Six months have passed since New York City's Department of Homeless Services (DHS) discontinued Advantage, a rental subsidy program designed to move homeless families out of shelters and into market-rate apartments. Since that time, the number of homeless families placed in permanent housing has decreased, and the average length of stay-in shelters has increased. The number of homeless families remains near historic highs.
Despite those disturbing trends, DHS continues to stress that homeless families should be ushered through the shelter system rapidly. That emphasis is part of a strategy called "Housing First," which has become the consensus choice among advocates, policy makers, and academics as the ideal strategy for dealing with homelessness. New York City's leaders in particular have been enchanted by the idea; their enthusiasm has not been diminished by the lack of real-world results.
New York City began its experiment with "Housing First" in 2004, and since then three separate housing subsidies have been introduced and discontinued. Now, with the benefit of hindsight, it is time to ask: What has been learned about rapidly rehousing homeless families over the course of the last seven years, and at what cost?
Housing Stability Plus (HSP) was New York's first rental subsidy program. Homeless families could only receive this benefit if they had open Public Assistance cases. At most, families would receive HSP for five years, and every year their subsidy was reduced by 20%. Program rules were incredibly and counterproductively strict. Recipients had to work, but if they earned a full-time wage they risked being cut off of Public Assistance, thereby losing their rental subsidy. This created a disincentive to becoming fully self-sufficient, and prevented families from saving for the time when rental assistance would end. The City discontinued HSP in just its third year.
With the end of Housing Stability Plus came Work Advantage. With this second rapid rehousing plan, the Public Assistance requirement was eliminated and a family's contribution to rent was reduced to $50 per month -- both positive changes. But the time limit for benefits was reduced drastically, from five years to a maximum of two years, and pressure mounted to move families out of shelter as quickly as possible, irrespective of their individual needs -- both significant missteps. Many Work Advantage families who were willing or even eager to work simply did not have the skills, education, or work experience to maintain gainful employment and retain their subsidy. In New York City, an adult earning minimum wage would have to work 134 hours every week of the year in order to safely afford a market-rate two-bedroom apartment. Understandably, even families who did maintain employment for the duration of their subsidy found it difficult to keep their housing when the subsidy expired, which sent many of them back into shelter.
Work Advantage was replaced by Advantage in August 2010. With the third rapid rehousing program, the City significantly increased the amount families contributed toward their rent, and made it more difficult for them to get a second year of rental assistance. When the program was introduced, DHS estimated that only 60% of participating families would be eligible for a second year of assistance. After the City shortened the length of the subsidy, increased pressure to move families out of shelter quickly, and raised rental contributions, the number of families who lost their housing and returned to shelter increased. After Advantage ended, DHS admitted that 19% of the families who participated in the program became homeless again.
Proponents of "Housing First" often claim that their model is the most cost effective way to reduce family homelessness, but in New York City this hasn't proven to be the case. Under the HSP, Work Advantage and Advantage programs, returns to shelter, or recidivism, increased dramatically, and cost the City millions.
A 2010 report by the Institute for Children, Poverty, and Homelessness estimated that in the two years before HSP began, housing families who returned to shelter after exiting cost the City an average of $68 million per year. After HSP and Work Advantage were instituted, that cost more than doubled to a total of $141 million annually. In April 2011, the Coalition for the Homeless estimated that sheltering recidivist families had cost New York City $370 million since 2004.
The idea undergirding "Housing First" is that shelters are a waste of resources, costly way stations that should be eliminated in favor of moving homeless families into permanent housing as quickly as possible. That model has been very effective when applied to some subgroups of the homeless population, such as chronically homeless single adults, but over the last seven years we have learned that it does not work for homeless families.
In a city like New York, where entry-level workers are paid low wages, housing prices are high, public housing is not an option, and shelter residents often lack work experience, skills, and education, homeless families cannot be simply pushed into the housing market with a rental subsidy and a dream. Before homeless families can be successful, their needs -- be they job training, education, or counseling -- must be seriously addressed, and the best, most cost-effective location for that to take place may actually be the existing service-rich shelter system itself. The taxpayers and vulnerable families of New York City, or any other city, should not have to pay any more to learn that lesson; we have already learned it three times over.