The New York Times
Discrimination Weakens Tool for Reducing N.Y. Homelessness, Lawsuit Says
Vouchers, which help people afford rent, have long been seen as a key to solving the nation’s housing woes. But in New York City, a broken oversight system is undermining their effectiveness, advocates say.
By Mihir Zaveri May 25, 2022
Excerpts:
A voucher program designed to reduce homelessness in New York City has been hamstrung by the discriminatory practices of landlords and real estate agents who have turned away people relying on subsidies to pay rent, according to a lawsuit filed on Wednesday.
The lawsuit, which accused more than 120 real estate companies, brokers and property owners across the city of engaging in the illegal practice, comes as New York City is struggling to move people out of shelters or off the streets and into homes, and reflects how voucher discrimination may be undermining nationwide efforts to address homelessness and segregation.
As part of a monthslong sting operation, investigators with a nonprofit watchdog group, the Housing Rights Initiative, posed as prospective tenants. The investigators made thousands of inquiries seeking to rent homes using a special city voucher for people struggling with evictions and homelessness. But in recorded phone calls, text messages and emails, which were shared with The New York Times, the investigators were repeatedly told that landlords did not rent to such voucher holders.
It is illegal in New York City, and in a growing number of places across the nation, for landlords to refuse to accept applications from tenants who depend on vouchers.
“Housing discrimination is not an isolated incident,” Aaron Carr, the executive director of the Housing Rights Initiative, said in an interview. “It is a part of an industrywide problem.”
More than 48,000 people slept in New York City shelters each night in March, according to the Coalition for the Homeless, a nonprofit advocacy group. The number of single adults in shelters has increased steadily over the last several years. City data shows that about 8,700 families with children were living in shelters in May.
The city last year expanded the voucher program, called CityFHEPS, that is the focus of Wednesday’s lawsuit. The CityFHEPS program, which stands for Family Homelessness and Eviction Prevention Supplement, covers a portion of a voucher holder’s rent, depending on their level of income.
In general, voucher programs have been relatively successful, said Ingrid Gould Ellen, faculty director of the New York University Furman Center and an urban planning professor at the university. She said that research indicates that families who receive vouchers are less likely to be homeless compared with other families in shelters; they are also less likely to be rent-burdened and less likely to live in crowded homes compared with other low-income households.
But the nonprofit’s investigation, which followed a similar lawsuit filed last year targeting federal housing vouchers, was another stark reminder of how government voucher programs are hampered by an array of problems, including discrimination against voucher holders, but also complex rules and regulations that make it difficult to navigate the voucher system.
Roughly a quarter of the nearly 90 defendants from the 2021 case have settled, Mr. Carr said, with brokers agreeing to pay agents higher commissions for renting apartments to voucher holders and some landlords agreeing to set aside units for voucher holders.
The investigation also exposed a skeletal oversight system in New York City, which lacks the capacity to enforce laws barring discrimination against voucher holders.
A unit with the City Commission on Human Rights that is supposed to investigate voucher discrimination had zero full-time staff members remaining after years of turnover, according to an April article from the local news site, City Limits. A report in the New York Daily News highlighted how city bureaucracy has kept people, who would otherwise be qualified, from renting apartments.
Inquiries to the commission were referred to the mayor’s office, which said there were currently full-time staff in the unit but would not say how many. The mayor’s office said it was also working to add more staff. Mr. Adams has said that he intends to address the problems with the voucher system as part of his housing plan, which is expected to be released next month.
The city’s Department of Social Services, which runs the CityFHEPS program, did not provide information about the program, including how many people have the vouchers and how many have found homes.
But many New Yorkers struggling with homelessness have encountered difficulties trying to find a home that they can pay for with a voucher.
Even as renters encounter problems while applying, landlords and brokers say they are frustrated with inefficiency and delays in the program.
Sarah Saltzberg, an owner of Bohemia Realty Group, which brokers sales and rentals in New York City, said that programs like CityFHEPS require landlords to meet complex inspection standards — for instance, a certain amount of kitchen counter space or square footage in a bedroom — that sometimes narrowly disqualify homes for voucher holders.
It can also take several months to complete the paperwork, she said, meaning tenants remain in shelters while landlords miss out on potential rent payments, if they choose to wait at all instead of seeking another tenant. Many landlords and real estate agents do not know all the rules of how to comply with voucher program requirements, she said, adding that the city should work to revamp the system with input from renters, landlords and brokers.
“It feels so often that we are odds, and I just don’t know why it has to feel that way,” she said.
Comment:
A non-profit’s investigation “exposed a skeletal oversight system in New York City, which lacks the capacity to enforce laws barring discrimination against voucher holders.” Evidently New York is dependent on compliant landlords to provide much of its affordable housing stock. Will “revamping the system with input from renters, landlords and brokers” really solve the problem?
Let’s take a look at an associated problem that affects this city and many others. Low income residents, prospective developers, neighbors, and adjacent property owners all suffer from the socially detrimental activity of building neglect. This is often accompanied by land speculation – holding onto vacant and underutilized sites for windfall gains when gentrification begins to occur.
Examples of building neglect resulting in land use code violations can be found in all major cities. Despite repeated citations and meetings with City Council and the City Attorney, the City of Seattle has had little success in changing owners’ behavior. In case after case, a bureaucratic system has failed in efforts to cite owners for property negligence. After multiple lawsuits, the process drags on for many months. Neighborhood residents and homeowners are outraged.
Portland, Oregon’s city auditor exposed a $858,762 payment by homeless services to the landlord of Sandy Studios, housing poor veterans in this squalid apartment building after the building inspector discovered bed bugs, roaches, black mold, faulty plumbing, holes in walls, and a collapsed ceiling. According to the auditor, conditions had been devolving for almost two years without action.
This saga is a sad reminder of the problems that programs like housing vouchers and neighborhood revitalization have when they rely on enforcement mechanisms. Why do we perpetually pursue the regulatory route to solving problems despite continued setbacks? Financial incentives may produce better results.
Has anyone given thought to how the property tax system encourages this kind of neglect? Slumlords know that if they did repair their properties, their tax bills would increase. The present method of taxing land and buildings at the same rate is not neutral in its affects. The equal rate system encourages unwise land use practices by imposing heavier fiscal burdens on property improvements and lighter burdens on under-improved parcels. Taxes on total market value make it profitable for some owners to let their properties deteriorate. Slumlords in effect receive a tax subsidy–an inducement to speculate on land.
A property tax reform adopting a differential rate would tax mainly the value created by the community at large (land values), not the capital invested by individual owners (improvement values). As a result of placing a higher tax rate on land assessments, it could become too costly to hold onto underutilized or deteriorated sites. Likewise, a proportionately lower tax rate on improvement assessments would encourage owners to repair or replace obsolete buildings. The widespread response to the fiscal inducement to reduce the land-to-building value ratio would lead to the development of infill sites and the upgrading of neighborhoods. Individual owners will now be willing to take the risk of investing in property improvements because they are assured that everyone in the community receives a similar tax incentive.
How can New York City’s property tax system be improved? The City could overhaul its property tax system by creating a Fifth Class within the existing tax system. This new Class would contain only vacant and blighted parcels, and tax them only on the value of the land. According to a GIS interface created by The Center for Property Tax Reform, this new Class would capture nearly 27,000 parcels – some 4,643 acres – across the five boroughs. And at a tax rate of 3.5% on the market value of the land, Class Five parcels would generate about $1 billion additional property tax dollars in year one.
A billion dollars annually can produce a significant amount of new affordable housing units owned by the public sector, with no voucher programs or dependence on uncooperative landlords. No wasted time and dwindling city budgets on enforcement procedures.
Tom Gihring, Research Director
Common Ground OR-WA
