The Approaching Public Housing Disaster

As Errol Louis wrote over the weekend, the New York City Housing Authority is facing a financial disaster similar to that faced by the New York City Transit Authority in the 1970s, and perhaps again soon. The causes are similar. “Solutions” that provided benefits to many politically important groups in the short run have proven to be a disaster in a future no one cared about. The NYC housing projects are, by (I believe early 1980s) federal law, the place of refuge for the worst off, most troubled and most vulnerable not just of NYC, but from anywhere. And, these people are only required to pay 30 percent of their income in rent, no matter how low that income is. At first, this federal burden was coupled with federal money that covered the net cost of the projects, the difference between what it cost to operate them and the paltry rent received. But more recently the federal government, because public housing is concentrated in NYC and has little support elsewhere, has cut funding for it. The projects have also been a politically convenient place for New York City to put those who for whatever reason become homeless. In fiscally difficult times, however, both the state and the city have cut their support, relying on the agency to shift burdens to the future. Moreover, the unlimited health care and the 2000 pension enhancement that are a boon to current and former NYCHA staff has sucked money away from services and maintenance in the projects. There is one key difference between the NYCHA and the MTA however. For public housing, the future is now.

That is because it isn’t just an operating gap that public housing is facing. Public housing construction has been limited since the early 1970s, with a substantial share built between the late 1940s and early 1960s, and system after system within the buildings (plumbing, electrical, elevator, heating and ventilation, windows) needs to be replaced. What many of the buildings need is a gut rehab, but the people living in them have a statutory right stay there and nowhere else to go. Moreover there is not enough money for operating costs let alone construction, and these buildings were built to be expensive, given that they are high rises that require elevators to function. Simple tasks like replacing windows and re-pointing bricks and replacing the roof are much more dangerous and costly on towers than on three-story buildings.

I admired Louis’s article, because his proposals seemed reasonable. However, one of them is to no longer require NYCHA projects to pay for public services like garbage pickup, since other landlords are not charged. The reason for the charge is that other landlords pay property taxes and NYCHA projects do not, and the charges are one way of having the federal government cover some of the enormous public service burden of hosting America’s most troubled families and individuals. Or was, since the projects are burden the Feds – and by extension the rest of the country – are increasingly inclined to shirk.

Louis also said “a permanent, long-term solution to the NYCHA funding meltdown must be created. NYCHA residents - more than 5 percent of the city’s population - have the right to know they have not been abandoned by their fellow citizens and condemned to live in miserable conditions.” What might that solution entail? I see all bad choices.

For other cities and states, the solution has been abandonment and demolition. You’ve probably seen implosions of public housing towers on television, from all over the country, over the past 20 years. Elsewhere high rise public housing is considered a social and financial disaster, and it has been left to rot until the buildings have to be closed and the few remaining residents left, and then torn down. Sometimes low-rise public housing – cheaper both to build and to maintain, takes its place. From the Chicago Housing Authority’s plan for renewal, which can be read about here http://www.thecha.org/transformplan/plan_summary.html , “the most intensive phase of the CHA’s Plan will occur at our family properties, many of which were designed as vast complexes of high-rises. After decades of deterioration, most of these structures were deemed non-viable by HUD and must be demolished by HUD mandate.” Unlike virtually everywhere else in the country, however, New York City’s public housing is full, not increasingly abandoned.

The second strategy could be to cut non-public housing services, and raise taxes, to replace the federal subsidy for public housing with state or local money. No other place has chosen this policy. In New York State, it might work like this. In the past, it might have been believed that New York City’s children deserved to receive a lower share of state school aid, and an inferior education, because many New York City families were on welfare (even though much of welfare was funded with federal and local dollars and New York City, net, was subsidizing the rest of the state). Then it was believed to be fair that New York City’s children deserved to receive a lower share of state school aid, and an inferior education, because the rest of the state had a right to get away with it, because that is the deal that was cut. In the future, specifically in the next recession, state legislators from New York City could agree to slash NYC’s share of state education funding in exchange for a smaller amount of state assistance for NYC public housing. Don’t think they wouldn’t. At the city level, they can always cut the libraries back to three days per week.

The third strategy, also employed in Chicago, would be to maintain the right to low rent occupancy for existing residents who comply with their leases, but to limit new occupants to those who have more money and can pay enough in rent to both maintain and renovate the units on an ongoing basis, and perhaps cross-subsidize the poorer residents as well. Per the Chicago plan, new communities, replacing the teardowns, “will consist of one-third public housing, one-third affordable housing and one-third market rate homes.” Meaning only one-third of the units will be available to the mentally handicapped, drug addicted, ex-offenders, and non-workers, with the rest going to working class and middle class people. The new projects will cover their costs. But there will be less room in Chicago for the worst off.

New York City has attempted to shift to this policy, in fits and starts, over the past 20 years, but has run into both legal and practical obstacles. Legally, the city’s attempt to assign a certain share of available public housing units to household with someone that works was challenged in court and, as I understand it, struck down. Practically, with the city’s families and education system churning out new cohorts of unemployables every year, many of whom have health, socialization, and criminal history problems, and court decisions assigning New York City (and only New York City) with the responsibility to find a place for them (and those from the suburbs and other states as well), the quick and easy solution to any homeless family continues to be a public housing unit. That is one more long-term resident that will be expensive to carry.

In other cities, it seems, no one worries about where the most troubled families will end up if public housing units are no longer assigned to them on a priority basis. Like the suburbs, their hope seems to be that troubled people, and their costs, will end up elsewhere. But New York City is elsewhere. And public housing is elsewhere within New York City.

What is the decision if no one makes a decision, always a politically preferential route to take? In that case no attempt is made to make the projects self-sufficient, but no new funding is allocated and no reconstruction is done. Eventually, the buildings have to be closed. If most of the residents succeed in staying in the city, the result is a social and fiscal disaster for future administrations. If most of them leave, then the result is a problem for other places. The residents of public housing lose either way.

I've worried about this for a long time. The deteriorating conditions for public housing residents may be out of sight and out of mind for most of us. The financial implications will not be. One reason things have gotten this far is that the New York City Housing Authority has always been a secretive organization, and because almost all of its funds came from the Federal Government or the residents, it didn’t feel the need to let a lot of people know what was going on. It has also reputedly been one of the better-run housing authorities in the country. But after operating in the shadows for 60 years or so, when it finally had to go to the city and state and ask for money, the NYCHA was essentially stiffed (just like the MTA over the past two capital plans). So now what?

Aside from NYCHA itself, the people who really know what the situation is are in HUD, but that agency won’t be doing much talking because its employees know their agency is not popular in DC, and it has had to cope with ongoing budget cuts from an administration that has spent like mad on everything else, and everywhere else. If you think that $20 billion for 9/11 was extra money, and not traded off money, think again -- our federal housing money, I suspect, was itself traded off for federal funding in other categories (education, transportation) over the years. At least I can say we have gotten above average funding for housing, and below average funding in other categories, relative to the federal taxes we pay.

If the Daily News is willing to pay a few dollars, and Errol Louis wants to cover this story more thoroughly, a trip to Chicago may be in order, to talk about the decisions the Chicago Housing Authority has made and hear from those who disagree. That city seems to be ahead of us in being forced to face this issue, and where they are, we may end up.