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Why Run a Slum If You Can Make More Money Housing the Homeless?

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A room at the Washington Hotel shelter.  

London worked at the Washington Hotel for thirteen years, before he was recently fired after a confrontation with a DHS caseworker over faulty security. In the outraged belief that he was taking the fall for his neglectful bosses, he offered me an account of systematic mismanagement. He produced invoices and e-mails showing the constant involvement of Amsterdam Hospitality executives and a year-end bonus check that was signed by Jay Podolsky. London, who went by the name “James Washington” at work, says his facility housed the homeless in “horrific” conditions: tiny, often windowless cells so narrow that you could stand in the middle and touch either wall.

London’s management duties sometimes included unusual assignments. He claims he attended meetings of the SRO Law Project on the orders of Lapes. “He said he needs me to go to a community meeting, use a fake name,” London said. He says he briefed Lapes on a street corner about plans to oppose the company’s actions at the Continental Hotel and later attended a protest masquerading as a tenant. A housing activist asked London to speak to the press, but when the cameras went on, he instead praised Lapes. The activist, Yarrow Willman-Cole, burst into tears. “I felt so naïve,” she recalled.

Sometimes, such ploys have consequences more serious than embarrassment. One frigid February morning, I met Torres at the Bronx Housing Court, a building housing advocates call an “eviction mill.” Tenants are not entitled to a lawyer. Torres, swallowed in a black parka, carried her creased legal documents in a floral-print bag. In the hallway, the landlord’s lawyer, Vadim Goldshteyn, gruffly told her, “The most I can do is give you until the end of the month to leave.” When Torres tried to make her case to the judge, Steven Weissman, he cut her off. “Mrs. Torres, we are beyond staying in the apartment,” he said. “The landlord wants you out.”

The building’s management company sent Torres a letter claiming it was owed $19,899 in back rent. But it turned out this was because the government had cut off Section 8 payments after a failed building inspection—in other words, because of the landlord’s own neglect. Obviously, this was not a proper justification. After Kathleen Meyers, a Legal Aid attorney, was alerted and intervened, the eviction was dropped. Torres is now one of the last rent-paying tenants in her building, which was renovated after the fire.

I wanted to ask the architects of Bloomberg’s homelessness policy why the city continues to do business with the Podolskys, but DHS officials declined interview requests. Privately, however, current and former agency employees advanced a rationale. The city needs beds, and it has to seek them from the willing suppliers: the kind of people who inhabit the bottom reaches of the real-estate market.

Like many creations of the Bloomberg era, the shelter system is now under reassessment. Liu tried to block the West 95th Street shelter contract, though Bloomberg sued him and the facility remains open for now. Last month, after protests from Carroll Gardens residents, Buildings Department inspectors descended on an empty Podolsky condo building slated to become a 170-bed shelter. Its front window is now pasted with a VACATE sign, warning of conditions “imminently perilous to life.”

De Blasio has promised to reform the city’s “disastrous and broken homelessness policy,” reinstituting rental subsidies and ending the cluster program. But the mayor-elect has also been embarrassed by reports that he raised more than $35,000 from shelter landlords and contractors linked to Hess and Housing Solutions USA. In May 2012, Hess threw the candidate a fund-raiser, attended by Lapes, who exploited a loophole to give twice the legal limit. De Blasio returned some of the contributions and has rejected any suggestion of improper influence.

The Podolsky’s business model, however, has outlasted many mayors; it has proven as persistent as the problem is intractable. Last week, a federal study showed a 13 percent rise in homelessness in New York last year, even as the population dropped nationally. On West 148th Street in Harlem, workers recently began subdividing a brownstone into cubicles. Winter is coming, and it promises to be a lucrative season for the Podolskys.


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