The Real Deal New York

Rent cut for homeless housing program gets some push-back

Landlord not happy about city's scheme to reduce payments to building owners
June 30, 2014 11:55AM

Mayor Bill de Blasio is looking to reduce the amount of money the city pays for apartments in the city’s so-called cluster site program, which uses privately-owned apartment buildings to house homeless families.

One such landlord, however, is refusing to accept the reduced rent and, according to officials, is threatening to evict about 200 homeless families should the measure proceed. The de Blasio administration’s take on the program is that a number of landlords have made a lot of money by housing the homeless, as the city pays more than market-rate for these units.

On average, the city forks out $3,027 per unit per month, an amount that covers social services provided to the occupants by nonprofit organizations in addition to rent for the landlord. The city contracts with the nonprofit, which in turn leases the apartment from the unit’s owner. On average, landlords receive $2,078 per unit, an amount that is supposed to cover security, utilities and basic furniture.

The city wants to reduce its monthly payments by around $300, with most of the deduction coming out of the landlords’ portion. In total, the de Blasio administration hopes to save $15 million out of the $122 million it spent last year on these apartments, redirecting those funds to a new rental subsidy program for the chronically homeless.

According to the mayor’s office, one Bronx landlord involved in the program said that he would not accept the new rent offer from the city — $1,500, down from $1,680. The owner denies threatening to put people out on the street, however.

So far, only one landlord group has agreed to accept the lower rates, but the city is in discussion with several others. [NYT]Julie Strickland