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Q&A
Pascale Leone discusses the financial instability of nonprofit housing developers
1:23:07
·
157 sec
Commissioner Valerie White asks Pascale Leone about the financial viability of nonprofit supportive housing developers facing long delays and late city payments.
Leone confirms the situation is dire, citing historical data where low rates forced a third of providers in one program to close, merge, or convert units to market rate. She warns that the current combination of delayed payments, rising costs, and potential federal funding cuts threatens the existence of many nonprofits crucial to addressing homelessness.
- Nonprofit developers face severe financial strain due to development delays and chronic late contract payments from the city.
- Historical data shows low funding rates have previously forced providers to close, merge, or leave the supportive housing sector.
- The current environment risks similar outcomes, potentially reducing the city's capacity to provide supportive housing.
Valerie White
1:23:07
Hi.
1:23:08
Good evening, panelists.
1:23:09
Thank you for your testimony.
1:23:11
Good to see you, Pascal.
1:23:14
I had a question, or it's a little bit more of a comment, but I want to hear your perspective.
1:23:20
As it relates to nonprofits who are developers that have carrying costs that come along with developing property because of the length of time.
1:23:28
And then you layer on top of that, right, the payment system, the procurement that you mentioned.
1:23:34
We do know in New York a lot of, you know, the chair asked a question to Kurt about MWBE carrying courses, and that is something that is, you know, detrimental to their balance sheet.
1:23:48
But we are seeing also nonprofit developers in general starting to, you know, not be able to potentially be in existence if we can eliminate that.
1:23:58
So I'm glad that there are very specific recommendations that you have in the written testimony for that.
1:24:05
But can you give a little feel as to how many of your members are in such a dire state that, you know, they may be in a position of having to merge or not being available to provide these services?
Pascale Leone
1:24:18
Yeah, no, that's a great question.
1:24:20
And we actually looked at data for the last twenty years.
1:24:23
Because of such low rates, we've had for one particular project called NYSHIP, the New York State Supportive Housing Program.
1:24:29
We had onethree of the providers who are NYSHIP providers either had to close their doors, had to merge with other organizations, or even worse, had to convert supportive housing to market rate housing as a result.
1:24:41
And we're seeing more of this.
1:24:42
And compounding, you named it, right?
1:24:44
The issues of the late contract payments, the compounding issue of the federal what we're seeing at the federal level, right, with COC contracts not being renewed.
1:24:56
This will take providers under, for sure, not having the rental assistance.
1:25:01
It's the developers and owners who projects will go under.
1:25:05
And again, you know, we could take a page from the 1980s in the Reagan era when we saw threefour of HUD's budget cut in eight years.
1:25:14
And what did that do?
1:25:15
That led to the widespread homelessness that we see now.
1:25:18
This was not always the case, right?
1:25:20
And we could really tie that back.
1:25:22
We're at this moment again where not being paid on time, the high cost to just construct, the lengthy process again, I know members who have spent eight to ten years to develop and open projects.
1:25:35
And then now we have this potential, not even a potential, just the looming cuts that we're waiting for him.
1:25:44
Thank you, Reilly.