The Philadelphia Housing Authority is laying off 126 employees, 14 percent of its workforce, as the city agency grapples with a $21 million deficit.

Federal housing subsidies have declined since 2008 while the demand for affordable homes has grown with 25 percent of Philadelphia residents living below the poverty line. The agency plans to put more money into Section 8 rental assistance for low-income families, according to the Philadelphia Inquirer.

"Our mission is to provide affordable housing, so we believe it was important for us to do exactly that to advance our mission as a housing provider, which means maximizing the number of houses for families who are in need," Kelvin A. Jeremiah, president and CEO of the housing authority, told the newspaper.

Standard & Poor's rating service recently cut the Philadelphia housing authority’s bond rating from AA-minus to A-plus, which means it will cost the agency more to borrow in the future.