City Chips Away at Homeless Housing Costs

Sheila Carroll and her daughter Judah Jones, who are homeless, participate in a rally in support of residents at the controversial Pan Am Shelter in Queens

Jessica Heinze’s problems with her one-bedroom apartment on the Grand Concourse in the Bronx begin as soon as she enters, when she can’t turn on the light.

“From the bathroom all the way to the bedroom there’s no electricity, no outlets that work,” she said.

In the bathroom, the toilet and the sink are clogged up, and a part of Heinze’s tub is missing.

Heinze, 37, has been homeless since she lost her rent subsidy two years ago. She stays in this apartment, for which the city pays $2,900 a month. The money goes to a non-profit provider who leases the apartment from a private landlord and is supposed to provide social services. It’s a model called cluster-site shelter.

Advocates have criticized it ever since the city first started renting private apartments for the homeless in 2000. Mary Brosnahan, president of the Coalition for the Homeless, describes it as “endless amounts of money just poured into some of the worst buildings in the city.”

The de Blasio administration announced in the spring that things were about to change in a big way: rents paid to the landlords would be cut in half, to $1,500. The city expected to save $60 million. But after a summer of negotiations with nine providers, the average cost of an apartment will only go down to $2,522, for a savings of $15 million in fiscal year 2015. Lorraine Stephens, first deputy commissioner at the Department of Homeless Services, said that’s still a success.

“We’re at a place where all of our providers are working very closely with us and have accepted the rent cut,” she said. “We’re very happy with the agreement.”

DHS said the agreement covers all but 100 apartments in three buildings in the Bronx. They are owned by one landlord, whom the agency refused to identify. And they’re all part of a larger portfolio managed by Aguila, which declined repeated request for comment.

The agency has a history of poor conditions in its buildings, with dozens of open housing violations. In 2011, the city Comptroller found that many of the agency's buildings were dirty and dangerous and that they were spending program money on inappropriate expenses, such as personal vehicles and out-of-state meals. Stephens said that Aguila has hired a new chief financial officer and that its performance will be closely monitored.

“We’re going to hold Aguila, as well as all of our provider agencies, accountable for the quality of services they provide,” she said.

Doing business with some of the worst landlords and providers is yet another example of the city’s struggle to control record-high homelessness. Currently 56,560 people live in the shelters. DHS says it wants to eventually phase out cluster sites, but right now it doesn’t have anywhere else to put the homeless families.

As more people enter the system, they’re relying on motels to handle the surging numbers, such as the former Pan Am hotel in Elmhurst, Queens, which sparked community protests when it opened in June.

Most recently DHS started using the former Capri Whitestone Motel in the Bronx, located across from Donald Trump's high-end golf course at Ferry Point Park. Far from residential areas, it hasn't led to protests, but local politicians oppose it. And some of the 80 families who live at the hotel complain about the conditions. After her brother moved out of the country, Altamese Gause didn’t have anywhere else to go. She’s staying at the hotel here with her nine- and one-year-old daughters.

“My child has been eaten up with bedbugs,” she said. “I have a sleeping bag. And we just lay it over the bed and we just lay over that to keep safe.”