Pols Decry Cuts to City Capital Budget

Elected officials and housing advocates argued Monday that the city’s proposed capital budget cuts would mean fewer affordable apartments, job opportunities, new schools  and infrastructure projects—exacerbating the same inequities that have led to a housing and economic crisis across the five boroughs.

The City Council Subcommittee on the Capital Budget, chaired by Bronx Councilmember Vanessa Gibson, along with Brooklyn Councilmember and City Council Deputy Leader for Policy Brad Lander and Brooklyn Councilmember and Housing Committee Chair Robert Cornegy released a white paper detailing the planned capital budget cuts. 

The white paper, “A Capital Mistake for NYC” argues the city’s proposed budget cuts would not help the adminsitration address the estimated loss of $9 billion in revenue over fiscal years 2020 and 2021. 

Instead it says the de Blasio administration’s proposed $2.3 billion reduction in NYC’s capital budget will only delay financing for affordable housing units, sap millions for infrastructure improvements, eliminate jobs, take opportunities away from women and minority-owned businesses and essentially “slow our city’s recovery, and weaken our infrastructure for the longer term.”

The proposed reductions could result in a reduction of over 5,000 new and 15,000 preserved affordable and supportive housing units over the next few years, based on analysis and testimony by the New York Housing Conference (NYHC). Valuable repair work would be set back: An estimated $800 million in cuts to infrastructure projects includes $376 million from bridge maintenance, $160 million for road resurfacing and $280 million for pier maintenance. The largest cuts could lead to the loss of 15,000 jobs and reduced contract opportunities for minority and women-owned business enterprises (M/WBEs). 

“There is a lot of opportunity to work with the administration to make sure we protect the priorities we fundamentally believe in and will keep New York moving,” said Gibson. 

She said a reduction in the affordable housing pipeline is the last thing the city needs.“We know when the [eviction] moratorium is lifted there will be a number of families facing homelessness and that may drive them into the shelter system. There will be a greater need for supportive housing with on-site wraparound social and therapeutic services for those who have trauma from COVID-19, particularly for communities of color,” she said. “I believe that housing has to be prioritized.” 

In the mayor’s latest budget proposal, the largest cuts are to the NYC Economic Development Corporation ($1.262 billion) for job creation and neighborhood development projects, the Department of Transportation for $480 million in bridge and road repairs and the Department of Correction ($472 million) for borough-based jails construction. The city’s housing agency, Housing Preservation and Development (HPD), saw its capital budget decreased from $1.48 billion to $902 million in the current fiscal year (2020) and from $1.19 billion to $741 million in the following fiscal year, pushing more than 40 percent of the capital program for affordable housing into later fiscal years.

Landers said the wave of protest gripping the city has revealed the deep frustration with persistent inequality.

“On the streets of our city are revealing these deep, deep structural inequities in a society that does not live up to the ideals and values we talk about,” said Lander during the press call. “That might make it hard to talk about capital projects but lifelong affordable housing advocates know that systemic inequities in affordable housing shape your access to a healthy neighborhood, to high quality education, to public safety, and the same systemic inequities structure themselves very throughout the economy.” 

The analysis further argues the capital budget cuts would not help address the estimated loss of $9 billion in revenue over fiscal years 2020 and 2021. Landers and Gibson say capital projects can take several years to complete and new debt is typically issued only as those projects proceed. The analysis estimates, “The savings from the proposed cuts to the capital budget will not be achieved until approximately 2027. Even then, they will likely yield less than $100 million in annual debt service savings—just one percent of the projected revenue shortfall, and 0.1 percent of the city’s total budget. 

New York City’s day to day operating budget is normally funded through the city’s Expense Budget and paid for with the revenue collected by the city primarily from taxes, fees, fines, or grants from other governmental entities. The annual operating budget covers expenses such as city employees and contracts while the capital budget provides funding for long-term projects such as schools, bridge and road repairs, or purchases of land, buildings, and durable equipment such as garbage trucks. The capital budget is financed through the sale of long-term bonds, which is paid by the city through the annual debt service payments included in the operating budget. 

In a letter sent Monday Mayor Bill de Blasio, Lander, the New York Housing Conference and over 160 housing and homeless advocacy groups said the effects of the coronavirus pandemic “boldly underscore the need for affordable housing” and urged the Mayor to  “fully restore the capital spending plan for housing.”

“We have over two million renters in the city alone who are going through the stress and anxiety and questions about how they can pay rent at this moment. They are trying to find out if they have to make a decision between rent, between healthcare, between food and continuing to be in a vulnerable situation,” said Barika Williams, executive director at Association for Neighborhood and Housing Development.

“The cuts to capital budget in many ways are the policy manifestation of what we talk about when we say the marginalization and disenfranchisement of black, brown and immigrant communities across the country and especially in this city. This will adversely impact our, black, brown, immigrant communities, our low-income communities. Those are the people who access these [affordable] housing units. So these things are connected and not just the units,” said Williams. “This is how policy layers together and creates a set of policy that maintains the system of racism.”

Generally, the final or adopted capital budget is voted on by the City Council along with the Expense Budget by July 1.