Thomas J. Main and Peter Nasaw
During the course of his overwhelmingly successful campaign for mayor, Bill de Blasio made poverty and income inequality his main issues. As the liberal journalist and fervent de Blasio supporter Eric Alterman put the matter, “De Blasio made economic inequality the central issue in his campaign and attempted to tie nearly every issue he addressed to that problem.”1 Homelessness was obviously such an issue, and so when de Blasio took office in January 2014, expectations were high that he would address that problem effectively.
Unfortunately, as of April 2017, under the new mayor, the homelessness problem had, by several important measures, gotten worse. The month de Blasio assumed office there were 53,615 people in the Department of Homeless Services (DHS) shelter system. That number has hovered around sixty thousand people since December 2014. The annual enumeration of street dwellers—the HOPE count—is down from 3,537 people in 2014 to about 2,794 in 2016, which is a positive trend but not a dramatic improvement. And the DHS budget remains high: $1.29 billion for fiscal year 2017.
Voters and other observers are not impressed. Quite surprisingly, given the emphasis de Blasio put on poverty and homelessness in his campaign, a March 2017 Quinnipiac University poll found that voters rated this the weakest aspect of the mayor’s performance, with 55 percent disapproving. And the New York Times, which supported de Blasio’s mayoral run, recently concluded, “The rise in homelessness is arguably the mayor’s biggest failure in that goal to close the gap between the haves and the have-nots.”2 How did the mayor end up in this position, and what is he doing about it?
To put de Blasio’s situation in context, we have to back up to 2004, when Mayor Bloomberg developed a five-year plan to “make the condition of chronic homelessness effectively extinct in New York.”3 Preventing homelessness would be emphasized through a “Home Base” program that would intervene with at-risk families to keep them housed. Analysis would show that Home Base did lower homelessness and even paid for itself. More supportive housing—that is, apartments with services for the mentally ill and other disabled street dwellers—was to be developed. This goal was accomplished in 2005, when the city and state signed the “New York/New York III Agreement,” which produced nine thousand such units. Under the “Housing First” philosophy, street dwellers would be moved into supportive housing as quickly as possible, an approach that both reduced street homelessness and encouraged enrollment in rehabilitative services. Shelter use was to be cut by rehousing long-term shelter stayers. And, very importantly, shelter clients were to be moved out through rent subsidies, which, a key document noted, “must continue to be available in shelter to re-house chronically homeless individuals and families.”4 Bloomberg pledged to reduce the shelter census—36,399 people in June of 2004—by two-thirds in five years, to about 12,000 persons by 2009.
On October 19, 2004, DHS abandoned its long-term policy of giving shelter residents priority for entering public housing and for federal Section 8 rent vouchers. Commissioner of DHS Linda Gibbs believed that moving one shelter family to public housing would draw at least one new family into the system. But economists found that to draw one family into the system requires placing seven families into subsidized housing. Perverse incentives are real but too weak to drive up the shelter census. Nonetheless, shelter families lost preferential access to public housing and Section 8 vouchers; instead, they were eligible for a temporary five-year rent subsidy, Housing Stability Plus, replaced in 2007 by the Advantage two-year-maximum rent-subsidy program, which was funded jointly by the state and the city.
By Bloomberg’s deadline of June 2009, the shelter census had not dropped appreciably. Then, as a result of a falling out between the city and the state over funding, Advantage ended. At that point no subsidies of any kind were offered to move families out of the shelter system. The number of people in the DHS shelter system began going up, and in January 2014 de Blasio inherited a record high shelter census. De Blasio’s challenge was to create a new rent subsidy, implement it effectively, and hang on until it took hold. How well did he meet that challenge?
First off, the new administration made striking changes in personnel as well as policy. Steven Banks, the Legal Aid lawyer who since 1983 had litigated against the city for the right to shelter for homeless families, became commissioner of HRA. Lilliam Barrios-Paoli, a former Catholic nun who served in the city’s social service bureaucracy under Koch, Giuliani, and Bloomberg, became deputy mayor for Health and Human Services. And Gilbert Taylor, formerly executive deputy commissioner for the Administration for Children’s Services, was appointed commissioner of the Department of Homeless Services.
The new administration’s biggest initiative in homeless policy is the Living in Communities (LINC) programs, which are a batch of rental-subsidy programs designed to help various sorts of shelter clients move out of the system. But the new programs had implementation problems. Getting LINC started required cooperation from New York State and thus between de Blasio and Governor Cuomo. The necessary small adjustments were not accomplished in a timely manner. LINC did not get fully up to speed until December 2014, and the nonpartisan Independent Budget Office concluded that “the homeless shelter population has remained stubbornly high this year. This is largely due to a slower than anticipated start to the LINC rental assistance programs.”5
The ongoing Cuomo/de Blasio turbulence also delayed the development of more supportive housing. Supportive housing provided through the New York/New York Agreements is one of the great policy successes in homeless policy and has been demonstrated to keep the disabled off the streets and reduce the cost of their care. The last of these agreements was signed in November 2005, and by 2014 most of its units were occupied. Thus the homeless remained on the streets, where they attracted the attention of unsympathetic media and the general public and fostered the perception of a homeless crisis. In fact, despite the declining street homeless population documented by the HOPE count, the March 2017 Quinnipiac poll reported that 54 percent of city voters believe that they now see more homeless people on the streets and in parks and subways than they did a few years ago.
The de Blasio team made a big misstep when in 2015 it decided to halt development of new shelters for eight months due to community opposition. When the delayed LINC program did not reduce the shelter census, the city was forced to rely on various unsatisfactory stopgaps to put up homeless clients.
One such stopgap is the cluster site program, which was initiated by the Bloomberg administration and harshly criticized by de Blasio before he became mayor. Under this program, DHS rents out a “cluster” of private apartments to shelter homeless families. Private landlords own the apartments while nonprofit providers under contract with DHS provide the families with services, and the buildings have a mix of homeless families and private rent-paying tenants.
The cluster site program is a policy disaster. It is premised on putting shelter families in apartments that would otherwise have gone to still-independent families, thus making an already tight low-income housing market even worse. And cluster site apartments are of poor quality. In March 2015, the Department of Investigation (DOI), which is a nonmayoral agency, released a scathing, 180-page report6 on family shelters that focused mostly on cluster site apartments. The DOI report found DHS’s cluster sites to be “poorly monitored” and said that they “provide the least adequate social services to families.” Among the issues were rodent infestations, fire safety code violations, defective window guards, a lack of furniture, and units in need of major repair. Landlords can charge three times the market rent for such low-quality apartments. Moreover, as the buildings are privately owned, DHS is unable to monitor who is using the apartment, security guards cannot screen guests, and there are many unauthorized visitors. Assaults, prostitution, gang activity, and other crimes are frequent. DHS is even renting from landlords who are on the Public Advocate’s list of the city’s one hundred worst landlords. Well before he became mayor, de Blasio was aware of these problems and pledged to end the use of cluster sites. But his moratorium on building new shelters and continuing high demand left him unable to do so. Given the vastness of the cluster site program—three thousand families—improvement will take years.
De Blasio inherited the cluster site program from Bloomberg, but is himself responsible for reviving the old and unfortunate practice of placing shelter system clients in commercial hotels. In the late 1980s, the common practice was to place homeless families in private, for-profit “welfare hotels” where conditions were infamously poor. Eventually the federal government refused to fund these hotels, and the practice was curbed.
But because of increased demand, de Blasio has had to return to using commercial hotels. Unlike with traditional, Tier II shelters, use of commercial hotels does not require community board notification, for the city is able to claim that it is not actually opening up a “facility,” but merely renting out hotel rooms. DHS has to make sure its clients maintain a low profile in these hotels to avoid protests from other guests. Further, providing social services in a private facility is difficult. DHS clients in commercial hotels, although they may like the relative independence hotels offer compared to Tier IIs, are thus less likely to receive the necessary assistance to obtain permanent housing. Also, security at the hotel is poor. Visitors are not monitored and only recently have security guards been stationed at hotels. In February of 2016, there was a triple homicide at the Staten Island Ramada Inn. Michael “Da Kid” Sykes murdered his girlfriend, and her two children, one of whom was his own. Had this hotel had the same security and monitoring that is provided in Tier II shelters, it is unlikely that this tragedy would have occurred.
The new administration was set back when Barrios-Paoli, a seasoned administrator and voice of moderation, left the administration just twenty months after she had joined it with much fanfare. Moreover, Gilbert Taylor did not work out as DHS commissioner and stepped down on December 15, 2015. Thus, for about the first two years of his administration, while he was being battered in the press and in public opinion over the issue of homelessness, de Blasio tolerated the presence of an ineffective point person on this crucial issue. With Taylor’s departure, HRA commissioner Banks took temporary charge of DHS.
Thus by mid-December 2015, city homeless policy was perhaps not in crisis but certainly less than optimal. Responsibility was widespread. Bloomberg failed to follow up on promising beginnings, eliminated housing subsidies, and drove up the shelter census. Candidate de Blasio underestimated how difficult a reversal would be. The conflict between de Blasio and Cuomo delayed the renewal of rent subsidies and kept the shelter census higher than it would have been. The feud also put off a fourth New York/New York agreement, leaving the city with few supportive housing units for the unsheltered mentally ill, who remained on the streets to be seen by all. The mayor responded slowly to the resulting media flap. Putting off building new shelters forced the city to rely on cluster sites and commercial hotels. Letting Lilliam Barrios-Paoli leave and Gilbert Taylor stay was a mistake. If de Blasio was to prove that a progressive could govern New York City, he would have to pick up his game, and he tried to do so.
To deal with the perception that street homelessness was out of control, the administration introduced the Home-Stat program. Sixty workers from the Mayor’s Office of Operations now patrol the streets and call in sightings of homeless people to the city’s nonemergency phone number, 311. Funding to private outreach nonprofits will be increased so that they can expand their street outreach teams from 175 to 312 workers and thus be able to respond to 311 calls within one hour. The Police Department will redeploy forty officers to its Homeless Outreach Unit. Two extra mini-counts of street homeless will be done each year for a total of four yearly counts. The idea is to identify street homeless individuals quickly and bring them to shelter rapidly. It may also be that the administration finally realized that more frequent and more accurate enumerations of street homelessness will be likely to rebut the belief that this population has exploded.
Further, it seems that a way around the Cuomo/de Blasio impasse, as it concerns supportive housing, may have developed. There is still no New York/New York IV Agreement, but there is what might be called a New York/New York IV Disagreement. In his State of the State Speech of January 13, 2013, Governor Cuomo announced plans for the state to develop twenty thousand supportive housing units over fifteen years. Earlier, de Blasio pledged that the city would develop fifteen thousand such units over the same period. In other words, since the mayor and governor cannot get along well enough to sign a formal agreement, each will undertake part of the job on his own. Supporters of a New York/New York IV Agreement had been calling for thirty thousand more units and are pleased that together the city and state plan to create thirty-five thousand units. The New York/New York Agreements were strikingly successful ventures in intergovernmental cooperation, so it is a pity that that process has apparently been abandoned for largely personal reasons. No one knows yet whether the lack of a formal agreement will prove to be a problem.
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A key part of this effort to get on top of the homeless issue was the partial remerger of DHS with HRA. Homeless services were spun off from HRA in 1994. In April of 2016, a ninety-day review authored by City Hall with the help of outside management consultants PriceWaterhouseCoopers argued that having two different agencies provide services to these largely overlapping populations was inefficient. The mayor’s solution was to have both HRA and DHS report to Banks, who was now dubbed commissioner of social services. The review projected $38 million in savings from the combined management structure.
But this partial merger may not be a good idea. As an independent agency, DHS was able to communicate and bargain with other city entities. Most homeless services are provided, not directly by DHS, but by contracted providers, who are generally not enthusiastic about the new arrangement. Most providers prefer to deal with a small agency focused on their specific issue rather than a very large but possibly more powerful superagency. Bureaucratic coordination via consolidation is rarely achieved in America’s fragmented administrative system. Agency effectiveness is more likely to be achieved by smaller, mission-driven organizations. But if the new, better-integrated structure is to work, the mayor needs to get serious about it: so far, no new head of DHS has been appointed.
Another problem for the de Blasio administration is that the LINC subsidies are not having as much of an effect as was hoped. According to a report from the Independent Budget Office, as of December 2015, the program had assisted only half as many families as had originally been planned. LINC has faced obstacles in recruiting landlords who are still angry over the Advantage debacle. Analysts believe that since the end of Advantage, housing prices have risen, and so LINC vouchers are too paltry (between about $1,200 and $1,550, depending on household size). Also, finding suitable units for LINC clients is difficult, partly because many of the very apartments that would be assigned to LINC voucher holders are still being used as cluster site units.
The de Blasio administration initiated another housing voucher program, CITYFEPS. FEPS stands for Family Eviction Prevention Services, and is designed for families that have experienced eviction. Landlords are reluctant to rent to tenants who have a history of eviction, so the CITYFEPS program has guarantees attached to it such that if the family is no longer able to pay its portion of the rent, the city will pay. The CITYFEPS vouchers provide the same support as LINC vouchers.
But the CITYFEPS program has serious problems. All apartments that participate in low-income voucher programs—Section 8, NYCHA, LINC, and TBRA—are inspected by the city department of Housing, Preservation, and Development (HPD) in order to meet federal standards for habitation. However, CITYFEPS units are not inspected by HPD. According to an HRA spokesperson, “For CITYFEPS, not-for-profit service providers generally do an assessment of the units, including a walk-through of the units.”7 But providers are judged by DHS partly by the number of families they place in independent apartments. Underperforming providers are at risk of losing their contract. So providers have an interest in approving apartments that can undermine their objectivity.
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The HPD inspection process is time tested; their inspectors are trained and regulated, and there are rules in place to prevent conflicts of interest. CITYFEPS apartments need to be inspected by HPD in order to protect vulnerable families from being exploited by unscrupulous landlords. Allowing potentially self-interested shelter providers to inspect CITYFEPS units is incautious and likely to provoke criticism when it comes to light.
A major factor that has driven demand, but has rarely been spoken about in public, is the eligibility process for families that apply to the shelters. The city must direct scarce housing resources to those who are most in need, and the eligibility process is designed to keep out families that are not actually homeless.
The city shelter system is regulated by the state welfare department, these days known as the Office of Temporary and Disability Assistance (OTDA). In December of 2015, OTDA issued a new regulation that drastically loosened eligibility rules. Very often, families applying for shelter had previously been living in an apartment leased to a family member or friend. Essentially, the new administrative directive made it much easier for the primary tenant of an apartment to refuse to let a family applying for shelter return to the apartment where it had been staying.
Often, prior housing history, public assistance records, and close family ties would show that despite the primary tenant’s refusal, the applicant was in fact lawfully permitted to reside at the address of origin. With the new rules, any applicant who told eligibility specialists that they were not allowed to return to their former apartment would be found eligible for shelter. In effect, the primary tenant now had a greater power to evict family members than did the city marshal. According to the Coalition for the Homeless, “the 2015 change in policy resulted in a decrease of the percentage of families denied shelter.”8 No doubt many needy families now received shelter, but the census was also driven up. Whether this was on balance a good deal may be doubted. In any case, almost one year later, in December 2016, a new OTDA regulation allowed the city to retighten eligibility standards. In effect, eligibility standards were loosened, more families were found eligible, the shelter census went up, and then the standards were tightened again. Fiddling with the eligibility standards at the very time when the new rent-subsidy programs were supposed to drive the shelter census down was probably not a good idea.
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In response to the growing shelter census, the de Blasio administration has released a new plan, “Turning the Tide on Homelessness,” which features an ambitious proposal to build ninety new shelters within a five-year period. The multipronged approach also touts the mayor’s success in enhancing shelter security and addressing code violations, which is particularly warranted given the state of disrepair found in many cluster site apartments.
Perhaps the most striking thing about the new plan is its tone, which is markedly more realistic than de Blasio’s campaign rhetoric was. When he was a candidate, de Blasio’s determination that the city could indeed successfully take on the daunting problem of inequality raised expectations about what could be done to deal with homelessness. Now, his new plan tells us that “[w]e must be clear-eyed: it will take many years to reset the unacceptable status quo we see today. . . . There are no silver bullets here. We will not solve this crisis overnight. It will be a long hard fight.”9 The more realistic tone is certainly welcome. But wouldn’t it have been better to start out by lowering expectations, which de Blasio could have afforded to do given the big lead he enjoyed in the general election campaign?
If the city indeed succeeds in building ninety new shelters, it will be able to end the use of commercial hotels and cluster site housing. But the greatest challenge to the construction of new shelters is community opposition. De Blasio’s new plan therefore calls for improved community relations and better outreach to community boards in order to curb resistance to new shelters. Unfortunately, the mayor’s promises to consult communities thoroughly sound all too much like those of his mentor, David Dinkins, who in 1991 proposed to overcome local opposition to his plan of opening a mere twenty shelters through “Early and Meaningful Community Involvement,” “Fair Distribution of New Facilities around the City,” and “Undertaking a Comprehensive Approach to Siting.” Dinkins’s plan was to win over hostile neighborhoods by being too impeccably fair to dispute. Communities would have none of it. The highly visible plan merely called attention to itself and gave communities an obvious target. The fact is, the less noticeable such siting efforts are, the easier they are for the city to accomplish.
Another problem for de Blasio’s plan is that where and how to place new shelters is governed by the city’s “Fair Share” law, which was incorporated into the City Charter in 1989. The law is outdated and confusing, and over the past twenty-five years, poor neighborhoods have in fact received more shelters than is equitable. In response to this unfairness, the City Council is now considering a proposal to reform the Fair Share law and push better-off communities to accept more shelters. Fair enough, it would seem, but a disproportionate number of shelter residents come from those same poor communities. Locating more shelters in better-off neighborhoods would mean that more homeless people would be sheltered far away from their places of origin, a practice that advocacy groups such as Coalition for the Homeless already dislike. How the de Blasio administration will square this circle is not at all clear.
Two courses of action for the city seem clear. One is to reform the CITYFEPS voucher program. As it stands, CITYFEPS is unlikely to meet its goals of rehousing families with histories of eviction, since families are returning to the shelters because they are being placed in apartments that do not meet minimal standards for habitation. The practice of having CITYFEPS units inspected by potentially self-interested service providers should end. The responsibility of inspecting apartments should be taken over by HPD, who already have a set of standards that is enforceable. They also are trained and equipped to perform this function. If the reintegration of DHS and HRA is successful, perhaps better coordination with HPD and other agencies will improve the administration of CITYFEPS.
The cluster site program should end, and the apartments it made use of should be converted into permanent housing for LINC voucher holders. But as the Independent Budget Office notes, the greatest challenge to this initiative is that the landlords will be paid half as much from LINC as they are already being paid to run a cluster site. Landlords are also reluctant to resume business relationships with the city after the fallout from the abrupt termination of the Advantage program in 2011. However, the city should be able to use the threat of withdrawing funding for cluster site housing as leverage in convincing landlords to participate in the LINC program.
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The experience of the de Blasio administration also sheds light on two conceptual issues. First of all, it seems that the issue of perverse incentives needs to be reexamined. The studies that undermined the perverse incentive theory and cleared the way for the reintroduction of rent subsidies are now eighteen years old and need to be updated. The introduction of LINC was supposed to drive the census down, but it has in fact gone up, which does not imply causality but does suggest that the issue of how policy affects shelter demand needs to be revisited. DHS needs to improve its forecasting ability to more accurately predict the likely results of changes in rent subsidies, eligibility, and other policies.
Also important is what recent experience with homelessness policy says about the prospects for the progressive coalition in New York City. A striking feature of city homelessness policy is that it was developed mostly under conservative mayors: Koch, Giuliani, and Bloomberg. From the beginning of modern homeless policy in the late 1970s to the end of Bloomberg’s term in 2014, the one-term mayoralty of David Dinkins was the only interregnum of progressive rule. As readers of this book will learn, coming to grips with homelessness proved difficult for Dinkins, who found that he had to rethink some of the progressive conceptions he had brought to the issue. Dinkins’s indecisiveness and his failure to make a dent in a problem he had decried as a candidate seemed to justify Giuliani’s criticism that progressives lacked the managerial skills necessary to govern New York City. De Blasio’s reelection prospects seem pretty good right now, but his lackluster record with an issue that was central to his political vision will not be helpful. To be fair, de Blasio was dealt a bad hand regarding the homeless problem, but he has not always played his cards well. The problem has not been fundamentally wrongheaded policy but lack of managerial and political deftness. Can progressives govern New York City? Not if they don’t get their act together.