Why Homele$$ne$$ is Big Business - JuniperCivic.com
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Originally published in the September 2014 Juniper Berry Magazine

Why Homele$$ne$$ is Big Business

Many readers of this magazine likely attended the May 22nd hearing at Christ the King regarding the proposed Cooper Avenue homeless shelter. You may therefore recall that a question was asked about whether or not the Pan Am Hotel on Queens Boulevard was to become a shelter as well. The answer provided by Lisa Black, Assistant Director of Governmental Relations at the Department of Homeless Services, was that the Pan Am had been reviewed by her agency and was immediately rejected based on the fact that not all the rooms had kitchens. (We believe she misspoke when she also said they were lacking bathrooms.)

In addition, news outlets were reporting that the Pan Am was preparing to reopen as a luxury hostel catering to young foreign tourists. Photos of the renovated interior were on their new website, and bookings were being accepted via various online reservation systems, such as Hotels.com.

So it naturally came as a surprise to everyone that homeless families were moved into the Pan Am on June 6th, just 2 weeks after Ms. Black's declaration that it would never happen and that Samaritan Village, a charity with a documented history of fiscal irresponsibility, would be providing services. Samaritan Village was cited for financial misconduct in an audit conducted by State Comptroller Tom DiNapoli earlier this year. (In spite of this, when City Comptroller Scott Stringer audited the organizations charged with providing emergency shelter to residents displaced by Sandy, he conveniently chose not to audit Samaritan Village, even though they had 2 out of the 20 contracts.)

The deceit surrounding this process whipped local civic leaders and the residents of Elmhurst into a frenzy. Protests were held that drew so many people that the local lanes of Queens Blvd in front of the hotel had to be closed by the NYPD. Defensive statements were released by elected officials and the Department of Homeless Services indicating that they regretted the way it went down, but due to the emergency family homeless crisis they had no other choice.

Meanwhile, as I write this, word has just come that the new owners of the Cooper Avenue site have applied to the Department of Buildings for permits to convert the old factory into hotel units. This will cost them millions of dollars.

Why would the owner of the Pan Am decide against running a for-profit hotel, and why would the original owner of the Cooper Ave site reject all offers to rent the existing factory and then sign the property over to a not-for-profit for $0? Why would the new not-for-profit then spend a huge amount of cash to convert this property into a shelter?

The simple answer is: major profit. The sky is apparently the limit for the City when it comes to spending money on homeless shelters. The city signs over more than $100 per room per day to the owners of these shelters and millions of dollars in contracts to the not-for-profits that provide services. (Speculation is that the owner of the Glendale site entered into a partnership with the not-for-profit, who will in turn rent the facility to Samaritan Village.)

Now, while pols may protest that there isn't much they can do to prevent a shelter from being sited, it's not true that they can't do anything about stemming the tide of homeless applicants.

A "RIGHT TO SHELTER" STATE

New York is a right-to-shelter state, meaning that you don't have to be a resident of NY State in order to ask for shelter here. However, most municipalities in the U.S. are not right-to-shelter. The total entitlement benefits package for NYC is one of the highest in the country, which entices people to move here to collect. All of this could be changed via legislation. It also doesn't help that the City Council Speaker, Melissa Mark-Viverito, stated that the City should provide shelter to the children crossing our southern borders illegally without their parents. We can't handle our own homeless, but we are volunteering to take on those from elsewhere? That doesn't seem like a fair proposal for the migrant children, the American homeless or NYC taxpayers.

Albany also passed a budget that could have provided the opportunity to replace Section 8 funding lost during the 2013 congressional sequestration, but failed to take advantage of it. This means that people who were previously receiving assistance in paying their rent to private landlords are now flooding the NYCHA system. And what is the fastest way to get moved to the top of the NYCHA waiting list? ‒residing in a shelter. An August 12 article in the New York Times pointed out that just over a quarter of a million households sit on the waiting list for an apartment in one of the New York City Housing Authority's 334 developments. Add to this the sad reality that NYCHA is $77M in the hole and needs an additional $18B for major repairs.

Here's another fun fact: since NYCHA is where most of the homeless are looking to be placed, it should be noted that Queens only has 22 NYCHA complexes ‒ the second fewest in the city. So if the goal, as DHS claims, is to place families in shelters in their home borough and then place them in housing in their home borough, why would we build more shelters in Queens, when we don't have the corresponding permanent housing here to transition families into? The turnover in NYCHA facilities is 3% yearly. That means Queens homeless families will be forced to languish in shelters for a much longer period, with the homeless kids displacing the children of residents in area schools.

FAIR SHARE?

What about the claim that Queens doesn't have its fair share of shelters? Well that's an interesting declaration considering that there are many different shelter classifications, and not all homeless people are placed in shelters. There are infamous halfway houses which are generally multifamily buildings or old hotels and nursing homes throughout the borough that house the homeless but are not counted on the DHS' facilities roster. Then there are the per diem shelters, like the Boulevard Motel on Queens Boulevard, which have some of their rooms used by the homeless which also aren't counted. So when you see headlines that claim a paltry number of shelters for Queens, take it with a grain of salt.

Furthermore, as the City rezoned manufacturing areas, sold most of its owned property off to the highest bidding developer, or in many cases sold acres of land for $1 to build so-called affordable housing that is anything but, they could have been building low income housing that would have addressed the homeless problem. Right now, the city is spending millions to design emergency housing for future disaster victims, but continues to neglect the homeless housing situation that the City itself deemed an emergency.

Considering all of the above, the people taking advantage of this messed up system really can't be blamed. If the choice is working a minimum wage job and living in crowded conditions in order to pay rent vs. entering the homeless system where free lodging, food, transportation and child care are provided, it's pretty obvious what people in that predicament are going to choose.

And then there's the flip side of the whole situation. If you run a not-for-profit homeless organization, such as Samaritan Village or Help USA, what incentive do you have to actually find housing for the people you are serving? You get paid to support them, and fewer residents would mean fewer services for which you can bill. If you are working at DHS, you want to keep your job, and the best way to do that is to ensure a large homeless population. If you are an elected official, you may publicly say that the system needs fixing, but do you really want to see it fixed? No, because the people running the not-for-profits are generous campaign donors, the DHS provides patronage jobs for your friends, and new voters are entering your district that will most likely register as Democrats and help insure your continued incumbency.

FRIENDS IN HIGH PLACES

One of the most obvious conflicts-of-interest is that former DHS employees run many of the not-for-profits that specialize in providing homeless services. They therefore are close with everyone making the funding and legislative decisions, and pols have gone to great lengths to make sure that their friends have been taken care of.

And speaking of government, what was the political reaction to the protests in Elmhurst? To demonize the protesters , act defensive and basically do nothing of value for any of their constituents. Cowardly Council Member Danny Dromm decided that it was in his political interest to claim that the protesters used 'racially offensive' language, when in fact, the worst things they said were, Pay your rent and Get a job when provoked by the homeless who confronted them with clearly racist chants of Go back to China and Make me some chicken wings. DHS used the racial tension between the two sides to their advantage and the press ate it up. When Comptroller Scott Stringer started feeling the heat for signing off on the contract to open these shelters, he came out with a lame press release that asked DHS to provide more notice to affected communities when they plan to open shelters. Then DHS proposed a 7-day notification period.

How would a 7-day notification period mollify the opposition? That's still basically dropping a bombshell on a community at the last minute. Please be aware that the entities behind both the Pan Am and the Cooper Avenue site (same partners, different business names) incorporated in 2013. The Cooper Avenue site was obtained in December 2013 and the Pan Am site was purchased in January of this year. It would seem that the deals had been promised well in advance, and that's when the community should have been notified. It's also a bit disingenuous for the DHS to be claiming that a recent uptick in families seeking shelter is responsible for the emergency need to open new shelters everywhere when these deals stretch back into the Bloomberg administration and there have been stories in the papers about the closing of shelters in other boroughs.

The de Blasio administration continues the failed policies of the Bloomberg administration, and has made the actions of City government even more opaque by refusing to answer activists' requests under the Freedom of Information Law (FOIL) for records regarding these contracts. It makes you wonder what exactly they are hiding, doesn't it?

And speaking of the Bloomberg administration, the Department of Parks and Recreation allegedly rejected the Cooper Avenue site for a recreation center and the School Construction Authority rejected the site for a school. The reasons? The site was expected to be contaminated and too close to a factory that manufactures potential explosives. It was too dangerous to allow kids to be at the site for part of the day, but it's perfectly fine to allow them to live on these dangerous premises. The contradictory logic of this is simply astounding.

Elected officials have now gone back to pushing for the proposed Glendale shelter site ‒ along with surrounding properties housing Independent Chemical Corp. and the former Hansel & Gretel factory ‒ to become a school, after required remediation. As per the Queens Tribune, School Construction Authority Director of External Affairs Mary Leas stated at a public meeting August 6th, Without three pieces of property, or [just] the Hansel and Gretel site, we're not going to want to build there, we don't want to build next to an existing property that might be a homeless residence and a chemical company. We would be hard pressed to convince parents to send their children there.

If the electeds actually pull this off, it would be quite a victory for them. But their past denials that this shelter proposal was moving forward, current proclamations that the shelter is a 'done deal', along with track records that lack real accomplishment, make the possibility pretty remote. Council Member Elizabeth Crowley hasn't even called for an oversight hearing at the City Council's Committee on General Welfare, the body with oversight of DHS, even though concerned residents have received responses from Council Speaker Mark-Viverito indicating that this was the proper course of action.

The negative impacts caused by the Department of Homeless Services, not-for-profit homeless service organizations and affordable housing developers are very apparent, and the press keeps touching on them, but no one at City Hall is motivated enough to connect all the dots together and put an end to the opaqueness and lies. It seems that failing audits and failing homeless families do not disqualify these groups from receiving millions of tax dollars. When will the so-called progressives that currently run city government put an end to this problem instead of encouraging it to continue?

Here are some of the more blatant examples of stupidity from recent press articles:

The affordable housing lottery at 66 Rockwell Place opened in March of 2013. After several lottery rounds, developers, who must give priority to local residents, could not find enough qualified applicants from Community Board 2 [Brooklyn] for the affordable units. A spokesman for the building said people living in the neighborhood made too much money to qualify.

‒ DNAInfo, 8/4/14

Homeless residents of a Bronx shelter woke up yesterday to find that their landlord was kicking them out. Sources familiar with the situation say that Aguila is balking at the mayor's plan to reduce City subsidies to shelter operators and landlords by 10%, closer to the market rate. According to the Comptroller's Office, Aguila has received $56.1 million in contracts from the City this year and last year alone. A 2011 audit conducted by former Comptroller John Liu found that Aguila misappropriated as much as $10.4 million in taxpayer funding, $1.4 million of which he asked the City to immediately recoup.

‒ Gothamist, 8/6/14

Led by a nearby church, community members and residents have expressed interest in transforming the [vacant] parcel into a recreational space for the kids and young men of the area, which is close to the York College campus. The city Department of Housing Preservation and Development owns the parcel plans and has planned for years to build the affordable housing unit. According to an HPD spokesman, the city agency is in the very early stages of moving forward with that particular project.

‒ Times Ledger, 8/8/14

The de Blasio administration has awarded a $15 million contract to a longtime private homeless shelter provider, one year after the city comptroller's office demanded City Hall cut ties with the company. The New York City Department of Homeless Services granted Aguila Inc. a five-year contract to operate a site for homeless adults and families in the Bronx, according to a notice in a recent edition of the City Record. Agency officials said Aguila has cleaned up its act since a scathing audit by former city comptroller John Liu last year found the company had accounting errors and produced unsafe and unclean conditions. The officials, who would only speak on background and not for attribution, said Aguila addressed Liu's audit by creating a new management team, making personnel changes including a new chief financial officer and fixing problems related to subcontracting, including updating paperwork with attorneys and establishing formal lease agreements, which were not in place in the past.

‒ Capital New York, 8/8/14

Residents from one end of the peninsula to the other assembled at the Macedonia Baptist Church recently to voice their displeasure. This time, it was about the abrupt decision and limited notification to open a homeless shelter in Arverne. On July 16, the Department of Homeless Services notified Community Board 14 that a homeless shelter was going to be placed on the site of the former Daytop Village on Beach 65th Street. On July 24, with families already living in the former drug rehab facility, Senator James Sanders Jr. and Councilman Donovan Richards hosted a community meeting meant to get answers from the DHS about the decision. Several times residents stood up in the Beach 67th Street church to say how insulted they felt that the agency made the decision, and only then came to meet with them after the "deal is done." Department of Homeless Services first deputy Lorraine Stephens answers residents' questions. Richards said, "It's how it came about. I'm disappointed in the process." There was also a feeling that a new facility with people in transition were being brought into an area that was ill equipped to handle it.

- The Wave of Rockaway, 8/8/14

Mayor de Blasio has put the kibosh on a homeless shelter proposed for the Upper West Side, the man pushing the project claims. Ron Edelstein, whose family owns the Imperial Court Hotel on West 79th Street, said a high-ranking city Department of Homeless Services official told him the mayor ordered the agency to reject his proposal to convert the 227-room building into apartments for 340 homeless people. Anti-shelter pressure came from local elected officials, including Assemblywoman Linda Rosenthal and Manhattan Borough President Gale Brewer, a former councilwoman. Brewer denied lobbying the mayor on the hotel but said her stance on the issue of shelters is well known. I have talked to Mayor de Blasio's staff and Mayor Bloomberg's staff and told them these buildings should be used as permanent housing, not homeless shelters, she said. Rosenthal ripped the proposal and threatened a city takeover of the site in a Jan. 28 letter to de Blasio and Homeless Services Commissioner Gilbert Taylor. These shelters have been used as cash cows without delivering suitable services or assistance to the homeless and as a means for slumlords to harass the remaining permanent tenants, she wrote. The building now houses about 50 tenants in $400 rent-stabilized apartments. If approved, the shelter would house 340 homeless people in 170 rooms and offer three meals a day, 24-hour nursing and security. The city would pay $82 per room per day and $94 per day per person for food, services and staffing — an annual cost of $17.6 million. The city would not pay for the hotel's conversion.

‒ NY Post, 4/6/14