New York Pays Landlords Above Market Rate To Shelter The Homeless – And Paying Tenants Get Forced Out
August 14, 2013 by Ben Bullard
An investigative piece Monday by Cindy Rodriguez, the Urban Policy reporter for National Public Radio affiliate WNYC, brought the public’s attention to the city’s practice of paying private landlords in low-income areas more money to shelter homeless people in near-derelict apartments than the landlords can get on the free market.
Guess what happens? Without the city having to lift a finger, the landlords follow the artificially-inflated new “market” price the government pays, and – through both attrition and outright eviction – lock out paying renters in order to house the homeless. The new homeless tenants effectively become wards of the State.
For the last year, the number of people in New York City’s shelter system has hovered around a record 50,000 overall. Nearly half are children. The numbers of people in shelters have shot up since 2011, when state- and city-funded programs designed to help people move into permanent housing were eliminated.
So the demand for shelter is high – creating the curious phenomenon of the city paying private landlords such high prices for lousy housing that it’s in the landlords’ interest to push out market-rate tenants like Melvina McMillan. The city rate in its deals with these landlords is typically about $3,000 a month. A portion of that goes to pay for security and caseworkers; at 60 Clarkson Avenue, an organization called CAMBA is providing the latter. McMillan, upset by the arrangement, said it was good for everyone – except the people living at the building.
And these are truly lousy buildings to begin with. McMillan’s building has 215 housing code violations, including roach infestation, leaks and mold. Fights in common areas are frequent.
The city pays an average of $3,000 a month to secure a unit. McMillan pays $700 a month.
Since 2011, there’s been a 66 percent increase in the number of apartments the city leases for the homeless. A court order forces the city to offer shelter to all who seek it, and, because the number of homeless people is highly liquid, it falls back on snapping up apartments instead of spending the money all at once to secure a less temporary method of compliance, such as subsidizing the building or expanding shelters.
The obvious absurdity of local government tinkering with the housing market is manifest when one considers that the paying tenants in these apartments – already at or near the very bottom of the economic ladder in New York City – don’t have a lot of options if they’re tossed out of their homes to make way for a city-subsidized homeless replacement. So where does that leave them?
That’s right: homeless.
“If [McMillan] ends up on the street,” writes Rodriguez, “she’d become part of the city’s homeless population – eligible to be placed in an apartment like the one she lives in now, at a cost to taxpayers of $3,000 a month.”