For Some Landlords, Real Money in the Homeless

This much be good, because it makes Lapes rich, and since he is rich, that is proof that God has blessed him. [sarcasm]

http://www.nytimes.com/2013/02/09/nyregion/for-some-landlords-real-money-in-the-homeless.html?pagewanted=all&_r=0

By JOSEPH BERGER
Published: February 8, 2013

Willy Machan acknowledges he is a gadfly, someone who writes bristling letters to local officials to get conditions improved in his grim single-room-occupancy building. But he was surprised by what his landlord offered last July to persuade him to move out of the room he has lived in since 1984 and for which he pays $371 a month.

¶ “If you are not happy, I will give you $25,000 cash,” he recalled the landlord’s representative telling him.

¶ Though barely getting by on Social Security, Mr. Machan, a 68-year-old retiree, turned down the offer, saying he had nowhere else to go. But some of his neighbors in the building on the Upper West Side of Manhattan — where the 71 rent-paying residents share bathrooms and there is no kitchen — told others they accepted similar cash payouts with the excitement of lottery winners and quickly vacated.

¶ The landlord, Alan Lapes, was clearing out these tenants to accommodate a group of people not often regarded as desirable: New York’s homeless.

¶ The city’s Department of Homeless Services pays many times the amount the rooms would usually rent for — spending over $3,000 a month for each threadbare room without a bathroom or kitchen — because of an acute shortage in shelters for homeless men and women.

¶ Indeed, the amount the city pays — roughly half that amount goes to the landlord, while the other half pays for security and social services for homeless tenants — has encouraged Mr. Lapes to switch business models and become a major private operator of homeless shelters. He is by most measures the city’s largest and owns or leases about 20 of the 231 shelters citywide. Most of the other shelters and residences are run by the city or by nonprofit agencies, but his operation is profit-making, prompting criticism from advocates for the homeless and elected officials.

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Mr. Lapes, 49, has been willing to weather the blistering response because of how lucrative these shelters have become. Mr. Lapes, who has a home in Upper Saddle River, N.J., that was valued in 2005 at $3.3 million, did not return numerous messages left at his home, office and homeless shelters seeking comment.

¶ The fact that these modest living spaces have such high rents opens a window on a peculiarity of the city’s overall homeless policy. That policy, which was put in place in response to court settlements in 1979 and 2008, requires the city, under threat of sizable fines, to find a roof immediately for every homeless person. It has given landlords willing to house the homeless leverage to dictate rental prices and other terms.

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With the number of homeless people rising to 30-year record levels — over 47,216 people as of early this month, 20,000 of them children — the city has struggled to find landlords willing to accommodate a population that includes people with mental health and substance abuse problems. So the city has resorted to housing adults in single-room-occupancy buildings originally designed for long-term residents who pay stabilized rents.

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Patrick Markee, a senior policy analyst for the Coalition for the Homeless, blamed the Bloomberg administration for the continuing use of private landlords to house the homeless, citing a policy not to give the homeless priority for public housing projects and Section 8 vouchers because of long waiting lists.

¶ “The crisis that’s causing the city to open so many new shelters is mostly of the mayor’s own making,” he said. “Instead of moving families out of shelters and into permanent housing, as previous mayors did, the city is now paying millions to landlords with a checkered past of harassing low-income tenants and failing to address hazardous conditions.”