A brewing housing crisis that could have resulted in thousands of struggling families losing their rental subsidies has been averted, officials said, thanks to an intricate $32 million plan devised by city and state agencies that received federal approval on Wednesday.
Under the plan, the city’s Department of Housing Preservation and Development will basically rescue the city’s public housing authority by taking responsibility for financing thousands of rental subsidy vouchers.
The rental subsidies, meted out under a program called Section 8, enable recipients to put 30 percent of their income toward rent at private apartments while vouchers pay for the rest. The city’s public housing agency, the New York City Housing Authority, administers about 100,000 of the vouchers with money provided by the federal government.
But last December, citing budget problems and a rise in demand, the Housing Authority said it was terminating 2,500 vouchers that had been issued but not yet used. A few months later, the Housing Authority confirmed that thousands more families could lose their vouchers because of a $45 million budget shortfall.
An infusion of $24 million from the federal Department of Housing and Urban Development narrowed the gap, but still left 4,000 families at risk.
The housing preservation department, in an agreement with the City Council, the Housing Authority and state housing officials, has agreed to spend $32 million from its reserves and money transferred from other programs to save the remaining vouchers that were in jeopardy.
The voucher crisis produced sharp criticism from the city’s public advocate, the Legal Aid Society and HUD, which said that the Housing Authority had issued too many vouchers — called overleasing — and continued doing so despite federal warnings to stop.
Beyond helping solve the voucher crisis, the housing preservation department had an additional incentive to use its budget reserves. At the direction of Congress, HUD had begun allocating less money to housing agencies that have unspent Section 8 funds.
“There was an obvious opportunity for us to work together to solve this problem,” said Rafael E. Cestero, the city’s housing commissioner. “The plan that we created ensures that everybody that has a voucher today will continue to have a voucher. Nobody is at risk of losing their voucher.”
The Housing Authority’s chairman, John Rhea, praised the agencies’ “hard work and creativity.”
In a statement, a HUD spokeswoman said that the agency was authorizing the city’s plan, “but with directives to Nycha to correct the overleasing that has led to this crisis that placed needy families in jeopardy.”
(Source: NY Times)
Join the official YWN WhatsApp status
One Response
“At the direction of Congress, HUD had begun allocating less money to housing agencies that have unspent Section 8 funds.”
Anyone who does business with government agencies knows that the last 30 days of any fiscal year are a boon for business. It is when agencies spend whatever money is left over in their budget on anything and everything, whether they need it or not. This is because of the beuraucratic logic that spends taxpyer money. If you didnt need the money last fiscal year, you wont need it next fiscal year. If you can show that you spent every penny, not only are you assured the same amount the next year, but you can ask for more.
I remember fielding a call from a CUNY IT department head on the last day of a fiscal year with a frantic request. Please invoice me for $12,300 and make sure it is dated today. I dont care what you send me, I just have to spend the money and it has to be spent today. We sent him $12,300 worth of racks, keyboards, mice, cables, toner, mouse pads and assorted “stuff”.
And we wonder why government agencies are always asking for money 🙂