On Friday, Aug. 12, Housing Authority Chairman John Rhea reinforced worries about mass layoffs when he posted an entry on NYCHA’s agency-wide blog warning of “significant challenges” the agency faces in closing a looming multi-million-dollar deficit, measures that very well may include “3,000 direct service jobs being cut.”
While NYCHA’s finances have gotten a boost in recent years from increased federal spending, including the largest single grant to a public housing authority under the American Reinvestment and Recovery Act in 2009, talk about layoffs at the agency has been swirling for months—with Rhea warning about the possibility of layoffs in testimony to the City Council in June; Friday’s posting by the chairman was a reminder that the threat is still out there.
While Rhea opened his 3 p.m. post highlighting some very positive things that have happened for the agency over the past three years – $423 million delivered in 2009 under the American Reinvestment and Recovery Act, aka the stimulus bill; federal assistance in 2010 to help NYCHA balance its budget and assistance in the sale of 21 NYCHA housing complexes to further increase federal subsidies – the Housing Authority chairman made clear that the battle on Capitol Hill over the budget has very real implications for New Yorkers, city workers and housing residents alike.
While it would take nearly $5 billion to fully fund the needs of the nation’s public housing authorities, so far less than $4 billion has been allocated by Congress, leaving housing authorities across the U.S. having to scramble to make up the deficit, Rhea said.
If the federal government proposes to close the gap uniformly across the nation’s housing authorities, “the New York City Housing Authority will face a shortfall of $200 million,” he warned: “This will be the equivalent of 3,000 direct service jobs being cut or 70,000 apartments going without even basic repairs.”
To respond to the possible $200 million in lost revenue, the authority has developed a preliminary contingency plan, the chairman continued: “which includes a drastic reduction in community programs, agency-wide layoffs, renegotiations of contracts and large transfers from our capital budget to our operating budget.”
When asked for a clarification on the proposed layoffs, NYCHA spokesperson Sheila Stainback said in an email that Rhea had warned of possible layoffs during his Council testimony in June and again in his chairman’s message in the residents’ journal in August. “The Chairman has discussed ‘possibilities’ within the context of what is now before Congress. Given that no final decision is before us, it behooves NYCHA to assess all possible scenarios,” wrote Stainback.
Another NYCHA spokesperson, Zodet Negron, explained: ““Earlier this year, when the federal government warned of a possible recapture of operating reserves from public housing authorities across the country, NYCHA Finance initiated contingency planning for such an outcome.” But Negron added,” HUD’s final determination is not expected until December, and any precise impact on or subsequent action by NYCHA, if any, will not be known until then.”
