So to reiterate and be clear, there are two separate Biden administration crack policies here
One was funding the distribution of crack pipes through the HHS harm reduction programs, which would distribute kits including various drug paraphernalia including crack pipes, mostly to black people. When this policy made headlines, the Biden HHS backed off and still support the program but are now specifically excluding crack pipes from the kits, and then Jen Psaki gets up and pretends crack pipes were never included in the first place, even though it was the HHS who said they were.
The other policy is the DoJ under Biden refusing to take legal action against crack houses being operated by the same 'harm reduction' organizations the HHS was contracting out to with the above policy. These crack houses are explicitly illegal under a federal law that Joe Biden himself wrote as a senator and made his signature piece of legislation. There's no wiggle room under interpretation, the law makes state-run crack houses just as illegal as privately-run crack houses, but Biden's DoJ is simply abdicating its responsibility to enforce the law. So several crack houses are being operated by organizations at the behest of the NYC HHS.