THE INCREDIBLE SHRINKING HUD

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This year’s federal housing budget may have just gotten a quarter of a billion dollars smaller, and Congress hasn’t even passed it yet.

While Congress continues to debate fiscal year 2003’s housing budget, officials at the Department of Housing and Urban Development recently broke some bad news to its public housing authorities: the agency’s operating budget for fiscal 2002, which ended September 30, came up $250 million short.

Rather than ask Congress for more money during these tight times, HUD told housing authority representatives it plans to ask the legislature to simply pull the needed cash from the 2003 budget, shifting the funding hole to this year’s coffers.

In early November, the federal housing agency explained in a letter to all local public housing authorities that the funding shortfall had occurred “due to the implementation of a new formula for the Operating Fund in FFY 2001 and a lag in data collection.”

The details of this new formula are unclear. HUD officials would not comment for this story, and at press time housing authority representatives were still waiting for information from the agency.

But many housing authority officials fear this new shortfall will only add to an operating budget funding gap, which–thanks to politics and HUD’s use of years-old data to determine need, they say–has grown over the last decade. The hole is now $1.5 billion, according to the Council of Large Public Housing Authorities, which represents 55 of the country’s largest housing authorities, including New York City’s.

Removing $250 million from an already uncertain 2003 budget, the council estimates, would leave housing authorities’ operating budgets short by 10 to 15 percent, and would force them to cut services.

This shift “is not a solution to the problem,” said Tim Kaiser, executive director of the Public Housing Authorities Directors Association. “It just defers the day of reckoning.”
Kaiser and others have spent recent weeks pushing members of the House and Senate to appropriate emergency supplemental funds soon. So far, though, they are not optimistic. While public housing “has never had a shortfall of this magnitude,” said Sunia Zaterman, director of the Council of Large Public Housing Authorities, President Bush’s efforts to tighten the budget mean “there’s going to be a squeeze on domestic spending across the board.”

At the New York City Housing Authority, which receives about 10 percent of HUD’s total budget, officials are trying to figure out how this loss could affect services. Shortfalls in prior years, said a NYCHA spokesperson, have forced cuts in building and ground maintenance.