City officials brace for steep federal public housing cuts, after Trump unveils budget proposal

Politico New York
By Sally Goldenberg
March 16, 2017

New York City’s housing officials are preparing for deep federal budget cuts that could slow repairs to broken elevators and boilers, trigger staff layoffs and ultimately cost low-income New Yorkers their homes, they warned on Thursday.

In his initial budget proposal, President Donald Trump slashed funding to the Department of Housing and Urban Development by $6.2 billion — nearly half of which would be accomplished by eliminating a nationwide Community Development Block Grant program that the city relies heavily on.

Two agencies that provide housing to hundreds of thousands of low- and middle-income New Yorkers estimate the cuts would cost them at least $550 million.

The Department of Housing Preservation and Development was counting on $136 million in its upcoming budget, which takes effect July 1, from the block grant program. It anticipates losing another $50 million intended for both low-cost housing for people with social service needs and down payments for low-income home ownership programs.

“Any reduction would undermine critical services New Yorkers depend on every day and the agency’s ability to serve the most vulnerable New Yorkers,” agency commissioner Maria Torres-Springer said at a press conference Mayor Bill de Blasio convened in City Hall.

She said the $136 million loss “would severely undermine our ability to enforce housing quality.”

The block grants are flexible and can be spent on anything from fixing boilers and hot water heaters at city-subsidized homes to providing tenants with emergency shelter.

She also warned a loss in Section 8 vouchers would “put in jeopardy the 39,000 New Yorkers who rely on our vouchers for housing.”

“There’s no way they’re going to be able to fully absorb the cuts that they did today. There will absolutely be a diminishing of services. There’s no doubt about that,” Rafael Cestero, a housing commissioner under former mayor Michael Bloomberg, said in an interview.

Since some level of code enforcement is mandated, he said the agency would likely have to cut staff to make up the difference.

Trump’s budget proposal said the 1974 block grant program is “not well-targeted to the poorest populations and has not demonstrated results.”

Trump had also promised to cut wasteful, redundant and failing programs, “and a lot of those are in HUD,” Mick Mulvaney, director of the White House Office of Management and Budget, told reporters Wednesday.

“We’ve spent a lot of money on Housing and Urban Development over the last decades without a lot to show for it,” Mulvaney said. “Certainly there are some successes but there’s a lot of programs that simply cannot justify their existence and that’s where we zeroed in.”

Also troubling for the de Blasio administration is a potential $370 million cut to the New York City Housing Authority, which has already been hit with $81 million in federal losses under Trump.

NYCHA, which is currently $17 billion in the hole for capital repairs, houses about 400,000 New Yorkers. The $220 million federal capital cut, on top of a $150 million operating budget hit, would amount to more than two-thirds of its entire capital budget, chair Shola Olatoye said at Thursday’s press conference.

The city inferred the amounts from the federal proposal based on the absence of any mention of public housing, she said.

“At the end of the day, it’s math. So it’s the quote-unquote budget is silent on public housing operating and capital funds, but yet there is an unspecified $2.1 billion of remaining cuts. We are inferring that that is public housing,” Olatoye said in an interview after the press conference.

Despite their warnings, city officials were hesitant to say how they would make up the potential loss. Olatoye is already pushing to lease the agency’s vacant land to private developers and said she is pressing for subsidies from Albany, where recent public housing allocations have gotten stuck in larger political fights.

Asked if he would commit to more funds for NYCHA should the cuts come to fruition, de Blasio told reporters he would not answer hypothetical questions and advised them to stop asking. (He recently pledged $1 billion over 10 years for roof repairs, which doesn’t come close to closing the gap.)

Instead, the mayor vowed to form a coalition with other mayors, business leaders and federal politicians to beat back the president’s plans.

“I wish I could explain more viscerally to you how something like community development block grant … how the removal of something that’s bread and butter to the operation of cities is going to light up the screen in red states and purple states,” he said.

Lorraine Woellert contributed to this report.