The New York City Housing Authority, which provides some of the city’s most inexpensive housing to a full 5 percent of residents, is facing a $170 million budget deficit this calendar year. Next year looks even worse: Another deficit of an additional $198.4 million is anticipated.

The dire effects of NYCHA’s budget shortfall – including closing dozens of community centers, cutting Authority staff, raising residents’ rents and deferring building maintenance – have been predicted, dissected and fretted over for months, as the city budget was shaped, then adopted. In a current annual budget of about $2.8 billion, the city ended up contributing $18 million. Since the protests of public housing residents, elected officials and others did not cause the federal government to reverse years of disinvestment – nor the city and state to kick in additional tens of millions they arguably owe to NYCHA for a number of complexes they and not the feds built years ago – public housing stakeholders find themselves asking, what now?

On a practical level many residents are anguished over what they fear will be continued sub-par physical conditions even as rents increase and “non-core” services are cut, with everything from seniors’ centers to education, sports, arts and other enrichment programming in imminent danger of disappearing. Panning out into the future, however, some housing analysts sound almost optimistic about the future of public housing in New York – widely considered the nation’s most successful large public housing operation – and around the country. The reason, they say, is that it simply must continue. And not just carry on, but thrive and serve even more Americans in need of affordable housing.

“There’s very much a realization that the current generation of public housing needs to be funded, needs to be preserved,” says Jeffrey Otto, a senior policy analyst at the Citizens’ Housing and Planning Council, a New York City nonprofit involved in public housing policy since the 1930s. The group will soon issue a report making recommendations for public housing’s future, based on a roundtable discussion among local and national public housing leaders convened by CHPC in December. “We hope that the next generation of public housing – a production program for a new public housing – could really help to preserve the existing stock.”

“Public housing is a viable model for delivery of affordable housing,” says Otto. “It’s the most basic model of affordable housing: Something that’s permanently affordable and publicly sanctioned, with the understanding that it’s held in the public trust.”

But the prescription coming from the roundtable – which included high-level New Yorkers such as NYCHA Chairman Tino Hernandez and General Manager Doug Apple, in addition to housing authority chiefs from St. Paul, Philadelphia and Fort Worth – will insist future efforts must be “significantly different” than the status quo, he says. The group sees public housing succeeding if it has more regulatory freedom, leverages existing assets to create new ones, initiates more partnerships with nonprofits and other private companies or organizations, and embraces competition and rewards higher-performing approaches.

Some of these ideas are already in use at NYCHA. In terms of leveraging existing assets, for example, open spaces are being filled in at some complexes with new housing construction, and the Authority is using new funding models to create several new developments.

One thing that will remain the same, Otto says, is that “the money ultimately is going to have to come from the federal level.” The lack thereof is the biggest reason NYCHA is in its current predicament. As Chairman Hernandez testified at a City Council budget hearing in May, “NYCHA has seen six straight years of underfunding by Washington. We have been shortchanged more than $611 million since 2001 and in FY2008, NYCHA will receive only 81.7 cents on the dollar, the lowest to date, in federal subsidy.” (The Authority’s fiscal year is the calendar year.)

Nicholas Dagen Bloom, a New York Institute of Technology professor who has just published a history of NYCHA – entitled “Public Housing That Worked: New York in the Twentieth Century” – is another who thinks public housing must have a bright future, if only because the alternative is too dark to countenance.
“Basically the city has to find a way,” says Bloom, who lives in Queens. “I think that well-managed public housing has been a key element in New York’s renaissance.” In researching his book, Bloom toured dozens of public housing developments around the city, and says he witnessed a lot of sound management and good upkeep – while emphasizing that there’s plenty of variation in size, condition and character of the various projects. (And, he notes that residents everywhere have complaints: “I live in a co-op building. I’m not exactly happy about maintenance in my building.”)

“It would be in the interest of everyone to figure out how to make sure that public housing stays decent … in the same way that it’s in the interest of people who always ride in cabs to have subways,” he says. “I think you could make the case that it’s time for more public housing, not less.”

NYCHA’s present financial crisis presents an opportunity for political mobilization, in Bloom’s view, and a moment to make the case to the public about how broadly the housing, the hundreds of community centers, the associated jobs and the social fabric benefit the entire city.

Lisa Burriss, director of organizing at PHROLES (Public Housing Residents of the Lower East Side), says her group is working on exactly that project. Like many housing activists, Burriss is also focused on trying to lessen one source of NYCHA’s financial trouble: payments it makes to the city for services that are borne by all taxpayers – and thus, many say, that NYCHA residents are paying for twice.

In a hearing last month before the City Council Subcommittee on Public Housing, NYCHA Deputy General Manager Felix Lam told councilmembers that in 2007, the Authority paid $210 million to the city for police, sanitation, environmental and senior citizens’ services, as well as “payments in lieu of taxes” or PILOTs – because NYCHA is not subject to property taxes.

At a hearing led by councilmembers who clearly found the payments counterproductive, and packed with residents who bubbled over with frustration, Lam said NYCHA officials are in conversation with the city Office of Management and Budget about the possible reduction of the payments.
“Residents are paying more to get less,” Burriss said this week. “Stop making this Housing Authority pay payments that other residents outside of public housing don’t have.”

Though she has plenty of frustrations of her own with NYCHA, Burriss sympathizes with the tough decisions the Authority’s grappling with. The additional $18 million from Council – about which NYCHA spokeswoman Sheila Greene says officials are “undergoing a process” about how to allocate – “didn’t scratch any itch in terms of NYCHA’s budget,” Burriss said.

PHROLES is working in local and national coalitions to figure out a solution to the current crisis. “The need will never grow old. When the shelters are empty in every city, then I can see tearing down public housing,” she said.

Although New York Senators Hillary Clinton and Charles Schumer had little to tell City Limits about any present initiatives on NYCHA’s behalf, they did point to recent efforts to shore up financing. And the local spokesman for the federal Department of Housing and Urban Development, Adam Glantz, sounded an apologetic note too.

“I don’t think it’s a secret that in terms of operating subsidies, they used to get 100 percent, and that has been lowered,” Glantz said recently. “Their mission is terribly, terribly important. We have literally thousands of public housing authorities going through the same thing.”

But author Bloom, for one, remains optimistic. Democratic presidential administrations historically have supported public housing. Should Sen. Barack Obama be elected president – though he’s hardly made affordable housing a centerpiece of his campaign – “I guarantee you HUD is not going to be holding up money for America’s public housing,” he said.

– Karen Loew

Additional reporting contributed by Lauren Victory and Betsy Morais.