New York City has spent $3.5 billion since 2014 sheltering the homeless but has done very little to improve the poorly maintained and unsafe living conditions endured by these populations. Presently 70 privately run non-profit and for-profit groups own approximately 450 homeless shelters. In addition, 139 hotels are privately owned, and the City runs only a handful. Deciphering the number of homeless shelters owned and operated by the non-profits businesses is difficult because some are operating without a contract, according to the State Comptroller Thomas P. DiNapoli.

But even more alarming are the businesses that provide shelter to the City’s most vulnerable homeless populations employ staff inadequately vetted by the Department of Homeless Services (DHS) which put homeless households at risk. In the past decade, the number of non-profit homeless shelter chains has expanded by 29%, and so have the complaints against them. In February 2021, Amy Julia Harris of The New York Times broke a story exposing the non-profit Bronx Parent Housing Network, Chief Executive Victor Rivera, who had been accused of sexual assault, harassment, and a conflict of interest. The shelter provider placed him on leave sometime in 2021. However, In the last five years, DHS awarded over $274 million in contracts to the Bronx Parent Housing Network, and even after the allegations surfaced against Rivera, the City continued to use the non-profit for shelter housing.

In 2019, the largest non-profit shelter provider in NYC, Acacia, with 750 individual family units and four buildings, racked up multiple violations with the Department of Buildings (DOB) for dangerous conditions. Since 2011, Acacia has pulled in over a billion dollars¾ in one year from June 2018 to June 2019, the non-profit landed over $259 million in homeless contracts ¾from the Department of Homeless Services (DHS). According to journalists Walker Bragman and Alex Kotch of SLUDGE, the contracts awarded to Acacia accounted for 18.5% of DHS contracts that year. The shelter super chain also receives additional funding from the Department of Social Services (DSS), funneling the funds collected from the resident’s child support into the account of the non-profit. The residents only receive a small portion of their child support collected monthly call a “pass-through” payment.

Multiple non-profit shelter providers remain on the city and state Comptrollers watchlist. Although they are entirely out of compliance with state and federal standards, they still receive Continuum of Care funding. Multiple hotels and non-profits have been cited for decrepit conditions, inappropriate conduct by staff members, Board of Health violations, and a long list of other severe issues but continue to operate without intervention from the Office of Temporary Disability and Assistance (OTDA). Further complicating matters is that a shelter room can cost $4000 monthly per household or $48,000 annually.  Providing homeless households with fair market-rate housing with a rental subsidy costs the City 50% less than a shelter room with substandard conditions. However, the non-profit shelter model thrives during the worst economic periods. The shelter industry in New York City is allowed to prosper because agencies and elected officials have a vested interest in its survival.

When Governor Andrew Cuomo served as the Chairman of the Homeless Commission, under the Dinkins Administrations, he Dinkins administration decided it made fiscal sense to outsource sheltering the homeless populations to private industry.  Within months, the City began contracting non-and for profits groups to provide temporary housing (shelter) for the homeless.  Perfect timing for the Cuomo’s because just 3 years prior, Cuomo founded his non-profit charity “Help One.” Cuomo’s charity, a supportive housing facility, was converted to a homeless shelter located on land transferred to Help One in 1987. Presently Help One is building a new facility on the property combining affordable supportive housing with homeless shelter rooms. In 2011, the non-profit Help One operated on an annual budget of $71 million, which included several state and federal grants and according to tax records from 2018 CEO and President Thomas Hamline was compensated $410,280 in benefits and compensation.

Since Maria Cuomo Cole, the Governor’s sister, Chairwoman of Help One (HELP USA), increased the annual budget by expanding the interests of the non-profit, dividing it into multiple LLCs, with large stakes in homeless shelters, supportive and affordable housing in several states, including New York. “Homelessness continues as quite useful and functional, providing financial, political, and social benefits.” With multiple temporary housing models emerging, large profit margins, and robust funding for NYC’s current housing crisis, eradicating homelessness seems impossible. However, we can begin to address the policies and limited distribution of federally subsidized rental vouchers like Section 8 to provide long-term affordability to working homeless households. The anguish endured by homeless households can start to repair when they are provided with a place to call home.