Categories: New York City, Federal, Member News
09.26.2013
Sequestration forces vacancies, threatens investments in NYC supportive housing
Over the past few months, the Network has fought to highlight the often-ignored effects of budget sequestration on low-income individuals and housing programs. In the below interview, we speak with Jim Dill, Executive Director of Housing & Services, Inc. (HSI), a supportive housing provider in New York City. Jim tells us about sequestration and its continued effects on HSI’s supportive housing residences and the vulnerable tenants they house. He speaks in particular about two residences: The Kenmore and The Cecil. To learn more about sequestration’s impact on the poor and formerly homeless, see our Sequestration Stories page.
The Network: Kenmore Hall provides housing and services to 325 of New York’s most vulnerable citizens. How has sequestration impacted the well-being of the residence and its tenants?
Jim Dill: The Kenmore currently has seven vacant apartments attributable to sequestration. The sequester has led to a freeze on new tenant-based Section 8 vouchers. We are scrambling now to see if we can fill these empty units with another referral source. This is proving quite difficult, because tenants at Kenmore must meet HUD’s criteria for homelessness and have a rent subsidy. In the meantime, seven perfectly good apartments at the Kenmore remain vacant. Housing and services at this residence costs roughly $14,000 per year. That’s cheaper than any of the alternatives for New York’s most vulnerable: shelters, jails, hospitals, rehab, etc. It costs about $28,000 a year, for example, to house a single adult in a DHS shelter. That’s a $14,000 difference per person. With these seven vacancies, we could save the city at least $98,000 a year. Instead, because of sequestration, the apartments are just sitting there.
Has sequestration jeopardized the building’s day-to-day operations?
Yes. In accordance with our regulatory agreements, our tenants must have very low incomes and their rent is restricted to 30% of whatever they make. In the past, any rent increases would be funded through Section 8. Sequestration has frozen such rent increases.
Our Con Ed, DEP water and insurance bills continue to rise, and now we have no way to raise our revenues. There’s only so long that our revenues can stay flat while costs continue to rise. The Kenmore was capitalized with $9 million in government funding and $12 million in Low Income Housing Tax Credits. All this investment is now being threatened.
Are you experiencing any of these issues at your other residences?
Yes. It’s been most notable at The Cecil, which provides housing and services to 89 formerly homeless people. Similar to The Kenmore, sequestration has frozen rent increase while expenses continue to rise. This historic residence received an $8.8 million rehabilitation grant in late 2011, funded through the HUD HOME program. Less than 24 months after completing the rehab, sequestration is jeopardizing an $8.8 million federal investment!
Describe the impact of sequestration on HSI’s ability to attract private-sector partners to help finance residences.
Back when Section 8 was available, the Kenmore’s finances were very stable and our private sector partners very happy. But then sequestration happened. With the prospect of no more Section 8 in the future, our private sector partners have little interest in helping finance any new projects. These cuts are quite simply undermining the Low Income Housing Tax Credit program.
Access to on-site services is one of the hallmarks of supportive housing. How has sequestration and the threat of cuts to the McKinney-Vento Homeless Assistance Program affected your ability to offer services to your tenants?
Kenmore case managers have an average of 40 clients each. That’s already a high number, which includes a significant number of recently housed, formerly chronologically homeless and disabled veterans. Any cuts to the McKinney-Vento program that’d impact Kenmore’s Supportive Housing Program grant would push their number of case loads to completely untenable levels. We strongly support all efforts to avoid cuts to McKinney-Vento.