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New York City Spends Big to Send Homeless Out of Town

December 24, 2019

The city’s Special One-Time Assistance program provides eligible homeless families a onetime cash transfer intended to pay for a year of rent in the city or elsewhere in the United States.

New York City has spent more than $89 million in taxpayer funds relocating homeless families to other cities across the country since August 2017.

The city’s Special One-Time Assistance (SOTA) program has exported a total of 5,074 families to other cities, according to NYC Department of Homeless Services data, the New York Post reported on October 26. SOTA was instituted in August 2017 by Mayor Bill de Blasio.

SOTA provides eligible homeless families a onetime cash transfer intended to pay for a year of rent in the city or elsewhere in the United States. The program requires tenants to remain employed and find housing that does not exceed 50 percent of the household’s income.

Social Problems, High Rents

Homelessness is a result of a combination of complex economic and social problems, says Stephen Eide, a senior fellow at the Manhattan Institute.

“You’ve got a category of social causes and a category of economic causes,” Eide said.

Rents are rising in urban areas that do not allow the market to supply enough affordable housing to meet the demand, Eide says.

“The leading economic cause would be a lack of low-rent housing, especially in cities with hot housing markets, like New York and San Francisco,” Eide said. “When advocates say that homelessness is a housing problem, they’re right, in the sense that [there are] places whose markets are very bad at producing housing that’s available for very poor people.”

Multiple Risk Factors

Substance abuse and households that do not include two parents can also lead to homelessness, Eide says.

“If you look on the social side of things, it looks less like it’s the case that homelessness is purely a housing problem, because there you talk about issues of untreated serious mental illness, substance abuse, and single-parent families.” Eide said. “All of those are risk factors that are going to make it very likely that someone ends up homeless.”

Most low-income families have housing, Eide says.

“The homeless are a small percentage of the total poor population, and the people who are most likely to be homeless are those who get hit by a combination of both social and economic risk factors,” Eide said.

Restrictive Housing Policies

Homelessness among families is mainly caused by economic factors, says Emily Hamilton, a research fellow for the Mercatus Center at George Mason University.

“Homelessness isn’t just an issue of mental health or drug or alcohol abuse; it’s an economic issue in many cases,” Hamilton said. “Many people tend to blame homelessness on drug issues or alcoholism or mental health problems, but there certainly is a component that is just related to economics and housing being too expensive.”

Homelessness among families is related to public policies that constrain the housing supply, Hamilton says.

“We’re seeing that with the rise of homelessness in families and children,” Hamilton said. “There are clearly established links between rental prices, homelessness, and land-use regulations. Those rules standing in the way of low-cost housing are contributing to increasing homelessness.”

A report by the president’s Council of Economic Advisers, “The State of Homelessness in America,” released on September 16, 2019, states housing deregulation could reduce homelessness by 54 percent in San Francisco, 40 percent in Los Angeles, and 23 percent in New York City.

Conservative Support

SOTA may be a better idea than more traditional entitlement programs for homeless individuals, Eide says.

“Conservatives have always been sympathetic to the idea of relocation grants as an alternative to traditional safety-net programs,” Eide said. “For a poor family in a city that’s a bad situation for them—whether it’s because it’s a Rust Belt city where the economy is really bad or a place like New York, where it’s really hard to make a living if you’re really poor—instead of subsidizing that existence, let’s relocate them to Texas or Florida or a place where it makes more sense for them.

“Conservatives are not always opposed to something like this, so if you want to think about this program as a form of relocation assistance, it’s not entirely obvious to me that this is a terrible idea,” Eide said.

Reform Options

Relocation assistance grants may also be more politically feasible than building more temporary housing or subsidized apartments, Eide says.

“New York City’s shelter system is just bursting at the seams,” Eide said. “It’s incredibly expensive, and people are sick of having shelters and other housing programs put in their neighborhoods against their wishes.

“To the extent that you could reduce the shelter population by shipping homeless people elsewhere, I’m not sure that’s something New Yorkers don’t want or that de Blasio is going against the wishes of his constituents,” Eide said.

Changing housing policies would help solve New York City’s homelessness crisis, Hamilton says.

“Some of the cities, New York included, that are really struggling with homelessness problems are not doing the regulatory reform that could really help solve the problem and provide more housing and more affordable housing to households at all income levels, without requiring any outlay of tax dollars,” Hamilton said.

Nationwide Problem

Homelessness is a problem in many urban areas across the United States. The annual point-in-time count of the homeless population conducted by the U.S. Department of Housing and Urban Development found there were more than a half-million homeless people in the United States on a single night in January 2018, of which just under 200,000 were unsheltered, states the CEA report. The next homeless count will take place in the last 10 days of January 2020.

Jesse Hathaway (think@heartland.org) is a policy advisor to The Heartland Institute.

Internet Info:

Council of Economic Advisers, “The State of Homelessness in America,” September 16, 2019: https://www.heartland.org/publications-resources/publications/the-state-of-homelessness-in-america

Author
Jesse Hathaway is a policy advisor for budget and tax issues at The Heartland Institute.
media@heartland.org @JesseinOH