An audit by the city comptroller criticizes the city for letting landlords get away with breaking the rules of a housing program for homeless families.

Most homeless families move out of city shelters by using a housing voucher that pays nearly their entire rent for up to two years. That money goes directly to a private landlord. A family of three, for example, receives $1,070 a month for rent. But according to the audit, some landlords pressure families to pay more on the side—a practice that is supposed to be forbidden.

"The families cannot afford, on a long term basis, to pay these side deals, nor should they have to because it is clearly against the rules," John Liu, the city comptroller says.

The Department of Homeless Services says side deals are illegal and when it finds out about them, it aggressively pursues the landlords involved, although the agency says it doesn't record or track any enforcement actions. But the department does have both the homeless families and landlords sign a form that says side deals are prohibited. The comptroller's audit says families are afraid of reporting side deals out of fear of retribution.

In addition, the comptroller's office says the buildings where homeless families are renting apartments are not inspected rigorously enough and three out of 95 buildings had vacate orders. Plus, other building owners owed more than $200,000 in city fines.

DHS calls any problems isolated. The agency says certified inspectors visit each apartment and addresses are cross-referenced with city housing databases to root out troubled buildings.

DHS commissioner Seth Diamond says the audit ignores how successful the program has been at moving large numbers of families out of shelters in a shorter amount of time. During the 2.5 year period the audit covered, more than 8,000 families were moved into private apartments.

Comptroller Liu acknowledges that DHS's job is not easy and the program is commendable, but he says with these problems, families are sure to end up homeless again.

The program is expected to get stricter on families starting this fall, requiring them to work more and pay more toward their rent. The comptroller's office believes this will only exacerbate the problem. In a letter to the city and state, Liu and homeless advocates are urging the changes be reversed.