HUD WARNS LANDLORDS IT MAY RUN OUT OF HOUSING ASSISTANCE FUNDS BY FALL

CITY LIMITS - Affordable housing advocates are on high alert as they predict the federal funding that covers the rent for thousands of New York City residents will dry up this autumn, but property managers and federal officials, while concerned, are more confident that affected tenants will be able to keep their apartments.

The looming problem is a $2.4 billion shortfall at the Department of Housing and Urban Development, endangering rent payments for low-income renters in the project-based Section 8 program, who pay 30 percent of their adjusted monthly income to landlords and have the balance provided by the federal government. But poor fiscal management by HUD, advocates assert, has left the agency in such straits that it sent letters to some Section 8 landlords telling them payments could end by Sept. 30, the end of the current fiscal year. They say landlords in turn informed some tenants that they'll soon have to pay regular market rate for their apartments, as much as five or six times their current rent portion.

Michael Kane, executive director of the Boston-based National Alliance of HUD Tenants, sounds a clear note of alarm. "People will be out in the street, and that could be as early as this summer," Kane said.

Representatives of the landlords said to be threatened - while distressed about what they see as HUD's persistent underfunding - anticipate less dire outcomes. The head of an organization of affordable housing owners and agencies says the she's more worried that the apparently insecure funding stream from HUD will cause banks not to back the investments Section 8 building owners want to make in building preservation. . .

At a rally at Judson Memorial Church, residents were joined by local U.S. Reps. Jerrold Nadler, Nydia Velazquez and Yvette Clarke, who voiced frustration with the Bush administration’s handling of the budget. . . “Bush is saying, ‘subsidized housing, that’s socialism,’” Velázquez told the ralliers, who nearly filled the main sanctuary at Judson. “People are working two, three, four jobs, and still they can not afford to pay rent in New York City. It is okay to go out and rescue Bear Stearns, but not working people.”. . .

Nadler elicited a loud response from the crowd when he said the $2.4 billion budget shortfall is the equivalent of less than one week of war expenses. . .