NYC: Renting Luxury Condos For Its Homeless

Posted: June 6, 2009 in Bureauacracy, Government, Homeless Shelters, Homelessness, Housing, Politics, Stupidity

New York City is known as the Big Apple. Lately however, with regards to its approach to handling its local homeless population, city officials seem to keep opening one can of worms right after another.

Their latest efforts are just as foolish as when Mayor Bloomberg began charging working homeless families "rent" to continue staying at local shelters (See my posts: NYC Homeless Families Must "Pay To Stay" and NYC Stops Charging Homeless Families Rent…Temporarily).

This time, however, instead of charging the homeless rent, the city is paying their rent – in luxury condos.  

In an article in the New York Daily News, Homeless flock to Brooklyn luxury condo in hopes of scoring shelter, reported that luxury condos in a 67-unit building was going to be used to house homeless families.

While I personally think it’s great that New York is trying to provide shelter for its homeless, I question the city’s rationale in paying "rent."

Here’s the situation in a nutshell.

Last summer, HQ Marketing Partners began trying to sell the condos for prices ranging from $250,000 to $350,000 per unit. But, because of the sluggish real estate market, there were no takers and the building remained vacant.

According to another Daily News article, City turns upscale building in Crown Heights into homeless shelter,

"When the market started to tank in the fall – and his gamble on a fringe neighborhood didn’t pay off – developer Avi Shriki said he had to come up with a Plan B.

‘When the market went south, we knew we had to do something different,’ said Shriki, 44. ‘With the market being the way it is you have to be creative.’ "

Plan B involved signing a contact with the Bushwick Economic Development Group to turn the building into a "homeless shelter."

The cost to the City of New York: $90 per night – which translates to $32,850 per unit annually. Multiply that by the 67 units and the city will ultimately pay $2,200,950 per year.

That’s where I get become befuddled by the city’s lack of common sense – and its seeming lack of fiscal responsibility.

Consider that, even at the highest sale price of $350,000 per unit, the city will have paid nearly the entire asking price within ten years. And since some of the units were slated to be sold for as little as $250,000, the city will have paid more than the market value.

It seems to me that it would have been more fiscally prudent for the city to have simply bought the property outright and converted it into low-income housing. That would have created permanent housing for the homeless – which would have been more in line with the city’s 10-year plan to end homelessness.

It’s no wonder that New City officials are making no headway at reducing the city’s homeless population. They lack a clearly defined method for doing so.

Instead, they seem content to approach the situation using knee-jerk reactions and ill-conceived ideas – none of which are making a bit of impact at helping folks get off the streets.

Homelessness is a complex social issue. It cannot be remedied overnight. Nor, can it be gotten rid of using haphazard approaches.

Increasing the number of "shelter beds" doesn’t end homelessness. It only serves to further trap folks in the system.

Passing laws and ordinances which criminalize homelessness isn’t a solution either – since this only punishes the homeless for not having a place to live.

The only effective means of ending homelessness is to help the homeless become housed. This requires affordable housing – something which is noticeably lacking in most communities.

Until elected leaders begin addressing the issue of the lack of affordable housing in their local communities, it doesn’t matter how much funding it spent on homelessness – the numbers of folks living on the streets will continue to increase.


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