Westchester, HUD at an impasse
The price tag of the fair housing court settlement for Westchester has grown exponentially since the accord was reached almost two years ago.
According to county figures, the deal will now cost nearly $25 million more to develop 750 units of affordable housing and could run some $43 million higher than originally agreed to if a new mandate to build half the units as three-bedroom residences is required.
The escalating costs came to light July 15 when Westchester County Executive Robert Astorino announced at a press conference the county and U.S. Department of Housing and Urban Development, which is in charge of helping implement the court-ordered settlement, were at an impasse. Astorino said the current cost projections for building 750 units over a seven-year period have risen from an estimated $68,800 per unit in 2009, or $51.6 million total, to $101,700 per unit or $76.2 million, a $24.6-million increase.
A new wrinkle, according to Astorino, came in a May 13 letter from HUD that called for the county to develop half of the units (375) as three-bedrooms due to the county”™s scarcity of affordable housing for families with children. This would increase the cost by $42.7 million, based on the county”™s estimate of a $150,000 development cost per unit, to $94.3 million, nearly double the original agreed-upon price when it was finalized in August 2009 by the county, the Anti-Discrimination Center of Metro New York and HUD.
County, HUD at an impasse
In August 2009, former County Executive Andrew Spano entered into a court settlement that was later approved by a majority of the Board of Legislators. It requires the county to build 750 units of housing in 31 communities. Under terms of the agreement, the county paid the federal government $30 million, of which the government returned $21.6 million to the county”™s HUD account to be used to build the 750 units. In addition, the county agreed to add $30 million to its capital budget to build the housing.
An immediate cost to Westchester comes from HUD, which in a July 13 letter informed the county it had disapproved its fiscal year 2011 “Action Plan” and had thus withheld, according to county estimates, between $6.5 million to $7 million in Community Development Block Grant funds. The cutoff in funding could result in the termination of 18 county government jobs that are charged with implementing the settlement, Astorino warned.
A July 27 meeting has been tentatively scheduled between Astorino and HUD Secretary Shaun Donovan in Washington to discuss how the county and HUD can bridge the impasse.
In response to Astorino”™s press conference, HUD released a statement through spokesman Brian Sullivan: “We”™ve been working for two years now to help Westchester County satisfy its legal obligations under the settlement agreement. Yet, the county continues to fall short of these obligations and shifting the conversation to HUD doesn”™t change that fact. We”™ll continue working very hard with the county but rhetoric like this is unproductive and does not help us reach the goal of expanding fair housing choices for the residents of Westchester County.”
Tallying up the costs
Ned McCormack, spokesman for Westchester County, explained the cost increase from nearly $69,000 per unit to some $102,000 per unit was due in part to “the current condition of the housing market in Westchester and beyond,” including the cost of land and development. He added that since there is very little market-rate housing development taking place in Westchester and therefore no mandated affordable housing set-asides that could be credited to the settlement, the county has been forced to start from scratch with new construction at higher costs.
He related that the original $51.6-million settlement cost estimate is a “math equation that really doesn”™t work out in the practicalities of the real world ”“ it is expensive to do business in Westchester.”
When asked how the county would make up for cost overruns, particularly if forced to build 375 three-bedroom units, McCormack said, “We don”™t know yet. We are just stating the obvious that if you want us to build these things and we know how much they are going to cost, we are going to be short by $42 million plus (based on the original cost estimate).”
He said the county could make up some of the $24.6 million (without the three-bedroom mandate) by utilizing monies that would have gone to affordable housing projects outside of the court settlement that are funded by the county, HUD and federal government. He said the county has not made a decision on that as yet.
However, when asked how the county will account for the additional $18.1 million cost for building the 375 three-bedroom units, he replied: “We have no idea. This is why we are going back to HUD and saying the county agreed to a settlement where we would put $51.6 million in. You are now coming up (with) a requirement that is not anywhere in the settlement that will jack up the cost $42.7 million and we have no source to apply against it. We don”™t have the money.”
He then added, “I think one of our options is that as we go up in price, one of the things that we can do is ask the monitor if we can build fewer units.”
Calls to James Johnson, the court-appointed housing monitor, were not returned.
A cooperative strategy with communities
Astorino at the press conference charged HUD with “unprecedented bureaucratic over-reaching” and “unwarranted trampling of local zoning rights.” He said HUD in a May 13 letter and once again in a July 13 letter went “far beyond the four corners of the settlement.”
He said HUD has rejected the county”™s proposed “Analysis of Impediments” five times. Prior rejections included the agency”™s demand that the county take legal steps if necessary to deal with exclusionary zoning practices in some Westchester communities and promote the source of income legislation, which last year was passed by the Westchester County Board of Legislators but vetoed by Astorino in June 2010.
Astorino, who was against the court settlement in his campaign for county executive, said has adopted a cooperative strategy with affected communities under the settlement and that threats of litigation will in the end prove counter-productive. Noting that local zoning laws are covered by the state”™s home-rule laws, he said, “We cannot allow HUD to dismantle local zoning and bankrupt our taxpayers. …”
Astorino said the county is ahead of schedule on the development of the housing. To date, it has 164 affordable units approved by the federal housing monitor. Of those, 154 have financing in place and 107 have obtained building permits. Settlement provisions call for 100 units to have financing and 50 units with building permits by year”™s-end 2011.
Meanwhile, the Anti-Discrimination Center is seeking to intervene in the court case because of what it termed the county”™s “comprehensive and unrelenting violations of its housing desegregation obligations under a federal court consent decree, and with the failure of the federal government and its monitor to enforce those obligations.”
Astorino stated at the press conference the county is against the Anti-Discrimination Center”™s application to intervene in the case.