City’s housing plan suffers major blow in “painful” budget

New York City’s affordable housing program is about to take a hit.

The $88.1 billion budget deal approved by the City Council Tuesday night includes a $457 million cut to the Department of Housing Preservation and Development’s next capital budget. Mayor Bill de Blasio on Tuesday morning announced the agreement to balance the budget in face of a $9 billion revenue shortfall.

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Some City Council members have estimated that the cuts — along with a $583 million reduction in HPD’s capital budget for the fiscal year just ending — would delay financing for 5,000 new affordable apartments. Based on an analysis by the New York Housing Conference, the reduction would also cut off financing to preserve some 15,000 affordable and supportive housing units.

“We really care about those HPD capital dollars because it goes to affordable housing, which we need more than ever right now in the middle of a pandemic and economic crisis,” City Council Speaker Corey Johnson said during a press conference Tuesday afternoon.

He noted that the budget deal “saved a lot of initiatives that have to do with housing” outside HPD’s capital budget. It partially restored funding for the agency’s landlord ambassador program and for legal services for certain tenants facing eviction.

The budget, which passed 32-17 shortly after midnight July 1, includes $3.2 million for HPD’s foreclosure prevention programs, $650,000 for Housing Court legal services and $637,000 for the city’s community land trust initiative, which encourages local nonprofits to invest in property to keep housing affordable. Housing advocates had sought $1.5 million for the land trust program, City Limits reported last week.

In a statement, Jolie Milstein, president and CEO of the New York State Association for Affordable Housing, said the cuts to HPD’s capital budget “cast serious doubts on the city’s commitment to solving our housing crisis.”

“We must now work to immediately fill these gaps with federal and state funding in order to provide New Yorkers with the affordable homes they deserve,” she said.

An architect of de Blasio’s housing program, former deputy mayor Alicia Glen, previously called the proposed cuts “one of the most short-sighted things I’ve ever seen” because that funding leveraged far more private-sector money for housing.

The budget cuts are a major blow to the mayor’s quest to build or preserve 300,000 affordable apartments by 2026. In the past week, housing advocates and Manhattan Borough President Gale Brewer have called for an overhaul of de Blasio’s program, given the loss of subsidies.

The mayor has said the cuts will be restored in future years. But he will be out of office in 18 months and there is no guarantee that the political will or tax revenue will exist to do that.

The budget deal also cuts the Police Department funding, albeit not enough for some City Council members and too much for others. The mayor said $1 billion in NYPD funding will be shifted elsewhere, including $87 million to expand broadband in public housing and $450 million for NYCHA parks and youth recreation centers.

Johnson said the NYPD cuts are a little more than $800 million, noting that the mayor’s calculation includes fringe benefits and other factors. Johnson said he wanted a full hiring freeze as part of the budget, but said the mayor wouldn’t budge on that, though he did consent to canceling the hiring of 1,163 officers.

“I wanted more cuts, but I was trying to find consensus,” Johnson said. “This is not a perfect budget. It’s a painful budget.”

Write to Kathryn Brenzel at kathryn@therealdeal.com