New York City Housing Authority

NEW YORK CITY HOUSING AUTHORITY -- (Extensions of Remarks - June 05, 2008)

SPEECH OF
HON. YVETTE D. CLARKE
OF NEW YORK
IN THE HOUSE OF REPRESENTATIVES
THURSDAY, JUNE 5, 2008

* Ms. CLARKE. Madam Speaker, I rise today to enter into the RECORD two newspaper articles illustrating the dire financial state the New York City Housing Authority (NYCHA) is in at the present moment. The first article is published in the New York Daily News by Frank Lombardi entitled: Eye Rent Spike, Shutdowns. The article affirms that NYCHA plans a rent increase for about 40,000 residents in order to reduce their budget deficit. NYCHA also plans to close all 280 community, youth, and senior centers in order to save money.

* The second article is published by the New York Times by Manny Fernandez entitled: Housing Cuts Are Proposed To Help Close Budget Gap. This article declares that NYCHA is making some of the steepest cuts in spending and personnel to reduce their shortfall in their operating budget.

* Today, the agency is looking at a $170 million deficit for 2008, which has halted more than 100 capital projects. But what is more staggering is that over 400,000 residents in 2,600 apartment buildings will be adversely affected by NYCHA's recent decisions. Many of these residents represent our nation's two most vulnerable demographics: senior citizens and youths. So eliminating all of the centers will result in losing many of the following programs that is essential to the growth, development, and progress for many living in public housing: community, educational and recreational programs; job readiness and training initiatives; day care and Head Start; sports, photography, painting, literacy classes and general education courses; computer training, arts and crafts, childcare feeding; and lunch, and senior companion initiatives.

* We must ensure that tenants do not become helpless victims of the recent state of financial affairs. I encourage my colleagues to support enhancing resources that can mitigate the struggles many public housing agencies such as the New York City Public Housing Authority is facing right now.[From the New York Daily News, May 30, 2008]

EYE RENT SPIKE, SHUTDOWNS
(By Frank Lombardi)

A brutal rent hike looms for 40,000 families living in subsidized city apartments as Housing Authority officials sprung a plan Thursday to close a gaping budget hole.

The Draconian move, which includes closing all 280 community, youth and senior centers, was spelled out at a City Council hearing on the authority's $195.3 million deficit, which is also projected for the next four years. ``This is real. I'm going to have to be able to manage within our means.'' said Authority Chairman Tino Hernandez after the hearing. ``So unless there's some relief that comes from some level of government I'm going to have to move forward with these actions.'' They include:

A second rent hike for some 40,000 families whose earnings require them to pay higher rents. Most tenants of the authority's 181,000 apartments pay a fixed rent capped at one-third of their income. The higher earners were hit two years ago with a 10% to 40% hike depending on income and now face hikes of 5% to 15%, to raise $45 million a year, beginning next year.

Closing all of the Housing Authority's more than 100 senior centers and 158 youth and community centers. That would cause the layoff or retirement of 1,500 workers--for annual savings of $60 million.

Diverting $75 million from the construction budget to cover operating expenses.

Selling or renting authority property to private developers for market-rent uses. Details are still being formulated.

The threatened actions will generate ``outrage'' among tenants, said Lisa Burriss. an organizer for the Public Housing Residents of the Lower East Side.

[From the New York Times, May 30, 2008]

HOUSING CUTS ARE PROPOSED TO HELP CLOSE BUDGET GAP
(By Manny Fernandez)

The chairman of the New York City Housing Authority painted a bleak financial picture of the agency at a City Council hearing on Thursday, saying that without increased government aid the authority would raise rents for some tenants and eliminate hundreds of community centers and resident programs.

The agency--the largest public housing authority in the United States, with 406,000 residents in 2,600 buildings--has made deep cuts in its spending and its work force in recent years to contend with ever-growing budget gaps.

But the steps outlined on Thursday by the agency's chairman, Tino Hernandez, and its general manager, Douglas Apple, were some of the most severe cutbacks the agency has proposed as it sought to close a $195 million deficit in its operating budget this year. Toward the end of the housing officials' testimony before several committees, about two dozen tenant activists stood up in the Council chambers at City Hall and chanted, ``Put residents first!'' as they marched out.

Staffs from the two sides will meet in the coming days to begin discussing the authority's needs. Although the city and the state do not provide annual operating assistance to the authority, they have provided one-time allocations to help close shortfalls. Most recently, Mayor Michael R. Bloomberg and the Council provided the agency with $120 million in operating aid in 2006.

Mr. Hernandez and Mr. Apple said the rent increases would be similar to the ones they announced in 2006, when the Housing Authority raised the rents paid by its highest-income households. The new increases of 5 to 15 percent for those same tenants would generate an estimated $35 million to $45 million

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in additional revenue, Mr. Apple said. The increases would be phased in starting next year, pending approval from the federal Department of Housing and Urban Development.

Mr. Hernandez and Mr. Apple also said that assuming no new governmental financing became available in coming months, they were planning to eliminate all of the agency's community-based programs, including 94 community centers and 147 senior centers operated by the agency or the city's Department for the Aging in public housing.

In addition, scores of programs that serve youth and provide tenants with job training and arts and athletics activities, among other things, would end. The plan, which Mr. Apple and Mr. Hernandez said would save the agency $68 million annually, would shutter all of the community and senior centers in the Housing Authority's 343 developments. It has already started the process, announcing in February that 19 ``underutilized'' community centers would close.

``As chairman of the New York City Housing Authority, I am here to tell you today that the future of public housing is at stake,'' Mr. Hernandez told council members. He added that because city, state and federal budgets did not include new financing for the agency, ``we have no choice but to begin to implement the actions that I have described.''

Mr. Hernandez and Mr. Apple also spoke about continuing efforts to sell or lease parking lots and vacant land for market-rate development.

Council members said they were stunned by the agency's dire financial situation, and though they vowed to help preserve public housing, a few members expressed disappointment at plans to raise rents and close community and senior centers.

Senior citizens in particular are vulnerable to being relegated ``to the dark ages, when we didn't have any programs at all,'' said Councilman James Vacca, of the Bronx, adding, ``I hope you know that there's no one there to fill this gap should this occur.''

The Housing Authority's operating budget for this year is $2.8 billion. More than half of that money comes from subsidies from HUD.

The annual operational subsidy HUD has given to the Housing Authority has fluctuated in recent years, from $747 million in 2001 to $780 million in 2007.

But the gap between the money the Housing Authority was eligible for and the money it ultimately received has widened.

From 2001 to 2008, the Housing Authority lost a total of $611 million in federal dollars, money it qualified for under a HUD spending formula but did not receive because of shortfalls in Congressional appropriations. Officials say that this year, the loss of that money means that for every federal dollar the agency needs to operate, it gets roughly 82 cents.

One hundred capital projects have been deferred or cut as the agency has used roughly $370 million in capital financing to help balance its budget since 2002, and Mr. Hernandez and Mr. Apple said they will continue to do so. The Council speaker, Christine C. Quinn, told Mr. Hernandez and Mr. Apple that she found this practice troubling.

In an interview, Ms. Quinn said that council members want to help the agency stabilize its finances, but that a better long-term plan is needed that draws on city, state and federal governments. ``All of us in city government are very troubled about the state of the Housing Authority's finances,'' she said.

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