Thousands Of Rent-Stabilized Apartments At Risk As NYC Phases Out Controversial Homeless Shelter Program

Gothamist June 2017

As many as 3,000 rent-stabilized apartments could be deregulated as the city phases out the notoriously dysfunctional cluster site homeless shelter program.

Created in 2000 as a stopgap measure, the cluster program places homeless families in private apartments, but as shelter residents, not tenants. As the program grew to include over 300 buildings and over 3,000 apartments, the city increased the rates it paid landlords and nonprofits, even as the buildings deteriorated and social services were slow in coming.

By 2015, when the Department of Investigation released a report calling clusters the worst-maintained, least-monitored type of shelters, the city was paying landlords and nonprofits $2,451 a month on average per unit. Because cluster site shelters are overwhelmingly in poor and working-class neighborhoods, that figure was more than double the average rent the apartments would have fetched on the market.

As the program has grown, paying tenants have complained with increasing frequency of their landlords pushing them out to make shelter money.

Early last year, Mayor de Blasio announced he was going to phase out the cluster site scheme by 2018. He has since extended the deadline to 2021, but in May the mayor touted the removal of more than 800 apartments from the program, saying, “Our homeless families deserve better and we will continue to take aggressive action in closing down the remaining sites and replacing them with better, safer shelters to help them get back on their feet and into permanent housing.”

There’s a wrinkle, though. Data obtained by Gothamist shows that of 3,300 cluster apartments in use at one point in fiscal year 2016, 3,167 were in rent-stabilized buildings. A combination of lax state oversight and landlord-friendly carveouts in the rent laws could make such apartments ripe for deregulation as the city pulls out. And responses to public records requests by the relevant city and state agencies suggest that despite the mayor’s plan to create and preserve 200,000 below-market apartments by 2024, little has been done so far to prevent this.

For the full story, click here.