NYCHA Miscalculated One-in-Five Rent Increases, New York City Comptroller’s Review Finds

 

Auditors reviewed rent calculations for tenants in the Red Hook East and Red Hook West Developments between October 2021 and October 2022.

The Office of New York City Comptroller Brad Lander found that the New York City Housing Authority (NYCHA) miscalculated one-in-five sampled rent adjustments at the Red Hook East and Red Hook West developments. The review followed complaints from tenants at the developments of improperly calculated rent.

“NYCHA tenants repeatedly raised concerns with the calculation of their monthly rent, so our audit team went to investigate. We found issues with the calculations that led to some tenants overpaying and NYCHA losing out on rental income. Our public housing system has a duty to provide decent, affordable housing for New Yorkers, and it can only do that successfully with strong oversight and management that guarantees accuracy and fairness,” said New York City Comptroller Brad Lander.

Monthly rent for NYCHA residents is generally set at either 30% of the household’s adjusted gross income (after subtracting allowable deductions) or the flat rent (the maximum amount charged per household based on the number of bedrooms), whichever is lower. NYCHA residents submit income documentation on an annual basis that the agency then uses to calculate eligibility and appropriate rents. The rent calculation processes are handled by each development’s management office. NYCHA uses Siebel System to maintain information and documentation provided by residents and third parties which are used to support rent calculations. Siebel is also used to generate the Public Housing Lease Addendum and Rent Notices after the completion of the recertification process.

Between October 2021 and October 2022, 32% (853) of the 2,692 units at Red Hook Houses saw rent increases. At a roundtable with Comptroller Lander and in survey responses as part of the resident engagement plan for NYCHA audits, residents raised concerns about the accuracy of rent calculations. To investigate, the Comptroller’s Office auditors reviewed income documentation and rent calculations for a sample of 102 units at Red Hook Houses.

The review found that:

• NYCHA miscalculated one-in-five (19%) sampled rent adjustments in the Red Hook East and Red Hook West public housing developments in 2022.
• Of the 102 apartments sampled, NYCHA overcharged three households by a total of $439 in monthly rent and undercharged 17 households by a total of $1,395 in monthly rent.
• NYCHA’s data management platform generated incorrect public assistance amounts on rent notices sent to the tenants.
• Auditors were unable to verify rent calculations for nine apartments due to a lack of supporting documentation.

The Comptroller’s Office made four recommendations, which NYCHA has agreed to address:

1. Review the rent calculation for the apartments that were either overstated or understated and determine if corrective action should be taken.
2. Provide periodic training to staff to ensure adherence to the Management Manual, so they are able to accurately verify and input household incomes and deductions for Siebel to calculate the monthly rent amount; and generate HUD’s Enterprise Income Verification report and confirm the tenants’ incomes through independent sources.
3. Test rent calculations across the system after every recertification.
4. Conduct a system review of Siebel to ensure that it properly generates the correct amount on Rent Notices for Public Assistance Income for each qualified household member.

Full Report: Letter Report on the Review of the New York City Housing Authority’s Calculation of Rent Increases for Public Housing Tenants at the Red Hook East and Red Hook West Developments