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The ANHD Blog raises the profile of our issues, and educates our member groups, city decision makers, and the general public on our core issue areas. The ANHD Blog offers sharp, timely and effective commentary on key public policy issues, as well as our work and the work of our member groups.

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Turning A Legacy Problem Into A Solution For Homeless Families

April 2, 2019

City Gets It Right by Converting Controversial “Cluster Site” Apartments into Permanent Housing for Homeless Families

The Cluster Site Program has been problematic from the start, allowing for-profit landlords to make a killing by temporarily housing homeless families in private apartments. Though getting the City out of this mess hasn’t been easy and paying profiteers is a painful exit strategy, ANHD applauds the City for taking bold action to get out of the program and giving hundreds of homeless families the chance at permanent, stable, and decent housing.

This past December, the Department of Housing Preservation and Development (HPD) announced it would address the worst buildings in the Cluster Site Program, which was started by a prior administration and has been riddled with serious problems. Landlords would often enroll rent-stabilized apartments with the lowest regulated rents in the program, which provided subsidies to match higher market rates. This allowed landlords to rake in much more income from homeless housing subsidies than they could have from rent-stabilized tenants, removing much-needed affordable rental apartments from the market. Meanwhile, weak oversight by the City meant unscrupulous landlords failed to provide the most basic repairs or maintenance creating deplorable conditions for the families housed through the program.

For years, local residents have complained about the loss of local affordable apartments and homeless families have cited the terrible conditions they’ve been living in. Organizing groups including Picture the Homeless and Banana Kelly Community Improvement led a campaign, but prior administrations ignored the problem assuming they couldn’t do anything to meaningfully improve it; but in 2017, the de Blasio Administration decided it could do better. The Administration announced it was phasing out the entire Cluster Site program and would transfer families currently in Cluster Site apartments into permanent housing. However, it takes time to unwind a troubled program without harming any of the current residents and some of the distressed apartments remained.

HPD recently announced that it would solve these issues by buying a portfolio of 17 Cluster Site buildings from the notorious Podolsky family and transferred the buildings to respected mission-driven affordable housing developers led by the Joint Ownership Entity (JOE NYC), an effective non-profit collaborative, and the innovative Neighborhood Restore. Once the sale goes through and the buildings are fixed up by their non-profit owners, 468 homeless families – over 1,200 people – will have permanently affordable, decent apartments to call their own. Additionally, another 300 families who live in non-cluster site apartments in the same buildings – who were also subject to unhealthy conditions by the Podolskys – will also benefit when the buildings are rehabilitated.

The City took the best approach to preserve safe and affordable housing for homeless families in the Cluster Site program by ending this unfixable program. The City had to act quickly to save the distressed housing and keep the families from harm, so in the end, they paid the Podolskys a competitive market price for the buildings in order to get the deal done. In a complex but necessary deal like this with an unsavory seller, the best way to ensure the public really benefits is if the buildings are transferred to respected, mission-driven non-profits, and the JOE NYC and Neighborhood Restore were strong choices.

With the sale scheduled to be closed soon, ANHD congratulates HPD, the JOE NYC, Neighborhood Restore, and the local non-profit partners Banana Kelly, Fifth Avenue Committee, Fordham Bedford, HELP USA, MHANY, Samaritan Village, and Settlement Housing Fund for successfully turning a difficult legacy problem into a solution for homeless families and the local community.

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