Handshake Hotels: Part 1

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Walking down the long brown hallway in the Marion Hotel on the Upper West Side, Jacqueline Davis fingers a keychain around her neck.

Bernstein: You’ve got a lot of keys on that keychain. What are they to?
Davis: Hotels I’ve been in. I keep them as souvenirs. This is my room.
Bernstein: I see you’re leaving the TV on, why is that?
Davis: ‘Cause I sleep with the TV on because of the mice. They go over there in the corner and they go down the hole and it’s scary. I keep my radio and my TV and here’s the refrigerator but it’s not too good here far as safe is concerned.

She sits down on the child-sized bed her tiny room. Jacqueline Davis has AIDS. As she talks she wipes a bead of sweat from her forehead.

Davis: A lot of people are not clean in the hotels, you could catch anything they leave behind them. If they got bugs or use the bathroom behind them you go in with a can of bleach thing and you spray before you sit.

Like so many of the homeless people we talked to in a dozen homeless hotels, she has detailed complaints. The buildings are vermin-infested, dirty, unsafe. Drugs are dealt in the bathrooms and the hallways. The security guards accept bribes for the larger rooms.

There are some hotels where the rooms are clean and quiet.

But unprompted, the residents often compare their room to jail cells.

Their cost? Up to $3000 a month. By those standards, Davis’s room is cheap – it costs about half that.

Bernstein: How long have you lived in these hotels?
Davis: Ever since I was 18 off and on I never had an apartment yet.
Bernstein: How old are you now? 35.

Jacqueline Davis is not alone. She is one of tens of thousands of New York City’s homeless, trapped in the system.

A rank elevator ride downstairs lives 56-year old Sadie James. James says she was evicted from her Harlem apartment after 21 years when the landlord accused her daughter of selling drugs. That was three years ago. James has been on the hotel circuit ever since.

James: My youngest is fifteen and I gave temporary custody of him to my older son until I find a place because he’s in school and I do not want him traveling around with me every 28 days.

The New York City Aids Housing Network, which advocates for the rights of these residents, describes this as typical. In a survey, it found not even half of the residents were even given applications for permanent housing. And with permanent housing for the homeless in short supply, residents are bounced from hotel to hotel.

That wasn’t the idea. This was supposed to be emergency housing.

Lilliam Barrios-Paoli was the Human Resources Commissioner under Mayor Giuliani. A long-time city worker, she remembers when the homeless were first housed in armories – as if they were temporarily displaced flood victims.

Barrios-Paoli: The assumption was that this was a problem that would eventually go away. It was an emergency.
Bernstein: Do you remember when they started using the private hotels?
Barrios-Paoli: Yes. I think it was because they ran out of space and it was as simple as that and you were under court mandate to house people and you didn’t know what to do or where to go.

In those days the rules were simple. You called a hotel manager, you booked a room, you paid a daily rate.

Then, there were a few hundred families in the system. Now there are close to 10,000. This year, the city is on track to spend 182 million dollars. That’s almost five times what it was spending just six years ago.

And how does the city do business with the owners of these hotels? The same way it did two decades ago.

Officials call a hotel, book a room, pay a daily rate.

Non-contracted housing, fiscal years 1997 through 2003

And with all of this business – $180 million taxpayer dollars changing hands, there are no contracts – just “gentlemen’s agreements” or “memoranda of understanding.” And because there are no legally binding contracts, there is no accountability. Armen Merjian is an attorney for Housing Works, a non-profit AIDS housing group.

Contracted housing, fiscal years 1997 through 2003

Merjian: With a contract comes the power to enforce minimum standards and conditions. You have power over those whom you do business with if you have a contract. You don’t if you don’t have a contract.

Part of that power is knowing who you’re doing business with – and if they’ve done a good job in the past.

But that isn’t what happens in the emergency hotel world.

In this world, the need for emergency housing is so great it is administered by two entirely separate agencies. One is the Human Resources Administration. It handles emergency housing for people with AIDS. The other agency, is the Department of Homeless Services handles emergency housing for almost every other homeless person in the city.

A visit to a Bronx hotel shows how the two agencies can work at cross purposes.

At the Anthony Hotel a 24-year old woman in a gold velour track suit is just arriving.

Pregnant Woman: Where’s the key, no key to the room, oh okay. What are you allowed to bring
Worker: what you really need, that’s what you could bring, not all your stuff.
Pregnant Woman: no I don’t have much I don’t have much.

Up in her room, the woman, who is three months pregnant, shows us a small, black backpack.

Bernstein: This is your stuff in this backpack, it’s all you got?
Pregnant woman: It’s all I got this backpack, a little backpack.
Bernstein. What’s in it? Two pairs of jeans, two tee-shirts, a lot of tee-shirts a lot of underclothes and that’s it, I got a jacket with me and the stuff I have on.

This hotel used to be full of homeless people with AIDS, sent by HRA, the Human Resources Administration. But HRA doesn’t send its clients here any more. It took the building off its referral list, along with every other hotel run by David Somerstein, one of the largest landlords in the business. We asked Patricia Smith, the first deputy commissioner of HRA, why they don’t use his hotels anymore.

Smith: The reason, the primary reason and frankly at the core we take places off line when there is something medically inappropriate in the main and that’s what we found. What we found were dirty conditions, unlivable conditions, one might say but certainly medically inappropriate conditions for a person with AIDS or HIV.

Owner David Somerstein outside the Anthony Hotel in the Bronx.
Photo: Andrew Lichtenstein

But with no contracts, there’s no violation of any legal agreement. There’s no formal way to notify city agencies that there’s a problem. So when HRA stopped sending people to the Anthony, the other city agency that handles emergency housing – the Department of Homeless Services, DHS simply took over the rooms. We asked Smith why the rooms were deemed inappropriate for people with AIDS – but not pregnant women.

Smith: I can’t speak for DHS. I can’t speak for DHS and why they think it would be appropriate for a pregnant woman I have no idea.

When one city agency would no longer place people with AIDS in The Anthony Hotel, another city agency filled it with pregnant women.
Photo: Andrew Lichtenstein

A DHS spokesman would only say the facility was inspected before any women were placed there – and conditions were found satisfactory. And in an interview, DHS commissioner Linda Gibbs expressed confidence in all the emergency housing providers, even in the face of media scrutiny of some of the landlords.

Gibbs: What I feel is that they are doing a great deed for the city that they are going out of their way and they have been the reason that this agency has been able to meet its mission. That they are not in this just to make money that they are committed to the service and they are mission driven.

Amy Eddings: Really, really, I mean you read the Post report and David Somerstein and the site at E 21 Street with 1000 building code violations. You can look me in the eye and say David Somerstein is providing a good service in that situation?

Gibbs: I work with these individuals routinely. What I am going to do is have results based accountability system that will have every provider for profit and not for profit and judge them on the results they are producing.

But the results aren’t squaring with HRA’s results. After HRA stopped referring clients to Somerstein’s buildings –the landlords business with that agency fell by about $1.2 million dollars. But at the same time his hotel business with the Department of Homeless Services went up, by almost exactly that amount.

Hevesi: That’s absurd -- that’s dumb. The left hand doesn’t know what the right hand is doing.

In 1998, State Comptroller Alan Hevesi – who was then the City Comptroller, audited both the Department of Homeless Services and HRA’s AIDS housing program. His conclusion: the emergency housing services, in BOTH agencies, should be contracted. And his warning came when the system was a fifth the size it is today.

Hevesi: The bottom line is there are rules that were violated and HRA is violating the rules to this day. They are required to have contracts based on a competitive process, and that’s been violated systematically by HRA. It’s wrong.

Patricia Smith of HRA says her primary objective is to get a medically appropriate roof over each clients head. She says she’s stepping up inspections and putting pressure on landlords to improve conditions. And HRA is forcing clients to move from hotel to hotel less often. Smith says she’ll “take under advisement” the question of whether to have contracts.

We wanted to talk to the landlords for this story, but almost none – including David Somerstein returned our calls. We did get Jerry Pollack, the owner of the Marion on the phone, but he declined our request for an interview.

WNYC began asking about why there were no contracts for this huge business back in February. Now, homeless Commissioner Gibbs says she wants to institute tougher standards for emergency housing providers, and to move to a contracted system.

Gibbs: Looking forward, our goal would be to convert the conditional capacity that remains in the system over to contract. We do this in the context of seeing a much smaller shelter system in the future. And so we’re looking for both ways to better prevent homelessness so that people are not becoming homeless, and doing a better job at moving folks who are in shelter to permanent housing more quickly.

But as we pressed Gibbs on exactly how she would move the system to a contracted one, she wouldn’t say. At that point, an aide ended the interview and ushered us out the door. Still we asked the Commissioner: when would the system change? She would only say: “many months.” And many months, she pointed out, could mean years.

For WNYC, I’m Andrea Bernstein


Jacqueline Davis: “How long have you lived in these hotels? Ever since I was 18 off and on I never had an apartment yet. How are you now? 35.”

Sadie James: “My youngest is fifteen and I gave temporary custody of him to my older son until I find a place because he’s in school and I do not want him traveling around with me every 28 days.”

Lester and Annette Bell: “We lived in Baltimore, Baltimore, MD, unlike New York doesn’t do anything for married couples. We lost our apartment, we lost our job with World Com….We knew how the system worked and said let’s come to New York to start all over again.”

Patricia Smith, First Deputy Commissioner, New York City Human Resources Administration and Bob Bailey, Counsel, HRA. “If it’s a medically appropriate environment, we will put people there.”

Linda Gibbs, Commissioner, New York City Department of Homeless Services, “This is a legal relationship that we have for use of conditional placements. There is nothing inappropriate about it. What we’re looking at is trying to build a stronger relationship with the providers that does use the procurement process.”

Comptroller's audit

'Handshake hotels' are only part of the city's uncontracted, emergency homeless housing program. Temporary apartments are also used. Read Bernstein and Eddings' report HERE

NonProfit Homeless Housing Provider May Have Misused Public Funds Part 1 and Part 2

NYC Homeless Services

NYC Human Resources Administration

NYC Housing Preservation and Development

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