Audit Faults New York For Unspent Federal Housing Funds

New York state has left millions of dollars in available federal funding on the table in the midst of an affordable housing crisis, according to a new report.

The audit released by state Comptroller Thomas P. DiNapoli’s office on Thursday found New York state’s affordable housing agency, Homes and Community Renewal, “failed to take full advantage” of the $9.4 billion in federal funds it received between 2017 and 2021 for Section 8 vouchers and other emergency housing assistance.

Auditors said the housing agency did not meet the federal standard of spending 95% of the vouchers by the U.S. Department of Housing and Urban Development during that time period, which included the height of the COVID-19 pandemic when the need for affordable housing spiked.

DiNapoli said New York is in the midst of a housing crisis and the federally funded program is “critical” to efforts to help individuals and families find affordable housing.

“Too many New Yorkers are struggling with housing costs to allow available resources to go unused,” he said in a statement.

He said the audit found in some areas of New York — in both urban and rural communities — voucher use fell “far short” of HUD’s performance threshold, with some areas of New York City using less than 85% of their available vouchers over the five year period.

In a response to the audit, the housing agency said the comptroller’s conclusions about Section 8 Housing Choice Vouchers “fail to recognize problematic and budget limitations” that prevent the agency from using all of its vouchers.

“Due in part to the relatively high rents in certain areas of the state, HTFC does not have adequate budget authority to fully utilize all of the HCVs allocated by HUD,” the agency wrote. “HTFC cannot responsibly commit to vouchers for which it has insufficient federal funding without risking displacement of tenants and violating federal regulations.”

The agency also pointed out it has spent about 96% of the HUD housing funds and noted the state’s 88.6% leasing rate for vouchers exceeds the national average.

DiNapoli also faulted the agency for sitting on significant reserve funds that could have been used for housing subsidies, and to increase participation in the housing programs.

He said the agency had up to $36 million in surplus revenue in 2021 that could have provided more than 3,000 housing vouchers.

But the agency argued in his response that tapping into those funds would have impacted its budgetary operations and potentially hurt its emergency housing programs.

“If HTFC followed the recommendations in the draft report, reserves would drop below the level recommended by HUD and HTFC would risk over committing vouchers, particularly at a time in which affordable housing across the state is in short supply and rents have been rapidly increasing,” the agency wrote.

DiNapoli recommended the housing agency increase the use of available housing funds, including the use of reserve money, to provide more vouchers. He also called on the agency to “improve the reliability” of its financial data by developing better information technology systems.


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