This summer, the landlords of a federally subsidized Manhattan building have started a high-stakes game of rent bargaining with federal Department of Housing and Urban Development officials. At stake is the fate of 70 senior citizen and disabled tenants, mostly dependent on fixed incomes, who will be facing rents of $2,500 a month if the landlords and HUD can’t strike a bargain. Many of the tenants have lived in the building for two decades, and all are poor. Now they can only wait, hoping they don’t simply get kicked out when the building’s subsidy contract expires next spring.
“This is incomprehensible to me,” said Lauren Gelber, who has lived in the building for 19 years. “Some of the people who live here were 65 when they moved in 20 years ago. Now they have no one except a [health care] aide. How will they find an apartment and move?” Gelber, who is in a wheelchair, has been working with other tenants to push the owners and the federal housing department to work out a compromise.
Rents in this newish brick building at 206 East 31st Street are subsidized through the Section 8 program. The rent is high, at $1,750 a month, but tenants pay only 30 percent of their income. The federal government pays the rest. But the owners calculate that the one-bedroom apartments in this mid-Manhattan building are worth quite a bit more: To stay in the program, they want HUD to pay $2,500 a month for each apartment after the 20-year contract expires in May.
That’s a lot more than the $1,200 the federal housing agency is willing to pay. But unless HUD and the owners pound out a deal, the owners will leave the subsidy program and the tenants will have to find a new place to live, armed only with vouchers worth $800 a month.
“The whole thing is an extraordinarily cruel process,” said Joe Heaphy, executive director of the New York State Tenant & Neighborhood Coalition, who is organizing the tenants. “They may not get an answer [for a while] and in the meantime, these people are scared.”
“It is clearly the agency’s desire and goal to keep the owner of this development in the Section 8 program,” countered HUD Director of Multifamily Housing Deborah Van Amerongen. “We are trying to craft a solution.” The owners’ lawyer, David Hanrahan, also insisted that the owners were looking to strike a deal.
But in a letter to Congresswoman Carolyn Maloney, HUD chief Andrew Cuomo essentially told tenants to prepare for the worst. It’s because the agency is facing a barrage of Section 8 negotiations: In the next five years, two-thirds of all contracts nationwide will expire, and building owners will be deciding whether it’s more lucrative to stay in the federal housing subsidy program or to opt out. In his letter, Cuomo worried that agreeing to a big rent hike at the 31st Street building might set off a chain reaction of other landlords pushing for major increases in their subsidies.
So far, only one New York City building has gone through the “opt-out” process, according to Van Amerongen. But there are many others likely to leave the program soon.
As Cuomo helpfully points out in his letter, these elderly and disabled tenants do have one option while they scramble to find $800-a-month wheelchair-accessible apartments in New York City: They can leave. Acknowledging that the vouchers are nowhere near enough to cover Manhattan rents, he concludes his letter with this reminder: “These vouchers are transferable to any location in the United States.”