Real Estate Weekly
Image default

Historic homeless levels have city examining all the options for housing

As the number of homeless people in New York City flirts with record levels, the effectiveness of affordable housing as a tool to keep people out of the streets is due for a thorough assessment.

Recently, homelessness has re-emerged as a favorite gripe among New Yorkers, from Rudolph Giuliani’s complaint against a homeless man on the Upper East Side, to the New York Post’s demonization of people living on the streets.

The city has sought to reduce homelessness through different measures. Recently, Mayor de Blasio announced a plan that leveraged land rezoning for the creation of affordable housing.

Last July, the city government financed the creation of 20,235 affordable housing units, the highest number since the Department of Housing Preservation and Development was established in 1978 and enough to house 50,000 New Yorkers, according to de Blasio.

Earlier this month, De Blasio also unveiled a $22 million per year plan that aims to provide mental health care to homeless people with mental illnesses.

The programs, whether they prove effective or not in reducing homelessness, would take some time to pay off. Meanwhile, the city is faced with a major homeless crisis.

The number of homeless people in New York City reached an all-time high of 59,000 people last December. The number has dropped by a few thousand since then.

The situation has been exacerbated by the changing profile of the city’s homeless, with an increasing number of employed workers occupying homeless shelters.


According to Elizabeth Strojan, the program director for public policy and external affairs for affordable housing non-profit Enterprise Community Partners, a large majority of the households they’ve helped have employed family members.

Enterprise runs the 10-month-old Come Home NYC program, which helps people in homeless shelters move into affordable housing.

According to Strojan, the initiative, which was launched last November, has so far placed 32 families.

“The average income for these families is $35,000. Which is not a whole lot, but it’s a lot of money to be homeless. It’s really shocking,” Strojan said. Since the December high, the de Blasio administration has introduced measures to boost the city’s affordable housing inventory.

With the 20,235 affordable housing apartments promised by the city yet ot be built, the administration still has to find ways to house 56,000 homeless people in municipal shelters.

While the de Blasio administration continues to grapple with the problem, they are quick to point to what they claim to be the situation’s source.

“The true spike in homelessness came before Mayor De Blasio came into office,” said Ishanee Parikh, a deputy press secretary for the Mayor’s Office. She pointed to the Bloomberg administration’s phasing out of initiatives such as the Advantage Program, which provided rent subsidies of $1,000 to families.

“The difference from the previous administration is that there are now a lot of programs to help people exit shelters, like these rental assistance programs. The people didn’t have a pathway to exit from shelter and move to permanent housing. They ended up getting stuck in shelter and, at that point, the homeless population went up.

“There was an affordability crisis, and, on top of that, a lot of programs that were helping them exit shelter were cut,” Parikh said.

This meant that even workers earning living wages were pushed out of their homes.

Strojan said that 94 percent of the households they work with have at least one member who’s employed. Her estimates align with city data, which estimates that each year, about 2,000 families with yearly incomes between $25,000 to $50,000 end up in homeless shelters.

The higher end of that income range exceeds the annual median income for American workers, which 2014 Bureau of Labor Statistics figures pegged at $40,560.

The entry of employed workers in the homeless population has been largely attributed to three factors: stagnating wages, rising rents and low vacancy rates.

The city’s efforts to tackle the crisis have been widely praised.

“Currently, too many New Yorkers are struggling to remain in their homes because they simply cannot afford the rent,” said State Senator Gustavo Rivera earlier this month.

“Mayor de Blasio’s Housing New York Plan has already taken a significant step in helping preserve and increase the number of affordable housing units in our communities. I commend Mayor de Blasio for working to ensure that all New Yorkers are able to afford and maintain a home.”

While the city looks for ways to create affordable housing, it faces a difficult task in courting developers.

“I applaud that (Mayor De Blasio’s) trying to preserve affordable housing. I think it’s extremely important. I think that there are better ways to do so. I think oftentimes, the efforts that are made are


not in the best interest of the lower income residents of New York City,” said Adam Mermelstein, the managing member at Treetop Development, which has 400 affordable housing units in its portfolio.

Mermelstein, who criticized the affordable housing occupancy of people with substantial salaries, added that returns for developers are “extremely low” for affordable housing. Nonetheless, his firm has more affordable housing units included in the 300,000 s/f of projects they have in the pipeline.

According to the advocacy group Coalition for the Homeless, the number of homeless people in New York City represent the highest levels since the Great Depression.

In finding solutions to the problem, organizations are looking at a number of programs that have seen success elsewhere. Perhaps, the most intriguing is the Housing First model, which has reduced homelessness in Utah by 91 percent.

The strategy, which is also called “rapid re-housing,” involves moving people from the streets to affordable housing, based on projections that it cost cities more to run shelters and provide services to homeless people rather than moving them into homes.

“Every city throughout the country is starting to look at this. We’re all looking at how will this work here,” Strojan said. “Enterprise has been interested for a long time. A major obstacle to that in New York City is the lack of affordable housing. In order to place someone, you have to have that housing available.”

In a best case scenario, the lack of affordable housing may be a problem with a ten-year shelf life. Last May, Mayor De Blasio announced a 10-year housing plan that aims to produce 200,000 affordable housing units. The plan, which will be funded by an $8.2 billion from the city, represents a significant jump in investment in affordable housing. During Mayor Bloomberg’s 12 years in office, the city only allocated $5.3 billion for such programs.

While there are questions on how best to end homelessness, Strojan insists that the final answer is less ambiguous. “The solution to homelessness is housing,” she said.

Related posts

AI and cloud adoption propel data center demand to record levels for 2023


Denholtz Properties Acquires 214-Unit, Luxury Community in Hudson County, N.J.


Pacific Urban Investors Expands Southern California Portfolio with Acquisition of La ScalaStrengthening Presence in Highly Desirable San Diego Submarket