NYC landlords find homeless are lucrative tenants

February 11, 2013 01:00PM

Paying rent-stabilized tenants lump sums of cash to move is a quotidian strategy for landlords eager to cash in on market-rate renters or luxury conversions. Buying out tenants only to replace them with the homeless is far more unusual. But according to the New York Times, generous city payments to house the homeless are causing more and more landlords to get into the game.

In part because of an extreme scarcity of homeless shelters in the city, the Department of Homeless Services is willing to pay far more than the standard asking rent to house New York’s homeless population, even spending in excess of $3,000 a month for derelict rooms without a bathroom or kitchen.

Landlord Alan Lapes has offered tenants in his buildings as much as $25,000 cash to move, just to bring in the homeless. He is now the city’s largest for-profit private operator of homeless shelters, owning or leasing about 20 of the city’s 231 shelters. He currently lives in Upper Saddle River, N.J., in a home that was valued in 2005 at $3.3 million.

“The city needs to make sure there’s affordable housing instead of waiting for shysters to come forward to make thousands of dollars off these poor unfortunate people,” State Assemblywoman Linda Rosenthal said. “Getting rid of the profit motive will reduce some of the bad actors.”

The city’s seemingly overly-generous policy originates from court settlements in 1979 and 2008 that force the city under penalty of massive fines to provide a roof immediately for every homeless person, giving landlords willing to house the homeless incredible leverage to negotiate rents.

Even the homeless seem critical of the city’s policy. “For $3,000 I could have gotten an apartment, a down payment and a security deposit and some furniture,” Joyce Colon, a resident of one of Lapes’ apartments, who entered the homeless system in December, said. “The landlord is getting $3,000 and I’m getting nothing.” [NYT] —Christopher Cameron