Testimony by New York State Senator Duane Before the New York City Housing Authority Public Hearing on the Draft 2011 Annual Plan

June 30, 2010

My name is Thomas K. Duane and I represent New York Statefs 29th Senate District, in which Amsterdam Houses, Amsterdam Addition, 344 East 28th Street, Fulton Houses, Chelsea-Elliot, Chelsea Addition, and Harbor View Terrace are located. As the State Senator representing the residents of these New York City Housing Authority (NYCHA) developments as well as residents of Section 8 Leased Housing and other NYCHA units, I am particularly concerned about New York City's public housing stock and the well-being of its residents. Thank you for this opportunity to submit testimony on NYCHAfs Draft Annual Plan for Fiscal Year 2011 ("Draft Annual Plan").

While I applaud NYCHA's Mixed-Finance Modernization Plan ("federalization"), which effectively eliminated the authority's structural deficits for public housing, and I was proud to co-sponsor its requisite State enabling legislation, I am concerned that the authority continues to face a projected deficit of $19 million due to funding shortfalls for the Housing Choice Voucher Program ("Section 8"). I am also concerned that the City continues to extract approximately $128 million annually from the authority for police protection, PILOT payments and Department for the Aging (DFTA) services, even as NYCHA faces an out-year deficit of approximately $60 million.

I further share the concerns of public housing resident advocacy organizations that many essential repairs and maintenance projects have been delayed until 2011. This dereliction would be penalized in any other apartment building in New York City, including those occupied by recipients of NYCHA's Section 8 benefits. My office has received complaints from many constituents who live in NYCHA developments regarding unsanitary or unsafe conditions in their apartments. As the New York State Division of Housing and Community Renewal has done for rent regulated apartments, NYCHA should establish a formal process through which to authorize rent reductions for those who have been forced to endure uninhabitable conditions. This process would serve to push the authority, like any other landlord, to make timely repairs.

Another factor that is essential to the habitability of an apartment is security. As you know, public housing residents throughout the City regularly make complaints about inoperative locks and broken doors. These residents express serious concerns regarding the risks of open apartment buildings. While NYCHA must strive to repair these conditions more quickly, I understand that the best cure is prevention, and that enhanced measures to reduce vandalism are warranted. NYCHA should accelerate its efforts to secure capital funding from elected officials, private organizations and other sources to install security cameras in every building at every development; residents in monitored buildings report a significant increase in their sense comfort and safety. Another promising idea proposed by advocates is to redirect some of the $73 million that NYCHA annually pays to the NYPD Housing Bureau – a special payment for police protection that no other housing provider in New York City must pay – to train residents in law enforcement and security and then hire them to police their own developments. Such a "community policing" model should be piloted immediately.

The Draft Annual Plan also fails to go far enough to address the employment and training needs of NYCHA residents. It cites Section 3 of the 1968 Housing and Urban Development Act, "whose purpose is to ensure that employment and other economic opportunities generated by Federal assistance to public housing authorities shall, to the greatest extent feasible and with best faith efforts, be directed to public housing residents and other low and very low-income persons." While the Draft Annual Plan highlights the marked increase in Resident Employment Services jobs, and the number of Section 3 residents in a training program, there is no plan for coordinating these programs with PlaNYC and NYCHA's "Green" Agenda. In addition to the above proposal to establish a community policing model, the authority should maximize the use of residents, or contractors who commit to training and employing residents, as it endeavors to "green" its developments. Doing so would in turn increase newly-employed residents' rent payments and therefore increase NYCHA's revenue stream.

I also wish to take this opportunity to address NYCHA's failure to adequately define what constitutes a "significant amendment," to the agency plan and therefore requires a formal review process. The criteria set forth on page 118 of the Draft Annual Plan explicitly enable NYCHA to use its discretion in determining whether its changes in policy are significant. I strongly believe that any NYCHA proposal to demolish public housing developments, dispossess its land, or modify its resident evictions or Standards for Admissions should be considered a significant amendment and be subject to an appropriately comprehensive planning and public review process, including a public hearing with a 45-day notice to all affected residents. This process would ensure that the interests of the authority, NYCHA residents, their neighbors and the community at large are adequately represented.

For example, in addition to the mixed-finance redevelopment projects that are already underway, the Draft Annual Plan includes lots and developments that are slated to be dispossessed or sold and redeveloped. Such actions must be considered significant amendments and undergo the standard public review. At the very least, NYCHA residents in these locations must be guaranteed the right of first refusal on new units built on-site and, crucially, all demolished units must be promptly replaced in equal numbers ("one-for-one").

As NYCHA finalizes its plan for Fiscal Year 2011 and beyond, I urge the authority to utilize the tremendous resources it has in its tenant associations, the Resident Advisory Board, and the Citywide Council of Presidents, and to work together with its surrounding communities. This collaboration could prove particularly helpful in addressing such controversial policies as the proposed sale and development of buildings and empty plots of land discussed above. Ultimately, however, we must work together to permanently close the budget gap by eliminating NYCHAfs exorbitant and unparalleled payments to the City, rather than by implementing unsustainable one-time stop-gap measures.

Finally, while I understand this issue is not directly within the purview of the Draft Annual Plan, I am deeply concerned about the crisis caused by NYCHA's indefinite suspension of it Section 8 program, its recent revocation of existing Section 8 vouchers and its proposed increases in rent contributions for remaining Section 8 voucher-holders. As you know, I have addressed this issue in many forums, expressing extreme dismay at the authority's actions and proposing viable alternatives. To date, I have received no official response from NYCHA regarding any of these alternatives. It seems the authority plans to offset its $19 million program deficit on the backs of its Section 8 voucher holders.

For nearly half of those who currently use vouchers, the authority plans to decrease its payment standard to 95% of the Fair Market Rent, imposing a potentially unaffordable rent burden on some of the most vulnerable New Yorkers. This situation is unacceptable and unsustainable. Many of those who lost their vouchers or who have vouchers but cannot afford this rent increase will fall into rent arrears, requiring a One-Shot Deal from the New York City Human Resources Administration or, worse, will lapse into homelessness. NYCHA must heed the call of advocates and elected officials to pursue more cost-efficient and less harmful alternatives to these drastic measures.

Perhaps the simplest corrective action would be for the City to accept the New York State Supreme Court Appellate Divisionfs June 22, 2010 decision upholding a lower court ruling in Casado v. Markus. That case invalidated the "poor tax" rent increase approved by the New York City Rent Guidelines Board (RGB) in 2008. Many of the rent stabilized tenants subject to the minimum increases that both courts found the RGB illegally imposed are enrolled in City-subsidized housing initiatives like Section 8, Senior Citizen Rent Increase Exemption (SCRIE) and Disability Rent Increase Exemption (DRIE). As a result, the City has overpaid private landlords thousands, and potentially millions, of dollars. Should the Appellate Division ruling stand, the City would be in line to not only recover those funds but also to lower its per-unit payments going forward. As a result, the City could reduce its contribution of public funds through Section 8 and other rental assistance programs, and redirect the funds to lower the Section 8 deficit. The Legal Aid Society estimates this action would generate $16 million in savings.

Thank you for your consideration of my comments. I look forward to continuing to work with NYCHA to preserve safe, affordable and decent public housing for New Yorkfs most vulnerable and disadvantaged residents.

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