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This Wednesday, March 6, 2013 photo shows the apartment building at 1475 Madison Avenue in New York. Officials want to demolish existing areas on public housing properties _ a baseball field, a community center, a parking lot _ and build more than half a dozen brand-new luxury apartment complexes.
NEW YORK—New Yorkers pay dearly for the privilege of living in one of the world's great cities. But would they shell out top dollar for an apartment on the grounds of a public housing project?

That scenario could play out across Manhattan under an unprecedented proposal by the city housing authority to lease out public housing land and allow developers to build market-rate apartment buildings—intended for much wealthier residents—on areas currently occupied by basketball courts, parking lots and outdoor plazas.


Rich and poor already live in close proximity to each other in New York's densely populated neighborhoods, with luxury buildings rapidly rising next door or down the street from the red brick towers of the projects.

But that's not the same as living on the grounds of public housing, which has long given shelter to the city's poorest residents. And some renters question whether that location is worth pricey market rents. At the same time, public housing residents are worried they might be looked down upon—or eventually displaced—by their new, well-to-do neighbors.

"We're not trying some social engineering experiment here," said John Rhea, the housing authority's board chairman, "but to the extent that we create greater income diversity and more mixed-income communities, we think that's a positive thing." Officials insist no public housing residents will be forced to leave.

But more than a half-dozen public housing sites have already been selected in some of Manhattan's most desirable neighborhoods, including the Upper West Side, the Lower East Side and the Financial District. "Market-rate" rents for luxury apartments on the Upper West Side, for example, can mean $2,544 a month or more for a one-bedroom and $4,047 for a two-bedroom.



"Maybe there is a particular stigma attached to public housing," said Becky Koepnick, the director of the Moelis Institute for Affordable Housing Policy at New York University. "But crime rates have been decreasing dramatically in New York over the last 10 to 15 years. So people will just have to make that judgment for themselves."


"If I was paying, say, regular neighborhood prices, I'd probably just live somewhere else," said Matt Talucci, 29, who works at Columbia University. "It would depend on how the projects look and how I felt about it. I'd have to go there, get a vibe for the place, get a feeling for the place."


"I would rather shell out the money to live in a neighborhood where I felt comfortable," she said.


"I think New York is sort of at a point where the housing market is ripping at the seams," she said. "There's just literally no more apartments for people to live in, at least in Manhattan. So I think people would do it. Especially newcomers who just got to the city, because they don't know any better."



"We need to find the money that we do not have," housing authority board member Margarita Lopez explained. "We have been cut to the bone. We have not been given the money that we need to repair the buildings."


"We have the last word," she said. "We say what goes on here."




City Councilwoman Margaret Chin said residents want assurance that they're not going to be displaced by their new neighbors.

"Whether it's a perception or real, that's their concern," Chin said. "They want to make sure that they are able to stay in the neighborhood that they grew up in, that they love."

Aixa Torres, 60, has lived in the Alfred E. Smith Houses at the southern tip of Manhattan complex for most of her life, raising her children there. She feels the plan implies that public-housing residents aren't upscale enough for their own neighborhood.

"So now you want to put in these huge buildings, block our view, take away the play areas that we have," she said. "And at the end of the day, segregate it."


The baseball field is a spot where families like to picnic in the summer. And it's where the development's large Asian community likes to conduct daily tai chi exercises.

"I just think they're looking at the fact that this is waterfront property, and why should we have that view?" Torres said. "That's the way I feel."