As the New York City Housing Authority faces a $225 million deficit in this calendar year, the federal Department of Housing and Urban Development has made a nationwide change that will mean even less money next year – not only for New York City, but for public housing authorities throughout the Northeast.
Because of increasing costs stemming from things like rising energy prices and an ever-smaller stream of federal subsidies, NYCHA is struggling to make ends meet as it enters its second consecutive year facing a significant deficit and unable to compensate with its own reserves, as it’s done in the past. And because New York state for nearly a decade has not subsidized the 15 developments it built around the city between 1958 and 1974, NYCHA officials say they have long been stretching federal money farther than it was intended to go.
Some residents are well aware of that. Rosia Wyche, who has lived in Coney Island Houses for 31 years, says she immediately started seeing problems arise after NYCHA consolidated the management for six housing developments in her area into three offices, as a cost-saving measure.
“It’s not as neat as it was, it’s not as clean as it was. People are beginning to complain about mice,” said Wyche, district chair of the housing authority’s Citywide Council of Presidents district for southern Brooklyn (which represents residents at meetings with NYCHA administrators). “We never had mice. In all the years I lived here I’ve never heard talk of mice before, until lately.”
She added that because of reduced services on weekends, the smell of trash piling up in Dumpsters has begun to reach residents living in the lower floors of public developments – who are mostly senior citizens, she adds.
The way it looks now, things are only going to get worse.
Experts say that Congress met only 83 percent of NYCHA’s expected need this year, and expect to see only 80 percent met in 2008. But it’s not only that: at a time when NYCHA is operating at a large deficit, HUD’s estimate of annual expected subsidy for NYCHA will slowly drop by another $60 million over the next five years.
Beginning with the 2008 calendar year, HUD will use a new formula to calculate annual operating subsidies for every public housing authority in the U.S. With this new method, based on the results of a 2003 Harvard Graduate School of Design study, NYCHA and other large, old housing authorities are losing out, according to Sonia Zaterman, executive director of Washington, D.C.-based public housing advocacy group Council of Large Public Housing Authorities.
“New York state, Pennsylvania, Ohio, and a lot of the northeastern cities will be subject to very significant cuts in their current subsidy levels,” Zaterman said. She added that because the Harvard study based its numbers on federally subsidized but privately owned developments rather than public housing – which has special regulations and additional costs that private owners don’t have to deal with – it suffered from “significant methodological flaws.”
“They were saying, ‘we think that certain housing authorities should have their subsidies lowered and another two-thirds should either remain neutral or have their subsidies increased,'” Zaterman said, “Particularly in the west, southwest, and in the south, where their subsidy levels have been traditionally very low.”
To see a map showing the expected gains and losses nationwide, press here.
HUD has created a stop-loss program for housing authorities like NYCHA that stand to lose a lot of money. If NYCHA changes the way it manages its developments to behave more like a private firm – producing balance sheets and five-year plans for each individual property, for example – by a deadline set by HUD, the reduction in annual subsidy will be limited to $3 million. The deadline had been set for this week, but was pushed back to the autumn.
If NYCHA is not in compliance, the authority will slowly lose more and more money each year for the next five years until it either suffers the entire $60 million annual loss of subsidy or proves it has changed its management practices to fit the new guidelines. NYCHA spokesperson Howard Marder says the Authority believes its current practices meet the new standards.
NYCHA already is cutting costs wherever it can. “We’ve consolidated management offices,” Marder explained last week. “We’ve cut back on overtime on the weekends by having people who come in to clean on the weekends work two fewer hours.” NYCHA has also stopped taking on new hires.
“Wherever we can try to find something that will save money,” he said, “we’ll do it.” Meanwhile, housing authorities in southern states will collectively gain in the coming years.
Lawmakers are trying to come up with money to support NYCHA. In 2006, Mayor Bloomberg allocated $100 million as the authority implemented a new financial plan, and the City Council has chipped in another $20 million. At the federal level, U.S. Sen. Chuck Schumer and Rep. Nydia Velazquez of Brooklyn have introduced legislation to provide another $100 million annually for a total of 21 housing projects that are currently unsubsidized.
Wyche of the Coney Island Houses hails from North Carolina but has lived in New York since 1964. She’s optimistic that NYCHA will eventually receive more funding – but is unhappy with the inconveniences residents in her area have been forced to deal with.
“What bothers me is that residents are talking about living in filth,” she said. “I’m a Southern girl. I don’t believe in filth.”