Homelessness Overwhelms Services in NYC as Rents Outstrip Wages

October 11, 2016 1:32 pm Last Updated: October 13, 2016 9:33 am

NEW YORK—As New York City pours hundreds of millions more into its homeless services, the homeless population continues to climb, testing Mayor Bill de Blasio’s campaign promise to tackle the problem.

On Sept. 29, almost 60,000 people spent the night at the city’s homeless facilities—setting a record likely to be broken on next count, too. The number of homeless has been increasing for the past decade.

Meanwhile, the city’s Department of Homeless Services repeatedly blows through its budget limit, spending over $1.3 billion during the last fiscal year—more than 23 percent over budget.

De Blasio defended his lineup of new initiatives, saying the situation would have been worse without them.

While his preventative and transition programs do seem to diminish the growth of homelessness, they’re not reversing the trend.

History

In New York City, every man won the right to shelter after the 1979 New York Supreme Court ruling Callahan vs. Carey. The city entered into a consent decree with the plaintiffs guaranteeing temporary shelter to every man made homeless “by reason of physical, mental, or social dysfunction.”

The named plaintiff, Robert Callahan, died on the streets before the consent decree was signed.

The original ruling applied to men only. It was extended to women through another Supreme Court ruling in 1983 and to families in a 1987 ruling.

Since then, fewer people have frozen to death on the streets, but the city is saddled with running a costly shelter system.

Currently, the city spends $41,000 to shelter a family for a year. By comparison, the median household income was just shy of $53,000 in 2014.

Becoming Homeless

Two-thirds of people entering a shelter had lost their job during the prior five years. About half had been evicted. Other reasons for homelessness include domestic violence, overcrowded or hazardous living conditions, and family feuds, according to a 2005 Vera Institute of Justice study.

Two-thirds of people ending up in shelters are single parents (mostly mothers) with children. That’s partly why city shelters house almost 24,000 children.

From a long-term perspective, rents in the city rise faster than salaries, pushing poor people closer to eviction. Half a million (15 percent of) families in the city fell behind on their rent or mortgage payments last year.

Affordable Housing

The mayor promised to build 80,000 and preserve 120,000 affordable housing units by 2024. “Preserving” means the city uses subsidies to persuade landlords to continue offering their apartments as affordable housing.

So far, almost 53,000 extra units have been built or preserved some two-and-a-half years into de Blasio’s term.

But only 3,500 of them have been financed for those earning less than $24,000—such as a single mother living in a shelter who lands a minimum wage job.

The majority, 54 percent, of the new and preserved units are aimed at middle-income people, with rents in the $1,000 to $1,500 range.

Such middle-income apartments were easier to build through the 80/20 system, which was scrapped by the state in January after New York City refused to demand union-level wages for workers on the developments receiving the tax breaks.

Under the 80/20 rule, the city had allowed developers to build taller apartment buildings (many luxurious) in lucrative areas like Manhattan, Williamsburg, or Long Island City and gave them tax breaks in exchange for renting out 20-30 percent of the apartments under market price.

Population of Homeless Shelters and Budget in New York City

The rate of increase in New York City homeless shelters population compared with the rate of increase of the Department of Homeless Services annual expenses. The expenses for the fiscal year 2017 are estimated 20 percent higher than the planned budget, based on the agency's track record of exceeding its budget. (Council of the City of New York, New York City Department of Homeless Services)
The rate of increase in the New York City homeless shelters population compared with the rate of increase of the Department of Homeless Services annual expenses. The expenses for the fiscal year 2017 are estimated 20 percent higher than the planned budget, based on the agency’s track record of exceeding its budget. (Council of the City of New York/New York City Department of Homeless Services/graph, estimate by Epoch Times)

From Shelters to a Home

Altogether, about 5,000 public housing apartments become available every year as older ones are vacated. De Blasio has started to give public housing to people from shelters, after previous Mayor Michael Bloomberg stopped the practice in 2004.

Bloomberg argued that giving the apartments to homeless people was unfair to the hundreds of thousands of other New Yorkers on the public housing waiting list (almost 260,000 as of March 31, 2016).

Former Mayor David Dinkins first started to prioritize the homeless in public housing applications in 1990. But the practice stopped when the shelter population shot up—people were intentionally entering shelters to fast track themselves into public housing.

A 1998 study found that indeed was a part of the problem, but also stated the shelter population increased mainly due to factors like the early 1990s depression and the city’s use of nicer family shelter apartments (called Tier II).

De Blasio started his tenure with 750 public housing apartments for the homeless a year and increased that number to 1,500 this year.

The city also runs programs helping people pay rent when they’re at risk of losing their apartments or after getting out of a shelter. The preventative at-risk program alone cost over $180 million in fiscal year 2015 to help make rent for 53,000 households.

A homeless man sleeps on Seventh Avenue in New York on Oct. 3, 2016. (Samira Bouaou/Epoch Times)
A homeless man sleeps on Seventh Avenue in New York on Oct. 3, 2016. (Samira Bouaou/Epoch Times)

Because the shelter system is so expensive, the city still saves money if at least 4,400 of those 53,000 households are families that would have otherwise spent this year in a shelter.

Rental assistance “and other move out programs” helped 40,000 people leave or avoid living in shelters in the past two years, the city stated in August.

Without such programs, the administration said the shelter population would have reached 67,000 by now.

Under Bloomberg, the city had a rent subsidy program that helped reduce homelessness, but the program was nixed in 2011 after the state stopped contributing to it.

Since then, the shelter population has swelled by about 50 percent.

After some haggling in Albany and staff shuffling at the Department of Homeless Services, de Blasio now has his own rent subsidy program.

The current mayor’s program “deserves a chance,” said Thomas Main, professor of public affairs and an expert on homelessness at Baruch College.

Ideally, New Yorkers would be able to earn enough to afford market-price apartments without taxpayer subsidies. But that’s wishful thinking under the current economy, Main said.

“I don’t think we’re going to end up anytime soon with an economy that’s radically different from what we’ve got,” he said. “I think we have to muddle through under the constrains, trying bit by bit to loosen them, but also trying to manage from day to day.”