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Public Housing in New York Reaches a Fiscal Crisis

Part of the Edenwald Houses in the Bronx. Mayor Bill de Blasio wants to use open land in the projects for new affordable housing.Credit...Jake Naughton/The New York Times

Everyone, it seems, wants a piece of New York City public housing.

Advocates for homeless people are demanding more apartments for families living in shelters. School officials want space in public housing for new prekindergarten classes. Mayor Bill de Blasio wants to use open land in the projects for new affordable housing.

And just over a quarter of a million households sit on the waiting list for an apartment in one of the New York City Housing Authority’s 334 developments.

But the demands on Nycha, as the housing authority is known, clash with a grave financial reality. After years of shrinking government investment in public housing, the agency has a $77 million budget deficit this year and unfunded capital needs totaling $18 billion, its officials say.

Shola Olatoye, the housing authority’s chairwoman, said the huge shortfalls had pushed public housing into a “pretty dire” phase, leaving the authority unable to meet many of its day-to-day obligations, like timely repairs, and most of its long-term capital needs.

“I wish it were triage,” Ms. Olatoye said in an interview. “It’s beyond triage.”

Eighty years after it was created during the Depression to replace crowded, unsanitary tenements, public housing in New York is at a crossroads. Who should pay for public housing, and how, are questions being asked as officials, experts and tenants try to figure out how to preserve a bastion of the poor and working class in a city with less and less affordable housing.

The job has fallen on a mayor who has staked his tenure on making New York livable for the poor but who is up against a steady government retreat from housing them.

More than 400,000 people live in public housing apartments, most of which were built between 1942 and 1969. Federal subsidies for Nycha and other public housing authorities, which are subject to federal funding and oversight but administered locally, have been shrinking in earnest since the 2000s, and while New York has withstood the cuts better than many other big-city authorities, the reckoning appears to be at hand, officials and experts say.

Expenses are being cut. Vital repairs are going uncompleted. And essential renovations are being put off indefinitely.

“It’s a perfect storm of an aging building stock at the same time of massive housing cuts from Congress,” said Holly M. Leicht, the Department of Housing and Urban Development’s regional administrator for New York and New Jersey. “Public housing has to redefine how they do business.”

The de Blasio administration, which has made housing a centerpiece of its agenda, has called for a “total reset,” which essentially means finding billions of dollars to keep thousands of aging buildings habitable for decades to come.

In some housing projects the unmet capital need is staggering. Castle Hill Houses in the Bronx, with 14 buildings and about 5,000 residents, needs $23 million worth of immediate repairs, housing officials said. The projected cost for needed improvements at Baruch Houses, the largest housing project in Manhattan with 17 buildings and more than 5,100 residents, reaches $241.9 million over the next five years, the officials said.

At Baruch, apartments need windows with better seals, facades need work to protect pedestrians from falling pieces of broken brick, and cracked walkways need repaving. In one 12-story building at Castle Hill, an entire vertical line of apartments shows cracks, residents said.

“I’m afraid the whole building might fall,” said Roxanne Reid, 58, a retired school crossing guard and tenant leader at the housing project.

At some sites, like Harlem River Houses, whole top floors have been vacated, and sometimes the apartments below them, because of roof leaks. (The project is finally set to start $22 million worth of renovations this year, housing officials said.)

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Shola Olatoye, the chairwoman of the housing authority, says persistent shortfalls have left the agency unable to meet many of its day-to-day needs. “It’s beyond triage,” she said.Credit...Jake Naughton/The New York Times

The authority houses more than 8 percent of the city’s approximately two million renter households, including some of the neediest. About 80 percent of public housing residents are poor or have very low incomes, making less than $41,950 a year for a household of four, city officials said. More than a quarter of the residents are 65 and older.

The agency gives priority in its admission policies to special groups — like domestic violence victims and, since Mr. de Blasio’s election, people from homeless shelters — as well as working families who can pay higher rents.

That economic diversity as well as the tremendous need for affordable housing in an expensive real estate market has helped public housing in New York survive even as it is demolished in other cities as units nationwide fall into disrepair. But affordable housing advocates say that this highly valued stock is threatened and that nothing short of a major government rescue plan — some use the term Marshall Plan — from the state and city will do.

Federal financing for capital projects has shrunk cumulatively by over $1 billion in the last decade or so, to $294 million this year from $419 million in 2001, federal figures show. Congressional appropriations for operations have not seen the same steady decline but have fluctuated significantly — $920 million in 2010, $830 million in 2013 — making it hard for officials to plan from year to year.

“If we don’t do something about these developments, we’re going to lose them,” said Judith Goldiner, a chief lawyer with the Legal Aid Society, which represents public housing tenants in litigation against the housing authority. “Capital disinvestment leads to deterioration. Some units here, some units there, leads to a lot of units.”

Some housing experts have urged a state-city partnership like the one forged to expand access to prekindergarten throughout the city. Others say the solutions should also include leveraging some of the open land in the public housing developments, which could be worth billions of dollars in development rights.

“You need a massive amount” of money, said Emily A. Youssouf, who served on the Housing Authority board as an appointee of Mayor Michael R. Bloomberg until earlier this year. “For a massive amount, you need to do something radical.”

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Mold and a buckling wall in the Castle Hill Houses in the Bronx. Officials said the project needed $23 million in repairs.Credit...Jake Naughton/The New York Times

But the idea of leasing public housing land, much less selling it, has been politically unpalatable. Mayor Bloomberg prompted controversy — and lawsuits — last year when his administration proposed leasing parking lots and recreational areas to private developers to build market-rate housing.

Mr. de Blasio has scuttled that proposal, saying the land should be used for affordable housing instead. But any future land development would bring in only a small fraction of the money needed, federal and city officials said.

“The reality is that we have to think of a very diverse financial strategy, and development is one piece of it,” Ms. Olatoye said.

When the de Blasio administration announced an affordable housing strategy this year, officials said that public housing would have to be addressed separately. It was a testament to the system’s vital role but also to the challenges facing the housing authority, including overcoming residents’ fears that they could be displaced. Now the administration hopes to deliver a plan for public housing in December.

Cutting overtime costs and transferring authority-run community spaces and social services to other city agencies are likely to be in the strategy. The agency is also planning to give individual housing projects responsibility over their own budgets and property management to make them more accountable.

Ms. Olatoye said that she was seeking new ways to leverage public funds to raise private money and planned to make a “compelling” case to the state to resume providing substantial support to public housing.

The authority, by far the largest public housing agency in the country, is a big employer and a big spender, with 11,200 workers and annual spending of more than $3 billion. That, Ms. Olatoye said, cannot be ignored.

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The central courtyard at the Berry Houses in Staten Island.Credit...Jake Naughton/The New York Times

“The notion that we contribute to the city and state economy and the state contributes nothing is a real conversation we need to have,” she said.

Nycha, while plagued by problems, has not had the levels of corruption and mismanagement seen in the county’s most troubled housing authorities, according to the federal housing agency.

But Scott M. Stringer, the city comptroller, whose office is conducting several audits of the housing authority, said the agency could do much better.

He said his office had already identified “very serious” issues involving the authority’s capacity to spend funds efficiently and take advantage of opportunities that would bring in more money.

“There’s been a tradition of incompetence and lack of accountability,” Mr. Stringer said.

But even if officials succeed in addressing those problems, the authority has to do more to bring about fiscal solvency. Nycha gets almost one-third of its revenue from rents — which cannot exceed 30 percent of a tenant’s income — and two-thirds from federal subsidies. The total is not covering costs, so for years the authority has had to tap reserves and capital funds to cover operating shortfalls.

A recent report by the antipoverty organization Community Service Society noted that the state and city used to pay the authority substantial annual operating subsidies. The money from the state has all but stopped and the city makes allocations only for specific programs.

The group says that public housing is worthy of a major investment, comparable to the hundreds of millions of dollars the city and state have invested in baseball stadiums. Mayor de Blasio and Gov. Andrew M. Cuomo “have to show a commitment to Nycha and that commitment has to be capital,” said Victor Bach, a senior housing policy analyst with the group.

In the meantime, many residents of the authority’s 2,600 buildings live with chronic leaks, mold and maintenance problems, and hundreds of apartments sit empty awaiting work. The buildings in most desperate shape need major renovations, like the replacement of roofs, facades, plumbing and heating systems, but have equipment nearing or beyond the end of its useful life.

“Basically,” said Dr. Nicholas D. Bloom, a public housing expert and associate professor at the New York Institute of Technology, “it’s a 1950s automobile that New York City is still driving. It’s like Cuba.”

A version of this article appears in print on  , Section A, Page 1 of the New York edition with the headline: Public Housing in City Reaches a Fiscal Crisis. Order Reprints | Today’s Paper | Subscribe

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