Letter to Secretary Ben Carson, Department of Housing and Urban Development - Reimbursement Rate Decrease by Department of Housing and Development on NYCHA

Letter

We write with deep concern in response to recent news announcing a decrease in the operating expense reimbursement rate the Department of Housing & Urban Development (HUD) has imposed on New York City's Housing Authority (NYCHA). Recently, an unexpected and significant cut was made to reimbursements for the months of February and March 2017. Given the tight budget on which NYCHA operates, and the significant challenges in meeting the monthly need to provide quality housing to its residents, it is evident that these cuts will have severe effects for New York City NYCHA residents. It is our belief that these cuts are ill-founded, unnecessary and harmful to hundreds of thousands of NYCHA residents. We are troubled both by their occurrence and the lack of warning or data-based justification for their implementation, and we strongly urge that they be reconsidered and rescinded.

NYCHA is dedicated to providing direct housing, vouchers and other forms of housing assistance to families in need. Additionally, NYCHA works to provide supportive services that equip residents with tools to become financially empowered. So far, our offices have yet to receive sufficient clarity on the basis on which these revisions were made and therefore, we request an immediate review of these cuts and a detailed explanation of how these rates were calculated.

The decision which was announced to NYCHA in February showed a sharp decrease, from 90% to 85%, in the prorated amount of operating funding that NYCHA receives. The unexpected and dramatic 5% cut amounts to an approximate $48.7 million loss in revenue. The change in the Section 8 Administrative fee from 84% to 77% proration has resulted in $7.6 million in lost revenue. These total cuts of $56.3 million are a significant decrease in the prorated amount of funding that the agency received throughout 2016. Unfortunately, this substantial loss will have severe and unfavorable impacts for the largest public housing authority in the nation.

NYCHA currently supports approximately 400,000 New Yorkers, all of whom will be impacted by these ill-advised cuts. This reduction will hinder NYCHA's ability to be prompt in responding to maintenance requests, as well as employing staffers to care for the 328 properties spread throughout the New York City metro area. Additionally, NYCHA faces a significant hurdle with regard to its current $17 billion capital backlog that will only be exacerbated by additional budget decreases. In light of these challenges, where we believe HUD should be doing more, not less, it is critical that HUD be transparent and provide the data that, from HUD's perspective, informs these changes; it is of utmost importance to know what has led to such a sharp decrease in the proration amount, one that we believe should be reversed.

During your confirmation hearing before the Senate Banking Committee you pledged to "advocate for the HUD budget" and suggested that it would be "cruel and unusual punishment" to cut the housing budget dramatically. These most recent announcements regarding cuts to NYCHA's budget are certainly inconsistent with your statements before the Banking committee, and therefore, we ask that HUD review the changes to rates and provide a detailed, data-based explanation for how this decision was made. This information should help clarify the process used by HUD and help set expectations moving forward. As in the past, we look forward to working with HUD in continued efforts to support our public housing programs and maintain the critical services and resources they provide.