Making serious inroads with the problem in New York City is going to require significant federal resources, said Sean Campion, the director of housing and economic development studies at the Citizens Budget Commission. He pointed to the New York City Housing Authority, which Politico reported in 2018 needed nearly $32B in repairs.

“Now it's probably closer to $45B once you factor in inflation, conditions that are worse than they expected, need to electrify, make these buildings greener and healthier and to deal with lead and mold,” he said. “The city definitely can't subsidize its way out of this problem, the state can’t subsidy its way out … It has to come from additional federal resources to really make these deals work.”

The Citizens Budget Commission has called on the city to look at its hiring and onboarding processes, which are time-consuming and may exacerbate staffing issues. Champeny also posited that the low headcounts at labor-intensive agencies may be scaring away job candidates.

“Not having the savings definitely creates a fiscal challenge that the city and unions will need to address these next few years,” said Ana Champeny, vice president for research at the nonprofit Citizens Budget Commission.

Citizens Budget Commission Director of State Studies Patrick Orecki breaks down the latest financial plan for New York, which projects future budget gaps as the result of negatively revised revenue estimates.

The MTA should be looking at cost reductions now in its operating budget, according to Andrew Rein, president of the Citizens Budget Commission, a nonprofit group focused on state and city finances. The transit agency should realign service with fewer riders, ask workers to contribute more to their health insurance and consider one-person train operation rather than two, he suggested.

“We need a strong MTA that functions, but we also need an affordable government that functions well,” Rein said. “Raising taxes would potentially damage New York’s competitiveness.”

The city has issued fewer building permits per resident over most of the past decade than Boston, Austin and San Francisco, according to a study from the Citizens Budget Commission, a nonprofit research group.

“We haven’t had to do a budget redo for one agency before,” said Ana Champeny, vice president for research at the Citizens Budget Commission.

The city’s overall financial plan could suddenly be out of balance, said Andrew Rein, president of the fiscal watchdog, Citizens Budget Commission.

"It significantly changes the discussion because the financial plan was balanced over the next four years which was a great thing for the state," said Patrick Orecki of the Citizens Budget Commission. "This changes that discussion."

The Citizens Budget Commission noted the updated forecast shows significantly lower estimates of future tax receipts, reflecting a less optimistic economic outlook.

Going from five years of balanced budgets to multi-billion-dollar budget gaps reinforces the need to build reserves, restrain spending growth and implement long-run cost savings, the CBC said.

"This update provides state leaders with a sobering view of the road ahead," CBC President Andrew Rein said in a statement. "While fiscal year 2023 receipts are strong, downward revisions to future tax receipt forecasts opened budget gaps that grow from $310 million in fiscal year 2024 to $6.2 billion by fiscal year 2027."

Even before the forecast revisions, the future budget balances relied on non-recurring items and optimistic tax revenue projections. The future outlook now is much more fragile, CBC said.

“This is a radically atypical occurrence in the history of city budget negotiations,” said Andrew Rein, president of the Citizens Budget Commission, a nonprofit think tank.

New York City lags far behind other large cities when it comes to housing inventory. There is not enough supply to meet the demand.