Are de Blasio's NYCHA Savings All There?

In his executive budget presentation on Thursday, New York City Mayor Bill de Blasio said he freed up nearly half a billion dollars for the city’s public housing system over the next four years by waiving its property tax payments and transferring administration of its senior and community centers to city agencies.

But shortly after de Blasio unveiled the plan, New York City Council Public Housing Committee Chairman Ritchie Torres questioned his accounting.

De Blasio touted the $33 million the New York City Housing Authority will retain annually once it is exempt from making payments in lieu of taxes. The mayor also claimed NYCHA will recoup $22.4 million annually by handing over senior and community centers to the city departments for the Aging, and for Youth and Community Development, respectively. But Torres says the money currently shoring up these community centers has not come from NYCHA’s budget for at least four years. And as a result, the City Council has stepped in and directed discretionary funding to the NYCHA hubs.

“The Council, obviously, has a pot of money of its own, and salvaging the NYCHA-run community centers is part of the budget dance. NYCHA has not been funding those centers for a period of time,” Torres said, noting that there does not seem to be any consensus about the wisdom of charging outside agencies with running NYCHA’s community centers. Based on constituent feedback, however, Torres said he would prefer to see them remain under NYCHA’s domain. “The tenant experience might change with private management of those centers—whether the tenants will feel the same sense of ownership over those centers,” he said. 

In his presentation, the mayor declined to provide details on how the New York City Housing Authority will distribute the savings. Instead, he stressed NYCHA's fiscal pitfalls, contending that the city scrapes to invest in developments that have received minimal federal assistance and “effectively no meaningful state“ aid—an assessment he repeated throughout his speech.

But while the address lacked specifics on NYCHA's future, the mayor did say the administration would unveil a long-term financial plan called NextGeneration NYCHA in the coming days.

“There’s not enough revenue to cover basic operations, so what we’re trying to do, obviously, is take burdens off of NYCHA,” de Blasio said. “That being said, a lot has to be done to improve the operations to save money because we see the structural reality. So that’s what we’ll address in the upcoming plan."

The savings will likely go directly toward paying NYCHA’s operating budget, according to Torres. The councilman says the authority’s operating deficit is expected to reach $300 million within four years and $400 million within a decade, coupled with at least $16 billion in capital shortcomings.

“Even though the magnitude of the challenge could be greater than our ability to solve it, I admire the mayor’s commitment of resources to preserving public housing,” Torres said, noting that the waived property tax payments came on the heels of the administration’s decision to stop billing NYCHA more than $70 million annually for police to patrol developments. “It is historically unprecedented in recent memory. The mayor deserves enormous credit.” 

Sunia Zaterman, executive director the Council of Large Public Housing Authorities, a national nonprofit focused on preserving public housing, called the mayor’s decision to waive property tax payments important, but not uncommon. In other respects, Zaterman said NYCHA’s size and portfolio of high-rises make it a virtual anomaly.

“We’re seeing cities get much more involved, particularly high-cost cities seeing that this is really an irreplaceable public asset and that the cost of developing public housing from scratch is prohibitive,” said Zaterman, noting that NYCHA’s proposal to lease some of its land to private firms may prove profitable. “As many housing authorities have proven across the country, you can use a mix of ownership structures and financing tools to have the same outcomes outside of the traditional public housing silos and still have the tenant protections and the long-term affordability.”

De Blasio’s $78.3 billion budget proposal also came with $132 million over the next two years for mental health services in struggling schools, shelters and on Rikers Island, $100 million for homeless prevention and assistance programs, $36.4 million to fund an anti-violence initiative at Rikers, $12.8 million for support to local businesses, $7.5 billion for building or preserving affordable homes and capital projects across several agencies.

It did not include funding for 1,000 additional NYPD officers or financing for a public bail fund, both of which the City Council sought.