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Homelessness and Shameful Waste

Carroll Gardens, Brooklyn, NYCOne of the worst and most underreported aspects of the homeless crisis is the amount of money wasted by cities in their attempts to not deal with it, or to handle it in ways ranging from sloppy to deeply criminal. Boise, Idaho, for example, really knows how to flush dollars down the toilet.

Briefly summarized here is a story reported by Rebecca Boone for Associated Press. Back in the 1990s, the city worked with an agency called Community House (CH), but the relationship was rocky, and in 2003, the city announced that its shelter would hitherto be run by the Boise Rescue Mission, which serves only men. The much more vulnerable women and children would be left out.

Boone writes:

Community House filed a complaint under the Fair Housing Act contending that the move amounted to discrimination against the homeless women and children currently living there because it would leave them with no place to go.

The city went ahead with its plans, so CH filed a federal lawsuit, and the jury found that the city had violated the state constitution and engaged in retaliatory behavior, and, most of all, discriminated against women and children. Eventually, Boise was ordered to pay $1 million dollars to CH. But all the attorneys who have worked on the case for seven years need to be paid, too, and they intend to charge the city nearly another $2 million for their fees.

But the city intends to have the discrimination and retaliation case overturned, which would leave both CH and the lawyers unpaid, and, incidentally, pile up even more legal fees. Not to worry, a spokesperson assured the public. The party line is, even if the worst happens, and the monetary award is upheld, it won’t cost the citizens, because the city’s insurer will pay.

Does that make any sense? Surely, it’s the taxpayers who buy the insurance policy, and will continue to do so after the rates are raised, in the wake of a big payout. If that isn’t the way it works, someone please explain. And what has all this expenditure on legal talent accomplished, as far as actually putting anybody under a roof?

Meanwhile, in Brooklyn, NY, a story is brewing whose ugliness increases daily. We know about it due to an impressive series of articles by investigative reporter Andrew Rice. The basic fact is that more than 45,000 New Yorkers are in the homeless system, some housed already at a monthly cost of $3,300 per unit, which is more than the market rate in Manhattan.

Of course, the price is described as including “services,” which mainly seem to consist of a hefty security staff. If the amount includes nurses, counselors, dietitians, and other personnel who do something for the residents, other than keep the rowdy ones in line, such expenditure would be justified. But that doesn’t seem to be the case. Rice explains how they do things in New York:

Shelter contracts can work in a variety of ways. Sometimes a property owner like Lapes bids directly and then subcontracts to a service provider. Sometimes, as is the case in Carroll Gardens, a service provider bids after having identified a property to lease. Few landlords, though, are willing to turn their buildings into shelters. That means the city must pay a premium, sometimes to sketchy characters.

The big story right now concerns Carroll Gardens, a building originally containing 10 apartments, that is being remodeled into a 170-bed shelter. What’s not to like? Several things, apparently, including pervasive secrecy and the invocation of “emergency contract rules” rationalized by the need to finish the work in a hurry before winter sets in.

That is the clearest aspect of the tale, which quickly devolves into a complicated mess concerning the Department of Homeless Services (DHS) and several unsavory characters, none of whom deign to return the reporter’s messages. Rice has been tracing all the people who stand to make money off the current project, and it’s not looking good.

He writes:

D.H.S. prepares to award a no-bid contract worth millions of dollars to the agency’s recently departed commissioner, who appears, in turn, to be renting the building that will house the shelter from one of his newly established nonprofit’s own board members… While few specifics […] have been disclosed, public records indicate that the bidder has an unusually involved relationship with the building’s landlord, who stands to profit from the deal.

The building appears to be owned by Alan Lapes, a convicted felon once characterized by the New York Post as “the public face for bona fide bad guys.” More than 20 shelters are run for the DHS by a shady outfit called Aguila Incorporated that was accused by the Comptroller of overcharging the city by almost a million dollars last year. And who is in charge of Aguila? The former DHS commissioner, a fellow named Robert Hess, also boss of Housing Solutions, which has three board members, two of them business associates of this Lapes character.

Then, there’s Amsterdam Hospitality, headed by Stuart Podolsky, whose expertise in previous ventures consisted of terrorizing tenants out of rent-controlled apartments (thus causing a great amount of homelessness) so the buildings they were driven from could be turned to much more profitable uses. Not surprisingly, Lapes also used to work for them, and all kinds of dicey things went on in the shelters he supervised. Rice says:

In recent years, scandals involving politically connected nonprofits and public-service contracts have led to corruption indictments and tough new state regulations on executive compensation and oversight.

Here, too, the legal costs have been ridiculous, including those incurred in several more lawsuits along the way, which Rice catalogues. Really, the whole sordid story deserves to be read in its entirety, and not just read, but studied and taken to heart as an object lesson, by any city that truly intends to house the homeless, and not merely enrich a battalion of attorneys and a legion of thieves.

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Source: “Lawyers for homeless shelter seek almost $2M,” Idahostatesman.com, 10/25/12
Source: “A New Carroll Gardens Homeless Shelter Built on Old Relationships,” CapitalNewYork.com, 10/15/12
Source: “The controversial landlord behind a mystery-shrouded Carroll Gardens shelter project,” CapitalNewYork.com, 10/18/12
Source: “Hidden in a Carroll Gardens shelter project, an owner with ‘terror’ on his resume,” CapitalNewYork.com, 10/22/12
Image by TijsB.