Getting a Better Deal for Homeless New Yorkers and New York Taxpayers
by Steven Banks, Department of Social Services Commissioner
One year ago, we announced a plan to transform the City’s approach to providing shelter. Our plan puts people and communities first by ending the use of decades-old stop-gap measures, like commercial hotels and cluster units, while opening a smaller number of new borough-based shelters to help families and individuals stay connected to the anchors of life — like schools, jobs, health care, families and houses of worship — as they get back on their feet.
As the lawyer who sued four Mayors and five Governors to enforce the right to shelter under our State Constitution, I understand the legal, and, yes, the moral responsibility we have toward our neighbors who have no homes. I understand the basic human pain New Yorkers feel when we see someone living on the street. So does Mayor de Blasio. After all, he knew my résumé when he hired me. We stand by our moral and legal obligation to provide shelter to New Yorkers experiencing homelessness on any given night and keep people off the streets — and we won’t let them down.
Our program to keep people off the streets is working. We’ve brought nearly 1,500 people in from the streets and provided assistance to help them remain off the streets. We continue to deliver on our promise to get out of clusters as part of our borough-based plan and have already ended the use of almost half of all cluster units citywide and announced our plans to convert 800 cluster units in this 18-year-old program into permanent affordable housing for homeless families, which will reduce our use of clusters overall by 60-percent.
We’ve announced seventeen high-quality borough-based shelters, eleven of which have already opened their doors.
We’re making progress and are headed in the right direction.
Our strategies for addressing the citywide challenge of homelessness are taking hold. Our legal services and prevention programs are ramping up and evictions are down 27 percent. Our rehousing programs have helped more than 71,000 people move out of shelters or avoid homelessness altogether. A recent Furman Center study found that the year-over-year shelter census growth from calendar year 2015 to calendar year 2016 was the lowest increase since 2011, the year the Advantage rental assistance program ended, leading to a 38-percent increase in homelessness. Additionally, the shelter census for 2017 remained roughly flat year over year for the first time in more than a decade.
These are promising accomplishments, but homelessness and a haphazard shelter system didn’t happen overnight — and they won’t be solved overnight. We have much more to do to address this crisis decades in the making across the five boroughs.
Prioritizing clusters for closure means we’ve had to increase use of commercial hotel locations to meet immediate capacity needs, with these locations serving as a bridge while we implement our plan. The City’s periodic use of commercial hotel locations dates back to the 1960s. The hard truth is that our transformation of the shelter system will take time. In fact, it will take five to seven years to be fully implemented.
Having litigated about hotel conditions for decades at the Legal Aid Society, I agree that waking up in a hotel, far from home, without adequate social service support, is not the way forward. We know our homeless neighbors deserve better.
That’s why, while we use hotels in emergency situations, we are improving that experience for homeless New Yorkers and getting a better deal for taxpayers. In the past, the City rented most of these hotel rooms on a per-day basis, which made controlling costs and providing services challenging. To offer better access to social services for these families and individuals and keep costs down, we initiated a Request for Proposal competitive bidding process to place all of the hotel rooms we are using under contract.
Last week, the City’s Budget Director provided the Council with a monthly snapshot of City funding for homeless New Yorkers. The monthly spending is $32 million for commercial hotels, $2 million for the remaining clusters, and $96 million for actual shelters. We monitor the spending and costs of sheltering our homeless neighbors on a monthly basis. And to control costs more effectively, the City entered into $364 million in annual contracts to shelter homeless New Yorkers in hotels on an emergency basis over the next three years. Actual spending will be based on the fluctuating emergency needs of the families and individuals who turn to us for help, including the different demographics of households, level of services and security required, and types of shelter settings available, among others. Moving to competitively bid contracts allows us to both hold contractors accountable and fulfill our legal obligations to provide shelter on any given night.
That’s a significant commitment of resources, but it’s a better deal for homeless New Yorkers and New York taxpayers than renting rooms on a night-to-night basis, which can result in paying much more per night. We’re making fewer dollars go farther and getting more guarantees on services, with better mechanisms for locking in room rental rates and ensuring quality control.
Under these contracts, the average nightly rate for a hotel room is $174, and no room costs more than $250 on any given night. The quality of client services at these sites will be enhanced, and we will be able to hold service providers accountable for delivering the same social services found at contracted shelter sites, including case management, assistance with public benefits, help finding permanent housing, and job training and counseling.
But even under contract, rates may sometimes exceed what you or I might find online for a night or two — and that’s because we’re providing more than a roof over people’s heads. We require accommodations for caseworkers, microwaves, refrigerators, bedding, and 24/7 security to ensure we are giving New Yorkers experiencing homelessness a safe, secure and supportive environment.
In our daily mission, we continue to increase our homelessness prevention and rehousing efforts and improve transitional housing for homeless New Yorkers by opening high-quality shelters citywide. As we work to phase out the use of cluster apartments first, followed by commercial hotels, and revamp the shelter system with our new borough-based approach, we are asking communities to come forward and help us identify sites for new shelters. It’s better for our homeless neighbors and it’s better for taxpayers, and could save the City a total of $100 million per year if we utilize only shelters and end the practice of using hotels.
In the meantime, working in partnership with not-for-profit social service providers, our contracts are a common-sense control to ensure the hotel locations we must use in this phase-out period are the best they can be as we finally make good on our promise to end this decades-old practice once and for all.
