NYC Homeless Shelter Costs Rising Due to Bloomberg Policy Failures

The NYC Independent Budget Office estimates that Mayor Bloomberg has under-budgeted $76 million for shelters next year in the face of rising homelessness and the Mayor’s refusal to provide housing assistance for homeless families – on the same day that administration officials admitted at an oversight hearing that they never did their own analysis.

The Independent Budget Office (IBO) today released its analysis of the Mayor’s FY 2013 preliminary budget plan (PDF), and the IBO found that shelter costs are bound to be much higher than the Mayor’s budget projects both this fiscal year and next. Here are the highlights of the IBO’s analysis:

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.

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.

As we’ve noted many times, the Bloomberg administration is now spending much more in New York taxpayer dollars on the shelter system – where it costs $36,000/year to shelter a homeless family – because of the Mayor’s refusal to resume priority referrals of homeless shelter residents to proven Federal housing programs. Indeed, as we noted in our State of the Homeless report from last year, the Mayor’s failed experiment with flawed, time-limited rent subsidies like the Advantage program has already cast taxpayers more than $370 million in avoidable shelter costs – and has caused incalculable hardship to homeless kids and adults.

But astoundingly, in a New York City Council preliminary budget hearing today, Bloomberg administration officials admitted that they’ve NEVER conducted a cost analysis of the consequences of denying homeless families Federal housing assistance.

In the face of smart and pointed questioning by City Councilmember Brad Lander, NYC Department of Homeless Services Commissioner Seth Diamond reluctantly admitted that the City had never conducted a cost-savings analysis of this major policy shift – the sort of fiscal analysis that the Bloomberg administration routinely demands of policy proposals that it opposes, like living-wage legislation.

Diamond also, incredibly, feigned ignorance about the application process for the key Federal housing programs, public housing and Section 8 rental vouchers. At first he claimed that those programs were “not available” to homeless people. Then, again under pointed questioning from Councilmember Lander, he tried to deny a simple fact that has underscored more than 25 years of New York City homeless policy: that homeless families referred by the homeless services agency to the Federal housing programs’ waiting lists actually have the highest priority.

Indeed, even at the end of the questioning, Diamond STILL refused to acknowledge this simple fact, saying something about not knowing the answer. Well, in the interest of being helpful, the commissioner can easily find the answer in the annual plan of the New York City Housing Authority, which is created every year pursuant to Federal law – the whole document is here, and the relevant passages are:

Public Housing Waiting List (page 37): Highest Priority:

“1- Referrals from the New York City Department of Homeless Services or the HIV/AIDS Services Administration of the Administration for Children’s Services or the New York City Department or Housing Preservation and Development or the New York City Health and Hospitals Corporation.”

Section 8 Voucher Waiting List (page 41): Highest Priority:

“1 Referrals from the New York City Departments of Homeless Services.”

The bottom line: For a Mayor and an administration whose PR spin is that they craft their policies based on data and research, it’s obvious that, when it comes to homeless policy, nothing could be further from the truth.

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