Last week, Mayor Eric Adams released his fiscal year 2024 executive budget totaling $106.7 billion. Last month Mayor Adams and Budget Director Jaques Jiha required agencies to submit plans with 4% budget cuts. NYHC and NYSAFAH partnered with a total of 80 organizations calling on the city to exempt housing-related agencies, including HPD, DHS, HRA, DOB and DCP from the cuts due to the ongoing housing crisis. You can find the new budget documents here. 

Budget Cuts 

The mayor’s summary budget documents said that some agencies, including DHS and HRA, had their budget cut targets reduced because the cuts would lead to service reductions. All housing agencies did propose cuts, and you can see all the proposed cuts here. 

Proposed housing cuts include: a $7.9 million per year realignment of NYCHA funding from HPD where they will use City capital funds instead of City expense funding to cover the repair and rehabilitation of vacant NYCHA units and the city’s capital budget for NYCHA was increased to cover this; a $3.2 million per year cut for a procurement re-estimate due to lower spending on new contracts due long procurement timelines and difficulty staffing up temps and consultants; $1 million in increased revenue from tax credit fees; and savings of between $5.1 million and $8.2 million per year from lower funding needs for “Supportive Housing Rental Assistance based on actual unit production trends.” This last PEG isn’t taking any units offline but is savings due to slower development of new supportive housing.  

We will not go through all of the proposed cuts at HRA and DHS but will highlight the one that likely impacts housing and homelessness. DHS is proposing a $29.1 million annual cut referred to as “provider flexible funding.” We are told that this cut requires shelter providers to find savings from vacant positions. They can then use some of these savings to increase salaries elsewhere. Providers do not have extra money and so cuts will mean reductions in services, including potentially housing specialists.  

Staffing 

Understaffing remains a major concern at the housing-related agencies. While some agencies have made progress, others continue to lose headcount. 

In good news, HPD had 2,282 people on staff at the end of March, according to budget documents, representing continued progress. This is 2% greater than in January and 3.6% greater than the lowest staffing we measured in August 2022. It remains 5% less than before the pandemic and 15 percent less than budgeted, so more progress is needed. But HPD is moving in the right direction and we hope they will continue to add headcount. 

Unfortunately, staffing at DHS and HRA continues to get worse. HRA had 10,340 people on staff at the end of March, 1% less than in January and 17.5% less than before the pandemic. Similarly, DHS had 1,780 people on staff at the end of March – 1% less than in January and 21% less than before the pandemic.  

The Department of City Planning added 6 net staff since January (a 2% increase), though they remain 10.5% down compared to before the pandemic. Meanwhile, the Department of Buildings headcount remains nearly the same as in January, but remains 6.6% below their headcount before the pandemic.  

This understaffing is affecting services, which for DHS and HRA is only getting worse. At HPD, affordable housing production has declined dramatically while at DOB the agency is doing fewer inspections. At HRA providers and advocates have described much slower processing of one-shot assistance, City FHEPS packets, and other public assistance benefits. HPD should continue their progress while DHS and HRA need to turn their ships around and add staffing ASAP.  

Housing Capital Budget 

Last year, at the start of his administration, Mayor Adams committed to a $22 billion 10 year budget for affordable housing (HPD and NYCHA capital), which included an additional $5 billion over 10 years for affordable housing. This included $3.6 billion for HPD, $1.2 billion for for NYCHA PACT (budgeted in HPD) and $200 million for NYCHA’s Gowanus and Wycoff Gardens (which was agreed to by former Mayor Bill de Blasio as part of the Gowanus neighborhood rezoning). 

Unfortunately, so far Mayor Adams is underspending on that plan. Last year (FY 2022) his administration spent just $915 million out of a budget of $1.5 billion and leading to producing fewer than 14,000 units – 51 percent less than the 28,000 units HPD produced on average over the previous five years. This year HPD’s capital budget for FY 2023 is reduced by $538 million, however it’s due to a reduction in PACT funding for NYCHA that flows through HPD. The city is projecting $1.56 billion in spending, down from $2.1 billion, with the reduced funding moved into FY 2024 and 2025.  

In total, the next two years’ budgets (fiscal years 2024 and 2025) were increased by more than the reduction in 2023 – $853.1 million and $291 million, respectively, totaling $1.1 billion increase over those two years. Almost half of the increase is ($537 million) is the reallocated funding from this year, another $372 million is reallocated from FY 2027 – 2033, $109 million is from projecting additional federal funding over the 10 year plan and $137 million is new funding for HPD’s capital budget.

The NYCHA / PACT funding, which was realigned, is part of the $1.4 billion total in fiscal years 2023 – 2026 in HPD’s capital budget is for NYCHA’s PACT program, which the budget documents say will support the conversion of 62,000 public housing units to Section 8 rental assistance vouchers by the end of 2026. 

Over the next four years, HPD’s capital budget includes $2.6 billion for new construction of affordable housing, $2.2 billion for affordable housing preservation, $1.5 billion for supportive and senior housing, $307 million for in-rem housing disposition, and $310 million for other programs.  

The city capital budget also includes $3.5 billion over five years for NYCHA (separate from HPD’s capital budget), which increased by $31.85 million from FY 2023 – 2027) in the executive budget. NYCHA’s agreement with the federal monitor requires the city to fund $2.2 billion over 10 years at NYCHA, with $1 billion in the first four years and $200 million per year for the following six years starting in 2019.