[Congressional Record Volume 154, Number 92 (Thursday, June 5, 2008)]
[Extensions of Remarks]
[Pages E1156-E1157]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    NEW YORK CITY HOUSING AUTHORITY

                                 ______
                                 

                         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

[[Page E1157]]

     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.

                          ____________________