Chapter 3: Suddenly, No One Wanted to Pay for Public Housing

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Michael Gaines, 50, resident leader at Kingsborough, has lived there since he was born.

Photo by: Jarrett Murphy

Michael Gaines, 50, resident leader at Kingsborough, has lived there since he was born.

Virginia is upset about her door. “You know, it’s gray,” she says as she smokes outside her building at the Kingsborough Houses in Brooklyn. She wants it painted. But NYCHA’s painters have yet to do the job. Michael Gaines, the 50-year-old head of the development’s residents association, says he’ll look into it. Then he turns to go, shaking his head. “People complain about stuff that’s not worth complaining about it,” he says. “You don’t like the color of your door? Buy some paint.”

But some things are out of residents’ hands—like the fact that the development’s official community center has been closed because, Gaines says, its toilets back up whenever it rains heavily. Now Kingsborough’s kids only have a small, makeshift center that they have to share with residents from the Park Rock development a few blocks away. The cramped conditions aren’t likely to foster beautiful friendships among young strangers, so many kids will ditch that scene for another one. “If you don’t want the kids to get into drugs, you got to give them a center,” Gaines says. “If all the kids see are drugs, what do you want from them?”

Fixing that problem isn’t like painting a door. “No,” he says. “I can’t do it on my own.” Increasingly, though, NYCHA’s residents have been on their own, because the authority itself has been neglected.

Back in 1969, when Congress limited the rent local authorities could charge public housing residents, it vowed to make up the gap by distributing annual operating subsidies. As costs rose faster than residents’ incomes, that federal money became the lifeblood of public housing. But for the past six years the funding from the federal government has fallen far short time and again. The Bush administration in several of its budgets proposed steep cuts in or flat-lined support for public housing and other housing assistance, and Congress often failed to resist the moves. This year, NYCHA is getting a paltry 83 percent of what it is supposed to receive under the funding formula—and that formula is less generous to New York than it used to be. At the same time, the federal government has also stopped funding a drug-elimination program for public housing that used to mean $35 million a year to NYCHA. The housing authority expects to receive a slightly better, but still insufficient, 88 percent of what it is owed under the federal funding formula in the current fiscal year.

The impact of a shortfall that large is obvious: More cities will opt to downsize or destroy public housing that they can no longer afford to operate. Whether this was the intention of those in Washington who accepted the cuts is almost beside the point. “They never said, ‘We do not believe in this program. We’re really trying to eliminate it by coercing agencies into selling the projects,’ ” says the Center on Budget and Policy Priorities’ Barbara Sard. “They never said that. But they either intended it or they were guilty of malfeasance.”

The federal failure to fund has cost NYCHA more than $600 million since 2001. But NYCHA’s problems don’t end there, because it also runs housing built by the state and city—a unique situation, since only three other states and no other cities built their own housing. In 1998, the Pataki administration stopped New York State’s operating subsidies for state-built public housing, a loss to NYCHA of about $11 million a year—but even that amount fell well short of the estimated $62 million a year it costs the authority to operate the 15 state-built buildings (containing about 12,000 units) in the city.

While the state does pay the debt service on construction costs for those buildings and ponied up $3.4 million to help NYCHA this year, that’s “still a drop in the bucket relative to $62 million,” says Victor Bach, a housing analyst at the Community Service Society. NYCHA sued the state to try to force it to pay, but lost.

Meanwhile, New York City has reduced support for its own share of NYCHA’s housing—8,000 units in six buildings remaining from the stock that the city built on its own. City payments fell dramatically under Rudy Giuliani. Then, amid post–September 11 budget cutting, Mayor Michael Bloomberg ended the NYCHA subsidy altogether in 2004. In 2006, the Bloomberg administration made a one-time payment of $121 million. But that did not make up for the shortfall under his administration, and it did not restore the kind of annual support NYCHA needs. The New York City Independent Budget Office (IBO) estimates that it costs NYCHA $24 million a year to operate the city-built housing.

“I think there’s been a policy of starvation at all three levels of government,” Bach says. “The city and state have also turned their back on the units they helped build that NYCHA has to keep running without federal subsidies. Right now, Washington—however much we complain about it—is the only level of government funding NYCHA [on an annual basis], and New York City is the only level of government taking payments from NYCHA.”

That’s a reference to the money that NYCHA, for all its budget problems, sends to the city’s coffers. Since the Housing Police merged with the NYPD in 1995, NYCHA has paid for police services, to the tune of $74 million in 2008. NYCHA also paid $2.4 million last year for sanitation services. And while NYCHA doesn’t pay property taxes, it does fork over $27 million in “payments in lieu of taxes” under a decades-old agreement with the city—an agreement that, oddly enough, was supposed to cover police and sanitation services, for which the authority now pays extra. Some other cities—like Chicago and East St. Louis, Illinois—also charge their housing authorities for police services, but most do not.

Some of New York City’s charges date back to a time when NYCHA was in better financial health than the city. That’s clearly changed. And while there’s an argument that NYCHA gets even more police protection than it pays for, the city’s transit system also enjoys a fair amount of police attention but pays nothing for it: According to the IBO, the MTA used $180 million in NYPD services in 2007 (on top of its $551 million in direct city subsidies) but did not pay for any of it.

Meanwhile, NYCHA’s other costs are rising rapidly. Since 2002, the price of providing employees with benefits has risen 70 percent. The future looks even pricier than the recent past: Between 2008 and 2012, NYCHA expects its labor costs to more than double. The city and state agreed in 2007 to hand over more money to NYCHA through a higher payment to NYCHA for each recipient of public assistance it houses. Doug Apple, NYCHA’s general manager, has nothing but praise for the Bloomberg administration: “The city of New York is doing an enormous amount for NYCHA.”

Councilwoman Rosie Mendez, who grew up in public housing and now chairs the City Council’s public housing subcommittee, says the cuts that Bloomberg made were understandable given the fiscal crisis after the World Trade Center attacks. “There was a lot of lost revenue after 9-11. They raised property taxes. They made cuts where they could.”

As its deficits mounted in 2006, NYCHA introduced its Plan to Preserve Public Housing, which raised rent for at least 47,000 households that were paying less than 30 percent of their income on rent, increased fees for parking and hiked surcharges for air conditioners and washing machines.

NYCHA has also cut 2,000 jobs since 2002. According to city payroll figures reviewed by the IBO, the cuts at NYCHA have fallen more heavily on nonmanagerial, nonunion workers. While managerial posts at NYCHA have decreased 7 percent since 2002, nonmanagerial jobs have fallen off 21 percent. The cuts have meant that apartments are painted less often, maintenance offices have been consolidated and security guards have been removed.

Apple defends the cuts he’s made. “When we’ve done our budget reductions we have really tried to target noncore services,” he says, stressing that he has tried to protect maintenance and other services that bear directly on life in the projects. “In those areas we really have strived to main services and headcount. But I cannot say today that there is no impact.” It’s not all bad: Lisa Burriss, the public housing organizer on the Lower East Side, says the new centralized call center for repair requests seems like a good idea. And the Mayor’s Management Report says the number of open work tickets for repairs has decreased steadily for four years. But the news isn’t all good either.

“You’re trying to put Band-Aids on things that have tremendous gashes,” says Greg Floyd, president of Teamsters Local 237, which represents many NYCHA workers. “Morale is low because members are uncertain about their positions. Because of the way they now dispose of garbage in some areas, they have a rodent problem, so that’s a health and safety problem.”

The share of NYCHA properties with signs of rodent infestation rose from 16 percent in 2004 to 19 percent in 2005 to 23 percent in 2006, after which the city changed the way it reported those statistics. Residents notice. “We got a lot of rodents, a lot of roaches,” says Joanne Smitherman, 72, a longtime resident and leader at Highbridge Gardens in the Bronx. “People have holes in their apartments. When I say holes, I mean holes. They have mold in their apartments in the Davidson development. You got decent people who live in housing. Everybody isn’t dirty. Everybody doesn’t sell drugs. Everybody ain’t been to jail. People work all day. They still pay their rent. But where is the services?”

At Castle Hill, resident Roxanne Reed and a neighbor stripped and cleaned a common-hallway floor because it had gotten so filthy. In October, Reed and neighbor Aleshia Ward discussed doing something about the graffiti on the walls. “If they don’t supply the paint, we’ll buy the paint,” Ward suggested. But as with Gaines and the community center in Brooklyn, residents at Castle Hill face limits on what they can do. Marie Francis has had to call the fire department twice about gas leaking from her stove. And she has been stuck in the elevator enough times—”jumping up and down” to make it move, she says—that she now avoids leaving her 11th-story apartment.

At least 18 community centers—which offer activities like domestic violence counseling, Al-Anon, after-school programs, sports and crafts—are slated to close next year. Fifteen have already closed. Some of these centers took years to build and open, only to be padlocked now. Other centers were built but never opened. In fiscal 2008, an average of 7,283 people used NYCHA community centers every day. For kids aged 6 to 12, community centers had a 105.7 percent utilization rate (meaning the centers had more patrons that they had room for), while for youth aged 13 to 19, the utilization rate was at 98 percent.

NYCHA says it has no plans to close senior centers, but many senior centers on NYCHA property are run or funded by the Department for the Aging (DFTA), which is considering a reorganization of its services and could consolidate some offerings. In fiscal 2008, NYCHA’s senior centers posted a 98 percent utilization rate. Senior centers are “critical to the social fabric,” in NYCHA communities, says Wanda Wooten, who runs a center at the Isaacs Houses in Harlem that is partly funded by DFTA. “As important as the meals and the nutritional services are, people need a place where they feel they belong. Disconnection leads to social problems. If you want a safer city, you need to make people feel a part of it.”

Perhaps the most ambitious part of the Plan to Preserve Public Housing was NYCHA’s bid to line up federal assistance for running the 21,000 units of city- and state-built public housing, for which City Hall and Albany had cut off operating subsidies. NYCHA petitioned HUD to allow Section 8 to cover the rent on 8,400 units of housing in those state- and city-built developments. Section 8 is intended to help poor people rent private housing, with the feds picking up the difference between the actual rent and what a family can afford to pay.

In effect, NYCHA was asking to become a Section 8 landlord. NYCHA officials do not emphasize it publicly, but their plan reduces public housing in New York. It states that the 8,400 units “would no longer be included as part of NYCHA’s public housing inventory.” The move depletes the number of Section 8 vouchers that could be used to obtain affordable housing in the private market in order to shore up public housing. It also shoves the 132,000 families on the city’s public housing waiting list aside so people on the Section 8 waiting list can use vouchers to move into the 8,400 targeted public housing units. And because the city wants to open up those units for the new Section 8 renters, current residents in the targeted developments who want to move out will receive preference for apartments in other NYCHA buildings, jumping ahead of others in line. Beyond its impact on people, the plan faces financial risks. Section 8 funding is not much more secure than federal subsidies for public housing, and is also a favorite target of conservatives.

But NYCHA didn’t have a choice of a good option versus a bad one. It had to pick between bad and worse—worse being a situation in which the unfunded state- and city-built units dragged down the whole system as they siphoned off inadequate federal subsidies. As the authority said in its submission to HUD, “NYCHA cannot continue to fund these developments in this manner as it endangers the financial stability of all developments operated by the Authority.”

Losing the 21,000 units in the city and state developments would have been far more damaging, supporters of the plan say, than pulling 8,400 Section 8 vouchers out of the private market and into public housing. Apple praised Bloomberg for lobbying HUD on NYCHA’s behalf to approve the Section 8 plan. Of course, the plan was only necessary because the state and city decided to stop funding the housing they built. “Let’s not lose sight of the fact that as a city and as a state we have turned our backs on NYCHA,” Councilwoman Melissa Mark-Viverito said in October.

Critics of Bloomberg, while crediting him for his $7.5 billion affordable housing plan, think he has neglected the lower end of housing need. “I don’t think I’ve seen the kind of fervor for public housing and NYCHA that I’ve seen for the other parts of the [housing] initiative. Clearly it doesn’t excite Bloomberg in the same way,” says David Jones, director of the Community Service Society. Using Section 8 vouchers to pay for public housing is an example of the zero-sum game being played, Jones says. “Just scavenging one part of it to shore up the rest is not good housing policy. If the mayor and others don’t see the causal connection between this and rising homelessness, then they’re smoking.”

NYCHA’s Section 8 plan and the higher welfare payments the state and city will make help shave the authority’s deficit from $195 million to about $100 million in 2008, according to Apple—a massive achievement, but not enough. Any remaining shortfall would “have to be dealt with by combination of internal resources and dipping into our dwindling reserves,” Apple said in October. Federal rules require NYCHA to keep two months’ worth of operating expenses in its bank account. HUD says the authority’s reserves are “sufficient” now, but Apple says, “We are dipping precariously into that zone.”

That’s one reason why in its 2008 budget, which foresaw annual deficits of close to $200 million even after the shelter allowance and Section 8–conversion money were factored in, NYCHA warned that “in order to achieve structural balance, significant policy decisions remain.”

NYCHA has consistently denied that it is considering what would be the most significant policy decision of all: the sale of some of its housing to produce revenue that it would use to protect the rest of the portfolio. In a letter to a resident leader last year, Apple wrote, “Rumors are circulating that NYCHA has plans to sell off public housing. This is unfortunate, as it is untrue and does nothing more than mislead residents and cause anxiety. We have no plans to sell off public housing.”

But the notion is not just a wild rumor circulating through the projects. It’s an idea with powerful cheerleaders. “A prominent New York real estate appraiser who we spoke to estimated for us the value of several public housing properties in the borough of Manhattan,” wrote the New York Sun in 2002. “By the appraiser’s estimate, selling just a handful of these public complexes would net $500 million right away, with a further $10 million a year that would be generated by adding these expensive properties to the tax rolls. Our appraiser said it would be no trouble at all to find willing buyers to manage the properties.”

At a 2007 conference at the Milano School, HUD regional director Sean Moss said, “If housing authorities had more latitude to manage their real estate or their resources … they would be able to create partnerships, or syndicate, or even sell those assets so that more housing could be created.” Julia Vitullo-Martin, director of the Center for Rethinking Development at the Manhattan Center, wrote in March 2008 that NYCHA “has the ability to solve its own financial problems by selling at least some of them on the open market.” She noted that the Riis, Wald, Baruch and Smith Houses are in a hot area of Lower Manhattan. “Bordering the hipster sections of Brooklyn are the Art Moderne Williamsburg Houses,” she continued. “NYCHA has several projects in the vicinity of the privately owned Starrett City rental complex, for which a developer last year offered $1.3 billion.” There are, of course, assets NYCHA could auction-off without actually evicting poor people. NYCHA developments often have outdoor parking lots; the authority could lease or sell the area over these lots for development without losing housing or green space.

But the green space could also be on the auction block: Manhattan Borough President Scott Stringer’s office in a 2008 report identified some 30.5 million square feet of open space and unused air rights on NYCHA property that could be sold. NYCHA has already entered into deals to sell space at four housing developments.

At a public meeting last October 29th, with the chairman not even present, the NYCHA board approved 10 measures in as many minutes. One of them was an amendment to an earlier proposal for selling 33,000 square feet at the Harborview Terrace projects in West Midtown. The revised proposal added 61,000 square feet of development rights to allow the construction of 220 “affordable” apartments on the site. There was no discussion of what af fordable meant, or of the 122 market-rate apartments that are part of the deal—the first market-rate dwellings built on NYCHA land. Vitullo-Martin hailed the deal as the dawn of a new era of market-rate partnerships for NYCHA. But some are skeptical about the process. “Obviously it will infuse money, but is that short-term or long-term?” asks Councilmember Mendez.

Selling off open space or parking lots is one thing; liquidating public housing is another. “That of course is going to be much more volatile politically,” Vitullo-Martin says. But, she asks, “How is NYCHA going to pay its multimillion-dollar deficit? NYCHA’s got to come up with revenue.”

If the funding crisis continues, this once-unthinkable option will become more palatable. Even if high-rise public housing is unlikely to be offered up, much of NYCHA’s stock consists of smaller buildings. Those are the type of public housing properties that have been lost in other places around the United States, says Barbara Sard: “In some of those cities where [smaller] units have been in desirable neighborhoods, authorities have sold them to get some money to maintain their other developments.”

One West Side group of preservationists, Landmark West, is so concerned about potential privatization of the Amsterdam Houses—a prized property because of its key location and historic architecture—that it is trying to persuade the city to declare the project a landmark. The request has so far drawn silence from the Landmarks Commission. Evan Mason, one of the preservationists at Landmark West, is working with Amsterdam Houses tenant leaders to present a unified front. But while landmarking would prevent the destruction of the Amsterdam Houses themselves, it wouldn’t necessarily protect the tenants inside.

Vitullo-Martin depicts this as a moment for NYCHA to make tough choices and save what housing it can rather than waging a futile fight to defend it all. “Ultimately, it’s too late for public housing. Most public housing is going to come down,” she says. “You’ve also just got to face facts on these things. That’s the way it is.” Others see the sale of public housing not as a strategic move, but a surrender.

Agnes Rivera, a resident of the Robert Wagner Houses in Harlem, understands that if NYCHA sold some of its more strategically located buildings, it might have more money to fix leaks, replace elevators and get rid of the roaches that have invaded her apartment . It could allow NYCHA to keep community centers open and pick up more trash so the rat problem at some complexes doesn’t worsen. It could shore up the rest of public housing. Asked to consider that trade-off, Agnes—a domestic violence survivor who has lived in public housing for 19 years and raised seven kids there—passes. “I don’t think so,” she says. “Where are the families going to go?”

Rumors about potential privatization are especially acute at the Ingersoll-Whitman Houses in Fort Greene, where a lengthy renovation process has left at least 25 percent of apartments vacant. The complex is located near some of the condos taking shape in Brooklyn, leading to what Theo Moore, an organizer at Families United for Racial and Economic Equality, dubs “conspiracy theories” that the buildings are going on the market. For years, critics of NYCHA have faulted the length of some vacancies in the system. A 2006 audit by the New York City comptroller found that at six developments (including Ingersoll-Whitman) undergoing major renovation work, about 2,000 units remained vacant for more than three years, with some out of service for as long as five years. Between fiscal 2007 and 2008, the time it takes to prepare vacant apartments has increased 72 percent; NYCHA says that’s because an unusually large number of people moved.

Even tough NYCHA critics don’t believe Ingersoll is really for sale. That doesn’t mean, however, that it will come back the same. Ingersoll was originally built as temporary housing for defense workers, so some of its apartments are too small for families to occupy long-term. NYCHA is combining apartments to improve living conditions for tenants. “That’s still tragic, because they’re going to have 300 less apartments,” Moore says. “That’s 900 fewer people in public housing.” In a system of 179,000 apartments, 300 is not a significant statistic. But NYCHA is shedding apartments elsewhere as well—sometimes in an effort to create other “affordable housing.” The former Markham Gardens project in Staten Island, with its 360 units of public housing, for example, is making way for a project by the city’s Department of Housing Preservation and Development. It will offer 150 apartments to Section 8 voucher holders, including former residents of Markham Gardens. But some of the other 90 units will be available to households making up to $85,000. Twenty-five two-family homes will be open to families making up to 130 percent of area median income, which for a family of four is $102,000.

In New York’s housing market, those families need help with housing too. The question is whether it’s right to eliminate public housing—which serves even-needier families—in order to secure that help. That’s what’s happening: Public housing, says Columbia University professor and urban planner Peter Marcuse, “is in effect expanding the provision of housing for middle-income people by dying.”