News Release: IBO Report Shows Mayor’s Homeless Policies Cost Taxpayers Tens of Millions

For Immediate Release: March 30, 2012
Contact: Dan Levitan or Jeremy Soffin, (646) 452-5637

IBO Report Shows Mayor’s Homeless Policies Cost Taxpayers Tens of Millions as Shelter Population Surges and Length of Stays Increase

DHS Commissioner Seth Diamond Admits City Failed to Estimate Cost to Taxpayers of Disastrous Homeless Policies


Record Homelessness Takes Bigger and Bigger Bite Out of City Budget


NEW YORK – The Independent Budget Office’s analysis of Mayor Bloomberg’s preliminary budget released this week found that rising homelessness and longer stays in city shelters – both a direct result of the Mayor’s failed homeless policies – will cost New York City tens of millions of extra dollars in fiscal years 2012 and 2013.

In testimony before the City Council on Thursday, Department of Homeless Services Commissioner Seth Diamond admitted that the City had never bothered to estimate the cost to taxpayers of cutting off access to federally- financed housing programs like Section 8 vouchers and NYCHA vacancies – decisions that advocates for the homeless say have directly contributed to record levels of homelessness.

“Instead of using federally-funded affordable housing options like Section 8 and NYCHA vacancies, Mayor Bloomberg has closed off the pathways that once allowed tens of thousands of people to leave the shelter system behind,” said Mary Brosnahan, Executive Director of the Coalition for the Homeless. “For the first time in modern history, New York City has no affordable housing programs whatsoever for those living in the shelter system, and thousands of families and New York City taxpayers are now paying the price.

“If the Mayor returned to the cost-effective and proven strategy of placing homeless families in permanent, affordable homes, taxpayers could save tens of millions of dollars and help desperate families get back on their feet,” Brosnahan continued.

“Refusing to even examine the cost savings to taxpayers of prioritizing homeless families for existing affordable housing -- driven by an ideological agenda not supported by the City's own data -- is bad public policy and fiscally irresponsible,” said Councilmember Brad Lander.

IBO ANALYSIS:

The IBO’s analysis states: “The Department of Homeless Services (DHS) is likely to face budget challenges in 2012 and even tougher choices in 2013. With a growing census and longer lengths of stay in the city’s homeless shelters, costs are going up, and—in the case of family shelter— these costs appear likely to exceed what the city has budgeted for this year and next. Additionally, the lack of a new program or policy to replace the Advantage rental subsidy program that ended last year may further increase costs, especially for family shelters.”

The IBO’s report continued: “Based on IBO’s estimates of shelter costs, this suggests that family shelter could cost about $37.0 million more this year than budgeted (about $12.0 million of which would be city funds) and as much as $76.0 million more in fiscal year 2013 (about $24.0 million in city funds) given the increasing length of stay, higher census, and lack of a replacement for the Advantage program.”