IBO: More money is needed to fix public housing

Stephon Johnson | 3/14/2019, midnight
A report by the Independent Budget Office suggests whatever money the city set aside to fix NYCHA won’t be enough.
St. Nicholas Houses/NYCHA Bill Moore photo

A report by the Independent Budget Office suggests whatever money the city set aside to fix NYCHA won’t be enough.

The IBO report, released last week, states that New York City’s government needs to add more funds in order to meet the terms of the NYCHA settlement with President Donald Trump’s administration. Last month, New York City Mayor Bill de Blasio signed an agreement that empowers the federal government to directly oversee NYCHA while the city makes repairs on its apartments.

As part of the arrangement, the city will pour $2.2 billion in capital funds into NYCHA over the next decade and finance an outside management consultant as well as any activities conducted by the HUD-appointed federal monitor. HUD will continue to provide the city with close to $1.5 billion in funds annually.

According to the IBO’s report, it’s difficult to estimate the cost of the settlement based on the broad performance goals. However, a comparison with NYCHA’s recent Physical Needs Assessment suggests that current funding levels won’t be enough to meet the required targets.

“Within five years of the agreement, 85 percent of elevators in all buildings shall have an unplanned outage no more than eight times per year, and no single elevator shall have unplanned outages more than 12 times a year,” read the report. “According to the federal complaint against NYCHA, there was an average of more than 13 outages per elevator in 2016. NYCHA’s current five-year capital plan contains $220 million to replace 404 elevators. According to the housing authority’s 2017 Physical Needs Assessment, however, the cost to make necessary repairs and/or replace elevators over the next five years is $1.5 billion.”

When asked about the methodology of the report, the author, Elizabeth Brown, said, “You could do a detailed cost estimate between NYCHA and the city and HUD. The settlement is in some ways very specific and pretty broad.”

Vic Bach, the public housing expert for the Community Service Society of New York, said he trusts the IBO report.

“There’s some questions about whether the Physical Needs Assessment figures are accurate, but I trust the IBO’s analysis,” said Bach. “It’s an open question as to whether or not the city can meet the objective of the deadline without putting more money into NYCHA.”

New York State is expecting a $2.3 billion budget shortfall this year, with de Blasio attributing it to the New York State budget's $600 million in cuts and cost shifts to the city and to a shortfall in income tax revenue. But the city itself will reportedly end the year with a $3.4 billion surplus ($230 million more than the mayor's projection). They expect the city to end 2020 with a $722 million budget surplus. With IBO’s report stating that more money needs to be directed NYCHA’s way to fix its deteriorating housing situation, Bach said that the city can still do right by them by shifting priorities and money.

“I think the best example is that $13 billion that’s committed to the [public housing plan] through the public/private partnership,” said Bach. Under the plan Bach mentioned (announced last November), de Blasio would bring repairs to 62,000 apartments, which would cost $13 billion. Those 62,000 apartments would be converted to Section 8 funding and stay permanently “affordable.”

The units would be completed on a rolling basis by 2028. Bach believes that money should simply be devoted to fixing NYCHA.

IBO’s report states that heat-related repairs, which would include the replacement of 290 boilers, would cost almost $1 billion alone under NYCHA’s current five-year capital plan. Overall, with the price of repairs set to rise, the city won’t have any help from Cuomo or from the White House.

“Recent history suggests that it is unlikely that funds needed for repairs in excess of what is already budgeted would come from Washington or Albany—leaving it to the city to pick up the tab or face the consequences of even greater federal control,” concluded the report.