NEW YORK – Mayor Bill de Blasio is poised to announce that New York City will waive an annual $30 million payment it is owed from the city's public housing authority, and the move is shedding light on the precarious future of the aging development that is home to more people than the city of New Orleans.
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De Blasio will announce the elimination of the payment, issued every year since 1949 as a "Payment in Lieu of Taxes," as part of his executive budget presentation on Thursday, city officials told The Associated Press. That decision will save the New York City Housing Authority approximately $130 million through fiscal year 2019.
"This administration has consistently made NYCHA a priority, with a clear vision to both repair buildings and serve NYCHA residents who deserve better," de Blasio told the AP in a statement. "This means using every tool we have to expand resources and support for NYCHA."
The move is one of several the de Blasio administration has made to aid NYCHA, which was a significant campaign promise of the first-term Democratic mayor.
A year ago, the city forgave the approximately $70 million that NYCHA owed the New York Police Department for providing security in the development's 2,602 buildings. The mayor has also acted to bolster security at the developments, especially after a troubling wave of shootings last summer, by installing more security cameras and removing unnecessary scaffolding that made some NYCHA walkways dark and dangerous.
Aides to de Blasio said the mayor will emphasize the dire situation NYCHA faces going forward.
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"After years of disinvestment by the state and federal government, coupled with NYCHA's aging infrastructure," the mayor said in the statement, "we need a bold, new approach because the status quo no longer works."
NYCHA is facing staggering costs.
Over the next five years, the NYCHA system is expected to have a cumulative operating deficit of more than $600 million and a projected capital need of nearly $17 billion. The average of age of a NYCHA building is more than 54 years, and hundreds of apartments need maintenance like tile work, painting, carpentry and plumbing, while many of the buildings themselves are in desperate need of massive, expensive repairs to roofs, boilers and brick facades.
With federal funding to NYCHA shrinking in recent years, city officials are expected to say in the budget report to be issued Thursday that the growing deficit threatens NYCHA's economic sustainability. For 2015, NYCHA had an operating budget of $3.2 billion; the largest single expense was $1.2 billion for the salaries and benefits of its staff. Historically, NYCHA has dealt with deficits with a series of one-time actions, including drawing from its reserves, which officials warn is not a sustainable solution.
Later this month, the de Blasio administration is expected to unveil NextGen, a blueprint that will outline a menu of proposals to make NYCHA more economically sustainable and safer for its 403,000 residents, officials said. The plan, which is being shaped with community input, could include the program known as infill, in which pieces of public NYCHA land would be sold to private developers.