The federal sequester's impact could soon be causing big headaches for New Yorkers who live in public housing.
During a City Council hearing Thursday the New York City Housing Authority said its budget is losing $205 million in federal funding.
To make up for the loss, the agency says it will lay off up to 500 workers, eliminate some programs and consider potential furloughs.
It would also mean the likely removal of 1,200 low-income families from the Section 8 housing program.
Those who are able to remain in the program will see, on average, a $57 increase in their monthly rents.
"If, in fact, this happens, it's going to be devastating," said Manhattan Councilman Robert Jackson. "Not only on NYCHA, not only on the seniors, not only on the youth. It's going to be devastating for New York City.
The agency's 37 senior centers and 69 community centers will remain open this summer, but it's not clear what will happen to them in the fall.
The city's Department of Aging says it may be abler to keep four of the senior centers open while the Department of Youth and Community Development said it could save 45 of the community centers.
The $205 million cut is a result of the sequestration cuts. The lost money represents 11 percent of the housing authority's total budget.
"We, the leadership of this city, the leadership of municipalities across this country, need to be the ones on the steps of Congress, telling Congress to get their job done," said Councilwoman Melissa Mark-Viverito, whose district covers parts of Manhattan and the Bronx. "This is us as a city coming together to say that we will not allow those least among us and our cities to be held hostage."
At the hearing, some City Council members lashed out at NYCHA officials saying they should have provided more information about the cuts long before the city's budget deadline now just two weeks away.
In a statement, Democratic mayoral candidate William Thompson even demanded that Mayor Michael Bloomberg fire the agency's chairman for not doing enough to prepare for the federal cutbacks.
"Anyone saying that NYCHA is responsible for these budget cuts, I mean, that's preposterous," said NYCHA Chairman John Rhea. "The federal government is responsible for sequestration and the continuing resolution. And we had a $205 million grenade dropped on us and we're doing what you would expect us to do, which is to be responsible in trying to deal with it, and doing it in partnership with many of our other agencies around the city and with the Office of Management and Budget. The blame game doesn't get anything solved."
In Albany, meanwhile, the state legislature approved a bill to overhaul the board of the housing authority. Supporters say it will make the agency more accountable and streamline its operations. But the reform plan will not save the agency from the cutbacks.
If the City Council is going to try and step in and fill some of the budget gaps, it is going to have to move fast. A budget agreement with the mayor is due by the end of June. The deadline is fast approaching.