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City officials say new federal affordable housing proposal would 'negatively impact’ NYC

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The proposal wants to help desegregate low-earning Americans by giving them access to higher earning neighborhoods

A federal government proposal that would change Section 8 rental subsidies, in an attempt to integrate low-income residents into higher-income neighborhoods, is being decried by New York City officials that include Mayor de Blasio, Senator Chuck Schumer, and several nonprofit housing organizations, reports Gothamist.

The proposal suggests decreasing the subsidies in low-income neighborhoods and increasing them in high-income neighborhoods as a way to give low-income renters an opportunity to move up. It would, in theory, create opportunities for those who formerly lived in lower-income areas to land higher-paying jobs, offer access to better schools, and improve opportunities overall.

But NYC officials argue that in a city with an incredibly vast shortage of housing, it just wouldn’t work. For one thing, there aren’t enough vacant apartments in wealthier neighborhoods for the city’s 119,000 voucher holders. As a result, the proposed bill would force residents to pay more out of pocket in low-income neighborhoods once their subsidies are decreased. "In New York, where there are few affordable housing options, the neediest residents will not have realistic alternatives, and will be faced with having either to pay more rent out of their own pocket or leaving the city altogether," De Blasio spokeswoman Aja Worthy-Davis said in a statement.

As it stands, recipients of Section 8 subsidies pay 30 percent of their monthly income towards rent while the subsidy covers the remaining balance up to a threshold determined by the Fair Market Rent (FMR), which is based upon the average rent for all of New York City. Under the new proposal, the average rents in each zip code would determine the FMR. The Daily News illustrates how this would work:

[T]he rule change in zip code 10451 in the South Bronx would lower the average rent cutoff from $1,727 to $1,287. Tenants would have to either make up the $440-a-month difference, or move. At the same time, in the higher-income downtown Brooklyn zip code 11201, the average rent cutoff eligible for subsidy would rise from $1,815 to $2,365.

In different cities across the United States, where there are more vacancies for higher-priced rental units, the proposal could be highly successful; in New York City, however, the vacancy rate is barely 3.5 percent.

Congresswoman Nydia Velazquez and Senator Chuck Schumer also penned an open letter to the Department of Housing and Urban Development (HUD) where they highlight the impacts that the proposal would have on voucher holders in New York City. They state that almost half of them would see their voucher amounts decreased. In response, a spokesman for HUD stated that the city would have the option to "grandfather" current Section 8 recipients so that they would not be impacted by the changes.

HUD stated that they will be reviewing comments on the proposed rule and will be working with affected cities to avoid negative impacts for current Section 8 recipients.