Gotham Gazette

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As NYCHA Teeters, Calls for More Funding in City and State Budgets

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NYCHA is on the brink (photo: Michael Appleton/Mayoral Photography Office)

Despite significant attention from Mayor Bill de Blasio and some from Governor Andrew Cuomo, the New York City Housing Authority, public housing home to more than 400,000 New Yorkers, continues to crumble. While both the mayor and governor, as well as many others, point to federal disinvestment in NYCHA, dissatisfied elected officials say that initial drafts of next fiscal year’s state and city budgets aren’t sufficiently addressing the problem.

As they push for more funding to a public housing authority with well more than $30 billion in estimated physical needs to enter a state of good repair, some have even threatened to vote against any budget that does not include a massive infusion of funds for NYCHA.

A growing chorus calling for more state and city money for NYCHA has been somewhat muted, at least temporarily, by the coronavirus outbreak, which is sure to bedevil the ongoing budget discussions. A new state budget is due by April 1; a city budget by July 1.   

For decades, public housing has been underfunded by the federal government, leaving the state and city to pick up the slack. But successive administrations showed little indication of taking the issue seriously, which left a ticking time bomb that exploded on de Blasio’s watch. While public housing is largely governed by federal law, the mayor appoints the leadership of the authority and is responsible for its day-to-day operations and conditions.

The latest federal budget proposed by the Trump administration would also slash funding for public housing further, including completely eliminating capital funding (which is currently about $582 million), $5 billion in cuts to Section 8 rental vouchers (the city would lose about 6,300 vouchers), and a 10% cut to operating funds for public housing agencies across the country (which would equate to about $100 million for the city).

NYCHA has had a few victories and mostly setbacks under the de Blasio administration. The administration was able to bring NYCHA’s operating expenses under control and has also put into place NYCHA 2.0, a plan to raise $24 billion in capital funds for repairs and maintenance at housing developments. But those funds are not only a long way from being realized, they are also eclipsed by the agency’s $32 billion capital need, which could rise to as much as $68 billion by 2028, noted Council Member Vanessa Gibson, at a NYCHA budget hearing on Friday, March 13. (Council Member Alicka Ampry-Samuel, who chairs the public housing committee, was absent and Gibson, who chairs the capital budget subcommittee, chaired the hearing in her stead.)

Early in the hearing, Gibson raised the red flag about NYCHA’s worrying funding gaps for critical capital repair and maintenance. “While NYCHA 2.0 is a big and bold plan, it still leaves about $9 billion in unfunded capital needs across its portfolio and does not account for the fact that NYCHA’s capital need could as much as double by the end of the ten-year plan,” she said.

NYCHA is also currently under the purview of a federal monitor, Bart Schwartz, installed last year in agreement with the federal Department of Housing and Urban Development, after the authority was found to have falsified lead abatement reports for years. Lead and mold at housing developments continue to plague the city, which is undertaking a concerted effort to remediate those conditions. Heat and hot water outages have become all too common in the winter, though emergency measures and a milder winter have meant fewer outages this year. Adding to the authority’s woes is the coronavirus outbreak, which has affected the operations of the entire city government.

NYCHA’s budget cycle begins in January, as opposed to the city’s, which begins in July. Its 2020 budget was adopted in December. The agency has a $3.75 billion annual operating budget, and was projecting a surplus of $91 million in revenues at the end of the year.

At the budget hearing, Greg Russ, chair and CEO of NYCHA, detailed the authority’s various efforts to meet its obligations under the federal agreement, including putting $2.2 billion in city funding towards capital repairs over the next ten years. “Mayor de Blasio has committed an unprecedented level of resources to the authority,” he stressed in his opening remarks, “a total of $6.4 billion, including $1.3 billion to repair nearly 1,000 roofs and $200 million to replace boilers and upgrade heating systems.”

He also previewed several other measures the agency is taking to improve operations and conditions at housing developments. An additional $100 million in state capital funds will go to fulfilling the federal agreement, after a spending plan for the allocated money was approved by the state. He promised that a new organizational plan for the authority will be released this summer.

NYCHA is also creating a small projects management team for capital projects as well as a new staff position to act as a liaison with the City Council to oversee current and future capital projects funded by the city. The agency’s lead action plan is being submitted to the federal monitor for his approval. 

Even as NYCHA contends with a capital needs gap, the proposed federal cuts “would completely spin us in the wrong direction in terms of the investment that we have to make,” Russ said. “These are significant cuts that the President and the administration have proposed and they're unconscionable.”

He did say he did not expect federal capital funding to be zeroed out, putting faith in the Congress to push back against the cuts. And he said the authority could continue to manage day-to-day operations even if operating funds were reduced.

Russ also testified about aspects of the NYCHA 2.0 plan that are underway to raise funds for the authority’s housing stock and renovate and repair 62,000 apartments by 2028. Those particularly involve utilizing the Permanent Affordability Commitment Together (PACT) program and federal Rental Assistance Demonstration (RAD) program. Under PACT, the housing authority partners with private entities to maintain and repair developments, with housing units transferred to the Section 8 housing program. Through the program, Russ said the city has so far addressed $1.1 billion in capital needs by converting almost 7,800 apartments in 30 housing developments to Section 8 funding. He said 21,000 apartments would be “in the conversion pipeline” by this spring. Just last month, the authority selected five development teams to convert 5,908 apartments in Manhattan and Brooklyn to the program, agreements expected to cover $1.5 billion in critical capital needs.  

There was, however, little discussion of other parts of the plan, including the sale of air rights and allowing private developers to build mixed-income housing on NYCHA land, also known as infill development. Infill projects were aimed at raising as much as $2 billion for the agency over ten years but have failed to move forward so far. Some air rights sales have been completed, though. 

On March 19, the New York State Assembly's Manhattan delegation released a report that highlighted conditions at NYCHA developments and tenant needs. Among several recommendations, the delegation urged the state to find a dedicated funding stream for the ailing agency as well as to provide more transparency around existing funding and how it is utilized. "Written prior to the COVID-19 State of Emergency, the pandemic further highlights that, for over 400,000 NYCHA tenants in substandard housing, the public housing crisis is a public health crisis,” said Assemblymember Richard Gottfried, dean and Chair of the delegation, in a statement. "New York State can act now with serious funding commitments and lead the way towards the restoration of NYCHA."

Though the City Council in its initial response to the mayor’s preliminary budget pledged to advocate for more funding for housing, there was no particular mention of NYCHA. It’s unclear what additional commitments the Council may request in its official response, which was due after budget hearings that have since been suspended amid the coronavirus outbreak.

But it’s clear that Council Speaker Corey Johnson is looking to Albany for additional funding from the state government. “The city can’t do it on our own,” Johnson said at a rally in early February outside City Hall, according to a New York Daily News report. He called for $2 billion more from the state. “We put up a lot of money — we should put up more money — but we need a state partner to put up money with us.”

Advocates and elected officials have also been critical of the state for its slow support for NYCHA. It was only in November that the state released $450 million in funds appropriated for NYCHA in 2017 and 2018. The funding was repeatedly put on hold as the city contended with the lead testing lawsuit and the subsequent negotiation over the federal agreement. Governor Cuomo eventually said he would not release the funds until an independent monitor was appointed to oversee its disbursement.

“For years the New York City Housing Authority was underfunded by the Federal government and its administrators, and to help, New York State stepped up and made an unprecedented commitment to NYCHA for reliable heat, safe elevators and a better quality of life,” said Freeman Klopott, a spokesperson for the state Division of Budget. “In all,” he said,” the executive budget Cuomo released in January that forms the basis for budget negotiations with the Legislature, “includes $650 million in ongoing support for NYCHA projects so that their 400,000 residents will finally see results.”

“Is there always a need for more funding for public housing? Absolutely,” said Bronx Assemblymember Michael Blake, a legislator who has repeatedly called for more NYCHA funding, in a phone interview. He said the state’s first priority should be to release $100 million for NYCHA that was allocated by the state Legislature last year, atop the $450 million that had already been set aside for the agency. And he called for an urgent response to ensure public housing residents are protected during the coronavirus pandemic without having to forego day-to-day maintenance.

“We have to make sure that we don't have a scenario where the funding that we're going for that is needed for the everyday repairs comes at the risk of the present emergency upon us,” he said. “While, yes, coronavirus is an emergency, so is a lead paint crisis.”

Other elected officials at the state and city level have already declared that they wouldn’t support any spending plans that don’t substantially increase NYCHA funding, though it is worth noting those promises came before coronavirus seemingly changed everything.

“I repeat. I will not vote for a budget without funding for our public housing,” tweeted Manhattan Assemblymember Yuh-Line Niou.

Manhattan Assemblymember Harvey Epstein echoed the sentiment. “I am with you @yuhline I will NOT vote for a budget without a substantial investment in public housing!” he tweeted.

New York City Council Member Carlina Rivera of Manhattan wants to see the city cough up more funding. “The City and State must step up this year and contribute billions more dollars in their own budgets, and we will be calling on our colleagues in the Council and State Legislature to fight for this as well,” Rivera wrote in a joint op-ed with congressional Rep. Nydia Velazquez in Gotham Gazette.

The Legal Aid Society, a member of the Upstate Downstate Housing Alliance which is behind the Housing Justice for All campaign, released data last week showing that between October 1 and December 31, 2019, there were 1,246 heat and hot water outages at NYCHA complexes, affecting about 178,267 apartments that are home to 391,661 residents.

“NYCHA is clearly still unable to ensure that utility systems seamlessly provide for residents, and these numbers confirm what we hear from our clients on a regular basis,” said Lucy Newman, Staff Attorney with the Civil Law Reform Unit at The Legal Aid Society. “These outages could be meaningfully addressed with the right resources. As Albany continues to negotiate the Fiscal Year 2021 budget, we demand that lawmakers allocate $2 billion to NYCHA to help the Housing Authority address these and other outstanding issues that still plague tenants.”

by Samar Khurshid, senior reporter, Gotham Gazette

Read more by this writer.

Note - this article has been updated with a reference to a new report released by the New York State Assembly's Manhattan delegation. 

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