State Budget Restores Vital Funding To Fight Foreclosure and Create More Affordable Housing

April 1, 2009
Assemblywoman Rhoda Jacobs (D-Flatbush) announced that despite the devastating economic downturn, the 2009-2010 state budget restores funding to two programs that support local housing rehabilitation, home buyer counseling, tenant counseling, and community rehabilitation and renewal. Ms. Jacobs added that more than $1 billion in federal stimulus money will help.

“This economic downturn started when the housing bubble burst, so it’s vital that we keep people in their homes with affordable housing options,” Jacobs said. “By shoring up our housing market and restoring critical public aid, we not only help low-income families throughout New York, but we invest in our economic future as well.”

Subprime Housing Crisis

The state spending plan renews its charge to meet the subprime mortgage crisis head-on, committing $25 million for foreclosure prevention services to assist New Yorkers victimized by aggressive and deceptive lending practices.

“Tens of thousands of New York families are facing foreclosure or default at the hands of deceptive lenders – a number that will continue to grow without the necessary safety nets in place,” said Jacobs. “Too many neighborhoods look like ghost towns because families have had to pick up and leave due to foreclosure. The bedrock of our economic recovery is a sound housing market. This money will help stabilize the housing market and give families the chance they need to get back on their feet.”

Neighborhood and Rural Preservation Programs

The final budget rejects the executive’s proposed cuts to the Neighborhood Preservation and Rural Preservation programs, which provide support to citizen-led, not-for-profit housing and community-based organizations that create and preserve affordable housing opportunities in urban, suburban and rural areas throughout the state.

The budget restores $5.64 million to the Neighborhood Preservation Program for total funding of $13.7 million, sets aside $150,000 for the Neighborhood Preservation Coalition, and restores $2.2 million to the Rural Preservation Program for a total of $5.77 million, with $150,000 allocated for the Rural Preservation Coalition.

“Now is not the time to cut these critical housing programs,” emphasized Jacobs. “Many homeowners are in distress and don’t know where to turn for relief. By offering education, counseling and legal services, preservation programs provide that helping hand many New Yorkers need to get through this rough time in our economy.”

Low Income Housing Tax Credit

The budget includes $4 million to expand the Low Income Housing Tax Credit, giving developers further incentives to build affordable housing. The tax credits must be used for new construction, rehabilitation or acquisition of low- and moderate-income housing.

“These tax credits give developers a dollar-for-dollar reduction in taxable income, which acts as a real incentive for developers to build affordable housing and keeps the dream of home ownership a reality for low- and moderate-income New Yorkers,” Jacobs said.

Federal Stimulus Money

The budget directs more than $1 billion in federal stimulus money to housing assistance initiatives, including:

  • $502 million for the Public Housing Capital Fund to rehabilitate, modernize and develop public housing;
  • $395 million for the Low Income Weatherization Program, helping to reduce home energy costs for lower-income New Yorkers and train workers to weatherize homes;
  • $253 million for the Home Investment Partnerships Program to provide tax credit assistance for low-income housing construction projects;
  • $141 million for the Homelessness Prevention Program to fund homelessness prevention services on a county-by-county and statewide basis;
  • $92 million for the Community Development Block Grant Program to fund community development initiatives such as infrastructure development, affordable housing and anti-poverty programs; and
  • Neighborhood Stabilization Program funding to buy, renovate and then resell or rent foreclosed or abandoned properties and stem the decline of house values of neighboring homes.

“At a time when we are seeing mounting job losses and rising homelessness, programs that create and protect affordable housing are essential,” concluded Jacobs.