Revolving Door: How the Bloomberg Administration is Putting Families At Risk of Returning to Shelter

BRIEFING PAPER

Revolving Door:
How the Bloomberg Administration is Putting Thousands of
Formerly-Homeless Families at Risk of Returning to Homelessness


By Giselle Routhier, Coalition for the Homeless
July 20, 2010

Download the briefing paper here.

Amidst record family homelessness and high unemployment, the Bloomberg administration is putting thousands of formerly-homeless families at risk of returning to homelessness by cutting them off from rental assistance under the three-year-old Advantage program. And to make matters worse, this summer the administration will enact changes to the Advantage program that will accelerate the program's "revolving door" back to homelessness.

• By the end of 2010, more than 7,400 formerly-homeless Advantage NY families will have lost their rental assistance and will be at risk of re-entering the shelter system. By the end of 2011, more than 7,100 additional families will lose their rental assistance.

Many Advantage families have already become homeless again. By October of last year more than 900 re-applications for shelter had been filed by Advantage NY families, representing as much as two-thirds of all expired Advantage NY families at that time - and the pace of return to homelessness is accelerating.

• The Bloomberg administration's planned changes to the Advantage program are deeply unrealistic and make a flawed program even worse. Indeed, the changes reduce the number of homeless families eligible for rental assistance, and threaten to cut off rental assistance to many families after one year instead of two years.

• The Bloomberg administration should halt the changes to the Advantage program and instead craft a rental assistance program that works like the proven, effective Federal housing voucher program - a long-term, flexible subsidy that effectively bridges the gap between income and rent.

• Additionally, the administration needs to reverse its 2005 decision to cut off families from receiving priority for proven Federal housing programs like public housing.

Record Family Homelessness and New York City's Housing Affordability Crisis

New York City is in the throes of a historic homelessness crisis. Currently, more than 37,000 men, women and children bed down in municipal shelters each night, including nearly 10,000 families with 15,000 children. The number of homeless families in New York City shelters hit all-time record levels during the past year. Indeed, under Mayor Bloomberg, New York City's homeless population has reached the highest levels since the Great Depression of the 1930s.

Since the 1980s and the beginnings of modern homelessness, New York City mayors -- from Ed Koch to Rudy Giuliani -- have successfully used proven Federal housing programs to reduce family homelessness. The City did this by prioritizing homeless families for Federal housing vouchers (known as Section 8 vouchers) and for public housing. This successful approach helped move tens of thousands of homeless families from costly shelters to permanent housing, and research shows that the vast majority did not return to shelter.1


However, in 2005 Mayor Bloomberg's administration ended this longstanding, successful policy. The administration replaced Federal housing programs with unproven short-term City rental subsidies characterized by unrealistic, one-size-fits-all time limits. Bloomberg administration officials claimed that the new "cut off" policy would reduce the number of families seeking shelter, but the opposite has happened. Since Mayor Bloomberg cut off homeless families from Federal housing programs, the number of homeless families has reached record numbers and the subsequent time-limited subsidies have failed to provide families with stable housing upon their exit from shelter.

Ultimately, Mayor Bloomberg's approach to the problem of homelessness fails to address the reality that family homelessness is, at its root, a housing affordability problem.

New York City's housing affordability problems have grown significantly worse in recent years, and the city continues to lose low-cost housing while renter incomes have not grown in real terms. Between 2005 and 2008, NYC lost nearly 55,000 apartments with rents below $800 per month, a 7.5 percent decrease. Between 2002 and 2008, NYC lost more than 194,000 rental housing units affordable to low-income households, a 16.4 percent decrease. At the same time, U.S. Census Bureau surveys found that, during the past decade, renter incomes in New York City stagnated. And since 2007, before the economic crisis began, the unemployment rate in New York City has doubled.2


In fact, according to a recent report by the National Low-Income Housing Coalition, an astounding 60 percent of all renters in New York City cannot afford the Federal fair market rent for a typical two-bedroom apartment.3 According to the same report, a family in New York City has to earn a wage of $26.13 per hour to afford a typical two-bedroom apartment - more than 3.5 times the current minimum wage.

Mayor Bloomberg's Unrealistic and Flawed Rental Assistance Programs

A lack of affordable housing, historically high unemployment, and a still struggling economy are a dangerous recipe for rising homelessness. However, the Bloomberg administration has made a bad situation even worse by imposing harsh, one-size-fits-all time limits on rental assistance for formerly-homeless families. Already hundreds of families enrolled in the Bloomberg administration's programs have re-entered the shelter system because their housing assistance expired and they were unable to continue paying their rent. And thousands more will be at risk in the coming years.

Housing Stability Plus

In 2005, Mayor Bloomberg initially replaced proven Federal housing programs with an experimental local rental assistance program called "Housing Stability Plus." This flawed program was limited to five years regardless of a family's circumstances, reduced the amount of rental assistance by 20 percent each year, and required recipients to remain on public assistance, effectively preventing them from working. This flawed program model essentially prohibited families from becoming self-sufficient, while plunging them deeper into poverty each year. Furthermore, the program lacked adequate apartment inspection standards and (as documented in Coalition for the Homeless' 2007 research report Homeless Families at Risk: Hazardous Conditions in the Housing Stability Plus Program4) many families were placed into housing with dangerous conditions including lead paint hazards.

In 2007, the Bloomberg administration abandoned the "Housing Stability Plus" program, largely in response to widespread criticism by advocates, service providers, and elected officials, but also because many landlords refused to participate in the program.

Advantage NY and Work Advantage

In the spring of 2007 the Bloomberg administration launched another flawed rental assistance initiative called Advantage NY. While Advantage NY (which is actually a group of three major subsidy programs) improved upon some of the problems of the "Housing Stability Plus" program - like removing the requirement that families have active public assistance cases and establishing better standards for apartment inspections - the new approach remained deeply flawed. Indeed, Advantage NY retained the single most unrealistic and damaging feature of the earlier program: one-size-fits-all time limits on rental assistance.

The largest and most flawed program under the Advantage NY umbrella is called Work Advantage. Following are the main features of the Work Advantage program.

• It is only available to families whose head of household is employed. According to City data, in 2009 only 19 percent of homeless families in municipal shelters - or fewer than one in five - met this criteria and were found eligible for the program.5

• It provides an unrealistic, one-size-fits-all time limit. Families receive no more than two years of rental assistance, and they must be approved for the second year, so some only receive one year. Indeed, City officials admitted at a recent public hearing that one-fifth of all Work Advantage families did not receive a second year of rental assistance.6 After two years, regardless of families' circumstances or need for additional rental assistance, they are cut off.

The time limit is the most serious problem for Work Advantage recipients, who may be employed but do not earn enough to pay their rent. In fact, the City's own data demonstrate clearly how unrealistic the program is. The typical Work Advantage family is placed into an apartment with an average monthly rent of around $1,000 (although it is worth noting that many landlords force families to pay much more as part of illegal so-called "side deals").7 At the same time, City data shows that the typical employed Work Advantage family earns barely more than $1,100 per month.

According to a New York City Department of Homeless Services (DHS) report submitted to State officials in March 2009,8 the median wage for Work Advantage families was $9.50/hour with families working an average of 32 hours/week - that is, the typical Work Advantage family earned $304/week or around $1,216/month. But in the past year, City data show the income of Work Advantage families has declined significantly. At an April 2010 New York City Council hearing, former DHS Commissioner Robert Hess testified that the median number of hours Work Advantage families work had dropped to 30 hours per week.9 So, the income of Work Advantage recipients effectively declined by 6 percent between 2009 and 2010 - from $1,216/month to $1,140/month - while apartment rents remained at the same levels.


The math tells it all. Simply put, the Work Advantage program is designed to cut off rental assistance to families who do not have the incomes to remain in their apartments. And without a continued housing subsidy, the majority of families will face eviction and eventually be forced to return to the municipal shelter system.

In addition to Work Advantage, there are also two other programs under the Advantage NY umbrella - Fixed Income Advantage and Children's Advantage - which, at least on paper, were better designed than the Work Advantage program. Unfortunately, serious implementation problems and the recent funding crisis affecting the Federal housing voucher program have made these programs nearly as flawed as Work Advantage. Fixed Income Advantage was targeted to households with a family member who is receiving disability benefits. Children's Advantage was targeted to families who have an active child welfare case. Both programs provide rental assistance for a maximum of two years, but were designed to transition families to a Federal Section 8 housing voucher.

However, City data shows that the promised transition to a Federal voucher never occurred for most families. According to a City report submitted to State officials, by March 2009 only 18 percent of families enrolled in these programs had actually transitioned to Federal housing vouchers, leaving more than four out of five of these vulnerable families at serious risk of returning to shelter.10

Section 8 Funding Crisis

To make matters worse, funding shortfalls in the Federal housing voucher program, coupled with mismanagement by City officials, have exhausted New York City's Section 8 voucher program for the foreseeable future. Indeed, in December 2009 the New York City Housing Authority (NYCHA), which administers the federal program, announced that it was actually revoking nearly 2,600 Section 8 vouchers which had been issued in the preceding months because of a lack of funding to pay for them. The majority of affected families - approximately 1,400 households - were Advantage NY recipients who had been promised Federal housing vouchers. In addition, NYCHA said that no new vouchers would be granted for the foreseeable future.

Evidence shows that the housing authority created this crisis by continuing to issue vouchers beyond its allowable budget throughout most of 2009.11 While City officials recently announced a temporary remedy for the Section 8 program's current deficit - a plan which is intended to restore the 2,600 rescinded vouchers12 - there are still questions about the future of the program. Thus, NYCHA's Section 8 program faces significant funding challenges, leading to the likelihood that Federal housing vouchers will be unavailable or extremely scarce for a significant time to come.

The initial and ongoing problems with Work Advantage, coupled with the more recent funding crisis in the Federal voucher program, have now created a much more devastating predicament for families in all three Advantage NY programs. The entire Advantage NY initiative has in effect become nothing more than a revolving door back to homelessness for formerly-homeless families struggling to maintain permanent housing.

Advantage NY: Early Evidence of the Revolving Door Back to Homelessness

Bloomberg administration officials claim that relatively few Advantage NY families have returned to shelter.13 However, the administration has refused to release comprehensive data about the actual number of Advantage NY families who have lost rental assistance and become homeless - including the number of Advantage families who have returned to the municipal shelter system. In addition, the City does not keep data on the financial stability of families who have reached the end of their subsidy, making it more difficult to project how many families are at imminent risk of returning to shelter.

However, despite a lack of comprehensive data, there is clear evidence that Advantage families have returned to homelessness in significant numbers. City data obtained through a freedom of information request shows that, by October 2009 - only a few months after the first Advantage families began to be cut off of rental assistance - more than 900 re-applications for shelter had been filed by families who had previously left the shelter system with Advantage NY subsidies.

The data, obtained from the New York City Department of Homeless Services, shows that hundreds of families did indeed re-apply for shelter after timing off of their Advantage vouchers in the summer and fall of 2009. These re-applications started to spike in mid-year and, by October 2009, 905 re-applications for shelter had been filed by Advantage families.14 From August through October of 2009, there were more than 100 re-applications each month by Advantage families.

To put the data in context, it is important to recognize that, by October 2009, relatively few Advantage NY families had reached the programs' two-year time limits. Of the 13,195 total Advantage NY cases in October 2009, only 1,354 families had reached the two-year time limits (although an unknown number of families may have also lost their subsidy after only one year). Thus, the 905 re-applications for shelter filed by Advantage NY families in October 2009 very likely represent a significant portion of expired Advantage NY cases - as much as two-thirds of all expired Advantage NY cases at that time.


Another troubling finding from the data is the high number of re-applications from Fixed Income and Children's Advantage households - especially given that these programs were designed to transition vulnerable families to Federal Section 8 vouchers. This may be of the result of the low percentage of families who successfully transitioned to Federal housing vouchers from the latter two programs, and it is a grim indicator of even worse problems in the future.

The volume of re-applications to shelter is especially worrisome given the thousands of Advantage NY families that will be timing-off of the program in the coming months and years. By the end of 2010, the Work Advantage subsidy will have expired for 3,673 families. By the end of 2011, another 3,552 families will time-off the program - creating a total of 7,189 families left without Work Advantage rental assistance by the end of 2011.

To add to the crisis of Work Advantage, as noted above, the Section 8 funding crisis means that Federal housing vouchers may not available for Fixed Income Advantage and Children's Advantage households, putting these families at risk like Work Advantage households. By the end of 2010, 3,698 families will lose their Fixed Income or Children's Advantage rental subsidy. By the end of 2011, another 3,502 families will join them, adding an additional 7,200 families to the 7,189 that will lose their Work Advantage subsidies by 2011.

Thus, by the end of 2011, over 14,400 Advantage NY families will have had their rental assistance cut off, placing them at serious risk of returning to the homeless shelter system.


Current Stories from Advantage Families

Ms. M:

Ms. M entered the Work Advantage Program in November 2007. She has three children and was placed in an apartment with a rent of $1400. She received a total of two years of assistance. Up until November 2009, her monthly income was around $2000. In November 2009, Ms. M reached the end of her Advantage subsidy. She immediately fell behind on her rent and in early 2010, her landlord initiated an eviction proceeding.

In early 2010, she lost her job and started receiving unemployment benefits. In April, her landlord agreed to reduce the rent on her apartment to $1070 and settled her rental arrears up until that point. However, Ms. M is now again behind on her rent because of her inability to afford her rent while continuing to support her family.

Ms. M has done everything in her power to get out of shelter, go to work and provide for her family, but two and a half years later she is again at risk of losing her home and becoming homeless once again.

Ms. P:

Ms. P is an elderly single woman receiving disability benefits for a variety of health issues. She was placed on Fixed Income Advantage in July 2009. Her monthly disability benefits total $761 and her rent is $889. Ms. P applied to have her subsidy renewed for a second year. So far, the Department of Homeless Services has only agreed to extend it on a month-to-month basis, without the protection of a lease and without knowing when she might be cut off.

When Ms. P loses her Advantage subsidy, she will be without any ability to pay her rent and worries that she will become homeless once again.

Mayor Bloomberg's Changes to the Advantage Program: A Faster Revolving Door

As if the problems with the current Advantage NY programs were not serious enough, this summer the Bloomberg administration will enact changes to the Advantage program that will exacerbate the flaws of the current program. The changes, which were approved by State officials in late May, will go into effect on August 1st, although some current Advantage NY households who received subsidies beginning in March will also be affected. The revised Advantage program will eliminate Children's and Fixed Income Advantage subsidies. The remaining program - called simply Advantage - will still be time limited to two years and will not transition families to Federal housing vouchers.

The major changes to the program include:

• To receive a second year of rental assistance, families will be required to be employed at least 35 hours per week. (This new requirement will also be in effect for current Advantage families who enrolled in the program since March 1st.)

• The program will primarily be restricted to homeless families with employment income (at least 20 hours per week), meaning that some four out of five families in municipal shelters will not qualify for any rental assistance.

• Families with a head of household receiving Federal disability benefits or caring for a family member with a disability will also qualify for the program, even though those families will have no employment income - and no ability to afford apartment rents - after rental assistance is cut off.

• During the first year, families will be required to pay 30 percent of their income towards the rent.

• During the second year, families will be required to pay 40 percent of their income, a higher rent burden than in any other subsidized housing program.

The changes to the Advantage program not only fly in the face of research and experience, but also fail to take into account the City's own findings and data about the three-year-old Advantage NY programs. Furthermore, the very document detailing the Advantage program changes, submitted by the City and approved by the State, contains ample evidence that the revised program will fail to work for homeless families.

Here are the highlights of the revised Advantage program's flaws:

1. Insufficient incomes to pay the rent:

Contained in the City's plan for the revised Advantage program are two tables describing "Example Households," both in year one of the program and in year two. The tables identify the "Example Household Income" as follows:

• Example Household Income, year one: $1,000/month
• Example Household Income, year two: $1,200/month

The same tables identify maximum monthly rents for the Advantage program as follows:

• 1 person: $962/month
• 2 people: $962/month
• 3 or 4 people: $1,070/month
• 5 or 6 people: $1,316/month
• 7 or 8 people: $1,481/month

According to City data, the average homeless family has three household members, typically a parent with two children.

Thus, the City's own plan acknowledges that the typical Advantage family will lack sufficient income to afford apartment rents after the subsidy is terminated - indeed, their monthly incomes will be barely higher than the apartment rents themselves, and in some cases less.

2. Unrealistic requirements for the second year of rental assistance:

As noted above, according to the City's own data, the average Work Advantage family currently works only 30 hours per week. Nevertheless, the revised program requires families to have 35 hours of employment income in order to receive a second year of rental assistance. Such a requirement makes the erroneous assumption that these families could work more hours if they wanted to. The unfortunate reality is that many employers do not allow low-wage workers to work full-time hours because of the struggling economy and in an effort to avoid certain workplace benefits like overtime pay. This requirement will make it harder for families to qualify for the program and also to renew the subsidy after year one.

3. Low predicted retention rate:

Remarkably, the City's plan predicts that only 60 percent of working families enrolled in the revised Advantage program will receive the full two years of rental assistance. That is, the City has crafted changes to the program which will provide less than two years of rental assistance to a whopping 40 percent of working homeless families, without explaining what will happen to those families.

4. Reduced funding for rental assistance for homeless families:

The City's plan also openly acknowledges that the revised Advantage program will dramatically cut back expenditures on rental assistance for homeless families. The City plan states that, in FY 2011, the Advantage programs will cost $174 million, but that by FY 2013 the program's cost will be reduced to $112 million - a cutback of $62 million or 36 percent.

However, the plan fails to account for additional shelter expenditures that will accrue as Advantage families return to the shelter system. Given that it costs $38,000 per year to shelter a homeless family in the municipal shelter system, the high rate of return to shelter caused by the flawed Advantage program will lead to higher shelter expenses in the long run.

5. Homeless families left with no housing options:

Finally, the revised Advantage program restricts rental assistance to only a fraction of all homeless families in shelter, leaving the majority of homeless families with no viable housing options. City data shows that, as of 2009, only 19 percent of homeless families in municipal shelters had employment income. Thus, more than four out of five homeless families will not have access to rental assistance under the revised program.

Furthermore, these new changes continue to ignore that families are struggling to support their families even with a rental subsidy. By increasing the amount families have to pay during the program, the likelihood that they will be able to pay their rent going forward will become even less realistic.

These changes do nothing but build upon the existing flaws of Advantage. Families will now be faced with a sharp increase in rent from year one to year two and will again be cut off from any continued assistance after year two. These new changes will put families in a worse economic position at the end of the program (if they even make it all the way through the two years), furthering the chance that they will return to shelter.

Moving Forward:
How the City Can Successfully Provide Housing Assistance to Homeless Families

Mayor Bloomberg's flawed approach to family homelessness has had dire consequences for New York City and its most vulnerable families. Ultimately, the Mayor and his administration remains mired in the mistaken notion that family homelessness is a behavior and jobs problem, instead of what it so clearly is: a housing affordability problem.

Numerous research studies have shown that long-term housing assistance, like a Federal housing voucher or public housing, is extremely effective in reducing and preventing homelessness as well as significantly reducing the chance that a family will return to shelter in the short or long-term.15 Unfortunately, Mayor Bloomberg and administration officials have ignored this research and evidence when crafting their family homelessness policies.

Amidst the current record numbers of homeless families in New York City, Coalition for the Homeless urges Mayor Bloomberg and City officials to go back to the drawing board and to work with homeless families, advocates, academic researchers, and service providers to craft policies that include the following principles:

• Rental assistance for homeless families should be modeled on the successful Federal housing voucher program

• Rental assistance for homeless families must be stable and long-term - that it, it should not include arbitrary, one-size-fits-all time limits. The value of the subsidy must not arbitrarily decline, but, rather, should be adequate to bridge the gap between income and the real cost of rental housing and ensure that families pay no more than 30 percent of their income towards housing costs.

• Rental assistance should be flexible and allow families to work and/or to transition from welfare to employment, but should assist those families who are unable to work or are currently unemployed.

• Participation in welfare should not be a requirement for rental assistance.

• Rental assistance should protect homeless children and families from hazardous housing conditions, in the same way that Federal housing programs protect families from unsafe housing.

• Finally, the City should target a significant portion of scarce Federal housing subsidies (including both Section 8 vouchers and public housing apartments) to those families most in need - homeless families residing in shelters.

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1 Indeed, the New York City Department of Homeless Services commissioned a 2005 research study by the Vera Institute that showed that homeless families leaving shelter with Federal housing vouchers or into public housing had the lowest rates of return to shelter. The study, "Understanding Family Homelessness in New York City," is available at http://www.nyc.gov/html/dhs/downloads/pdf/vera_Study.pdf. Additional research studies showing how Federal housing programs reduce family homelessness are summarized in the Coalition's briefing paper, "Research Proves that Federal Housing Programs Work to Reduce Family Homelessness" (February 12, 2009), available at http://www.coalitionforthehomeless.org/pages/research-proves-that-federal-housing-programs-work.
2 Data on housing and renter incomes is from the U.S. Bureau of the Census' triennial Housing and Vacancy Survey, and local unemployment data is from the New York State Department of Labor.
3 National Low Income Housing Coalition, "Out of Reach 2010," available at http://www.nlihc.org/template/index.cfm.
4 Coalition for the Homeless, Homeless Families at Risk: Hazardous Conditions in the Housing Stability Plus Program (2007), available at http://www.coalitionforthehomeless.org/pages/homeless-families-at-risk.
5 New York City Department of Homeless Services report to the New York State Office of Temporary and Disability Assistance, March 2009, obtained via freedom of information request.
6 Testimony of New York City Department of Homeless Services Commissioner Seth Diamond, New York City Council, General Welfare and Finance Committees, FY 2011 Executive Budget hearing, May 18, 2010.
7 New York City Department of Homeless Services report to the New York State Office of Temporary and Disability Assistance, June 2009, obtained via freedom of information request.
8 New York City Department of Homeless Services report to the New York State Office of Temporary and Disability Assistance, March 2009, obtained via freedom of information request.
9 Testimony of New York City Department of Homeless Services Commissioner Robert Hess, New York City Council, General Welfare Committee, oversight hearing, April 15, 2010.
10 New York City Department of Homeless Services report to the New York State Office of Temporary and Disability Assistance, March 2009, obtained via freedom of information request.
11 New York Times, "Thousands Lose Rent Vouchers in Cutback," December 17, 2009, available at http://www.nytimes.com/2009/12/18/nyregion/18vouchers.html.
12 New York Times, "Deal Restores Public Housing Subsidies," June 30, 2010, available at http://www.nytimes.com/2010/07/01/nyregion/01vouchers.html?_r=2&ref=nyregion.
13 Testimony of New York City Department of Homeless Services Commissioner Seth Diamond, New York City Council, General Welfare Committee, oversight hearing, May 18, 2010
14 From New York City Department of Homeless Services documents entitled, "Reapplications of Families with Prior Advantage Exits," obtained via freedom of information request. Numbers do not specify the number of unique applicants. As a result, some may be repeat applications.
15 Vera Institute for Justice, 2005, "Understanding Family Homelessness in New York City," is available at http://www.nyc.gov/html/dhs/downloads/pdf/vera_Study.pdf. Additional research studies showing how Federal housing programs reduce family homelessness are summarized in the Coalition's briefing paper, "Research Proves that Federal Housing Programs Work to Reduce Family Homelessness" (February 12, 2009), available at http://www.coalitionforthehomeless.org/pages/research-proves-that-federal-housing-programs-work.