today marks the beginning of the end of the nightmare for NYCHA residents," Berman said.

Mayor Bill de Blasio, a Democrat, called the settlement a "dramatic step" and a "turning point for our public housing system."

The settlement came in response to a civil complaint that zeroed in on what it portrayed as the agency's indifference to the risk of lead paint poisoning children, saying, it "knows that there is lead paint within apartment units in roughly thirty percent of its developments, but has failed — and continues to fail — to protect its residents from that paint when it peels and crumbles." Between 2010 and 2016, there were 19 confirmed cases of lead poisoning of children exposed to paint in public housing apartments, with hundreds more testing above safe levels for lead, it said.

One of the most stunning discoveries of the federal investigation was that NYCHA actually trained its staff on how to deceive Housing and Urban Development inspectors. Former agency officials from Brooklyn and the Bronx told authorities that workers would shut off an entire building's water supply just before inspections to keep them from finding leaks, the complaint said.

Other times, signs reading "Danger: Do Not Enter" were posted on basement doors to keep inspectors from discovering dangerous or unsanitary conditions, it said. A former maintenance worker reported that NYCHA staff also would build false walls out of plywood just to conceal other dilapidated conditions, it added.

The problems were the result of "management dysfunction and organizational failure, including a culture where spin is often rewarded and accountability often does not exist," it said. Often, NYCHA's internal guidelines would "expressly encourage staff to use subterfuge."

Berman said he was "completely outraged" when his inspectors found out they were being deliberately mislead. Mayor Bill de Blasio said he was "sick to his stomach."

"We are not going to tolerate lying," he said. "We're not going to tolerate people who don't do their job and don't support the residents of NYCHA."

The housing agency's annual operating budget is $2.3 billion for public housing where nearly 400,000 low- and moderate-income residents live. Tenants pay an average of $522 a month in rent, with the U.S. Department of Housing and Urban Development subsidizing the rest.

In April, public housing chairwoman Shola Olatoye stepped down amid increasing public scrutiny of her tenure over the lead paint and heat issues.

Berman noted that the NYCHA has new top management.

"We're hopeful with the federal monitor and the funds available that they're going to be able to right the ship," Berman said.

Feds didn't bring criminal charges because they said they want to get the apartments fixed, but they reserve the right to do so if they city doesn't keep their end of the bargain.

Prosecutors said the culture of deceit had been going on for at least a decade, which predates the de Blasio administration. The mayor said that he apologized for anything that went on during his watch, but added others needed to apologize as well.

(© Copyright 2018 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)

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