City saves affordable housing with $14 million

Volume 1, Number 50 | The Weekly Newspaper of Chelsea | Aug. 31 - Sept. 6, 2007

By Lawrence Lerner

Housing advocates got a much-needed boost last week when the city allocated $14 million in new funds to rehabilitate federally subsidized housing throughout Gotham, ensuring that apartments otherwise destined for the auction block will remain affordable.

City Council Speaker Christine Quinn, together with colleagues and officials from the Department Housing Preservation and Development (HPD), announced last Monday that the Council secured the money in HPD’s fiscal 2008 capital budget to repair and preserve about 500 apartment units belonging to the U.S. Department of Housing and Urban Development (HUD).

The apartments are in “distressed” HUD properties throughout the city, buildings that have fallen into poor financial or physical condition and are in danger of foreclosure. These buildings rank high on HPD’s preservation list, since foreclosed properties frequently end up on the auction block, where they may be bought by owners who fail to rehabilitate them, or who opt out of the HUD federal subsidy program altogether, resulting in the loss of affordable units.

“When HUD housing falls into disrepair, the answer shouldn’t be to auction off the property on the open market,” said City Councilmember Erik Martin Dilan, who chairs the Council’s Housing and Buildings Committee and was instrumental in securing the new funds for HPD. “What we need to do is rehabilitate these properties, find responsible owners for them and keep them in the affordable housing stock.”

According to a report issued this February by the Center for an Urban Future, 2,000 units of HUD housing were slated for public auction between 2003 and 2005. By coming up with the $14 million for HPD—which rehabilitates and develops low- to moderate-income housing, often properties that come into the City’s hands through tax foreclosure—the city is sending a message to housing advocates that it plans to intervene and help preserve at least some of New York’s older federal, state or city-subsidized affordable housing stock, even as Mitchell-Lama buildings and developments like Stuyvesant Town are de-controlled.

That sits well with Dina Levy, of the Urban Homesteading Assistance Board, one of six organizations making up the Partnership to Preserve Affordable Housing, a coalition working to preserve distressed HUD housing throughout the country.
“The Council’s funding initiative is absolutely key to preserving this badly needed housing stock,” Levy said. “Hats off to Speaker Quinn, Chairman Dilan and other key players who made this happen.”

According to HPD officials, there are 16 HUD developments (amounting to 20 buildings total) within Community Board 4, which includes Chelsea, Hell’s Kitchen and Clinton. Some of these may qualify for a portion of the $14 million. In doling out the money, HPD will focus on those HUD properties that are in the worst financial and physical shape, earmarking approximately $26,000 per rehab unit.

Since 2004, a partnership between HPD, the City Council, HUD and tenant advocates has saved 17 buildings consisting of more than 2,100 units, preserving these as affordable. This latest cash infusion is part of Mayor Bloomberg’s $7.5 billion New Housing Marketplace Plan, to build and preserve 165,000 units of affordable housing over 10 years. It comes after several years of federal budget cuts for affordable housing nationwide.

According to a “housing report card” given to the mayor by the advocacy group New York Tenants & Neighbors in June, Bloomberg’s efforts to preserve distressed HUD housing received an “A,” although that mark was one of the few bright spots on an otherwise dour evaluation proffered by the group.