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Citing a report by the Office of the Inspector General, Schumer says there are more than 5,800 registered sex offenders living in federally-subsidized housing in the city, despite a 1997 law banning sex offenders from living in public housing.

At a news conference yesterday, Schumer proposed sweeping changes.

"The legislation had two purposes, first and foremost to protect New Yorkers and Americans from the sex offenders, and from the fact that their children might be subject to them," he said. "But second, there was also the salt in the wound of the federal government subsidizing people who committed these horrible crimes."

In a statement, a Housing and Urban Development spokesman says the agency is concerned that even one sex offender may live in government-subsidized housing.

The agency says it's considering regulatory changes and resending guidance to local housing authorities to make sure families are living in the safest environments possible.