Democrats Want to Hand America's Failed Public Housing an $80 Billion Slush Fund

Democrats want to use tens of billions of dollars in Congress’s $3.5 trillion reconciliation bill to bail out America’s failed public housing system. This money — an incredible $80 billion — has few limits on how it’s spent. Senate Majority Leader Chuck Schumer has promised to hand over the bulk of these dollars to the scandal-plagued New York City Housing Authority. Worse yet, the Democrats want more failed NYCHA through a backdoor repeal of limits on new public housing.

Here’s the reality: We shouldn’t reward the worst landlord in New York City with a Schumer slush fund. Rather than giving a blank check to America’s most broken public housing systems, we need more accountability, more choice, and more care for residents. None of that’s going to happen in this week-long rush to pass a 2,500-page reconciliation bill.

Back in April, Sen. Schumer called on President Joe Biden to double his planned spending of $40 billion on public housing — “it’s just not enough,” said Schumer more recently. He wanted all of the original money just to pay NYCHA’s repair bill. And what Schumer wants, he gets: an increase to $80 billion in spending on public housing and enormous influence on securing half of it for a NYCHA bailout. And even this may not be enough: NYCHA estimates its repair costs may be as high as $68.5 billion by 2028.

The Democrat’s reconciliation bill gives Housing Secretary Marcia Fudge the authority to allocate $66.5 billion in new public housing dollars however she pleases. Given its soaring repair bill, NYCHA alone could easily soak up every new discretionary dollar spent on public housing. Then there’s another $10 billion Fudge will get to spend under her agency’s “business as usual” formula plus $2.75 billion in grants under terms also set by the secretary. In short, it’s an $80 billion slush fund.

NYCHA is what we get when we get more public housing. And that should scare every American, especially for the survivors of public housing. NYCHA is the nation’s oldest and largest public housing system, housing more people than the city of Atlanta. New York spends more and more money taxpayer money on public housing with fewer and fewer results. Expenditures have risen to by nearly three-quarters of a billion dollars over the past decade while NYCHA’s total capital needs have grown by an astonishing $25 billion. Spending $40 billion to repair NYCHA amounts to roughly $250,000 for every family living in public housing in New York City. Do we really believe we won’t get more of the same?

The pandemic highlights NYCHA’s long history of harming the health and safety of its residents. Just this month, New York City public health officials admitted that NYCHA residents are dying from Covid-19 at nearly twice the city rate. “The pandemic has trapped many poor New Yorkers in miserable living conditions in the city’s public housing system,” observed The New York Times. It turns out that one of the deadliest places to be in New York City during a pandemic is in a New York City Housing Authority apartment.

In 2018, NYCHA’s own tenants sued the housing authority for its squalid living conditions. “We are living as if it’s a third world country,” said one tenant who joined the suit. Then the feds sued too: “The New York City Housing Authority worked harder to cover up the squalid conditions tenants are forced to endure—including lead paint, vermin, broken elevators and no heat—than it did to fix any of those dangerous problems,” claimed U.S. Attorney Geoffrey Berman. The city’s housing authority claimed that just 19 children had been exposed to lead. It turns out NYCHA housing poisoned over a thousand children with lead exposure, then lied and covered it up.

"The real disaster is the management at NYCHA and its culture of deception," said Berman in 2018, and he’s right. A 2017 report by New York City’s Department of Investigation found “a culture of misconduct, employee mistreatment, and favoritism” at NYCHA. Appointing a federal monitor after the housing authority fessed up to its lying and cover-ups was the “equivalent of nailing a 2-by-4 to a collapsing building.” And just this week, Brooklyn’s District Attorney charged nine NYCHA contractors with bribery over the authority’s no-bid contracts. “We have every reason to believe that there are other superintendents being offered bribes,” said DA Eric Gonzalez.

Despite record levels of funding, “New York’s public housing isn’t getting better,” admitted The New York Times. Sometimes more money means more problems. There’s an “ecosystem of people willing to make and take bribes at NYCHA,” found the Brooklyn DA, and the judge who appointed the authority’s federal monitor condemned its “organizational disarray” and “systemic cover-up.” A new paint job won’t fix NYCHA’s problems. (Even if it did, painters take well over a year to show up in a NYCHA apartment.) The Democrat’s public housing slush fund harms accountability and leaves structural problems in place.

We are promised more failure by striking the Faircloth Amendment and allowing new public housing units to be built, a top priority for Alexandria Ocasio-Cortez and the Squad. “For the first time in a long time, public-housing authorities are being told they can build and expand,” crowed the American Prospect. That means more demands for even more public housing dollars in the future. The backdoor repeal of the Faircloth Amendment ensures America will trap more generations in public housing poverty.

Public housing has failed — look no further than NYCHA. It’s time we did better for Americans in need of more affordable housing. Bailing out scandal-plagued public housing authorities is not the answer.

Michael Hendrix is a senior fellow and director of state and local policy at the Manhattan Institute.