What’s the Advantage?

Why, in the midst of both a budget crisis and an economic downturn, would both the city and state pursue policies that would both needlessly and dramatically increase spending, while increasing homelessness in New York City by 15,000 people?  It’s unclear, but there is a very real chance that this is exactly what could happen as soon as the end of April.  But how?

Well, it started when Cuomo left about $35 Million out of his proposed budget.  A small amount when compared with overall budget deficit, but the entirety of the State’s normal contribution to the City’s Work Advantage voucher program, a program that provides a rent subsidy to homeless families to help them move out of city shelters and into their own apartments.

While not always the most popular or effective , since Cuomo released his budget, both proponents and opponents  have fought to restore the funding (with the notable exception of Coalition for the Homeless).

In fact, the City has said that it will not continue the program without the state contribution, which accounts for about 25% of the program’s total cost, but which the city has said is necessary to pull down additional federal funding.  Perhaps to prove they aren’t bluffing, on March 17th and 18th, the 15,000 families currently enrolled in the program received letters informing them that, as of April 1st, their vouchers would be terminated, leaving them immediately responsible for the entire rent.  Even with Monday’s budget deal showing $15 Million in the budget for “a new program for the homeless in New York City,” presumable to replace or supplement advantage, the city has not yet agreed to continue the program.

Yet, while certainly unfortunate for the families involved, and potentially a violation of the contracts signed with these families Landlords, if the city and state can no longer afford it, then at least ending the program will save money, right?  Well, not exactly.

After a number of protracted legal battles over the meaning of a few lines in the State’s constitution (get background here), New York families actually have a protected right to shelter.  In practice this means that, if a family can prove they have nowhere else to go, the city and state have an obligation to provide emergency shelter for them.  And doing so is extremely expensive, approximately $38,000 per family per year.  Even assuming only half of the 15,000 families currently on advantage go back into the shelter, this would cost the city and state an additional $285 Million, or about $85 Million more than is spent on the program in total.  Not only does it have the potential to force 15,000 families out of their home, it leaves the city and state at an even greater fiscal disadvantage.