Sequestration’s Effect on Housing Vouchers for Low-Income New Yorkers
Sequestration has resulted in cuts to the three New York agencies that administer more than 150,000 Section 8 vouchers in the city: the New York City Housing Authority (NYCHA), the city's Department of Housing Preservation and Development (HPD), and the state's Department of Homes and Community Renewal. The cuts will affect not only owners whose tenants receive Section 8 vouchers, but also those owners who contract directly with HUD through the project-based Section 8 program. Approximately 630 properties with 75,000 units subsidized by the Section 8 program face cuts, which could lead to rent hikes for tenants or loan defaults for owners who have mortgages backed by the program.
The agencies are taking different approaches in responding to the cuts. Facing a $36 million cut, HPD has decided it will forgo issuing 1,000 new vouchers while changing the formula that determines subsidies for the 37,000 households it still has on the books. That could reduce monthly subsidies by an amount between $100 to $400. NYCHA, with 95,000 vouchers, has not publicly stated how it will react to the cuts. The housing authority has not issued vouchers to new people since 2009 because of budgetary problems. However, due to the sequestration's $70 million hit to the authority's voucher program, the issuance was canceled. Existing voucher holders will be spared, albeit at the cost of greatly depleting NYCHA's reserves.