Saying that they had averted a major housing crisis, New York City officials announced yesterday that the federal government had agreed to restore almost all the $55 million that had been scheduled to be cut under a recent regulatory change affecting the government's main housing program for the poor.
At the same time, the Department of Housing and Urban Development announced that it would restore about $160 million that 378 other housing agencies across the country had protested was also being unfairly cut out of their Section 8 voucher financing.
HUD officials attributed their decision to the agencies' collective ability to prove that they needed more money. Without such financing, many agencies warned, the regulatory change might have forced them to freeze the number of rent vouchers, squeeze more money from tenants or even evict them.
In New York, the shortfall might have produced other bad effects, as well, said Shaun Donovan, the city's commissioner of Housing Preservation and Development. He said that it might have delayed Mayor Michael R. Bloomberg's ambitious plan to renovate or build 65,000 units of housing; made it harder to get more homeless families out of shelters; and even given financial institutions pause to finance Mitchell-Lama and other private developments because of a loss of confidence in Section 8.
http://nytimes.com/2004/09/02/nyregion/02housing.html