Tenants across New York suddenly face a grim choice between day-to-day necessities and rent payments, and property owners face understandable pressure to forgive the monthly bill. Cutting landlord income could make it tough to make mortgage payments, which makes it clear just how complicated this is — and why across-the-board forgiveness might not be the right answer. But things look different when one looks at the city’s largest landlord: The New York City Housing Authority, with its 170,000-plus apartments.
The $1 billion a year that NYCHA receives in rents is second only to federal operating assistance as the Authority’s top source of income. A sudden drop in rental income could make it necessary for NYCHA to reduce repairs and maintenance — adding to an already huge backlog.
This is a potentially serious problem that the federal CARES Act did not adequately address. Although the legislation dedicated $3 billion for affordable housing of all kinds, it set aside just $680 million for public housing operating assistance nationwide. Keep in mind that must be shared by more than 3,000 public housing authorities.
NYCHA, with its backlog of repair problems, is at special risk. Just check out the NYCHA Twitter feed and you’ll see a constant stream of heat and hot water problems the Authority must scramble to address.
The possibility of a drop in rental income is more than just a possibility; it’s likely. Notwithstanding the fact that public housing is home to the poorest New Yorkers, many NYCHA residents are — or at least were — working. The federal Department of Housing and Urban Development reports that wages are the major source of income for 39% of NYCHA households, and that 38% earn more than $20,000 a year.
By law, public housing residents pay 30% of their income in rent, so a sudden drop in income means a sudden drop in rental revenue for the authority. In fact, NYCHA has already informed tenants of the option to “recertify” their income levels, which is a way of saying that if someone has lost a job, they can qualify for a lower rent. That’s the right thing for tenants — but a blow to NYCHA’s revenue.
When it comes to fixing NYCHA, additional revenue is of course necessary but not sufficient. Many public housing developments are far from grocery stores, making it difficult for tenants to restock their refrigerators. (FreshDirect, working with the five borough presidents, deserves credit for delivering thousands of free boxes of groceries every week across the city.)
And even if the Authority has funds to pay workers, the spread of COVID-19 appears to be making it difficult to ensure there are enough hands on deck. The Authority is advertising for “per diem” workers to help with “general maintenance” to fill the gap.
NYCHA is part of a nationwide group of housing authorities calling on Congress to provide additional assistance in another round of financial relief. Let’s hope Sen. Chuck Schumer, joined by Republicans in the Senate, will help. Keep in mind that NYCHA constitutes some 15% of all public housing units in the US. Schumer should make sure it gets its fair share of any future relief.
This is not to say, however, that this emergency aid should be seen as the new normal for NYCHA. There simply won’t be enough federal assistance to address the $30 billion of capital improvements it needs. It must still employ a range of creative approaches to bring in private funds and management to some developments, and to deploy the underutilized land in most of its developments to create new commercial and residential development. Chairman and CEO Greg Russ understands this well and has been moving forward aggressively to save the system.
But right now, NYCHA needs help from Washington — and deserves to get it.
This piece first appeared at the New York Daily News
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Howard Husock is a senior fellow at the Manhattan Institute, where he directs the Tocqueville Project, and author of the new book, Who Killed Civil Society?
This piece originally appeared in New York Daily News