Comptroller Wants “Landlord Disqualification” List for CityFHEPS

New York’s CityFHEPS voucher program has a $1.2 billion price tag. Now, the state comptroller wants less of that money going to “bad” landlords.

In an audit of the program released Friday, the comptroller’s office found that the city approved units with infestations and other serious concerns for participation in the program. And some tenants have used their vouchers to pay landlords on the city’s “Worst Landlords” list.

As such, the comptroller recommended that the program establish a “landlord disqualification” list.

The audit is the latest public criticism of the rental assistance program, which serves mostly formerly homeless New Yorkers, and is a source of income to private landlords. Disqualifying specific landlords from the program would cut them off from that income stream.

The state comptroller’s office reviewed 45 CityFHEPS cases in the five boroughs. Of those, three had open housing code violations classified as “immediately hazardous,” including infestations.

That’s not only not a great situation for tenants, it’s expensive, the report argued. For audited voucher recipients who ultimately had to move, the program had to pay nearly $119,000 in new brokers’ fees and landlord incentives.

In one case, the city’s Department of Social Services approved a tenant to move into a unit with 20 open violations, including mouse and cockroach infestations. DSS paid more than $7,000 to the broker and the landlord to secure the apartment before the tenant moved in. Another CityFHEPS tenant had already been approved to move out of that unit because of similar concerns.

“Landlords continue to participate in CityFHEPS without having to rectify poor living situations,” the report said.

Further review by the comptroller’s office found DSS also approved at least 57 CityFHEPS households to use their vouchers on units owned by landlords on the public advocate’s “Worst Landlords” list.

DSS said it would establish a landlord “escalation” list, “to enable more intensive reviews of specific landlords.” DSS disputed several of the report’s conclusions, saying it contained several inaccuracies and doesn’t highlight the successes of the program.

In a statement to Gothamist, DSS accountability chief Bedros Boodanian blamed the habitability issues on New York’s low vacancy rate.

“Tenants, especially low-income households with vouchers like CityFHEPS, have very few available units from which to choose,” Boodanian wrote. “Restricting voucher use to only pristine landlords would shrink an already microscopic pool of available units, further delaying housing for people who need it most.”

To the comptroller’s office, DSS said The “Worst Landlords” list lacks legal enforceability.

The audit identified other concerns with CityFHEPS oversight. For example, in thirty out of 75 statewide cases, there was no record of income verification. The comptroller’s office recommended that DSS follow its income verification policies.