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November 16, 2023
ALBANY – A new report traces the alleged decline of public housing in upstate New York and argues there are consequences to the government’s increased emphasis on privatizing a public program.
With a politically divided federal government offering tepid support for public housing, the nonprofit Community Service Society argues New York State lawmakers should step in and revitalize public housing that is operated by local public housing authorities.
The Society is a New York City-based nonprofit organization that seeks to reduce poverty.
Erie County has more public housing units – about 4,500 – than any other county outside New York City, according to the report. In Buffalo, an aging housing stock built in the 1930s, '40s, and '50s has posed a challenge to city leadership.
To fund the rebuilding of public housing, the Buffalo Municipal Housing Authority is partnering with private developers on several major, ongoing projects. But the authority’s executive director, Gillian Brown, said several concerns raised in the report about such partnerships do not apply to Buffalo’s approach.
The Community Service Society report focused on public housing development in New York, but not Buffalo specifically.
The report argues that leaders of public housing authorities are constantly in “disaster response mode” looking for funding sources. In 2023, according to the report’s author, Iziah Thompson, the Buffalo Municipal Housing Authority received $3.6 million less in federal funding from Congress than it was eligible to receive.
The BMHA by law cannot operate in the red, and according to the authority, finished the 2022-2023 fiscal year with improved fiscal stability, ending the year with a $2.3 million positive cash flow.
Earlier this year, HUD changed the rating of BMHA from “troubled” to “substandard,” giving the BMHA a score of 62 – up from 54. That was a result of the authority improving efficiencies and ensuring departments had adequate staff and resources.
BMHA properties like the Commodore Perry development have been vacant for years and count against BMHA’s vacancy rate, negatively impacting its score from HUD.
The boarded-up brick buildings of the Commodore Perry apartments are poised to come down, giving way to more modern apartments in one of the biggest redevelopment efforts in the city's history.
Privatizing public housing
Traditional public housing, operated by local housing authorities, was built under “Section 9” of a 1937 federal housing law. The Community Service Society report traces how such public housing is being replaced by a system of vouchers and private landlords.
At Commodore Perry, the developer plans to build 415 apartments in the first phase, including 284 units subsidized through the federal “Section 8” program.
Through a program begun during President Barack Obama’s administration, called Rental Administration Demonstration (RAD), significant amounts of Section 9 housing are being converted to Section 8, a measure meant to help address a massive nationwide backlog of deferred maintenance of public housing. The Section 8 program authorizes payment of a federal rental housing assistance voucher to private landlords on behalf of low-income households.
The housing authority retains ownership of the land and administers the tenant’s vouchers, while in many cases, a private management company manages units, collects rent and addresses tenant concerns. HUD requires that the development be upgraded in the first two years of the contract.
There are downsides, according to the Community Service Society report, including that conversion often occurs without a tenant vote and that some residents now deal with a private company, not the public authority.
From 2010 to 2021, according to the report, New York lost 13 Section 9-administering public housing agencies (out of 85) across the state, resulting in a decline in union workforce at housing agencies. During that time, 2,259 Section 9 units were lost, the report found.
If conversions in the pipeline occur within the next seven years, by 2030, between 12,958 and 25,000 Section 9 apartments may leave the program in New York, the report found.
The report suggests that privatization has been useful in New York to fix up residents’ bathrooms and kitchens, but that longer-term capital improvements, such as replacing boilers, old pipes or leaking roofs, at times remain unaddressed.
Not in Buffalo, BMHA exec says
Brown, the Buffalo Municipal Housing Authority executive, said several issues described in the report alleging problems with RAD did not apply to Buffalo.
“I have no desire to dismantle my union workforce,” he said. “I like my union workforce and fully intend to keep BMHA workers employed by the BMHA.”
Even in projects with private financing, Brown said, the authority continues to play a key role. And in Buffalo, he said, RAD is being used for full-scale rebuilding of dilapidated housing stock, not cosmetic changes.
“I’m not doing these projects – and banging my head against the wall, meeting with development professionals and bankers – so that I can make a bad building look pretty,” he said.
Over the next 20 years, the looming cost of capital expenses for public housing in New York, outside New York City, is between $1.4 billion and $5 billion, the report found, significantly more than U.S. Congress has proven willing to appropriate.
The state government, currently controlled by Democrats, has also not provided adequate support for public housing, the report argues.
“Outside of the budget, the state funnels billions into tax credits for everything from the motion picture industry and video games to commercial construction,” the report found. “When they do invest in housing, permanent affordability, resident control and stability, and fair housing are neglected.”
Assembly Majority Leader Crystal Peoples-Stokes, D-Buffalo, said data in the report demonstrating chronic federal underfunding of public housing was not a surprise.
She also said Albany is committing significant funding for low-income housing that’s being rebuilt in Buffalo, including Marine Drive Apartments (which could ultimately consist of more than 700 units) and Commodore Perry.
Brown said New York State has so far committed $5 million to Commodore Perry project, and that Gov. Kathy Hochul’s administration has “expressed a willingness to commit significant resources” both to that project, and Marine Drive Apartments.
“It’s easy to say more funding is necessary,” Brown said. “The reality is that this is the most exciting time for public housing in the State of New York ever, especially for Buffalo.”
Among other recommendations, the Community Service Society report argues for a plan called “PHIX New York” to preserve 25,000 public housing units outside of New York City and build 5,000 new units. The report argues this would create $9.5 billion in economic activity with $4.5 billion in capital spending.
Peoples-Stokes said she felt the building of new housing should be primarily a federal responsibility. While the report to some degree is critical of the privatization of public housing, Peoples-Stokes said that in the absence of other federal support, it was necessary.
“That has provided affordable, quality housing for a lot of seniors in and around my district, so I'm OK with that as a strategy,” she said.