Hundreds of mostly impoverished, elderly or disabled tenants demonstrated on Saturday in Manhattan against the decision by New York City’s Housing, Preservation and Development Agency (HPD) to compel them to move from apartments the agency deems to be too large.

The HPD has taken this draconian action in response to the $35 million in sequester cuts to New York City’s Section 8 and public housing funds. Thousands of people across the city, primarily the elderly and disabled, will be affected by the decision. The HPD sent out a letter on July 22 stating that tenants currently occupying a unit too large for their family size will be considered “overhoused.”

The move is a downgrading of housing benefits under Section 8 of the 1937 federal Housing Act, which provides rental assistance through a voucher program that pays landlords a large portion of the rent and utilities. This reduction of benefits is the result of budget cuts imposed on federal programs by the Federal Budget Control Act of 2011, and the sequester cuts that the HPD is projecting will cause a $35 million shortfall in Section 8 funds this year.

One of the speakers at the rally, former head of the American Civil Liberties Union, Norman Siegel, said that his law firm is preparing to take the HPD to court to stop the removal of seniors and other residents to small studio apartments. Siegel, however, will not argue for those families who will be forced to move to apartments with at least one bedroom.

Though a few Democratic Party City Council members attend the Saturday rally, it was the Democrats in Congress who made the sequester cuts possible. The recent deal between the Democrats and the Republicans to reopen the federal government and lift the debt ceiling took place with an agreement not only to continue the sequester cuts, but to discuss even deeper budget reductions—which will almost certainly include more cuts to housing subsidies.

The downgrading of living space under Section 8 is only one aspect of the mounting attacks on poor and working class tenants in New York City. The Frederick Douglass Houses’ tenants’ association has joined other tenants’ associations in a lawsuit to stop the New York City Housing Authority’s (NYCHA’s) so-called “Infield” project that would build 14 new luxury apartment towers on their development in Harlem as well as at several other public developments in Manhattan.

The NYCHA claims that it needs revenue from the luxury housing in order to reduce its $13.4 billion shortfall. The housing agency set a deadline of November 18 for Request for Expressions of Interest by investors.

While the Democratic-controlled City Council has joined the Douglass residents’ lawsuit, the party remains staunchly determined to defend the interests of the big realtors. All five major Democratic Party mayoral candidates took contributions from the real estate moguls while they were railing against the real estate industry. According to a report in the New York Times, the Democratic primary winner, Public Advocate Bill de Blasio, raked in $215,300 from the industry.

The transformation of Manhattan into an island of wealth and privilege proceeds non-stop. Last week, multibillionaire mayor Michael Bloomberg ended his Friday radio appearances by saying that the housing crisis in New York City is a “good sign.” He tried to give a picture of a vibrant city where everyone wants to come and live and the developers are working overtime to provide decent housing.

In reality, the real estate industry is only interested in building housing for the top 1 percent, for which it can charge the highest possible rents.

According to recent studies, New York City’s monthly median gross rent in the city has risen 8.5 percent from 2007 to 2011, while median household incomes have fallen 6.8 percent during the same period (see “ Crisis of affordable housing hits broad sections of working class in New York ”).

Maria Gomez, 46, lives in a two-bedroom apartment with her 26-year-old son and received a letter ordering her to move into a one-bedroom apartment.

She told the WSWS, “I have been working in a home care agency for the last 23 years, and am studying to be a nurse. My son works part-time, 10 hours a week, for facilities that service the mentally challenged. He is also going to school to learn business management.

“What the government is doing is not right. These are not huge bedrooms in our apartments, but it is better,” she added, “than living under a bridge.”

“We work and we study. We and everyone have the right to some privacy. Our living room is also our dining room. It is the same space.

“We who work to service others like people who work at Dunkin’ Donuts and in clothing stores cannot afford to live here.”

Maria said that it was becoming increasingly difficult for workers to get jobs in New York City. “They started to reduce workers in my agency around 2009, and the rest of us are doing the same amount of work,” she reported. “This is going on in all the agencies in my industry throughout the city and the state. It is happening in private industry, as well. My job contains five different job descriptions, and I am doing all five.”

Christine Mahmoud told the WSWS: “People living in New York City housing are being downsized. We are fighting for the whole city. When I was younger, I lived in Knickerbocker Plaza also. Then, you could find affordable housing all over. I moved out of there because the rent was too high.

“Now, I live in New York City public housing in the Stanley Isaacs Houses on 93rd Street and 1st Avenue. Downsizing is going on there, as well. It is being done by the city, the state and the federal governments. There are public housing people who came to this rally today.

“We have Section 8 tenants in my building in public housing, and I’ll tell you what they are doing with the downsizing. My daughter, my husband and I have a two-bedroom. If my husband were to pass away, heaven forbid, they would put me and my daughter in a one-bedroom because they can downsize two members of the same sex into a single bedroom. But if my daughter then moved out, they would force me to go to a no-bedroom studio. Often this is not in the same building, and I really don’t want to move out of my building. They have been downsizing us for quite some time.

“The rally here is for seniors and the disabled who are being pushed from one-bedroom apartments to no-bedroom studios. They figure if they can start on the most vulnerable—the seniors and the disabled—they will set a precedent to be able to force it on others later.”