Last year, the City of New York tried to divert $25 million in federal money for housing for AIDS patients into case management and support services. The federal Department of Housing and Urban Development turned it down, but this year the city is going to get its way.

The city announced the move again last fall, as part of the blueprint that it presents to the federal government every year on how it plans to spend housing money. Last week, the federal housing department approved the plan, including the AIDS cash shift.

Advocates protested that the move would redirect badly needed funds from housing construction, and that the city’s overall budget for AIDS-related services would dwindle. The Housing Opportunities for People With AIDS program provides about $50 million to New York City to provide needy AIDS patients with stable, permanent housing by building new apartments and rent subsidies in scattered-site housing.

Under the plan, half the cash will go instead to the city welfare department’s AIDS services division.

Although the city has pledged to replace the federal housing money, advocates pointed out that the funding will be vulnerable. “Any money the city decides to spend on it is subject to the budget [process],” said Brad Usher, a legislative aide for State Senator Thomas Duane. “And the Giuliani administration has not always been willing to spend money on housing.”

In addition, HOPWA funding mandates that an advisory committee of local AIDS advocates give input into how the funds get used. “We’re losing a way of having community feedback on how money is being spent,” Usher added.

Officially, HUD approved the plan because this year the request was made much earlier in the budget process. “The city has proven that they were able to meet the needs of the AIDS population satisfactorily; [it] is consistent with HUD regulations,” said agency spokesperson Adam Glantz.

But housing watchers pointed to another motive: The political skirmishes between Mayor Rudy Giuliani and federal housing secretary Andrew Cuomo. Last month, Cuomo yanked $60 million in homeless funding away from the City of New York, charging that the city was improperly administering the money. In retaliation, Senate Republicans announced plans last week to hold hearings on HUD, claiming that the agency was simply trying to make Giuliani look bad.

Given the circumstances, observers speculate, HUD may have approved the city’s funding plan simply to avoid attracting any more attention. Said one: “They’re fearful of looking more political by inserting themselves into [the city’s] budget.