Landlords Profiting in Homelessness

Photograph by the New York Times
Photograph by the New York Times

According to the New York Times, the homeless population in New York City has risen to 47,216 this month  — a 30 year high. Of the city’s homeless population, 20,000 are children. As the number of homeless folks increases, the number of unoccupied shelters decreases. To accommodate the growing homeless population, the Department of Homeless Services (DHS) has implemented a new tactic.

The DHS is paying for-profit developers $3,000 per unit to house homeless folks. Nearly half of the funds go to the landlord, while the other half is meant for security and social services. The DHS stipulates that landlords use the money to address mental health and substance abuse concern.  To address these concerns is to combat the roots of poverty.

Alan Lapse is one of the many for-profit developers that is housing the homeless. Initially, Mr. Lapse provided housing to many low-income tenants living on the Upper-West Side. After learning about DHS’s program, he changed his business practices.  To turn a better profit, Mr. Lapse began offering current tenants $25,000 in cash to vacate their apartments.  Many tenants in the building accepted Mr. Lapse’s offer. Now, he owns 20 of the 231 homeless shelters citywide.

Willy Machan, a tenant in one of Mr. Lapse’s buildings, was wary of his landlord’s offer. While Mr. Lapse offer seemed profitable, Mr. Machan recognized that the lack of housing stock in New York City has significantly depleted.  Therefore, finding a new, reasonably priced apartment would prove challenging.

The Coalition for the Homeless claims that lack of affordable housing is the main cause of homelessness in New York City. As landlords recognize the lucrative incentives of the DHS program, they have abandoned their affordable housing developments, causing the affordable housing stock to continue dwindling. With less access to affordable housing, homelessness continues to rise. Therefore, DHS’ program is perpetuating, rather than alleviating, homelessness.

While the incentives of DHS’ program address the imminent needs of the homeless population, they also perpetuate the root cause the problem — lack of affordable housing. To end the cycle of poverty, rethinking the program’s incentives are imperative.  Additionally,  the city must better prioritize homeless folks when allocating public housing as well as Section 8 vouchers.  From an ethical standpoint, the DHS program calls into question the implications of profiting from the struggles of homeless folks. While the DHS development program is well-intentioned, the city must redefine their tactics to better address the needs of the population that it supports. To end homelessness, providing affordable housing is necessary.

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