Will a business model to solve the homeless crisis work? Follow the money Shelter operators can make up to $500,000 a year?
New York City Councilman Mark Choi (left) and New York State Assemblyman Bill Cotton (second from right) in front of the shelter site selection on the 23rd. They said that building a homeless shelter has become a business model and does not solve the problem.
This month, an African-American homeless man from Brooklyn drew citywide attention after he stabbed two people to death and injured two others along the A line subway in a 14-hour period. The city’s plan to house 150 male transients in Bensonga, Brooklyn, has caused even more fear among local people.
The city’s plan to build a homeless shelter in Bensonga has not been communicated to local residents, causing dissatisfaction in the community, and hundreds of residents have formed the “Brooklyn South Residents Support Group”, pictured here is the main leader of the support group.
Many residents opposed the Bensonga shelter plan, and they went to the site of the shelter on the 23rd to make their voices heard.
The Bensonga shelter plan is also opposed by young residents.
Ms. Zhou said she was concerned about the safety of the shelter because it was located too close to the school and the bus stop where all the children and seniors ride.
Hundreds of local residents petitioned in front of the shelter site with various signs, arguing that building a shelter there would pose serious safety and quality of Life issues.
Local residents petitioned in front of the shelter site with various signs, arguing that the construction of the shelter would bring serious safety and quality of life problems.
The Chinese community at 2147 Bath Avenue in Bensonga district will begin construction of a male homeless shelter this year. Yesterday (23rd), hundreds of community members braved the rain in front of the construction site to demand a halt to the plan. Local state representatives, senators and city councilors were there to support the residents in their struggle.
New York’s homeless crisis at its highest since the Great Depression
New York is one of the world’s wealthiest metropolises, but it also has the second highest homelessness rate in the country, behind only California. According to the U.S. Department of Housing and Urban Development’s (HUD) annual homelessness report released early last year, New York houses 16 percent (92,091) of the nation’s homeless population.
Combined, New York City’s homeless programs cost a total of $3 billion a year. (From the New York City Council Speaker’s January 2020 “Homeless Crisis” report)
Of the federal, state and city budgets for shelters, the state spends the least. The total investment has been rising significantly from 2014 to 2020. (From the New York City Council Speaker’s January 2020 “Homeless Crisis” report)
For the different homeless service agencies, there is a significant increase in the amount of money spent before White took office (2014) compared to the amount spent during his term in 2020. (From the New York City Council Speaker’s January 2020 “Homeless Crisis” report)
The New York City Department of Homeless Services (DHS) spends the most money on New York City’s homeless shelter program. (From the New York City Council Speaker’s January 2020 “Homeless Crisis” report)
New York City’s fiscal year 2020 budget allocates $2.1 billion to the Department of Homeless Services (DHS), and with a total homeless population of over 60,000, the government spends nearly $3,000 per month per homeless person. But the homeless problem is still worsening, and it is difficult to find meaningful solutions.
In order to survive the Epidemic, many New York hotels have chosen to work with the government to become homeless shelters. Some owners of vacant lots are also finding it difficult to make money building hotels, and the only way to make a profit is to become a homeless shelter.
The number of homeless people in major U.S. cities from 2014-2018 has decreased in cities like Washington, D.C., and increased significantly in cities like New York. (From the New York City Council Speaker’s January 2020 “Homeless Crisis” report)
The U.S. Department of Housing and Urban Development’s (HUD) annual homelessness report, released early last year, found that New York houses 16 percent (92,091) of the nation’s homeless population. (Taken from HUD’s website)
New York State Assemblyman William Colton, whose district includes Bensonga, said the solution has become a business model “that a lot of people are making money off of, but it’s not a solution that helps the homeless. It doesn’t provide permanent housing, it’s basically run as a hotel, they call it a shelter. Millions of dollars are put into a temporary solution that benefits the people who run it and the real estate developers. The city spent the money without solving the problem of homelessness.”
After researching, Curton found that the property at 2147 Bath Avenue, where the city was going to build a shelter, was sold to an LLC (limited liability company) on Dec. 23, 2020, for $4.9 million to Superior Globe, and the $2.3 million mortgage on this property was taken over by another investor, not a bank, but a financing company, Capital Fund LLC, in addition to the financier issuing a total of $4.3 million in mortgages.
The question then becomes, just as the city is looking at this as a shelter, “Why would someone want to buy this property for $4.9 million and get a $4.3 million mortgage from an investment firm? Why are there so many LLCs involved?” said Cotton, who discovered that LLCs are involved in most shelter programs, yet it is very difficult for an LLC to know who the real partners and back office owners are when you want to know their names, “and no one told us.
Following the money shows a lot of things. As an example, Cotton said, “The CEO who runs another shelter has an annual salary of $500,000, that particular program has hundreds of violations, and the city of New York is paying to rent buildings to those operators.” A $500,000 annual income would be at the “top of the pyramid” anywhere, and Dr. Fauci, the nation’s top infectious disease expert, now earns just $417,000 a year.
“It’s business. It’s a business that people make money from.” It’s not that the community is antagonistic to the homeless or unwilling to help those who are sick, frail and struggling to survive, Curton said, but the community is actually a very humane one, with compassionate residents who want to help.
The number of homeless people in New York City is currently at its highest level since the Great Depression. It’s painful to see the homeless crisis, says Cotton, “People are choosing to stay on the streets because the city-funded shelters are in terrible shape and do little to help those who need support services, including mental health and addiction treatment. No one has paid attention to how the network of third parties, LLCs and corporations have sited and converted shelters that have become businesses that provide profit opportunities for developers, with the overhead ultimately passed on to taxpayers.”
Local Democratic City Councilman Marker Treyger also lamented that Mayor Pat White’s policies have exacerbated New York’s decades-long homeless crisis. The solution, he argued, is not to build shelters; the solution is to create treatment programs and how to heal these people’s mental health problems.
From 1983 to 2020, the number of homeless people sleeping in New York City shelters each night has increased every year, especially in recent years. (From the New York City Council Speaker’s January 2020 “Homeless Crisis” report)
Under the administrations of Mayor Edward Kuo, Mayor John Ting, Mayor Giuliani, Mayor Bloomberg, and Mayor Patricia White, New York City has used different strategies to deal with the homeless problem, and the number of homeless people has risen dramatically during White’s tenure. (Taken from the New York City Council Speaker’s report on the “homeless crisis” in January 2020)
Chinese seniors: worried about the safety of the young and old traveling
Since White took office, the number of homeless people in New York City has been rising sharply, and the burden on taxpayers has become heavier. In 2017, White launched the Turning the Tide Plan to build 90 new “community-based” shelters by 2021. Thirty-seven are not yet operational. Of the 43 operating shelters, about half (21) are located in the Bronx, eight in Queens, nine in Brooklyn, five in Manhattan and none in Staten Island.
Three new homeless shelters are planned for the Benson Heights area as part of this project. The area has attracted more and more Chinese to buy and invest in real estate in recent years. Ms. Zhou, who has lived here for 10 years and is now retired, told reporters that the area is not as crowded and dirty as Eight Avenue, the neighborhood is clean and beautiful, Chinese restaurants and supermarkets are just a stone’s throw away, the beach and wooden walkway are not far away and very pleasant, with convenient transportation and a safe community, and the three-Family Home she bought has increased in value by nearly $500,000 in 10 years. She said the site of the shelter was too close to the school and the bus stop where all the children and seniors ride and she was concerned about travel safety.
People in the audience argued that Whitehouse’s plan to evenly distribute shelters to all neighborhoods in hopes of stopping the city’s expensive hotel and condominium rentals to house the homeless is treating the symptoms rather than the cause, and has led to community complaints as homelessness has become more pronounced, as well as a drug epidemic, a rise in misdemeanor crime, a decline in quality of life, and a drop in real estate prices.
Recent Comments