This afternoon, the Citizens Budget Commission's (CBC) Director of Housing and Economic Development Studies Sean Campion will testify at the Preliminary Budget hearing on the worsening structural challenges in the operating budget of the New York City Housing Authority (NYCHA). 

Campion will stress that as properties deteriorate, increasing both capital needs and annual costs to just maintain the buildings, and rent collections continue to decline, NYCHA's day of reckoning is growing alarmingly closer. Its structural operating gap is growing; its reliance on the City budget increasing; and its reserves being depleted.

With deferred maintenance driving costs higher and flagging rent collection, NYCHA's structural budget gap is widening, and it is increasingly reliant on non-operating revenue and local government subsidies to balance its budget. Specifically, CBC found that:

• The average cost to operate NYCHA’s public housing reached nearly $1,500 per unit per month, 80 percent higher than cost to operate both privately owned rent regulated buildings (excluding property taxes) and NYCHA buildings converted to Section 8 under the RAD/PACT program;  
• NYCHA was only able to balance its 2022 budget by using $789 million in non-operating sources, including diverted federal capital funds, City subsidies, and drawn-down reserves;
• The rent collection rate fell to an all-time low of 64 percent in December 2022, costing NYCHA hundreds of millions of dollars in lost revenue;
• While being in Emergency Rental Assistance Program's (ERAP's) lowest priority funding tier contributed to NYCHA’s flagging rent collection, the problem is likely not caused by limited ERAP eligibility alone;
• Of the 46 percent of NYCHA households in arrears, having accrued $454 million in unpaid rent, only one-third had pending ERAP applications, covering 24 percent of total NYCHA arrears;
  • The rent recertification process also has not stabilized the current collection rate;
• Between March 2020 and February 2022, 59,811 households, or more than 35 percent of occupied units, requested rent decreases, but the rent collection rate has continued to fall, and the number of households in arrears has continued to increase; and
  • NYCHA has just $211 million in reserves remaining.

To improve the lives of tenants and preserve NYCHA’s viability, CBC continues to recommend that NYCHA: 

• Fix deteriorating buildings through the RAD program and the Preservation Trust;  
• Improve property management;  
• Boost rent collections; and  
• Negotiate savings and increased productivity through collective bargaining.