The President’s FY21 HUD budget represents a 15% decrease in spending for critical affordable and public housing programs compared to FY20 enacted funding levels. It includes the complete elimination of several impactful and proven HUD programs and insufficient funding for existing rental assistance vouchers.
Below is a preliminary analysis of the top impacts to NYC’s affordable and public housing programs. These funding levels compare the President’s FY21 budget proposal to the FY20 enacted funding NYC received from HUD. The below figures also operate under the assumption that NYC will receive the same enacted FY20 funding from HUD for FY21.
Elimination of Public Housing Capital Fund – reflects a loss of all funding – $549 million in FY20. NYCHA and its residents are in the midst of a crisis, NYCHA needs more funding not less to make critical capital repairs.
Reduction in Public Housing Operating Fund – 10% loss of funding for day-to-day operation and maintenance of NYCHA properties compared to current funding.
More than 20% decrease in Section 8 Contract Renewals – based on current funding levels, proposal could lead to a loss of approximately 9,000 existing vouchers from HPD and NYCHA programs in NYC and an additional 600-700 vouchers administered by NYS HCR in the five boroughs.
Elimination of Community Development Block Grants – Loss of $167M for NYC compared to current funding. Last year, HPD used approximately $130M in CDBG funds to enforce housing quality standards, including code inspections, emergency repairs, housing litigation, and emergency shelter.
Elimination of HOME Investment Partnerships Program – Loss of $70M for NYC compared to current funding. Last year, HPD used these funds for new construction of special needs housing (including seniors), down payment assistance, and rental assistance for homeless families.
Elimination of the VASH program, Family Unification Program, and the Mobility Demonstration.
For additional housing program funding levels, please see NLIHC’s comprehensive budget chart.
Harmful Policy Provisions
Making Affordable Housing Work Act – Trump reintroduces his dangerous rent reform proposal for HUD-assisted households that the NYHC has fought hard against since he first proposed the idea in 2017. It would lead to dramatic rent increases for some of the most vulnerable New Yorkers. Public Housing residents, who are non-elderly or disabled, would face up to a 40% rent increase. Section 8 voucher holders who are non-elderly or disabled would see an average rent increase of 20%.
While Congress has rejected the President’s budget cut proposals in previous years, with NY’s current homeless and affordable housing crises, we cannot afford to be complacent! NYHC will continue to fight for adequate HUD funding levels and against dangerous policy proposals, but Congress must also hear from you about the importance of HUD programs in your community or to your organization and how cuts would hurt vulnerable and low-income NYers!
President Trump’s FY 2020 budget proposal entitled “A Budget for a Better America: Promises Kept. Taxpayers First” was released today highlighting the Administration’s top priorities, of which housing definitely is not one. This budget includes $2.7 trillion in spending cuts—higher than any other administration in history and reduces non-defense discretionary spending. The administration requests $44.1 billion in funding for HUD’s Budget, which represents a 18% cut from the enacted FY 2019 budget. If enacted, this budget would seriously harm HUD-assisted households and severely damage affordable and public housing programs in New York and across the country.
SETTING NYCHA UP TO FAIL
Only one month after HUD reached a settlement agreement with NYCHA, in which the City of New York commits more than $2 billion, the Trump Administration audaciously proposes the complete elimination of public housing capital funds. The Administration is effectively divorcing itself of its responsibility to fund the maintenance and repair of public housing and proposes moving to rental assistance platforms like RAD to leverage private financing. However, it is not a real plan with only a paltry $100 million in RAD funding and not enough Section 8 to even maintain current use. Additionally, the budget requires that RAD funding must be prioritized for redevelopment use in Opportunity Zones, which will have limited use in New York City. Despite HUD’s Regional Administrator Lynne Patton’s spotlight on conditions during her month stay in NYCHA housing and her introduction of President Trump to Frederick Douglass Houses Tenant Association President Carmen Quiñones, this budget completely fails public housing residents. It also sets NYCHA and its new monitor up to fail. It is impossible for NYCHA to meet substantial compliance with federal regulations relating to health and safety outlined in the settlement agreement without a substantial and sustained increase in funding from all levels of government.
With $8.7 billion in proposed cuts, the President’s attack on low-income households continues with reissued proposals for work requirements and rent reforms in the Making Affordable Housing Work Act (MAHWA). These proposals would increase rent for thousands of HUD-assisted households. Despite the contradiction, Secretary Carson top budget priorities include 1) Increasing rent assistance (although the budget cuts it); 2) Continuing homeless grants (also cut); 3) Removing lead and health hazards from homes (slight increase but wildly insufficient funding); 4) A 5-year “Financial Transformation” plan and meeting critical staffing needs (lowest staffing levels reached under his leadership) and lastly 5) “The Prescription for HUD” focused on economic opportunity and streamlining HUD processes (Envision Centers rebrand existing programs). Check out NLIHC’s budget chart for a full comparison to FY2019 funding levels. Here are some HUD budget highlights worth noting:
- Public housing capital funding is eliminated and operating funds cut by ~40%.
- CDBG, HOME, Choice Neighborhoods, Self-Help and Assisted Homeowner-ship Opportunity Program are all eliminated.
- Section 8 is cut by $354 million, which means fewer vouchers to combat homelessness and insufficient Tenant Protection Voucher funding to meetNYCHA’s conversions needs.
- Homeless Assistance Grants are slightly decreased.
- While the budget boasts ~$60 million proposed increase for the mitigation of lead-based paint and other hazards in low-income homes, that number is based on the President’s FY2019 proposed budget and not the actual budget enacted by Congress. When compared to the actual enacted budget of FY2019, the proposed increase is only a mere $11 million extra nationwide.
- Opportunity Zone Technical Assistance Funding is new for local municipalities that are seeking to attract public and private investments to their communities. This is something to watch as aligning HUD programs with OZones can be potentially be problematic in a state like New York with a robust affordable housing pipeline.
- HUD’s staffing levels have declined over the last four decades from a high of almost 18,000 full-time equivalents (FTEs) in 1977 to fewer than 7,600 FTEs in FY 2018, while its budget authority has steadily increased from just under $30 billion to more than $50 billion. Surprisingly, the President’s Budget allocates $1.6 billion toward salaries and expenses (S&E), almost $56 million above the 2019 Annualized CR level. This funding will enable HUD to increase its staffing to nearly 7,800 FTEs.
- FHA lender enforcement program and down-payment assistance practices reform legislative proposals are expected to be forthcoming.
OTHER FEDERAL PROGRAMS
- The budget reduces the USDA budget by 15%.
- Eliminates Community Development Financial Institutions (CDFI) Fund discretionary grant and direct loan programs.
- The president once again pushes for work requirements across all safety-net programs and proposes substantial changes to Temporary Assistance to Needy Families which would impact homeless families and NYC’s shelters.
- The President has called upon the Congress to pass legislation that generates at least $1 trillion in infrastructure investment. His infrastructure proposal last year was described by CBPP as a “mirage”.
President Trump’s budget will cost New York State at least $1 billion and hurt low-income families. As in prior years, we expect Congress will fully reject the President’s proposal. NYHC will be advocating against these cuts and will produce more detailed analysis of impact on New York housing programs in the next weeks and as Congress unveils their spending bills.
Congress and the President were able to pass a FY 2019 budget bill package to avoid another costly and dangerous government shutdown. The FY 2019 HUD and USDA spending bills needed to fund programs through September were included in the package. The strong Congressional support for HUD programs in last year’s spending bill has been maintained into FY 2019 HUD budget. The HUD budget was increased by $1.5 billion, while USDA Rural Housing programs saw relatively flat funding.
Here are some HUD and USDA key highlights:
- New Mobility Demonstration Program: $25 million for a new mobility demonstration program, $5 million of which can be used to provide new housing vouchers and rest for mobility-related services to help families with children move to areas of opportunity. With HPD launching a new mobility initiative and compelling research on improved outcomes for young children, this is welcomed support.
- HUD-Veterans Affairs Supportive Housing Vouchers: $40 million for new HUD-VASH vouchers. This program has been successful in reducing and even eliminating veteran homelessness in some localities.
- Section 8: Advocates believe the budget sufficiently funds all current Section 8 vouchers and contracts. This should mean that NYCHA, HPD and HCR are all able to issue vouchers through attrition at minimum.
- Public Housing: Public Housing Operating Fund received a $103 million increase, while Public Housing Capital Fund saw a $25 million increase specifically to address lead-based paint hazards. While there was a larger increase last year, this is at least moving in the right direction.
- Community Development Block Grant: CDBG received level funding.
- HOME Investments Partnerships: HOME was cut by $11 million.
- Section 202 Housing for the Elderly: $678 million funds existing contracts and renews service coordinators, while also providing $51 million for new 202 housing and $10 million for home modifications. Last year was the first appropriations for new 202 housing since 2011. It is critical that this funding for new elderly housing continues and expands to meet growing demand.
- McKinney Vento Homeless Assistance Grants: Homeless Assistance Grants increased by $123 million.
- Family Self-Sufficiency Program: FSS received a $5 million Increase.
- Fair Housing: HUD’s office of Fair Housing and Equal Opportunity received level funding.
- No HUD Program Rent Policy Changes that had been proposed by the Administration were included in this budget.
- USDA Section 521 Rural Rental Assistance: Section 521 was cut by $23 million.
- USDA Section 515 Rural Rental Housing Loan: Section 515 received level funding.
- USDA Multifamily Preservation and Revitalization Demonstration was increased by $4.5 million.
For a more comprehensive breakdown of HUD and USDA programs please see NLIHC’s Budget Chart.
As of October 1st, HUD is currently being funded via a three month Continuing Resolution (CR) that is set to expire on December 8th. The House also passed an Omnibus FY 2018 appropriations package in September, which included its Transportation Housing and Urban Development (THUD) appropriations bill, but the Senate floor has not approved its THUD appropriations bill as of yet. Currently, it is not clear whether Congress will be to reconcile the differences between the two bills and approve FY2018 appropriations legislation before December 8th or if they will have to issue a second CR. All of the federal actions that relate to the HUD budget taken this year are detailed in chronological order below starting with release of the startling Executive budget laden with steep cuts to non-defense discretionary programs this spring that led to a furious public outcry that the House and Senate Appropriations Committee heard and allayed in their approved THUD bills this summer. Subsequently, after devastating Hurricanes hit Texas, Florida and the Caribbean, a Disaster Relief Spending Package was quickly bundled and approved with a three month CR and debt ceiling extension, and then shortly after the House approved its Omnibus Appropriations package.
President Trump’s released a preliminary budget blueprint in March and his full budget request to Congress in May, which proposed $7.7 billion in housing cuts compared to FY 2017 levels. The budget proposed increasing defense spending by $52 billion by slashing non-defense programs such as HUD assistance, food stamps, TANF and Medicaid. It also proposed the elimination of several key housing and community development programs as well as devastating Rental Reform policy reforms. In New York alone, the President’s budget would have cut more than $1 billion in housing funds statewide. Executive Budget’s Impact on NY State:
- 26,530 households receiving Section 8 rental assistance across New York State would be at risk of homelessness.
- -$409,387,940 cuts to public housing authorities including NYCHA
- -$286,644,708 eliminated in CDBG funds across the state.
- -$91,483,440 eliminated in HOME funds for low-income rental housing
- Rent burden would be increased from 30% to 35% of tenant income in a pilot impacting 98,700 Project-Based Rental Assistance (PBRA) and 14,800 households residing in Housing for the Elderly (Section 202) and Housing for Persons with Disabilities (Section 811) in New York State. Note that average tenant income for 202 households is $13,300 annually. In these buildings, owner adjustments are frozen and utility allowances are also proposed to be eliminated.
Programs Eliminated or Unfunded
- Community Development Block Grant
- HOME Investment Partnerships
- Choice Neighborhoods
- Section 4 Capacity Building program
- Self-Help Homeownership Opportunity Program
- National Housing Trust Fund (HTF) is eliminated and Trump’s budget permits the HUD secretary to redirect these remaining resources to offset the cost of salaries, contract expenses, and technology improvements at the Federal Housing Administration (FHA).
Rental Reforms (full details are linked here)
- An increase in the tenant contribution toward rent from 30 percent of adjusted income to 35 percent of gross income. The Department does not plan to implement this provision in the Section 8 or Public Housing programs in 2018, but nonetheless requests authority for this change across core rental assistance programs. The Department will implement this provision as a pilot in Project Based Rental Assistance (PBRA), Housing for the Elderly (Section 202), and Housing for Persons with Disabilities (Section 811) in 2018. Hardship exemptions, as defined by the Secretary, will be available for tenants.
- The establishment of mandatory minimum rent of $50 per month, with hardship exemptions.
- Elimination of utility reimbursement payments to tenants, with hardship exemptions.
- For PBRA/202/811: A one-year freeze on annual rent adjustment increases.
- Ability of the Secretary of Housing and Urban Development to waive, or specify alternative requirements for, statutory or regulatory provisions related to public housing agency (PHA) administrative, planning, and reporting requirements, energy audits, income recertification, and program assessments.
- HCV program will no longer provide higher payments for enhanced vouchers. This reform would apply the same cost limitation on the maximum subsidy that may be paid under the voucher program to enhanced vouchers, but the tenant rent limitation will be waived so that families will not be required to relocate as a result of this change.
HOUSE of REPRESENTATIVES THUD APPROPRIATIONS BILL
In July, after months of public outcry against the President’s HUD budget cuts, the House Appropriations Subcommittee on Transportation Housing and Urban Development (THUD) released and approved their spending bill, which cuts HUD programs by $487 million below the fiscal year 2017 enacted level. Thanks to advocacy efforts and public pressure, the House bill’s proposed HUD cuts are drastically smaller than the president’s by $6.9 billion. However, these cuts would still have real impacts on New York families. For New York State, the cuts would mean:
- ~14,000 families using Section 8 vouchers to pay rent would be at risk of homelessness.
- $330 million decrease to NYCHA capital funding.
- NYCHA expects 2,500 residents would be impacted in 23 buildings needing boiler replacement. Another 2,250 residents would be impacted at one development that would be unable to repair brickwork causing water damage.
- 11% cut to HOME funds, which help fund supportive housing development and homeownership opportunities statewide.
- 3% cut to Community Development Block Grants, including a $6 million cut to HPD, which uses funds for Code Enforcement.
- No new HUD VASH vouchers for returning veterans. House funding only covers renewal of current vouchers.
Fortunately, none of the Executive budget’s dangerous rental reform proposals were included in the House THUD budget. While the House Appropriations bill may be better than the President’s draconian budget request, the House budget fails to provide needed federal investment in affordable and public housing. The decreases to NYCHA capital funding will continue the deterioration of public housing buildings across New York, impacting the health and well-being of residents plagued by mold. HUD cuts will also exacerbate the growing homelessness crisis in New York, as housing agencies will be unable to issue Section 8 rental assistance vouchers and will have less capital dollars to create and preserve affordable homes. Additionally, proposed cuts will impact the ability to enforce housing quality standards for all New Yorkers.
SENATE THUD APPROPRIATIONS BILL
Senate Appropriations Committee approved its Transportation, Housing and Urban Development (THUD) Appropriations bill at the end of July. The bill provides increased funding for HUD programs: $40.2 billion in HUD funding for FY 2018, $1.4 billion above FY 2017 levels and $1.94 billion more than the House THUD bill. The Senate bill includes level funding for the HOME and Community Development Block Grants after push back from mayors across the country. The Senate maintaining and even slightly increased HUD’s funding levels are a direct result of the affordable housing community and public’s tremendous advocacy efforts showing the impact of this important and critical programs. It also like the House THUD bill did not include any of the harmful Executive budget rental reform proposals. The Senate bill allocates:
- $21.365 billion for tenant-based Section 8 vouchers ($1.07 billion above the FY 2017 enacted level);
- $6.45 billion for public housing ($103.5 million above the FY 2017 enacted level); $11.5 billion for project-based Section 8 ($691 million above the FY 2017 enacted level);
- $573 million for Housing for the Elderly ($70.6 million above the FY 2017 enacted level);
- $147 million for Housing for Persons with Disabilities (nearly $1.0 million above the FY 2017 enacted level);
- $40 million for new HUD-VASH vouchers (same as FY enacted level);
- $2.456 billion for homeless assistance programs and includes $20 million for new family unification vouchers to prevent youth exiting foster care from becoming homeless.
- $55 million is provided for grants and technical assistance to test comprehensive efforts to end youth homelessness in urban and rural areas;
- $25 million for rapid rehousing assistance for domestic violence.
SHORT-TERM SPENDING AND DISASTER RELIEF PACKAGE
In the beginning of September, Congress passed a three month legislative spending package that provides funding for Hurricane relief and recovery, lifts the debt ceiling, and keeps the government funded through December 8th. The bill’s Continuing Budget Resolution extends FY 2017 levels for three months with a 0.68% across the board reduction to keep funding under the Budget Control Act (BCA) spending caps. The legislative package also provides an initial $15.25 billion in disaster spending that includes $7.4B for FEMA’s Disaster Relief Fund, $450 million in Small Business Administration disaster loans, $7.4 billion in Community Development Block Grant Disaster Recovery (CDBG-DR) funds. In addition, the legislation also includes a provision granting a necessary extension of the National Flood Insurance Program for three months, which was set to expire on September 30th, and language to provide FEMA with flexibility under the bill’s Continuing Resolution to continue to respond to Hurricanes Harvey and Irma, as well as other disasters.
HOUSE OMNIBUS APPROPRIATIONS PACKAGE
On September 14th, the House then passed its FY2018 Omnibus appropriations package entitled ‘The Make America Secure and Prosperous Appropriations Act’. It is too soon to know if the Senate will also pass an Omnibus which will have to be conferenced with the House or if a second Continuing Resolution (CR) will be passed for FY 2018. While the House funding level for HUD programs remains unchanged from the House THUD bill approved in July, there were a few notable housing amendments that were included in it:
- Section 202 Housing for the Elderly amendment to increase funding for the program by $2.5 million. The increase is offset by a $2.5 million reduction to HUD’s Office of Policy Development and Research.
- Public Housing Capital amendment to increase the public housing capital fund by $2 million. The funds would be offset by a $2 million reduction to HUD’s Information Technology (IT) Fund.
- Public Housing Operating/CDBG amendment would shift $10 million in funding from the public housing operating fund to CDBG.
- CDBG amendment to increase funding for CDBG by $100 million. The increase is offset by a $100 million reduction to HUD’s IT Fund.
- HOPWA amendment to increase funding for HOPWA by $19 million. The increase is offset by a $19 million reduction to HUD’s IT Fund.
- Section 4 Capacity Building amendment to increase funding for the program by $5 million. The increase is offset by a $5 million reduction to funds initially set aside for FHA administrative contract expenses.
- Sanctuary Cities amendment that prohibits HUD funds from being used for a State, or local government entity or official if that entity prohibits, or in any way restricts any government entity or official from sending to, or receiving from, the Immigration and Naturalization Service information regarding the citizenship or immigration status, lawful or unlawful, of any individual.
- Fair Housing Initiatives Program (FHIP) Amendment to shift FHIP funding designated for private nonprofit organizations toward state and local governments.
On February 9th, President Barack Obama released his budget request for FY 2017. The President called for more than $48 Billion in 2017 spending for the U.S. Department of Housing and Urban Development (HUD), an increase of about $2B over FY 2016. Much of the proposed increase in spending would be devoted to a much welcomed new initiative to combat homelessness. There are also several new policy proposals, many supporting efforts to affirmatively further Fair Housing.
- NEW Ending Family Homelessness Effort– The President’s budget request proposes a bold new proposal to end family homelessness by 2020, building on the success of the initiative to end veteran homelessness. Through this effort, known as Opening Doors, the President challenged Congress to authorize $11B in new “mandatory” spending to serve 550,000 families over a 10 year period. As a mandatory program, the initiative would not be subject to the often contentious annual discretionary appropriations process. Specifically, the Administration is requesting $88 million for 10,000 new (incremental) Section 8 housing choice vouchers targeted to homeless families with children, as well as funding for 25,000 new permanent supportive housing units, and funds to provide 8,000 families with rapid rehousing assistance. If enacted, New York would be certain to receive a considerable increase in Section 8 vouchers given our high levels of family homelessness. Statewide, more than 80,000 New Yorkers are homeless including more than 23,000 children sleeping in shelters each night.
Other housing highlights from the President’s budget proposal are found below. For a detailed budget chart, see the National Low Income Housing Coalition’s website linked here.
- Section 8 Housing Choice Vouchers- The 2017 budget request would fully fund all expiring Tenant Based Assistance (i.e. existing vouchers). The budget also includes $10.8 billion for the Project-Based Rental Assistance program, which supports 12 months of funding for rental assistance contracts. $2.1 billion is allocated for fees to housing agencies administering Section 8, using a new evidence-based formula aiming to more accurately reflect the actual cost of running the program and to provide low-income families greater access to opportunity areas.
- NEW Housing Choice Voucher Mobility Demonstration- $15M is requested to assist households to move to areas of opportunity. In high cost cities like New York, Section 8 voucher use is primarily concentrated in low-income neighborhoods due to the limitations of Fair Market Rent levels.This is a welcomed proposal which mirrors NYHC’s policy priorities suggesting a similar program on the local level.
- Public Housing- Operating Funds would be increased slightly while Public Housing Capital Funds would be decreased. Given the tremendous capital needs of PHAs like NYCHA, this is disappointing. The Choice Neighborhoods Initiative, a signature program of this administration to revitalize neighborhoods and transform public housing, would see a substantial increase in funding from $125M in 2016 to $200M in 2017.
- RAD- The President seeks $50 million to expand the Rental Assistance Demonstration (RAD), another signature initiative of this administration to aid public housing. RAD leverages private capital for public housing through the conversion of operating funds into rental assistance. HUD also proposes to remove the 185,000 unit cap on the number of public housing units that can be preserved under RAD. Additionally, the budget proposes to make Section 202 Project Rental Assistance Contract (PRAC) owners eligible to convert their subsidy stream under RAD.
- Section 202 Elderly Housing- Funding for Section 202 Elderly Housing is increased only to cover refinancing. No funding is proposed to create any new senior housing. The federal government has not funded new senior housing for several years, which is a huge failure given current demand and anticipated population growth. According to recent LiveOn NY survey, more than 200,000 seniors are on 202 wait lists for an average of 7 years. By 2040, NYC will see a 40% increase in elderly households, rising to 1.4 million seniors.
- CDBG & HOME- Unfortunately, the request calls for a $200M cut in Community Development Block Grants (CDBG) which fund a wide variety of programs in New York and support HPD’s code enforcement activities. HOME funding would be maintained at FY 2016 levels.
- National Housing Trust Fund- In the request, HUD estimates that the National Housing Trust Fund will receive $136 million in 2017. This newly funded program support low-income rental housing and is allocated to States.
- NEW Pay-for-Success (PFS)- The budget proposes a one-time mandatory appropriation of $300 million for a new Pay for Success (PFS) fund within the Department of the Treasury which would fund state and local PFS contracts or Social Impact Bonds that are expected to save federal dollars. This could be beneficial to supportive housing or innovative MRT-type projects NYS has undertaken.
- LIHTC Income Averaging- The President’s proposal calls for Congress to authorize Low Income Housing Tax Credit (LIHTC) Income Averaging which would encourage income-mixing in projects and allow cross-subsidization to achieve deeper affordability in high-cost cities like New York. This is one of NYHC’s top priorities. Learn more about benefits for New York in NYHC analysis here.
- NEW QCT Cap Lift- A legislative proposal in this budget to remove the cap on the number of census tracts that can be designated as qualified census tracts (QCTs) would greatly benefit New York by allowing more areas to qualify for the 30% LIHTC basis boost. Until this year, all of NYC qualified for the basis boost as the entire metropolitan area was considered a difficult to develop area (DDA), which also qualifies projects for the basis boost. Currently, the population living in QCTs cannot exceed 20 percent of the population of a metropolitan area, which is problematic for dense urban areas including New York City and San Francisco.
- NEW QAP Requirement- Qualified Allocation Plans (QAPs) for tax credit allocating agencies will be required to include “Affirmatively Furthering Fair Housing” as an explicit allocation preference. While we support this policy change, it still may not be effective in driving development in many “high opportunity areas” in NYC, where land costs are prohibitively high.
- NEW Local Housing Policy Grants- The budget proposes $300 million in mandatory funds for a new Local Housing Policy Grants program. This program will provide grants to localities and regional coalitions to support new policies, programs or regulatory initiatives that create a more elastic and diverse housing supply, and in turn, increase economic growth, access to jobs and improve housing affordability.
The President’s proposals face, at best, an uncertain future given the election year and the difficulty we have seen in authorizing appropriation bills in recent years, not to mention Congress’ demonstrated desire to cut rather than increase funding for many of these programs. Ideally, the House and the Senate will take up the HUD budget request in the Spring as part of a “Transportation/HUD Appropriations Bill”. Each chamber will put forward funding bills which will then be “conferenced” to resolve any differences and a final bill will be sent to the President prior to the end of the fiscal year on September 30th. In recent years however, Congress has not been able to agree on appropriations for individual agencies and has instead passed Omnibus “Continuing Resolutions” (CRs). We will know more about what to expect in the FY2017 budget process in the upcoming months.
The House passed H.R. 2577 on June 9th and the Senate passed their Transportation, Housing and Urban Development (THUD) Bill on Thursday, June 25th. These bills, still operating under sequester budget levels, do not provide the funding for affordable housing required in NY or other parts of the country struggling with housing affordability. The only hope in avoiding further cuts this federal fiscal year would be a bipartisan budget deal to end sequester spending caps. It is unlikely that we will know more about THUD funding this year until we are closer to the end of the fiscal year in September. For a comparison of select HUD programs, please see the National Low Income Housing Coalition’s FY16 Budget Chart.
Impact for New York, varies by program:
HOME funds are significantly reduced from $900 million in 2015 to $767 million in the House budget (28% cut) and essentially eliminated in the Senate budget at $66 million with a 93% cut. Only 5 years ago, the City of New York received more than $100 million annually in HOME funds prior to the damaging sequester cuts. This funding for low-income rental housing is primarily used to build supportive housing for the homeless in New York. If the program is not funded at the President’s requested level of $1.06 billion, there would be a loss of an estimated 38,665 affordable housing units across the country.
Section 8 Tenant Based Rental Assistance
Section 8 Tenant Based Rental Assistance and Homeless Assistance Grants both increase very slightly in the House and Senate budgets. It is unclear if the minor increases in rental assistance funding in either bill will provide any new vouchers or just cover program renewals.
Project Based Rental Assistance
Project Based Rental Assistance is underfunded by the House and slightly increased in the Senate. Underfunding will be problematic for these existing affordable housing buildings.
Public Housing Capital
Public Housing Capital is set to decrease in both budgets (10% cut in House and 7% cut in Senate), adding to the mounting capital needs facing many public housing authorities.
Public Housing Operating
Public Housing Operating is flat in the House at $4.44 billion and only barely increased in the Senate ($4.5 billion).
Community Development Block Grants
Community Development Block Grants, funding an array of services and municipal functions in low- and moderate-income communities including code enforcement and emergency repair programs in New York neighborhoods, is maintained at $3 billion in House budget and slightly reduced in Senate.
Governor Cuomo released his Executive Budget proposal this week, seeking help from Washington with a $15 billion budget deficit. In his final year of the statewide housing plan, the Governor has not proposed to renew the plan but does commit to another year of supportive housing with a $250 million investment, towards the creation of 20,000 units over 15 years. The Supportive Housing Network of NY provides detailed analysis linked here. He also continues HCR programs at current budget levels. NYHC calls for a $3 billion investment for a new 5-year housing plan, including 7,000 units of supportive housing. In a new policy brief linked here, we show why now is the time to double down on affordable housing investment.
Notably, the Governor’s budget expanded on his support for converting hotels and offices to residential housing, which includes a temporary override of local zoning in exchange for affordable housing. While we are still analyzing the proposal and many details remain unknown, we applaud Governor Cuomo for advancing this proposal to create affordable housing. We look forward to working with the administration and other stakeholders on developing this proposal for underutilized commercial real estate further to work for building owners while benefiting communities.
Policy Proposals Impacting Affordable Housing:
State Override to Facilitate Hotel & Office Conversion. Governor Cuomo proposes override of local zoning and other regulations to facilitate office and hotel conversions in exchange for 20% affordable housing or contribution to a fund for affordable housing or operate as supportive housing in a contract with the city or state. This sweeping flexibility to support residential conversions will be allowed for the next 5 years, should this proposal become law.
Seeking to overcome local zoning regulations addressing the minimum light and air standards which are a barrier to conversion, the proposal applies in all NYC boroughs with a narrower geographic eligibility in Manhattan. For hotels with fewer than 150 rooms in Manhattan, the eligible geographic zone extends from Chambers north to 110th Street from the Hudson River to the East River. For “class b and c offices” in Manhattan, the area is between 9th Ave and Park Ave and from Chambers north to 60th Street.
$1.3 Billion to Protect Renters. The Budget advances the emergency rental assistance program supported by Federal funds allocated in the last Covid relief package. The program will support households in rental arrears that have experienced financial hardship, are at risk of homelessness or housing instability, and that earn less than eighty percent of area median income. The program would prioritize the unemployed and those with the lowest incomes. As part of this, there will be a hardship fund for undocumented immigrants. In addition to using the $800 million provided directly to the State, it would be structured to enable coordinated efforts between the State and the local governments that opted to receive funds directly.
Protect Tenants through the COVID-19 Emergency Residential Tenant Late Fee Suspension and Security Deposit Utilization Act of 2021. This bill would temporarily allow people impacted by COVID-19 to use their security deposits to make rent payments, as well as prevent property owners from imposing late fees upon tenants who are unable to make timely rent payments, through May 1, 2021.
Encourage Part-Time Work through Partial Unemployment Insurance Benefits. A change in the calculation for Unemployment Insurance (UI) benefits paid to claimants will encourage working part-time while they seek full-time employment. Currently, a claimant’s weekly UI benefit is reduced by 25 percent for each day worked, regardless of the amount paid or hours worked. As a result, there is a disincentive for workers to try to return to the workforce through part-time work which can otherwise serve as a bridge to full-time employment.
Prohibit Discrimination Based on Citizenship. This proposal would amend the Human Rights Law to make explicit that discrimination on the basis of citizenship and immigration status is unlawful in New York State, making it clear to employers, housing providers, places of public accommodation, and others that discrimination because of citizenship and immigration status is unlawful in New York State.
Clarify Sales Tax Exemptions for Affordable Housing Development. Codifies the eligibility of not-for-profit Housing Development Fund Corporations (HDFCs) that enter into a regulatory agreement with Homes and Community Renewal (HCR) or the NYC Department of Housing Preservation and Development (HPD) for a sales tax exemption to support the development of affordable housing.
Expand Homeownership through SONYMA Mortgage Programs. This bill would expand the State of New York Mortgage Agency’s (SONYMA) authority to (i) purchase mortgage loans from a broader pool of non-discretionary lenders, (ii) purchase mortgages secured by new construction loans, and (iii) expand SONYMA’s authority to modify its mortgages to assist financially distressed SONYMA mortgagors.
This bill would amend the SONYMA statute to (i) eliminate the requirement that non- depository SONYMA participating lenders be approved by Fannie Mae or Freddie Mac and substitute supervision by federal and State government; (ii) expand the agency’s purchase powers to include construction loans; and (iii) provide broader authority to SONYMA’s ability to complete loan modifications for distressed borrowers.
These amendments are necessary as several not-for-profit housing agencies lack the net worth to be approved by Fannie Mae or by Freddie Mac, as currently required under the SONYMA statute.
Additionally, an expansion of SONYMA’s authority to purchase mortgages secured by construction loans, targeted to the modular/manufactured home market, will fund the new construction of these modular/manufactured residences and enable SONYMA to better meet the legislative goal of supporting the purchase of newly constructed residences in New York State.
Finally, this proposal would allow SONYMA to renegotiate, waive any default, or consent to the modification of the terms of any mortgage in a manner that would further the purposes of the agency which would serve to assist homeowners who are delinquent on their mortgage payments or in danger of going into default so foreclosure or abandonment may be avoided, while still protecting the interests of holders of SONYMA bonds. This is a welcome shift in policy, especially important to aid struggling homeowners in needs of solutions post forbearance.
Extend Prevailing Wage to Covered Renewable Energy Projects. This bill would create prevailing wage requirements for covered renewable energy projects, defined as construction work and engineering and consulting services performed in connection with either the installation of a renewable energy system, as such term is defined in section 66-p of the public service law, with a capacity over 25 megawatts alternating current and with a total project cost of over ten million dollars; or the installation of a solar energy system with a capacity over 5 megawatts alternating current and with a total project cost of over five million dollars.
Governor Cuomo released the 2020-2021 Executive Budget outlining priorities for spending $178 billion while closing the $6.1 billion gap.
The FY2021 budget marks the last funding year of the 5-year statewide affordable housing plan, which promises to create or preserve 100,000 units of affordable housing and 6,000 supportive housing units. The $20 billion initiative is not subject to public reporting, so we have limited details on spending and production progress. The budget briefing book says, “The State is well on track toward meeting that mark, having already financed the new construction and preservation of more than 60,000 affordable units.”
Over 5 years, the $20 billion is broken down into “$3.5 billion in capital resources, $8.6 billion in State and Federal tax credits and other allocations, and $8 billion to support the operation of shelters, supportive housing units, and rental subsidies.” While most of the capital funding for the affordable housing plan was appropriated in the first year of the plan, $407.336 million of the original funding is scheduled to be available starting April 1, 2020. In addition, the Executive Budget doubles funding for the Homeless Housing Assistance Program this year to $128 million for supportive housing operated by the Office of Temporary and Disability Assistance (OTDA). This includes $5 million dedicated to housing permanent, emergency and transitional housing for persons living with HIV or AIDS and another $5 million for veteran housing. With a record high statewide homeless count of 91,897, this additional funding is needed but more must also be done by the state to address our homeless crisis. The Executive Budget fails to include Home Stability Support funding which would prevent families from becoming homeless. NYS must also continue funding for the successful ESSHI program in order to ensure a continuous pipeline of critically needed supportive housing.
Notably, public housing was left out of the Executive Budget again this year. With capital needs now projected to be $40 billion in NYC alone, NY State must do more to preserve public housing across the state.
We were also hoping that the new Source of Income Law enacted last year in the budget would receive enforcement funding this year but it was left out. Read more about the #EndIncomeBiasNY campaign in a recent Op Ed by our partners, Elaine Gross from Erase Racism and Lorraine Collins from Enterprise Community Partners, Inc, “Section 8 discrimination is a crime, now Cuomo must fund enforcement”.
Additional capital proposed in the Executive Budget for HCR’s ongoing programs is detailed in the chart below.
Here are some other related policy and budget proposals:
- The Medicaid Redesign Team (MRT)
MRT is charged with identifying cost-containment measures that will provide approximately $2.5 billion in gap-closing savings in FY 2021 and ensure Medicaid spending in future years adheres to the Global Cap indexed rate. The spending targets are incorporated into the Financial Plan projections. The Team’s recommendations are due prior to the Enacted Budget on April 1 so there is not a lot of time to act. In the past, MRT had proposed investing in supportive and senior housing to reduce healthcare costs with great success. SKA Marin’s Metro East 99th Street is an example of how targeted investment in housing (in this case for chronically disabled individuals) can improve quality of life while saving tax dollars. We hope MRT will revive their housing committee as part of this process.
- New Authority to Reduce NYC Funding to Offset Costs Incurred for Administering Rent Regulation
NYC already pays NYS to administer rent regulation according the emergency tenant protection act of 1974, amended in 2019. HCR establishes an estimate and there is codified schedule of payment. This new amendment would allow the director of the budget to direct any other state agency to reduce the amount of any other payment or payments owed to such city or any department, agency, or instrumentality thereof; provided however, that such reduction shall be in an amount equal to the costs incurred by the state in administering the rent regulation program for such city.
- Abolish the State Board of Real Property Tax Services
This transfers remaining duties of this State Board to the Commissioner of Taxation and Finance. In 2010, when the responsibilities of the State Office of Real Property Services were transferred to the Department of Taxation and Finance, the State Board of Real Property Services was retained and renamed the State Board of Real Property Tax Services. This bill would abolish that board and thereby make the process of reviewing and determining complaints involving equalization rates, special franchise assessments, and certain assessment ceilings more efficient, while aligning the Department of Taxation and Finance with other agencies, and eliminating instances where complaints cannot be resolved due to the lack of a quorum.
- Provides a Local Option for Placing Converted Condos Into the Homestead Class Purpose
This proposal would give municipalities that have separate tax rates for homestead and non-homestead properties, and that value converted condos using the sales approach, the local option of placing converted condominiums in the homestead class.
- Deny STAR Benefits to Delinquent Property Owners
Provides state support for the local enforcement of past-due property taxes, by precluding delinquent property owners from receiving STAR credits or exemptions if their property taxes remain unpaid.
- Allow for the Appointment of Acting County Directors of Real Property Tax Services
Amends the Real Property Tax Law (RPTL) to allow for the appointment of an Acting Director of Real Property Tax Services in the event that the appointed Director of Real Property Tax Services is unable to perform the duties of the office or the office becomes vacant.
- Modernize and Merge Real Property Tax Forms and Processes
When real property is sold, two different State-prescribed forms must be filed, both on paper, and a real estate transfer tax (RETT) must be paid, unless an exemption from the tax applies. The two forms (TP-584 and RP-5217) are largely duplicative of one another, but they cannot be readily combined because one form is a RETT return that is subject to the secrecy provisions of the Tax Law, and the other is a real property tax report that, by law, is fully subject to public disclosure. This bill would authorize the Commissioner of Taxation and Finance to combine these two forms into a consolidated real property transfer form and to implement an online system for e-filing this consolidated form and paying the associated taxes and fees. In New York City and Westchester County, which have instituted their own electronic deed recording systems, the Department’s e-filing option would be available only if the city or county opted to allow it to be used.
- Make Exceptions for Late Enhanced STAR Filers
This bill would reopen the enrollment period for the STAR Income Verification Program (IVP) and allow DTF to send checks to qualified late enrollees.
- Shift Basic STAR Exemptions to the Credit Program
The bill would reduce the income limit for the Basic STAR exemption from $250,000 to $200,000. Property owners with incomes greater than $200,000 who had been receiving the Basic STAR exemption on the preceding assessment roll would be switched automatically to the Basic STAR credit, unless the Commissioner of Taxation and Finance is unable to verify their eligibility for the credit, in which case they will be notified and given an opportunity to demonstrate their eligibility.
For more information on this policy proposals, click here.
New York State Lawmakers passed a $175 billion budget adopting several progressive policy changes with some notable exceptions- public housing being the glaring one. NYHC housing has been advocating for long-term capital funding for NYCHA and dedicated revenue from luxury real estate taxes. The failure of Albany lawmakers to include public housing in their robust budget deal is disheartening given the challenges facing NYCHA’s future and insufficient federal funds. Given the renewal of the rent laws in June, there may be some post-budget opportunity to revisit the need for public housing capital funding. A statement issued by the housing chairs, Senator Brian Kavanagh and Assembly Member Steven Cymbrowitz says that an agreement on public housing funding wasn’t reached and they are “deferring any decision on these proposals until later in the legislative session”.
Here are some updates on our other housing priorities in the budget:
- ZERO PUBLIC HOUSING FUNDING- The Assembly had called for $400 million for public housing ($300 million for NYHCA and $100 million outside of NYC). The Senate’s budget proposed $350 million ($250 million for NYHCA and $100 million outside of NYC). Governor Cuomo’s Executive Budget called for $0. At this critical time for public housing in NYC, each level of government must commit resources to restoring living conditions for public housing. See a statement from NYHC and some of the members of the Coalition for Capital Investment to #SAVENYCHA.
- RENTER SOURCE OF INCOME PROTECTIONS ENACTED!– A new statewide standard for discrimination will protect renters who are currently denied housing solely based on their source of income. NYHC is proud to be partners on the successful enactment of this important change to NY State law to expand housing opportunity to renters, 600,000 of whom have some form of supplemental income. We thank our partners in the #BanIncomeBiasNY campaign including the Fair Housing Justice Center and Erase Racism and especially thank Enterprise Community Partners, Inc. for their leadership. See a full statement on this exciting victory.
- NO NEW PREVAILING WAGE REQUIREMENTS– Both the Senate and Assembly proposed new prevailing wage requirements for both construction and building service workers in their one house budget bills. We are grateful that these costly requirements were left out of the budget as they would significantly reduce production of affordable housing. Governor Cuomo has expressed a desire to expand prevailing wage requirements this session but also stated the importance of not impacting affordable housing. We expect our advocacy on this issue will continue into June.
- NEW FORECLOSURE FUNDING– $25 million is provided for housing and foreclosure counseling. With previous funds from AG settlement monies expected to run out, communities and low- and moderate-income homeowners will benefit the extension of these services. NYHC is part of the Coalition for Affordable Homes and a strong supporter of Communities First.
- NEW CENSUS FUNDING– $20 million has been allocated for 2020 Census outreach funding across New York State. This is half of what advocates recommended. Let’s hope it is sufficient as there is much to lose in an undercount- including representation in Congress! NYHC is a proud member of the NY Counts 2020 Coalition.
- RENT LAW ENFORCEMENT FUNDING– The budget provides a total of $64 million for administration and enforcement of rent regulation in New York City, Nassau, Westchester, and Rockland, including funding for an additional 94 staff positions, and $5.5 million for the Tenant Protection Unit (TPU). Dedicated funding for TPU had been blocked by the Republican-controlled Senate in previous years.
- TRANSFER TAX– Instead of a pied a terre tax which was building some political momentum, an enhanced transfer tax on real estate was adopted in the budget. The tax is expected to generate $365 million annually. This funding will go towards critical needs at the MTA. REBNY has produced a helpful chart of the new transfer tax sales categories and tax increases.
- PERMANENT 2% PROPERTY TAX CAP– This was a high priority for the governor. This existing cap was made permanent in the budget.
- PACB BOARD– The Public Authorities Control Board approves the allocation of state-controlled bond cap to affordable housing projects among its other functions. Reacting to the threat of PACB board rejection in the failed Amazon deal, the budget includes the following language sought by the Governor as reported by the WSJ. “A member of the board must vote within the scope of his or her legal authority. The legal authority of a member of the board pursuant to this section is solely to determine whether the issuing authority has demonstrated that there is the commitment of funds sufficient to finance the acquisition and construction of the project subject to approval. Failure of a member to vote within the scope of his or her legal authority constitutes a violation of the public’s trust for the purposes of paragraph h of subdivision three of section seventy-four of the public officers law. As the appointing authority, the governor has the full discretion to immediately remove a member of the board he or she finds to be acting, or threatening to act, beyond the scope of such member’s legal authority set forth herein.”
- HOMELESSNESS– Home Stability Support, a new resource for homeless prevention with support in the Legislature, did not get funded.
With little change from the Executive Budget proposal for housing funding, the chart below shows that Governor Cuomo’s budget priorities were adopted. Besides leaving out public housing capital, the budget also failed to provide $100 million for Mitchell Lamas as proposed by the Assembly. There were also some slight differences in NPP/RPP funding amounts. We are pleased that these community programs received increased funding this year. Since much of the 5-year statewide affordable housing plan received multi-year funding in FY 2018, this budget makes modest increases to resources available to HCR to implement the housing plan.
On March 31st, the New York State Budget for FY 2018-2019 was approved. The $168.3 billion enacted budget includes $250 million in new appropriations for NYCHA. The final budget also included re-appropriated funding for the 5-year Statewide Affordable Housing Program. Last year, Governor Cuomo and the Legislature passed a budget funding a $1.97 billion 5-year affordable housing plan that more than doubled historic capital levels. The re-appropriated funding will allow for the program’s continued implementation and the building of housing units statewide. We would like to thank Governor Cuomo, Assembly Speaker Heastie and Senator Majority Leader Flanagan and all members of the Legislature for their continued support and investment of affordable and public housing in NY. For full details, click here to view NYHC Analysis of NYS 2018-19 Budget. Other budget highlights include:
Additional $250 million NYCHA Capital Investment for Emergency Repairs
This new $250 million allocation combined with $300 million previously appropriated by the State to NYCHA and Mayor de Blasio’s $200 million commitment this year will allow for some substantial progress to be made to restore safe and healthy housing conditions for NYCHA residents. More funding is needed, but we are happy to see the State and City providing this down-payment to remediate some of the emergency conditions at NYCHA.
New NYCHA Oversight Measures by State Statute and Executive Order
The budget amends public housing law section 402d to allow the Governor to enact a oversight plan for the funding, which he did on Monday when he signed an Executive Order creating a new independent monitor, who will oversee the spending of the $550 million that the State has appropriated to NYCHA over the past three years. The monitor’s title will be Independent Emergency Manager and must be unanimously selected by the Speaker of the City Council and the President of the NYCHA Citywide Council of Presidents (CCOP) in consultation with the Mayor within 60 days. If the three stakeholders are unable to come to an agreement in their selection, the City Comptroller would step in and have two weeks to make the appointment. The monitor would create a comprehensive emergency remediation plan and then have 30 days to bid out and select an independent contractor to perform the work. In addition to the State now regulating how its State capital funding is spent, HUD decided last week that it must approve all draw-downs from NYCHA’s federally allocated capital funds. These additional layers of spending oversight could affect the speed of repairs.
Expediting NYCHA Repairs Using Design-Build
The FY 2019 Budget includes design-build authorization for NYCHA’s repairs, the construction of new jails to replace the Rikers Island Jail Complex, and the reconstruction of the Brooklyn Queens Expressway. As a result of design-build authorization, the City will avoid significant delays in construction and will realize savings in excess of $1 billion.
SLIHC/LIHTC Bifurcation and Certification Amendment
The budget added a provision to allow for the bifurcation and certification of State Low Income Housing Credits (SLIHC) and federal Low Income Housing Tax Credits (LIHTC) permitting credits to be decoupled allowing investors in a project to transfer state credits independent of federal credits. A taxpayer allowed a state low income housing credit now will be able transfer the credit, in whole or in part, to another person or entity, without regard to how any federal low income housing tax credit may be allocated. Furthermore, the other person or entity would not need to own interest in the eligible low-income project. However, the transfer must be approved by the Commissioner of HCR and a transfer contract be made. This will make SLIHC credits more attractive to investors, which will create additional demand and drive up pricing as competition increases, thereby translating into additional equity for SLIHC projects.
No Temporary Deferral of Affordable Housing Tax Credits including State Low Income Housing Credit (SLIHC), Brownfield and Historic Credits
The Executive Budget had proposed a deferral of the usage of most business credits for tax years 2018 through 2020, where such credits exceed $2 million. This would have negatively impacted credit pricing and caused delays in permanent financing. We are excited to see that the Legislature decided against this proposal.
NY State Tax Code Adjusted to Circumvent Tax Reform’s State and Local Tax Deduction (SALT) Cap
The recently enacted federal tax law has negative fiscal implications for many New Yorkers. By gutting the deductibility of state and local taxes, the law effectively raises middle class families’ property and state income taxes by 20 to 25 percent. New York is fighting back by decoupling the state tax code from the federal and creating two New York charitable contributions funds that New Yorkers can donate to in order to claim a State tax credit equal to 85 percent of the donation amount for that tax year. Also, the State would allow employers to opt-in to a payroll tax that can pass on to its employees to allow them to avoid personal income tax since full State and local tax deductibility for individuals was taken away by tax reform, but it was not for businesses. The IRS could challenge these changes.
Continue the Local Property Tax Relief Credit
The Property Tax Credit, enacted in 2015, will provide an average reduction of $380 in local property taxes to 2.6 million homeowners this year alone. By 2019, the program will provide an additional $1.3 billion in property tax relief and an average credit of $530.
Outreach and a Comprehensive Homeless Services Plan Required from Each Local Social Services District
The FY 2019 Budget requires all local social services districts develop and implement an approved outreach and services plan to address street homelessness.
The New York State Legislature passed a $153 billion FY 2017-2018 budget on April 9th. The spending plan appropriates $2.7 billion for affordable housing including $2.5 billion for a new 100,000-unit, state-wide, 5-year housing plan. NYHC would like to again thank Governor Cuomo, Speaker Heastie, and Majority Leader Flanagan for funding the 5-year housing plan to address the growing affordable housing need across NY State. Through their leadership efforts, NY has shown the rest of the nation how fundamental and critical it is to invest in affordable housing despite being in a period of great federal funding uncertainty. This unprecedented achievement is also a credit to our ongoing advocacy and the strong partnerships between New York housing groups. Congratulations to everyone involved in the fight for the MOU funds!
Last year’s $1.97 billion Housing Plan funds were reappropriated this year and supplemented by $541.5 million in future year capital to create the $2.5 billion Housing Plan funds. Similar to previous years, ongoing HCR programs are funded through the general fund and the Mortgage Interest Fund (MIF). $97 million was appropriated from the general fund for housing programs- some funding levels differ significantly from previous year. The MIF was also tapped for excess reserves for nearly $134 million for housing programs administered by Homes & Community Renewal. MIF funds were also allocated for the following purposes: $1,000,000 for NORC; $1,000,000 for NNORC; $6,522,000 for HHAC; and $12,500,000 for “municipal relief to the City of Albany”. This funding for the City of Albany is a departure from housing-related uses seen in previous years. For full details, see NYHC NYS Housing Program Budget Chart linked here.
According to the budget legislation, the appropriation schedule for the $2.5 billion in housing plan funds will provide an average of $543 million annually over the next 4 years. Since capital funds may be rolled over into future fiscal years, it is unclear what the production schedule is for this plan that started a year late.
Housing Plan Programs A full list of all funded housing programs is found in the NYHC NYS Housing Program Budget Chart. Below are programs funded in the $2.5 billion housing plan.
• Supportive Housing– $950 million for the construction of 6,000 supportive housing units throughout the State. With lack of political will to renew the successful city-state NY/NY supportive housing agreements, the State is now independently funding their own supportive housing plan. Supportive housing is proven to save taxpayer dollars by stably housing homeless people with disabilities.
• New Construction– $472 million for new construction or adaptive reuse of rental housing affordable to households that earn up to 60 percent of area median income (AMI). We expect this funding will go towards new housing on state-owned sites, including sites in the “Vital Brooklyn Initiative” investing in Central Brooklyn.
• New York City Housing Authority Capital– $200 million for projects and improvements related at housing developments owned or operated by NYCHA. The FY 2018 budget requires NYCHA funds to have a plan approved by the Director of the Budget, in consultation with NYCHA and DASNY, for the purpose of capital projects and other improvements. NYHC has been a strong advocate for State funding to meet NYCHA’s most pressing capital needs. We hope this funding is released in a timely manner and goes towards critical capital needs such as roof replacement.
• NEW Affordable Housing Preservation– $177 million for substantial or moderate rehabilitation of affordable multi-family rental housing currently under a regulatory agreement. NYHC made recommendations with other housing groups for this “Year-15” type program to ensure we are preserving existing affordable housing.
• Moderate Income Finance Program– $150 million for new construction, adaptive reuse, or reconstruction of rental housing affordable to households that earn between 60% and 130% AMI.
• NEW Senior Housing– $125 million for developing or rehabilitating affordable housing targeted to low-income seniors, aged 60 and above. This new program is a welcome start to building for our aging population. NYHC worked with senior housing advocates to ensure dedicated senior housing funding was part of the statewide housing plan.
• NEW Upstate Public Housing– $125 million for substantial or moderate rehabilitation and/or the demolition and replacement through new construction of public housing authority developments outside of New York City. This funding is critical for PHAs to take advantage of HUD’s RAD program to revitalize public housing across the state. The budget bill also includes tenant protections and notification requirements strengthening provisions in HUD’s RAD program.
• NEW Low Income Affordable Housing Preservation & Development Program– $100 million for the preservation, restoration or creation of affordable housing units in a city with a population of a million or more. Priority will be given to not-for-profits with prior experience in community development projects. This is a new preference for dedicated funding with a non-profit preference.
• Rural and Urban Community Investment Fund (CIF)– $79.5 million for mixed-use affordable housing developments that may include retail, commercial or community development components.
• Mitchell-Lama Rehabilitation– $114.5 million to preserve and improve Mitchell-Lama properties throughout the State.
• NEW Small Building Construction– $62.5 million for rehabilitation and/or the demolition and replacement through new construction of buildings of 5 to 40 units. This is an important program for hard-to-finance buildings and reflects another NYHC priority.
• Homeownership– $41.5 million for promoting homeownership among families of low and moderate income and stimulating the development, stabilization, and preservation of New York communities.
• Mobile and Manufactured Homes– $14 million for mobile and manufactured home programs. New provisions are also established outlining the program’s replacement contract requirements and restrictions, Energy Star mandates, and financial assistance format details.
• NEW Community Restoration Fund– $1 million to facilitate the development of nonprofit community land trusts. This is a new program taking advantage of the potential land trusts have to create affordable rental and homeownership opportunities.
• Main Street Programs– $14.2 million for stimulating reinvestment in properties located within mixed-use commercial districts located in urban, small town, and rural areas of the State.
Additional Transparency Homes & Community Renewal is subject to a new annual Housing Plan reporting requirement. HCR must provide a detailed annual report to the Legislature and Director of the Budget of projects and activities undertaken until the final disbursement of those funds has occurred.
Governor Cuomo and leaders of the NY State Legislature announced a budget deal with significant new funding for affordable housing. New York Housing Conference thanks Governor Cuomo and members of the NY State Legislature for $2 billion in new funding for a comprehensive statewide housing plan to combat housing affordability and homelessness. With big ticket items like minimum wage, paid family leave and income tax breaks being negotiated down to the wire, lawmakers funded a new housing plan but could not reach agreement on details of this new initiative. Therefore, funding will be subject to a Memorandum of Understanding (MOU) between the Governor, Assembly and Senate. New PACB and ESDC approvals for “volume cap” proposed in the Governor’s Executive were not included in the final budget. This is good news as we believe they would have been detrimental to affordable housing and were advocating to exclude new approvals from the budget. While we don’t have too many details on the Governor’s 100,000-unit, 5-year affordable housing plan, we expect significant budget increases for many existing programs listed in the chart below. We hope Governor Cuomo will release his comprehensive vision for affordable housing preservation and development in New York State in advance of the MOU talks to facilitate discussion around the housing needs of New York State.
- More than $1 million in settlement funds have funded housing and homeless programs over the past year since NYHC issued analysis on availability of funds from bank settlements. In this budget, $590 million of the $2 billion in new housing capital is funded by settlement funds. NYHC analysis of accumulated settlements was helpful in establishing the availability of these funds for housing.
- Low Income Housing Trust Fund, Homes for Working Families and the Rural and Urban Community Investment Fund Program all see increases. In addition, significant funding in the new housing plan will be allocated to producing supportive housing as the Governor has committed to 20,000 new units over the next 15 years.
- It is unclear if a new Affordable Senior Housing Program will be funded out of the $2 billion housing plan this year although there certainly was great interest in senior housing in Albany thanks to our advocacy partners who helped us reinforce the need to plan for our State’s growing elderly population.
- Unlike last year, NYCHA has not been appropriated $100 million this year, which we have been advocating to go towards new roofs. Given the financial needs of the housing authority and the serious consequences of mold to tenants’ health, we hope $100 million will be funded out of the $2 billion housing plan to ensure NYCHA buildings are safe and healthy homes for their residents.
Analysis of the fiscal year 2015-16 enacted budget for the state of New York
In the early morning hours of April 1, the NY State Fiscal Year 2016 budget was enacted into law. The record $142 billion budget includes a $5.4 billion bank settlement surplus. Most of the surplus will be used for infrastructure investments and $1.5 billion will fund an economic development program for upstate New York. We are disappointed that none of the $5.4 billion in bank settlement surplus was directed to housing programs and that settlement recommendations specifically outlining uses for $492 million of the funds for housing were ignored. However, overall funding for housing and homeless programs in the FY 2016 budget has increased significantly compared to last year. This is mainly due to the programming of $439 million from a separate JP Morgan settlement, which is required to be spent on housing. Nearly $312 million of this funding was enacted in last year’s budget without agreement on programmatic use. We thank Governor Cuomo and the Legislature for increasing appropriations to housing programs in 2016. Given the extent of New York’s affordability crisis, the New York Housing Conference will actively advocate for a more substantial commitment from New York State in future appropriations to fund housing programs creating new affordable housing opportunities, preserving existing affordable and public housing and strengthening neighborhoods recovering from the foreclosure crisis.
Housing Program Highlights
$100 Million for NYCHA
Last autumn, the NYHC Advisory Board made preserving public housing one of our top three policy priorities for 2015. We are thrilled that $100 million will support NYCHA’s capital repair needs, improving conditions for existing tenants and preserving public housing for future generations.
New Middle Income Housing
$25 million has been allocated for a new program to support mixed and middle income housing. This new capital program will create units affordable to tenants earning up to 130% AMI. Communities will greatly benefit from enhanced income diversification in affordable housing.
Supportive Housing Programs
Under the $124.5 million listed in the linked chart, $74.5 million has been allocated for a new state-wide supportive housing initiative and $50 million ($10 million per year for five years) for Ofice of Mental Health Supported Housing to help ofset cost increases in scatter-site housing in areas with rapidly escalating fair market rents. While this is a great start, NYHC will continue advocating with the supportive housing community for a larger statewide program. MRT Supportive Housing Program is funded at $254 million over two years. This is a $32 million increase over last year’s funding level, providing service funds, rent subsidies and capital dollars to create supportive housing for high-cost Medicaid recipients. For full analysis of supportive housing funding, please see the Supportive Housing Network of New York analysis linked here.
40 million will fund New York City’s LINC rental assistance programs to get families out of shelters. This sorely needed funding may help reduce New York City’s homeless census of 60,000 New Yorkers. Another $15 million will fund a new homeless prevention pilot. A full analysis of these and other State homeless program funding will be posted here by Coalition for the Homeless in upcoming days.
Analysis of Fiscal Year 2014-15 Enacted Budget for the State of New York
Governor Cuomo and the Legislative leaders reached an agreement over the weekend on the Fiscal Year 2014-15 State Budget, and the various budget bills were being finalized and approved on March 31st as this summary was released. Cuomo once again waived the three-day waiting period required by law to age legislation – clearing the way for the fourth on-time budget in a row. The Budget, which holds spending growth below two percent, provides significant new spending for housing, mostly due to one-time proceeds from a settlement agreement reached by the Attorney General last November. The settlement funds make up over $312 million of the $382.5 million increase for State housing programs over the Fiscal Year 2013-14 Budget. The increased funding includes legislative adds to restore funding cuts to the popular Neighborhood and Rural Preservation Programs and a restoration of funding for the NYCHA Tenant Pilot Protection Program. Summarized below are some of the highlights, followed by a chart showing all funding for State housing programs.
Housing Program Highlights
Public Protection/General Government Article VII (S.6355-D):
This section of the budget bill amends the State Finance Law by adding a new section 99-v establishing in the joint custody of the State Comptroller and the Commissioner of Tax and Finance a trust and agency fund known as the “Mortgage Settlement Proceeds Trust Fund” to distribute settlement funds. There is a corresponding “Foreclosure Avoidance and Amelioration” appropriation in the NYS Division of Housing and Community Renewal’s (DHCR’s) Aid to Localities budget in the amount of $312,366,643 that states that such funds will be allocated in accordance with a plan approved in a memorandum of understanding (MOU) to be executed by the Division of the Budget, the Assembly and Senate. Under the MOU, the funds can be sub allocated to other agencies; however, $81,500,234 of the monies shall be distributed by the Attorney General. The appropriation sets forth a schedule for how much funding may be drawn down in each fiscal year in accordance with the settlement.
The Health and Mental Hygiene Article VII (S.6358-D/Part K):
This bill expresses concern for the number of children under the age of 18 living in homes headed by grandparent caregivers or other elderly relatives and directs the NYS Division of Housing and Community Renewal (DHCR) to conduct a Grandparent Housing Study. The study is to look at the scope and scale of the issue as it relates to housing, economic costs, and other factors. The study shall be led by DHCR and shall be done in consultation with the NYS Office of Children and Family Services (OCFS), The NYS Office of Temporary and Disability Assistance (OTDA), and the NYS Office of Aging (SOFA). DHCR must report their findings in 12 months. For services and expenses related to the study $200,000 is provided in the State Operations portion of DHCR’s budget. The Budget continues the House NY program created last year to rehabilitate the State’s remaining Mitchell Lama portfolio which suffers from significant physical deterioration. The 44-project Mitchell Lama portfolio which was moved last year from the Urban Development Corporation to the Housing Finance Agency will benefit from an additional $32 million in FY 2014-15 funding. The Low Income Housing Trust Fund Program benefits from a significant increase, $11.5 million over last year for total program funding of $46.7 million. Funding for the Neighborhood Preservation Companies is restored to $10,073,000 and Rural Preservation Companies to $4,204,000, to bring them back to last year’s levels through a combined appropriation and funding from the Mortgage Insurance Fund.
2013-2014 New York State Housing Budget Analysis
It appears the Fiscal Year 2013-14 New York State Budget will be passed on time this year, although not as early as some had hoped. The Assembly and Senate starting passing bills late last week, but took the weekend to finalize details for the Aid to Localities and Capital spending bills which include funding for most state housing programs. These bills were printed Sunday night and are now “aging” to meet a provision in the New York State Constitution that requires lawmakers to wait three days before voting on new legislation. The Senate is expected to return today and start passing bills this afternoon when they can legally take action on the legislation. The Assembly does not return until this Thursday when they will take up the same bills. According to the bills that have been introduced, the final budget plan includes funding for two new housing initiatives: 1) initial funding to preserve the state’s aging Mitchell Lama portfolio, and 2) the new Rural and Urban Community Investment Fund which will provide grants and loans to help develop commercial and retail space within mixed-use affordable residential developments. These two new initiatives will largely be financed from excess reserves from the Mortgage Insurance Fund (MIF), which proved to be a key source for this housing budget. The legislature will agree to the Governor’s proposal to utilize the excess MIF reserves as a key part of the fiscal plan for 2013-14. This represents a fairly dramatic shift in public policy – changing the source for several of the housing programs within the Aid to Localities budget, from the State’s General Fund to the MIF. The MIF is a division of the State of New York Mortgage Agency (SONYMA). Existing statute allows for excess revenue from the MIF to be returned to the State with SONYMA Board approval, as long as the remaining reserves are sufficient to attain and maintain the State’s credit rating. So in future years when the MIF doesn’t have excess revenue, these programs could be facing an uphill battle to get back into the General Fund.
According to the plan, the MIF will fund the following this year:
- An amount of $8,479,000 would be provided to support the Neighborhood Preservation Program.
- An amount of $3,539,000 would be provided to support the Rural Preservation Program.
- An amount of $20,400,000 would support rental subsidies for low-income individuals under the federally funded Rural Rental Assistance Program.
- An amount of $17,582,000 would be transferred to HFA to support the refinancing and capital repairs of thirty-six Mitchell Lama affordable housing projects.
- An amount of $3,500,000 to support the new Rural and Urban Community Investment Fund Program.
- An amount of $3,000,000 to support the Low Income Housing Trust Fund Program.
- An amount of $2,000,000 to support the Urban Initiatives Program.
- An amount of $1,500,000 to support the Rural Area Revitalization Program.
- And an amount of $104,000,000 would be transferred to the General Fund.
Housing Program Highlights
Preserving Affordable Housing
The 2013-14 Budget will help Governor Cuomo’s House NY program to get underway with an initial investment of $17,582,000 from the MIF. This funding will go directly to the Housing Finance Agency (HFA) to support the refinancing and capital repairs for some of the State controlled Mitchell Lama portfolio. It is expected that an additional $158 million from the MIF will be available over the next four budget cycles to address some 35 Mitchell Lama projects in total, that suffer from significant physical deterioration. As part of this initiative, the Mitchell-Lama affordable housing asset portfolio will be transferred from Empire State Development to HFA.
Creating New Housing Opportunities
The legislature will create the Rural and Urban Community Investment Fund as part of the 2013-14 Budget with a total of $5,354,000 from the General Fund and the MIF. The Fund will provide grants and loans for the creation and improvement of affordable housing, as well as the commercial, retail and community facilitates related to mixed-use affordable residential developments. The program will have a one-third match requirement and sixty percent of the funds will be allocated to urban projects and 40 percent to rural projects. The new program will be administered by the Housing Trust Fund.
Homeless Housing Assistance Program
The legislature has omitted language in their bills that would have transferred the administration of the Homeless Housing Assistance Program (HHAP) from the Office of Temporary and Disability Assistance (OTDA) to the Division of Housing and Community Renewal. Instead, the program remains at OTDA with no change in funding over 2012-13 ($30 million from the Capital Budget).
Neighborhood and Rural Preservation Programs
The legislature did not agree to the Governor’s proposal to merge the Neighborhood and Rural Preservation Programs (N/RPP) into a single, performance based program. In addition, the legislature restored the funding levels for the N/RPP’s to prior year levels. The legislature did not agree to the Governor’s proposal to fund a $5.7 million Tenant Protection Unit within DHCR. The budget will reduce funding for the New York Main Street Program, increase funding for the Low Income Housing Trust Fund, and restore funding for the Rural Area Revitalization and Urban Initiatives Programs. Funding for all other capital programs (Access to Home, Affordable Housing Corporation, Homeless Housing Assistance Program, Homes for Working Families Program, Housing Opportunity Program for Elderly, and Public Housing Modernization Program) will remain at prior year levels. (See chart below).
Other Budget proposals of interest include the following:
The Budget continues the implementation of Medicaid Reform Team (MRT) recommendations, including making additional funding available for affordable housing. The legislature will not enact the Executive’s proposal to limit the powers of a local Industrial Development Authority (IDA) to provide State Sales Tax abatements to local projects. However the agreement will limit the industries to which IDAs can offer State sales and other use benefits to key sectors, in particular excluding retail with certain exemptions. The law will also increase the reporting requirements for IDAs. Source: 2013-14 New York State Executive Budget Education, Labor and Family Assistance, Article VII Legislation [S.2607D/A.3007D], Part K, L and M.
2012-2013 New York State Housing Budget Analysis
NEW YORK (March 29, 2012) – Governor Andrew Cuomo and the Legislature have reached a three way agreement on the FY2012-13 State Budget and the Legislature is poised to pass the final parts of the plan within the next few hours. The new fiscal year begins April 1. The housing part of the Budget is very favorable to supportive housing and the popular nonprofit networks known as the Neighborhood and Rural Preservation Companies. The affordable housing program highlights are below.
Housing Program Highlights
Local Assistance Funding for Affordable Housing:
The final Budget will more than restore full funding to the community based nonprofit organizations under the Neighborhood Preservation Companies program (NPCs) and Rural Preservation Companies program (RPCs). According to the Budget, NPCs will be funded at $10.072 million – this includes a restoration of the $8.479 million cut that had been proposed plus an additional $1.593 million over 2011’s funding level. The RPCs will be funded at $4.204 million – this includes a restoration of the $3.539 million cut that had been proposed plus an additional $665,000 over 2011’s funding level. This is the first increase in funding in five years for these two programs. The Budget will increase funding for the Rural Rental Assistance Program (RRAP) which provides State funded rental subsidies to approximately 4,700 low income occupants of rural housing projects partially financed by the US Department of Agriculture. The program will receive an additional $4.798 million under the new Budget bringing the total appropriation to $19.6 million. The Budget includes an agreement to continue to assist homeowners through the Subprime Foreclosure Prevention Program. The Budget provides $9 million for the continuation of mortgage foreclosure counseling services to be administered by NYS Homes and Community Renewal over the next 6 months until proceeds from the National Mortgage Servicing Settlement Agreement are realized. At that time, additional services will be financed with proceeds from the Settlement Agreement under the administration of the State Attorney General’s office.
Supportive Housing Programs:
Medicaid Redesign Team (MRT) Supportive Housing Development Program – The Budget includes $60 million for the MRT Supportive Housing Fund. Following the recommendations of the MRT, the budget establishes and funds a new Supportive Housing Development Program that will provide service funding, rent subsidies and capital dollars to create supportive housing for high-cost Medicaid recipients. The new fund will be funded with $60 million of State general funds this year, and $75 million of State general funds in each of the following two years, with funding originating in the NYS Department of Health, to be distributed to HCR, OTDA, OMH, OASAS, OPWDD and the DOH AIDS Institute. It also allows the fund to grow to $150 million annually if the State can convince the federal Center for Medicaid and Medicare Services to provide matching funds. The State’s draft spending plan envisions approximately one-third of this year’s fund going to scattered-site rental and service subsidies, another third going to capital development of supportive housing units at NYS Homes and Community Renewal, and as much as $14.5 million to OTDA Homeless Housing Assistance Program (HHAP) for upstate projects, with the rest going to specific projects including $7 million to provide capital funding for the development of community-based permanent housing for residents of Goldwater/Coler Hospital. Further details will follow in the coming weeks. Community Reinvestment in Supportive Housing – In addition to the $60 million in funding this year, the budget authorizes a new, ongoing community reinvestment vehicle, the Supportive Housing Development Reinvestment Program. This new program will redirect savings achieved by closing nursing home and hospital beds to build and operate new supportive housing in the community for high-cost Medicaid recipients. NYS Supportive Housing Program (NYSSHP) & NYS Solutions to End Homelessness Program (STEHP) – The budget also increases funding for NYSSHP and STEHP by $1.5 million each, a total of $3 million in additional funding to the Homeless Housing and Prevention Services Program.
Capital Budget for Affordable Housing:
The Budget calls for the expansion of the State Low Income Housing Tax Credit Program. The Division of Housing and Community Renewal is authorized to allocate an additional $8 million annually in each of the next two years in aggregate credit awards to taxpayers who develop qualifying housing projects for low-income New Yorkers. Credits are given in equal installments for a ten-year period. The Budget also calls for $32.2 million for the Low-Income Housing Trust Fund Program – same as 2011, which provides grants of up to $125,000 per unit to construct or renovate low-income apartment projects. The Budget includes $25 million for the Affordable Home Ownership Development Program – same as 2011, which provides grants of up to $40,000 per unit to construct or renovate homes for low and moderate- income families. The Budget includes $6.4 million for the Public Housing Modernization Program – same as 2011, which subsidizes repairs at 74 State-supervised public housing projects across the State. A total of $400,000 will be reserved for capital activities aimed at reducing illegal drug activities at these projects. The Budget includes $7 million for the Homes for Working Families Program – same as 2011, which combines State funds with other available public and private sector moneys, Federal Low Income Tax Credit proceeds and non-State supported bond funds to construct affordable rental housing for low- and moderate-income households. The plan calls for $400,000 for the Housing Opportunities for the Elderly Program (also known as RESTORE) – same as 2011, which provides grants to low-income elderly homeowners for emergency home repairs. The Budget includes $1 million for the Access to Home Program – same as 2011, which provides funding for home adaptations for individuals with disabilities to enable them to continue to live in their own residences and avoid institutional care. The New York Main Street Program, which provides financial resources and technical assistance to communities to revitalize historic downtowns, mixed-use neighborhoods, commercial districts and village centers was increased by $3 million, to $5.2 million. The Budget also funds two programs that have been in existence for many years, but infrequently funded; the Urban Initiatives and the Rural Area Revitalization programs will each be funded at $4 million this year. Both are administered by NYS Homes and Community Renewal.
Mayor Bill de Blasio unveiled the preliminary version of his last budget. The $92.3 billion budget is almost $3 billion less than the current year’s budget and had to close a $5.25 billion gap, the impact of the coronavirus pandemic and the related recession. However, there is good news for housing production in New York City in the budget.
The preliminary plan increased the current FY 2021 HPD capital budget to $1.43 billion, $233 million more than the budget before the pandemic. The budget for FY 2022 is $1.45 billion, $193 million more than it was before the pandemic.
Last year, de Blasio cut $1 billion from HPD’s capital budget over two years. Last fall, he restored more than $450 million of that cut in the current year’s budget after New York Housing Conference showed that the cuts saved little money in the expense budget but cost the city thousands of units of housing.
However, the cut to last year’s budget – $583 million – went through. The additional funding in the current and next year’s budget restore roughly $425 million of last year’s cut. We estimate that these additional funds will allow HPD to produce an additional 7,300 units total over the two years.
We are encouraged to see this funding added back this year and next year. We have long argued that housing capital spending is an efficient way for the city to engage in stimulus spending, and the city desperately needs stimulus right now.
There were few changes in the expense budget for HPD. Given the city’s strained fiscal situation from the pandemic, HPD saw minor cuts in their budget as part of the city’s savings program. HPD is saving 945,000 this year and $1.6 million next year in the Department of Neighborhood Preservation and $500,000 this year for owner outreach, both by leveraging federal funding. They are also seeing $121,000 in savings this year in hiring and attrition for management. In good news, in the current year HPD was given $1.8 million for “new needs” including $350,000 for legal needs and $300,000 for temporary staff, both for development, as well as $700,000 for “ERP and AEP floodplain” and $461,000 for three-quarter housing programs needs.
Mayor Bill de Blasio released his fiscal year 2021 budget proposing $89.3 billion in spending, $8.1 billion less than the current 2020 budget and $6 billion less than the mayor’s preliminary budget plan for 2021 that he released in January before the health crisis took hold.
The city is expecting $2.2 billion less in revenue in 2020 and $5.2 billion less in 2021 compared to the preliminary budget that he released in January, due to a decline in the sales tax, the hotel tax, personal income tax, and business taxes, all due to the COVID-19 pandemic.
Mayor de Blasio proposed $2.1 billion in cuts (called PEGS – Program to Eliminate the Gap – in city budget speak), with education funding particularly hard hit. The city is also using $4 billion in reserves over this year and next year. You can find a summary of the budget in the mayor’s press release here or all of the budget documents here.
The city has been spending additional money to fight the coronavirus, spending more than $700 million so far this year and they project to spend a total of $3.5 billion by the end of the calendar year.
- HPD Capital Cut- This year’s capital commitment plan provides $741 million for HPD, $450 million less than the preliminary plan and a 38 percent cut from the $1.2 billion planned in January. The money is added back to future year’s capital plans, adding $350 million each year in fiscal years 2022 – 2024, although this cannot be relied on given the economic uncertainty caused by Covid-19. Capital supports 300,000 units by 2026 through new construction ($256.6 million); special needs housing ($251.6 million); preservation finance ($168.3 million) and disposition ($62.1 million) programs; and funding for technology, infrastructure, demolition and other ancillary investments ($2.8 million).
- NYCHA Capital: $429.6 million will fund upgrades to building exteriors and systems, including roof work and mold remediation, boiler replacements, decoupling heat and hot water, heating controls, and other general capital maintenance.
The city is confident that they will still meet their plan’s goals given the record production in recent years, but this is a big hit to next year’s capital budget. Although money is added into future years, that funding is uncertain given the ongoing health and economic crisis. We will also be looking to see how other changes brought on by the recession affect housing production, including the decreasing value of the 4% Low Income Housing Tax Credit.
Here are the major savings proposed to the housing and homelessness agencies’ operating budgets:
- HPD saves $1.1 million through a hiring freeze in total over this year and next year
- HPD also cut $10 million in non-personnel costs
- HPD savings will affect two programs:
- Basement Apartment Conversion Pilot Program will see a cut of $1.09 million
- Landlord Ambassador Program will see a cut of $503,000
- The Department of City Planning cut $1.15 million this year and next through a hiring freeze, attrition and delayed hiring
- DHS is saving $35 million in hotel costs and $25 million in security costs each year starting this year
- There is also a $20 million cut in the DSS operating budget to supportive housing next year, though so far this does not appear to significantly affect programs.
The mayor’s budget also includes forecasts for the housing market that point to some tough times ahead. In the report, the city projects that the local housing market will soften further after two weak years, with sales volume decreasing in 2020 and with a rebound in 2021 but a full recovery will be years away. The city also projects that the weaker housing market will slow construction, with new permitted units decreasing by half to 12,000 in 2020 (down from 26,000 in 2019, the second highest in a decade) and slowly returning to 17,000 units by 2024.
NYC Mayor Bill de Blasio unveiled an $89 billion executive budget proposal for fiscal year 2019 last Thursday. The latest executive budget proposal reflects a net spending increase of $390 million from the Mayor’s preliminary budget released in February and a $3.82 billion total increase from last year’s adopted budget. The Mayor added an additional $20 million allocation over the next two fiscal years for NYCHA to help reduce a 50,000 work order backlog for repairs to apartments and common areas, such as plastering and carpentry. This $20 million is in addition to the $200 million he promised to replace boilers and upgrade heating systems at 20 NYCHA developments earlier this year. This executive budget proposal will now serve as the foundation for negotiation with the City Council before the July 1st budget deadline.In February, NYHC and other housing groups called on Mayor de Blasio and Governor Cuomo to each commit at least $250 million in capital this year to NYCHA as a downpayment in a long term capital plan in a letter linked here. With $250 million already in the State budget, we hope the Council will negotiate an increase in the City’s capital budget to meet this goal of a combined $500 million from the City & State this year. More importantly, we need the City and State to come together in addressing solutions to preserve public housing in a long-term capital and management plan that will address the underlying challenges facing NYCHA’s delivery of property management services and building upgrades.
Analysis of New York City 2018 Budget
On June 2nd, Mayor De Blasio and the City Council reached an agreement on the FY 2018 budget, an $85.2 billion spending plan, which represents a 3.7% increase over the previous year’s adopted budget. It has been lauded as the earliest the city has reached a budget agreement since 1992. The budget commits $1.9 billion in new Capital funding for the development to increase the affordability levels for up to 10,000 apartments of the 200,000 planned units in the Mayor’s 10-year housing plan (Housing New York), which was released in 2014. The plan’s goal is to develop 80,000 new housing units and preserve 120,000 units to meet the needs of more than 500,000 City residents. The new commitment will dedicate the resources to allow 10,000 more Extremely Low-Income households to afford housing constructed under the Mayor’s Plan, of which 5,000 will be dedicated to seniors and 500 units will house veterans. This increases the projected share of units reserved for New York ELI households from 20% (40,000) to 25% (50,000). The additional HPD funding will be allocated to the Extremely Low & Low-Income Affordability Program (ELLA) and the Senior Affordable Rental Apartments Program (SARA), among others. The budget also includes $25 million in property tax exemptions for war veterans, which is estimated will save an average of $443 per person annually. Furthermore, the City Council has notably committed to providing:
- $11.2 million to HPD’s annual operating budget to support various housing initiatives, including tenant advocacy and education, code enforcement advocacy, housing court assistance, and other housing-related public education.
- $255,000 to DCA’s operating budget for financial empowerment support for tenants.
- $77 million towards unprecedented universal access to free legal services for tenants facing eviction in housing court. At full implementation, the City’s investment in anti-eviction legal services will total $155 million by Fiscal 2022.
Regarding Public Housing, earlier this year in January, the Mayor committed to $1 billion in City Capital over 10 years to fix 729 NYCHA roofs benefiting 120,000 residents. This is in addition to the administration’s previous funding commitments to NextGeneration NYCHA’s 10-year strategic action plan, which had been unveiled in 2015. This additional capital will not only fund the replacement of roofs and parapets, but it will also help to substantially reduce mold, which can be detrimental to the health of residents.
Analysis of City of New York 2017 Preliminary Budget
Last week, Mayor Bill de Blasio announced his preliminary 2017 fiscal year budget for New York City. The budget which totals $82.1 billion funds the Mayor’s promise to raise the minimum wage for city workers and provides additional support to combat homelessness. In particular, the Mayor is calling for additional FY2017 investments of $8 million for a Shelter Repair Squad 2.0; $12.3 million to move New Yorkers out of illegal, unsafe, and unstable housing to permanent homes; $4 million for “Homebase” Prevention to double the number of single adults at risk of homelessness assisted to stay in their homes; $16.9 million for adult shelter programming to help over 10,000 clients find employment; and $12.5 million to operate the first of 15,000 new supportive housing units. The Department of Housing Preservation and Development (HPD) will also receive funding for expanded staff capacity to implement the 200,000-unit Housing New York plan and participate in homeless shelter and three quarter housing inspections as follows:
- New HPD Staff– The addition of 80 positions (in various offices including Development, the Office of Neighborhood Strategies, Technology and Strategic Development, and Asset & Property Management) and $6.8 million in city tax levy funding to support the continued success of Housing New York.
- The addition of 10 positions to implement the Local Law #462 Elevator Repair Program. The program will officially rollout in FY17. A total of $6.5 million in FY2017 will be tax levy but the remaining program funding will be covered with Community Development Block Grant funding (CDBG).
- Funding to cover the HPD’s participation in the DHS Shelter Inspection Task Force. Since May, HPD has been part of the Shelter Repair Squad, working with other City agencies to identify and address problems in the City’s homeless shelters. Mayor de Blasio recently announced a new inspection, repair, and capital improvement plan – Shelter Repair Squad 2.0 – to promote the long-term sustainability of emergency shelter housing, greatly expanding HPD’s role in the effort.
- The addition of 4 positions and $7.8 million to support the continued inspection and relocation of individuals impacted from the three quarter house initiative.
Analysis of New York City 2016 Budget
The 2016, $78.5 billion, budget for the City of New York was enacted on Friday. Congratulations to Mayor Bill de Blasio and Speaker Melissa Mark-Viverito for a budget that supports affordable housing. Following through on Mayor de Blasio’s promised investment of more than $7 billion in City funds for affordable housing over 10 years, an increase in City capital has been strategically allocated to support the development of 80,000 new construction units and the preservation of 120,000 across the 5 boroughs.
Local investment in affordable housing is $7.45 billion in capital, which is comprised of $7.1 billion from City Capital, $279 million in HOME and $75 million in Reso A over 10 years. City Capital must account for any reductions of federal HOME and CDBG funds stemming from anticipated federal cuts and transfers to other City agencies. HPD’s budget also includes the following new additions and changes:
- $64M-New funding for 450 homeless set aside units in the Extremely Low and Low-Income Affordability Program (ELLA). This capital funding will be used to supplement existing per unit subsidy outlined in term sheets.
- $5M-New funding to support the ¾ Houses Task Force. These expense funds primarily pay for shelter and Emergency Repair Program (ERP) funding.
- $18M-A capital transfer to HRA will create a new HOME Tenant-Based Rental Assistance Program for 1,250 homeless families.
- $3M-Pays for HPD housing inspections and provision of temporary shelter related to East Village gas explosion.
- $5.6M-Funds about 74 positions across HPD. Agency headcount was reduced by almost 25% from 2008-2014 but it on the rise again to support an ambitious housing plan.
NEW SERVICES IN SENIOR HOUSING In Mayor de Blasio’s State of the City early this year, a 10,000-unit senior housing program was announced. A new item in this budget, and one that NYHC has been advocating for with partners at LiveON NY, is a program to fund on-site services for seniors. This funding is needed to allow seniors to age in place and also support the new homeless set aside requirement in the Senior Affordable Rental Apartments (SARA) program.
- $750M-New expense funding will provide service contracts for 500 units of senior housing per year for just 5 years. The expense budget is only a 5-year financial plan so they are not able to provide 10-years of funding to match the housing plan. This new program is great news and we are awaiting information on how the funds will be implemented as they are expected to be administered by the Department for the Aging (DFTA).
To support an increase of affordable housing production at a time when City-owned land is scarce and land costs are high, significant investment in infrastructure is being made to aid development and improve communities.
- $586M-For projects that will “unlock” housing opportunities including sites in the Southwest Bronx and Hunter’s Point South. Funds will also be used for roads and sewers and to create or improve parks and open space etc.
- $512M-New Affordable Housing Fund will be dedicated to infrastructure investments required to make potential development sites viable.
- $750K-New EDC Acquisition Fund to acquire mixed-use sites.
- $700M-New Neighborhood Development Fund will focus on community infrastructure and help balance community needs especially in the case of upzonings.
- $330M-New sewer infrastructure.
NYCHA NYCHA receives significant local investment this year as outlined below. Additional funding from City Council and Borough Presidents is also provided in the budget but we don’t have a breakdown yet.
- $100M-New capital funds for roof repair, matching a new State capital contribution this year.
- $3M-Funding for senior centers.
- $30M-Representing payment in lieu of taxes (PILOT) forgiveness