More Late Stage Socialism At NYCHA

Here in New York City, we love to bash landlords.  First, we impose on many apartments a rent regulation regime that makes it almost impossible for landlords ever to raise the rent.  And then, woe be to any landlord who fails to provide heat or hot water on some cold day in the winter, or to fix a leak promptly.  This regime is guaranteed to engender a degree of animosity between landlords and tenants, and indeed it does so.  From time to time the authorities single out some particularly disliked landlord to make an example of, and have him sent to prison.

Obviously the answer to this exploitative capitalist housing system is a public ownership socialist model system.  And sure enough, New York City has gone for such a socialist model system in a big way with its publicly-owned low-income housing provider known as the New York City Housing Authority, or NYCHA.  NYCHA's exploits have previously been covered many times here at MC.  NYCHA is the landlord for about 180,000 apartments, mostly in what are called the "projects," that house in excess of 400,000 people, or about 5-6% of the City's population.

Surely then, the NYCHA projects have brought perfect justice and fairness to the housing of the low-income residents of New York?  Well, perhaps we had better check in on that.  The Wall Street Journal helpfully provides a detailed article on the subject in today's Greater New York section, headline "Residents Vent Over Housing Woes."  (may be behind pay wall)  Uh-oh, that headline already sounds ominous.  Here's the introduction:

More than 143,000, or 80%, of New York City’s 175,000 public housing apartments have been without heat or hot water at times this winter, city officials said Tuesday.  Tempers flared over widespread heat and hot water outages in New York City public housing at an unusually contentious City Council hearing. Some residents were in tears. . . .   Residents have been left without heat sporadically throughout the winter, on average for two days at a time, according to city officials. The outages, which the city has blamed on aging boilers, have affected more than 320,000 people.

Wait a minute -- I thought this is exactly the kind of ill treatment of tenants that public ownership was supposed to fix.  And it seems that the City Council thought that too, so they decided to hold a hearing on the subject yesterday, and to call the head of NYCHA, one Shola Olatoye, on the carpet.

“She has haplessly presided over a humanitarian crisis,” Councilman Ritchie Torres said.

So what is your answer, Shola?

Ms. Olatoye said she was struggling to maintain even basic services after decades of declines in federal funding. The city’s public housing agency has lost $3 billion in federal aid since 2001.

Really?  Funny, but I thought to check on that, and I was able to find "NYCHA Projected Revenue by Source" for 2003, and then "NYCHA 2016 Operating Plan Revenues."  And, believe it or not, the two are actually presented in the same format, thus facilitating direct comparison.  (Most bureaucracies would never allow such a thing to happen, and would gradually change the format of presentation over time so that you could never hold them accountable.  Probably, that only means that NYCHA is uniquely incompetent.)  Anyway, the answer is, in 2003 NYCHA got $664.2 million from the feds as "Federal Public Housing Operating Subsidy," and $680.6 million as "Federal Section 8 Housing Choice Voucher."  For 2016 those numbers became $910.0 million for "Federal Operating Subsidies" and $982.8 million for "Section 8 Subsidy."  

OK, the handouts may not have gone up as much as you would have liked, but how in the world do you get to characterize what are obviously large increases in funding as "los[ing] $3 billion in federal aid"?  A clue can be found in the big "NextGeneration NYCHA" Report that the de Blasio administration put out back in 2015.  At page 7 of that Report, we find a claim that NYCHA had suffered a "$1 Billion Loss in Operating Funding since 2001."  But when they describe that "loss," we find that the "loss" is not an actual decrease in funding, but rather a "loss" measured by comparison to some formula of increasing hypothetical amounts that they somehow think they ought to have gotten:

Annual Proration and Federal Operating Funding Cumulative Loss by Year
Of the total operating funding NYCHA is eligible for on an annual basis from HUD, NYCHA receives only a portion, due to lower Congressional appropriations. This is known as a prorated amount.

Got that?  Now, how Ms. Olatoye managed to jack up the $1 billion to $3 billion for her testimony at this hearing, I cannot explain.  But hey, when you have obviously gotten large increases in funding, and you nevertheless want to claim a "cut" based on some ginned-up calculation that you don't disclose and nobody would understand anyway, what's the difference whether it's $1 billion or $3 billion?  Why not make it $5 billion?

Another subject covered in the testimony at the hearing was the amount of necessary but unfunded capital repairs that need to be made on the NYCHA buildings.  In that "NextGeneration NYCHA" Report a couple of years ago, it was $17 billion.  Yesterday:

City officials also said for the first time Tuesday that the housing agency’s infrastructure needs total about $25 billion, up from $17 billion several years ago.

Mayor de Blasio was giving his own news conference across the street at about the same time, and somebody asked him for his comment on the NYCHA issues.  Here it is:

“People in public housing deserve the very best living standard we can give them with the money we have,” Mr. de Blasio said. “But do I think we in the public sector can achieve everything that a private sector can achieve, with much greater resources in the private sector? No, I don’t have that illusion.”

 Was that an admission that socialism doesn't work?