NYCHA faces $1B budget gap as de Blasio spends stimulus elsewhere

The scandal-plagued New York City Housing Authority faces a new obstacle amid an overhaul to finance $40 billion in repairs — it’s running out of cash for its current operations.

The agency faces a multi-year budget deficit of more than $1.2 billion between 2022 and 2025 — with annual shortfalls of at least $249 million, according to new budget projections from the City Council and the Independent Budget Office.

But Mayor Bill de Blasio has invested just $24 million of the Big Apple’s recent $5.9 billion in federal COVID relief into the beleaguered agency, which houses more than 360,000 New Yorkers and is the city’s single biggest landlord.

And virtually all of that money has been earmarked for Hizzoner’s $234 million City Cleanup Corps, which plans to temporarily hire 10,000 people to battle graffiti and litter.

“Twenty-four million is far less than NYCHA’s fair share of the federal aid,” said Rep. Ritchie Torres (D-The Bronx), who chaired the Council’s public housing and investigations committees before winning his seat in Washington.

Rep. Ritchie Torres has spoken up about the lack of funding for NYCHA.
Rep. Ritchie Torres has spoken up about the lack of funding for NYCHA.

“It’s too small given the centrality of public housing to the affordability of the city — and public housing is in a state of crisis,” added the lawmaker, who grew up in NYCHA housing and rose to political prominence probing the agency’s scandals.

Instead, the IBO says it appears that de Blasio is banking on President Biden moving his major infrastructure package through a narrowly-divided Congress to come up with new funds to fix NYCHA’s budget and repair woes.

“[P]assage of an infrastructure plan, let alone the President’s proposal, is far from certain,” the IBO warned. “Uncertainty over the passage of a federal infrastructure package, combined with the uncertain future of the authority’s plans to reduce costs, could strain the city’s own finances.”

All told, de Blasio plans on spending at least $98.6 billion in his 2022 budget, fueled by an additional $13 billion in stimulus funds passed by Congress and the Biden administration.

More than half of the aid package — about $7 billion — was earmarked by the feds for education. The remaining nearly $6 billion can be used by City Hall for almost any government program.


The IBO, the city’s budget watchdog, pinned the Housing Authority’s new budget woes on increased costs due to reforms ordered by federal monitor Bart Schwartz.

“While NYCHA’s financial plan is balanced in the current year, the authority faces deficits averaging $300 million in each of the remaining years of its plan period, deficits that are due in part to the planned reorganization resulting from the federal oversight of the authority,” IBO analysts wrote in a report released this week.

They warned that NYCHA’s finances and multibillion-dollar repair needs are among the biggest “risks to the city’s finances.”

“If NYCHA does not obtain the resources it needs, the city will encounter additional pressure to increase its capital contribution to the agency in order to prevent further deterioration of the city’s public housing stock,” the watchdogs concluded.

Schwartz was installed as the federal monitor in 2019 under the deal City Hall struck with regulators in Washington to overhaul NYCHA.

Bart Schwartz, the city's federal monitor of NYCHA.
Bart Schwartz, the city’s federal monitor of NYCHA.
Gabriella Bass

In exchange, the US Attorney’s Office in Manhattan dropped its bombshell lawsuit, which alleged NYCHA officials mounted a years-long coverup to hide suspected cases of lead poisoning in children from crumbling paint and other scandalous living conditions, including widespread heating failures, elevator breakdowns and rodent infestations.

De Blasio also agreed to chip in an additional $2 billion for NYCHA’s repair backlog, bringing the total available to nearly $8 billion — but still an estimated $32 billion short of the need.


The IBO’s report threw sand on City Hall’s two controversial strategies for financing those repairs by scoring federal subsidies that are not available to traditional public housing agencies. The first involves transitioning about a third of NYCHA’s units to partnerships with private management firms; the second calls for moving the remaining 110,000 apartments to a new city-owned corporation, known as the Blueprint for Change.

“[E]ach program faces considerable opposition from both tenants and elected officials and — in the case of the Blueprint for Change — would require state legislation and additional federal appropriations to bring to fruition,” the analysis warned. “Each of these obstacles decreases the likelihood that these programs will be successful in improving NYCHA’s financial outlook.”

NYCHA buildings in Brooklyn.
NYCHA buildings in Brooklyn.
Photo by Spencer Platt/Getty Images

A City Hall spokeswoman defended de Blasio’s handling of NYCHA’s budget — pointing to the roughly $100 million in funding provided by forgiving payments the agency once made for property taxes and policing. The administration also highlighted its $300 million contribution to NYCHA’s construction budget planned for the coming year.

“This Administration made unprecedented investments in NYCHA,” argued spokeswoman Laura Feyer, before acknowledging City Hall’s strategy of banking on Washington for new subsidies or other aid to solve the authority’s pressing needs.

“In addition to our push to unlock billions in federal dollars via the Blueprint for Change, we are hopeful Congress will appropriate additional capital funding in the upcoming infrastructure bill,” she added.