Landlords cheer CoJo’s plan for homeless, but warn of problems

Proposal offers bigger vouchers, more apartment shoppers — and some headaches

City Council Speaker Corey Johnson (Credit: Getty Images)
City Council Speaker Corey Johnson (Credit: Getty Images)

Landlords are lauding City Council Speaker Corey Johnson’s proposal to expand rental assistance as part of his new plan to combat homelessness in New York, but say it will take more than money to achieve its goals.

The Rent Stabilization Association said Johnson’s call last week to increase the value of rental vouchers would allow people emerging from homelessness to shop for apartments otherwise out of reach. But they said the city must address issues with vouchers that have nothing to do with their dollar value.

The speaker’s 202-page plan calls for increasing the voucher amount to fair market rate, expanding eligibility for the subsidy and combating discrimination by landlords against prospective tenants who use it. It would cost about $236 million over five years.

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The maximum voucher provided by New York’s CityFHEPS program for a three- or four-person household is $1,580 per month, far short of the fair market rate of $1,951 per month for a two-bedroom apartment, according to the report. The recommended increase could add nearly 70,000 two-bedroom units per year to the housing stock available to voucher holders, the report says, citing an analysis from homeless services provider Women in Need.

Mitch Posilkin, counsel for the Rent Stabilization Association, a group representing owners of multifamily buildings, said making the city’s voucher programs — FHEPS and another called LINC — more robust was a good idea. Johnson would also expand eligibility for vouchers to people who have spent 90 days in any city-funded shelter or foster care, along with unsheltered people receiving qualified case-management services.

“It should be expanded,” Posilkin said. “That would enable more people to find housing in the marketplace.”

But complaints about landlords rejecting applicants bearing vouchers have persisted for years. One of several reasons noted by Posilkin is that landlords are less trusting of city voucher programs than of federal Section 8, based on past experience.

Landlords view Section 8 as dependable, which helps explain why nearly all of the city’s available vouchers for that program are in use.

“Despite all the historic problems of Section 8, one of the reasons the program generally works is that there’s some expectation that the funding for Section 8 is not going to go away,” he said.

Posilkin contrasted this with the Advantage Program, which the state and city abandoned in 2011 after promising landlords it would be a reliable source of income for them.

“Landlords were convinced by assurances from the city and state that if they rented to the homeless, the rent would be paid,” he said. “There were thousands of people placed in apartments in privately owned buildings. Then the state, followed by the city, defunded the program.” Mass evictions followed.

This has made owners skeptical of city and state rent-assistance programs, he said.

The programs present other risks for landlords, as well as obligations and bureaucracy. Vouchers trigger a housing quality inspection that could yield violations not just on the unit but on the building, and the apartment must be kept vacant and unrented until repairs are made or the violations otherwise cleared by a second inspection.

“It can take a couple of months,” said Posilkin. “Maybe more.”

While city law prohibits landlords from discriminating against prospective tenants based on the source of their rent payments, it is not hard to see why many owners would choose a tenant with a check in hand rather than hold a unit open for an indefinite period while dealing with inspections and paperwork.

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“There are many sophisticated owners who know how to navigate these programs and understand their obligations,” said Posilkin. “But there are many smaller owners who don’t.”

He added, “Some may not understand where their obligations under the city’s source-of-income law begin and end.” That is not a defense, the attorney said, but a reality.

Another concern for landlords about vouchers is that they might carry unexpected requirements, as a case in Brooklyn demonstrated. An apartment complex then known as Starrett City was sued in 2015 for rejecting two homeless tenants bearing vouchers from the city’s LINC program.

The complex objected to the program’s requirement that landlords renew tenants’ leases for a second year at the same rent, then limit rent increases for the next three years to amounts set by the Rent Guidelines Board — even though Starrett City was not rent-stabilized.

The housing complex, now called Spring Creek Towers, eventually won on appeal, but the case reinforced landlords’ belief that city voucher programs carry extra burdens.

These factors can be a lot to overcome for prospective tenants already disadvantaged by coming from the shelter system.

“Some are homeless through no fault of their own, and some are homeless because of serious issues,” said Posilkin. “Many owners participate in these programs, but people have concerns.”

Paulette Soltani, political director at the activist group VOCAL New York, was less skeptical about expanding vouchers, describing it as “one of the most important proposals” in Johnson’s plan.

Housing Rights Initiative executive director Aaron Carr echoed that. “While expanding rental assistance is no panacea, it’s one of many tools that our city should use to house the homeless,” he said.

Soltani expected to see it gain support from landlords as well, as it should mean they will get more rent.

“If you’re offering more money to landlords, that’s the focus of what they want, is just to make a profit,” she said. “So I think landlords would be amenable to it.”

Johnson, a likely mayoral candidate in 2021, will have an opportunity to fund his homelessness plan when the City Council negotiates a budget with the de Blasio administration for the fiscal year beginning July 1.

“Raising the rental assistance voucher amount is the most immediate, impactful action the state and city can take to move more people from shelter into permanent, affordable housing,” his report says.

It would engage landlords to combat discrimination based on sources of income as well, specifically when the source is a rental assistance voucher. The plan advocates expanding legislation and education efforts around source-of-income discrimination and creating a working group to remain in constant dialogue with landlords about housing the homeless.

That outreach would appear to be crucial to the success of Johnson’s plan.

“It’s daunting to deal with a tenant who’s coming from a homeless shelter, who might have issues, and to deal with a whole new set of rules,” Posilkin said.