Sequester could cost Phila. Housing Authority $42M

Posted: March 08, 2013

With across-the-board federal cuts that kicked in March 1, the Philadelphia Housing Authority calculated that it would lose $42 million in funding this year, equal to an 11 percent drop in its budget, the agency's interim executive director told employees in a letter this week.

Kelvin Jeremiah wrote on Wednesday that the agency wanted to avoid layoffs and was trying to cut costs, find savings, and identify alternative sources of funding.

Among the steps he instituted were: transferring some contracts for services to staff; implementing furloughs; freezing wages and eliminating bonuses; collecting debt and rent more aggressively; stepping up efforts to sell scattered sites; and suspending new rent subsidy vouchers.

Jeremiah called the cuts triggered by the budget-balancing impasse in Congress "irresponsible."

"These are draconian cuts," he said, "that hit the neediest among us."

Even before the automatic spending cuts took effect this month, the public housing agency already was facing a drop in federal support.

Jeremiah said while the budget news may seem "frightening or demoralizing," PHA remains in good financial condition.

PHA only gets about $24 million a year from rents. The rest of its budget - about 90 percent - is funded by the U.S. Department of Housing and Urban Development. The state only contributes a small amount in grants.

In letters sent in March, HUD Secretary Shaun Donovan itemized for governors across the country what the sequestration cuts would mean for their states.

Gov. Christie was notified by Donovan that New Jersey would see a reduction of $38 million for community development programs, as well as rental assistance for lower-income families, homeless individuals, and people with special needs such as HIV.

In Pennsylvania, Gov. Corbett learned that the cuts for those same services would amount to $37.5 million.

Donovan said that across the country, 125,000 people, a majority of whom are elderly or disabled, could lose rental assistance. He warned that they are "at risk of becoming homeless."

At the same time, he said the sequestration cuts will result in 100,000 formerly homeless people being removed from their current housing or emergency shelter programs.

States will also lose $2.5 billion to recover from disasters including Hurricane Sandy, he said.

Contact Jennifer Lin at 215-854-5659 or, or on Twitter @j_linq.

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