ALBANY, NY | The Fiscal Policy Institute today released a new report by Emily Eisner, Chief Economist, on the federal funding risks NYCHA faces and how the State budget can address them.

FPI Recommendation

FPI strongly encourages the Governor and Legislature to adopt the Assembly’s one-house proposal with regards to NYCHA funding. The State must also prepare to backfill lost federal operating funding.

Key Findings

• The New York City Housing Authority (NYCHA) houses over 500,000 New Yorkers and receives a majority of its funding from the federal government, leaving it especially at risk of impending federal budget cuts. New York State must be prepared to fill gaps in both the operating funding and capital funding for NYCHA.
  • With Section 8 funding included, federal funds make up 68 percent of the overall NYCHA operating budget.
  • Over 2024-2028, NYCHA expects $4.5 billion in capital funding from the federal government.
  • NYCHA’s Section 9 program received $1.3 billion in federal operating subsidies in 2024 — 45 percent of NYCHA’s Section 9 operating budget.
• Current state budget negotiations could allocate a historic amount of state funding to the NYCHA budget, though may still fall short of the need. Historically, the State contributes very little to NYCHA’s budget.
  • Both the Senate and Assembly propose appropriating $100 million to NYCHA operations.
  • The Senate earmarks an additional $500 million of the City of Yes capital funds for NYCHA, making a total NYCHA capital allocation of $525 million.
  • The Assembly earmarks $25 million of the City of Yes funds for NYCHA (same as the Executive) and additionally includes another $750 million (not from City of Yes funds) for NYCHA capital funding.

Introduction

The New York City Housing Authority (NYCHA) is the largest single landlord in New York City, with over 361,000 people living in public housing in New York City. NYCHA also administers the city’s Section 8 program, which serves another 167,000 low-income residents using housing choice vouchers. Over recent years, NYCHA has relied heavily on federal funding for both its operating budget and capital budget. Without these federal funds, NYCHA will face severe budget cuts and may fail to make much needed safety improvements for residents, such as lead remediation and heating improvements. The Trump administration has promised large cuts to federal housing funding and has already made significant cuts to the US Department of Housing and Urban Development (HUD), which funds public housing authorities through section 9 of the US Housing Act of 1937 (often referred to as “Section 9”). To remedy likely cuts, New York State must be prepared to fill gaps in both the operating funding and capital funding for NYCHA.

In its 2024-2028 five-year plan, NYCHA projects receiving over $1 billion annually from the federal government in operating support and $4.5 billion over five-years in capital funds. In contrast, NYCHA has not received any operating funds from the State of New York in recent budgets and projects only $355 million from the State in their 2024-2028 capital budget.

State investment in NYCHA is long overdue. NYCHA has been underfunded by the federal government for decades, with State and City policymakers taking little responsibility for the security of the program’s finances and the safety of residents’ housing. This year, the Executive Budget allocates just $25 million to NYCHA. The Senate and the Assembly both allocate $100 million in operating funds, and an additional $525 million and $775 million, respectively, in capital funds. These proposals from the Legislature, though much better, still fall short of sufficiently protecting the NYCHA budget from federal risks.

FPI strongly encourages the Governor and Legislature to adopt the Assembly’s one house budget proposal with regards to NYCHA funding. The Assembly allocates more funding than the Governor and the Senate, while still preserving funding for other housing initiatives in the City, funded by City of Yes. FPI also proposes increasing operating support for NYCHA to at least $500 million, in expectation of steep federal cuts.