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City Hall is planning a new method for providing long-term operating funds for AIDS residences–and it could mean a serious drop-off in the number of new apartments developed for low-income people living with HIV.

The city intends to redirect federal money originally designated as capital funds for development of new special supportive residences run by nonprofit groups, according to government sources. Some of the money will instead be used to cover long-term operating expenses for the residences, replacing city and state funding that had been used for this purpose in the past.

About 900 men and women currently have rooms in AIDS-supportive housing, which provide health care, counseling, drug treatment and other services. The projects have nearly all been developed since 1992, many with federal grants under the Housing Opportunities for People With AIDS (HOPWA) program. They are designed to meet the needs of people who are not healthy enough to live entirely on their own, but not sick enough to need a nursing home or hospital.

HUD has given the city $157 million since 1992 through the HOPWA program. Nearly $80 million of the funds have been earmarked for the construction or conversion of new supported housing. So far, it has paid for construction and rehab of several hundred units.

Problem is, no one can develop a new project under HOPWA without also having secured 10 years of subsidies to cover rent, social services and health care–essential operating expenses. Since 1994, the city has offered no new requests for proposals for these subsidies, and the Giuliani administration has signed only a small handful of new, specially-negotiated contracts. Groups have had to look elsewhere, with limited success.

Annual operating costs amount to an average of $20,000 to $30,000 a year per tenant, or more than $1 million a year overall for some of the residences. In a time of social service cutbacks, the city has been reluctant to take on new obligations, advocates say. Using some of the capital money to cover operating costs will allow some new projects to move forward but there will be less money for new developments, advocates say.

The city says hopes to be able to make up the money from other sources, although they offer no specifics. “It's not logical to conclude that there will be fewer projects,” said Scott Turner, the HOPWA administrator at City Hall. “There are other funding variables in the mix.”

AIDS advocates aren't so sure. “It will reduce the number of units they will develop,” said Eric Galloway, director of Community Lantern Corporation and a longtime developer of housing for people with AIDS. “And eventually there will be no program.”