After 45-day camp-out and 15-day hunger strike, NY medallion owners celebrates victory

 Mayor Eric Adam’s administration announced Aug. 30, 2022, that the program to provide a city-backed guarantee on restructured loans to taxi drivers will be operational starting September 19, 2022.

Thousands of yellow cab medallion owner-drivers will finally begin to see the debt relief they won after NYTWA (New York Taxi Workers Alliance) members held a 45-day camp out and 15-day hunger strike last November, a press release from NYTWA said.

Under the program, loans that are reduced by medallion lenders to no more than $200,000 will receive a $30,000 grant and the remaining balance will be guaranteed by the city in case of default.

Indian-American Founder and Executive Director of NYTWA Bhairavi Desai, heralded the change, saying in a statement,

“We are finally at the starting line of a new life for thousands of drivers and our families. The city-backed guarantee is a ground-breaking program that will save and change lives.”

Desai thanked City Hall, the TLC, the Mayor’s Office of Management and Budget, the Law Department, and Marblegate “for burning the midnight oil to set up this historic program to address the crisis of debt across the industry.”

The NYTWA is ready to work collectively with all concerned including the lenders, “to end this crisis and hit re-start,” Desai went on to say.  She congratulated union members “who chose to organize, and not despair, and won back their lives. Against the darkness of a crushing debt, their courage remained the light, and today, the triumph is fully theirs.”

The average debt is currently $550,000 with average monthly payments at $3,000. Under the final program, the new loan term for thousands will be $170,000 payable at $1,234 per month.

The final program reflects an increase in interest agreed upon in November 2021 from 5% to 7.3% as rates have gone up due to inflation; and a longer term of 25 years from 20 years to help drivers offset some of that cost.

The loan will be secured by a city-backed guarantee, relieving thousands of drivers from the fear of losing their homes or thousands of dollars in case of default, NYTWA said.

Marblegate Assets, the largest holder of loans, is ready to begin restructurings on September 19th – bringing immediate relief to the largest segment of owner-driver borrowers, the press release noted.

The City’s program is for all lenders and all eligible medallion owners (medallion owners who do not own more than 5 medallions.) Other lenders representing hundreds more loans are expected to also participate.

https://www.newsindiatimes.com/after-45-day-camp-out-and-15-day-hunger-strike-nytwa-celebrates-victory-led-by-founder-bhairavi-desai/

NYC banks shutting doors overnight to ATM users to keep out homeless

 Banks around the city are locking out ATM users at night in an effort to keep out homeless people — some of whom have been using the vestibules as toilets, sources tell The Post.

Branches of Chase, City National Bank and Citizens have been quietly locking their doors even to customers who have a bank card as early as 10 or 11 p.m. and reopening them in the early morning, The Post has learned.

Bank branch employees told The Post that ATM lobbies have become refuges for homeless people who sleep in them overnight or use the space as toilets, leaving “poop” behind and creating a safety hazard for both employees and customers who are afraid to enter the lobbies. 

“A lot of stuff happens at night,” said an ATM technician who did not want to be identified because he’s not authorized to speak to the media.

He added that some banks, including Bank of America branches, “periodically” shut their ATM lobbies overnight.

Bank of America did not respond for comment.

Citizens acknowledged the disruption to its service, citing “safety issues.”

“Like a number of other banks, we have temporarily closed some ATM vestibules overnight at certain New York City branch locations where we have seen repeat activity that could present a potentially dangerous situation for our customers or colleagues,” spokesperson Eleni Garbis said in a statement.

A customer uses the ATM at a Bank of America at 47th Street and Third Avenue.

G.N.Miller/NYPost

A spokesman for Chase, Jerry Dubrowski, said the situation is “fluid” and that the bank is “constantly evaluating the environment in a community.” 

Some Chase branches may close for a period of time and then reopen for full 24-hour access again, he said, adding that the limited hours apply to a minority of Chase branches in the city.

Some banks have hired security guards to sit inside the vestibules in the early evening hours, Matt Roberts, president of the 17th Precinct Community Council, told The Post, adding that some homeless people have bank cards and can let themselves into the lobbies.

Banks say they are closing some of their ATM lobbies at night for safety reasons.

G.N.Miller/NYPost

In April, The Post documented the homeless problem in ATM lobbies, including photos and accounts of a shirtless man sitting on the floor of a Bank of America surrounded by his belongings, others sprawled out on sleeping bags and a couple shooting up drugs.

Earlier this year, banks began to put pressure on the NYPD to remove people from the lobbies, according to Roberts, whose precinct covers Midtown East neighborhoods including Murray Hill and Sutton Place. 

But after a March incident in which two NYPD officers were attacked by a homeless man at a Citibank branch on Park Avenue when they asked him to leave the lobby, Roberts called on the banks to simply lock their doors overnight.

A City National Bank branch in Midtown is limiting its ATM hours from 6 a.m. to 11 p.m.

Lisa Fickenscher

Roberts is bracing for the issue to become a bigger problem when lower temperatures arrive and the “city is kicking people out of the subways,” he told The Post.

In the meantime, several banks are heeding his advice and simply locking their doors overnight, including the Chase branch at 1120 Sixth Ave., which closes its ATM lobby at 10 p.m. and reopens it at 7 a.m. The nearby City National Bank branch closes its ATM lobby at 11 p.m., reopening it at 6 a.m.

Banks say they are periodically changing the hours of their ATM lobbies.

Christopher Sadowski
City National did not respond for comment. 

“Unfortunately the private customers of ATM systems during off hours will be the collateral damage,” Roberts said. 

https://nypost.com/2022/08/30/nyc-banks-shutting-doors-overnight-to-atm-users-to-keep-out-homeless/

Cloudy With a Chance of Fraud: Federal Weatherization's Back

 Alarm bells are sounding at the Department of Energy as the Biden administration has moved to triple the budget for the Weatherization Assistance Program, which provides low-income applicants with free home and apartment renovations, such as insulation, duct-sealing, new heating systems, and kitchen appliances. The last time the program was lavished with such a surge in funds, through President Obama’s 2009 stimulus bill, audits and investigations uncovered a pattern of fraud, embezzlement, shoddy work, inflated expenses for parts and materials, sketchy billing, kickbacks, and gimcrack construction.

In a private meeting in February, the department’s inspector general, Teri L. Donaldson, warned Secretary of Energy Jennifer Granholm that the enormous new budget for the program – slated to grow to $1 billion a year from $315 million  – threatens to overwhelm the department’s ability to protect taxpayers’ money. In April, the inspector general made that warning public with a memo to Secretary Granholm cataloging the risks to the money being entrusted to the Department of Energy. Donaldson identified a history of problems with the program, noting that “few administrative remedies such as suspensions and debarments were made for the multitude of problems that occurred and were identified.”

Despite those problems, the program’s labyrinthine structure remains. Congress apportions weatherization funds to the Department of Energy. The department, then, distributes grants to the states; the states, in turn, disburse the monies to “community action agencies” [CAAs], organizations that administer, at the local level, various programs to aid the poor, including Head Start, “Community Services Block Grants,” and “SNAP Education & Training.”

The model used for the weatherization program illustrates how many federal anti-poverty programs operate. There are over a thousand community action agencies managing the local implementation of federal anti-poverty programs, and for many the weatherization program is their flagship. If there are problems with the management of weatherization, there are likely to be similar problems, if not worse, with the programs that are less visible.

For the weatherization program, CAAs collect applications from low-income residents and check that they meet eligibility conditions, including that an applicant’s income falls below 200% of the poverty line. People “who are most in need,” the DOE states, “are often moved to the top of this list.” Contractors bid for the weatherization work and are chosen and paid by local community action agencies to install insulation, plug holes in ductwork, repair or replace doors and windows, install programmable thermostats, and put in new furnaces, water heaters, and refrigerators.

But just like shoddy connections in a gas or water line, the many junctures where money changes hands can lead to leakage. Costs are supposed to be kept low by awarding contracts to the most competitively priced bids, but the DOE’s office of inspector general has found that low bids are often followed with “work scope changes” – extra parts or labor added on well after the bid, and even added to final bills. Work changes, the IG warns, tempt contractors to sidestep the cost controls of the competitive bidding process. An audit to test how Tennessee was handling and spending its share of Obama-era stimulus funding, for example, found local Community Action Agencies regularly approved work order changes – often after the job was done. It also found that “prices for smoke alarms, fire extinguishers, and thermostats ranged from about 120 percent to 200 percent over the average retail price.”

Other audits have found that CAAs have problems verifying who is and isn’t eligible for free weatherization. The community groups have also struggled to meet the demands of other rules such as competitive contracting and “proper accounting for funds.” Previous inspector general reports have chastised states and local agencies for “insufficient oversight.”

At the top of the IG’s list of threats to the weatherization program is “senior leadership fraud,” better known as embezzlement. Recent years have seen several cases of theft from program coffers.

Steven Lloyd Taylor, for example, was a manager at the Northwest Michigan Community Action Agency, where he was in charge of handing out money to weatherize low-income housing in nearly a dozen of the state’s counties. Taylor created a shell company and phonied-up invoices to his fictitious weatherization company. In a year and a half, Taylor stole $349,210. He bought, among other things, an 18.5-foot Seaswirl fishing boat. When he was sentenced at the end of 2019, Taylor was ordered to pay $431,828 in restitution – the amount he embezzled, plus the taxes he failed to pay on that money.

Randi Smith was chief fiscal officer of the New York State Weatherization Directors Association, a group representing WAP agencies in the state. She embezzled from the group for four years. It’s possible she might have done so for even longer if her son hadn’t gotten his hands on the checkbook too. Together they stole over $1 million. They pleaded guilty to the theft in 2018.

The weatherization program was launched in 1976 and has been managed by the Office of Energy Efficiency and Renewable Energy, an agency within the Department of Energy. Now the Weatherization Assistance Program, together with a grab bag of other new offices, such as the Local Government Energy Program and the Energy Futures Grant, are being housed in a new bureaucracy, the Office of State and Community Energy Programs. SCEP – in best Washington fashion, the new office is already being referred to by its initials – promises to “expand the weatherization provider network to assist low-income families with home energy retrofits.”

The program's guidelines show administrators are aware of the risks of shady business.

WAP

For all those grand plans, the department’s inspector general seems as if she would be happy if the State and Community Energy Programs merely managed to keep participants in the weatherization game from robbing the government blind. Issues with billing proved to be “pervasive,” the IG said in her report.

So too problems with quality control: Audits found as much as a third of projects to be unacceptable because of “substandard workmanship,” slipshod contracting such as “improperly installed kitchen exhaust ductwork…creating a potential fire hazard,” heating systems emitting dangerous levels of carbon monoxide, and “alarming” numbers of gas leaks.

And that’s the work that got done. On 10 of the 15 houses examined in Illinois as part of the inspector general’s accounting of how the Obama-era funds were spent, auditors found contractors had billed for work that wasn’t done.

Connected Family Members, Friends

Favoritism was another problem. Auditors found it was common for friends and family of community action agency employees to jump to the front of the weatherization queue. An audit of the program in West Virginia found that relatives of the staff waited less than three months, on average, for weatherizing to begin; for low-income clients without connections to people working at the agency, the wait was nearly two years.

Supporters of the weatherization program point out that most of the cases of fraud, waste, and abuse the IG cites are a decade old. But they are also the most recent reviews of the program and IG Donaldson’s recent warning indicates that her office still considers them relevant – that the problems that plagued the anti-poverty program a dozen years ago persist.

If the Department of Energy finds the inspector general’s special report an unwanted or unwarranted intrusion, the department is doing its best not to show it. “DOE has worked closely with the IG in the past and is continuing to do so, including working with DOE’s IG to gain insight on past issues,” a Department of Energy spokesperson told RealClearInvestigations. “DOE is acutely aware of the lessons learned from past funding efforts and the IG’s compilation of previous areas of concern is very helpful as we design our funding programs.” Acting on the IG’s advice, the spokesperson said the DOE is “providing additional fraud training to recipients.”

A research fellow at the conservative Heritage Foundation, Katie Tubb, made a case in congressional testimony for the IG’s concerns: “The last time Congress authorized such a huge influx of taxpayer spending,” she stated to the Senate Committee on Banking, Housing, and Urban Affairs in May, “the federal government and state partners struggled to maintain the program’s integrity or responsibly use taxpayer resources.”

But David Bradley, CEO of the National Community Action Foundation, which lobbies Capitol Hill for community action agencies, told RCI that the IG’s focus on the problems of the recent past was welcome: “I’m not opposed to anyone raising flags,” he said. “That’s what IGs do.”

Bradley acknowledges that a dozen years ago the weatherization program wasn’t ready for the massive increase in spending under Obama’s stimulus plan. Also, he said, because no Republican had supported the Act, any problems that arose with spending under the Obama-era program became scandalous illustrations of the law’s failure rather than issues to be corrected.

Bradley says that inspectors hired by community action agencies are doing a better job of identifying problems and requiring they be fixed. Projects now require the sign-off of a “Quality Control Inspector who was not involved in the job.” There are also extra inspections of randomly chosen weatherized homes.

President Biden and DOE Secretary Granholm are confident more money is the answer, notwithstanding the problems that increased funding has brought the weatherization program in the past. In a joint statement in March, Biden and Granholm declared that the funds provided by the new infrastructure law “will transform the WAP program by expanding weatherization services to ten times current funding levels.”

Does that risk, however, putting the program at 10 times the risk of fraud?

The success or failure of the weatherization program “is worth following,” according to Bradley. “Weatherization always had a spotlight on it, and it will again.”

If the inspector general’s cautionary report is ignored, the massive influx of money into the Weatherization Assistance Program may produce a massive outflow of wasted tax dollars.

“We’ve got to be on our A-game,” Bradley told RCI. “We just have to prove them wrong.”

https://www.realclearinvestigations.com/articles/2022/08/30/cloudy_with_a_chance_of_porkballs_federal_weatherizations_back_850334.html

Canada challenges U.S. softwood lumber duties under USMCA trade pact

 

The Canadian government said on Monday it challenged U.S. softwood lumber duties under the United States-Mexico-Canada Agreement (USMCA), calling the duties "unwarranted" and "unfair."

"Today, Canada filed notice that it will challenge, under Chapter 10 of the Canada-United States-Mexico Agreement (CUSMA), the final results of the U.S. Department of Commerce's third administrative reviews of its anti-dumping and countervailing duty orders on softwood lumber from Canada," the Canadian government said in a statement.

https://www.marketscreener.com/news/latest/Canada-challenges-U-S-softwood-lumber-duties-under-USMCA-trade-pact--41643945/

Deal for office space near big US cities bets on suburban lifestyle, remote work

 One of the world's biggest sovereign-wealth funds and its U.S. partner are buying a majority stake in 53 suburban office buildings in a deal valuing the properties at $1.1 billion, a major bet that remote work will boost demand for workplaces close to residential areas.

Singapore's GIC Pte. Ltd. is investing in the buildings alongside Workspace Property Trust, a privately held commercial real-estate firm based in Boca Raton, Fla., according to a person familiar with the matter. The deal will nearly double Workspace's holdings to around 18 million square feet. Many of the newly acquired buildings are clustered around Atlanta, Dallas and the San Francisco Bay Area.

The suburban office sector has been hit hard by the pandemic. Vacancy rates rose in 2020 and 2021, and some properties have lost so much value that developers are tearing them down to build warehouses or apartments.

Workspace and GIC are betting that demand will rise for higher-end, modern suburban offices in good locations as more companies seek out areas closer to where their employees live. More Americans are working from home at least part of the week, and some firms are looking to add spaces that would allow their workers to return to the office without having to commute far.

"We believe the pandemic really accelerated the shift to suburban offices," said Workspace's co-founder and chief executive, Thomas Rizk.

Downtown Scottsdale and suburbs of Phoenix, Arizona, with the White Tank Mountain Range in the background (iStock / iStock)

Suburban office properties recently have suffered less than some central business districts, where vacancies are at record levels. In the second quarter, the U.S. downtown office vacancy rate surpassed the suburban vacancy rate for the first time in decades, according to CBRE Group Inc. Vacancies fell slightly to 16.8% in the suburbs and rose to 17% in city centers, the brokerage firm said.

While many suburban office buildings are obsolete, big financial firms are still willing to invest in fully occupied, higher-end properties, said Jordan Roeschlaub, co-head of Newmark Group's debt, equity and structured finance group, which brokered the mortgage funding the purchase.

Mr. Rizk said suburban office vacancies are kept high by older buildings in poor locations. Modern properties that are close to residential areas, shops and restaurants are seeing rising rents, he said.

When Workspace launched in 2015, it was difficult to raise money for suburban office purchases, Mr. Rizk said. At the time, many corporations were ditching their sprawling, leafy office parks and moving into cities, and investors were more interested in buying office towers in places such as Manhattan or downtown San Francisco.

But since the start of the pandemic, the sector has attracted some new money. Last year, Workspace landed a $326.5 million investment from Oak Hill Advisors' real-estate unit.

JPMorgan Chase & Co. and Bank of Montreal are financing the deal, which closed on Friday. The seller, Griffin Realty Trust Inc., is keeping a minority stake in the buildings.

https://www.foxbusiness.com/real-estate/deal-office-space-near-big-us-cities-bets-suburban-lifestyle-remote-work

Rent Forever and Love It

 Housing is an industry, but it is also where people live, raise families, and stake their future. Yet increasingly, all around the world, housing has increasingly become just a commodity to be traded, often by foreigner investors, notably from China, as well as by large well-capitalized financial institutions who plan to cultivate a generation of lifelong renters. In the notorious words of the World Economic Forum, “You will own nothing, and love it.” Well, you may not love it, but the first part is coming true.

This shift has been taking place for decades, as the superrich and large investment companies buy up much of the land. In the United States, the proportion of land owned by the one hundred largest private landowners, reports the New York Times grew by nearly 50 percent between 2007 and 2017. In 2007, this group owned a total of 27 million acres of land, equivalent to the area of Maine and New Hampshire combined; a decade later, the one hundred largest landowners held 40.2 million acres, more than the entire area of New England.

In much of the American West, billionaires like Jeff Bezos, Bill Gates, and Ted Turner have created vast estates that systematically make the local population land-poor. Landownership in Europe, too, is becoming more concentrated in fewer hands. In Great Britain, where land prices have risen dramatically over the past decade, less than 1 percent of the population owns half of all the land. On the continent, farmland is being consolidated into larger holdings, while urban real estate has been falling into the hands of a small number of corporate owners and the mega-wealthy. Amidst instability in commodity and stock markets, this trend of big capital investment in housing may be expected to accelerate.

A profound threat to the future of the middle class

The implications of the current land grab are profound, threatening the future of democratic institutions and the middle class. These trends are distressingly common across the higher income countries. The Organization for Economic Cooperation and Development (OECD) reported in Under Pressure: The Squeezed Middle-Class that the future of the middle-class is threatened by house prices that have been growing “three times faster than household median income over the last two decades.” The pandemic drove prices even further, and, in the U.S., housing affordability is at the lowest level since 1989.

On both sides of the Atlantic, large financial institutions like Britain’s Lloyds Bank and BlackRock have placed multi-billion dollar bets on buying homes for the rental market. In the first quarter of 2021, investors accounted for roughly one out of every seven homes bought, a marked increase from previous years. The popular notion is of a “rentership” society where people remain renters for life, enjoying their video games or attending to their houseplants, never knowing the pleasure of having a real garden or backyard of their own.  It might assure a steady profit for the landlord class, but would destroy the dream of ownership for the average person.

High home prices are the key driver of reduced social mobility. Matthew Rognlie, of Northwestern University, found that most of the increased inequality in Western countries was attributable to increased house values. In the United States over the past decade the proportion of real estate wealth held by middle class and working owners fell substantially while that controlled by the wealthy grew from under 20 percent to over 28 percent. In the last decade, high income households enjoyed 71 percent of all housing gains while the shares of middle and lower income families declined precipitously.

Property and democracy

Ownership has long been a critical issue for democratic institutions, from the Greek city-states to Rome to the Dutch Republic and North America. Aristotle saw a large class of middling owners as critical to Athens and its democracy, while warning, correctly, about the dangers of an oligarchy that would control both the economy and the state.

During the great democratic revolutions that swept western Europe, and later to the New World and Oceania, aristocratic and ecclesiastical landownership gave way to a more “individualistic” concept of property rights. By the thirteenth century, the Netherlands, a country short in natural resources, began to expand its territory by draining swamps and building dikes. The new lands made valuable by Improvements in agricultural methods fueled a widely spread economic “takeoff” driven by a new class of property owners. As the economic historian Jan de Vries observed, “capitalism grew out of the soil in Holland.”

After the Second World War, wider home ownership created unprecedented middle-class stability, broad social benefits, and helped subsidize comfortable retirements. Democracy grew stronger with the growth of a stable middle rank with a natural stake in economic progress  and an interest in the political system. Property also remains key to financial security. Homeowners have a median net worth more than 40 times that of renters, according to the Census Bureau. As the radical social theorist Barrington Moore said a half century ago, “no bourgeois, no democracy.”

The great betrayal

Sadly, the next generation likely will have a far more difficult time buying property than their parents and grandparents. After 1940, U.S. homeownership rates grew rapidly, from 44 percent to 63 percent thirty years later.  Now, the trend is in the opposite direction. Millennials are less likely to be homeowners than baby boomers and Gen Xers. The homeownership rate among millennials ages 25 to 34 is 8 percentage points lower than baby boomers and 8.4 percentage points lower than Gen Xers in the same age group. Their chances of buying now have been made more problematic by the rapid rise in interest rates.

Similar trends are seen in other high-income countries, including Australia, Ireland, and the United Kingdom. Australia historically has had high rates of homeownership, but the rate among those between 25 and 34 years old dropped from more than 60 percent in 1981 to only 45 percent in 2016. The proportion of owner-occupied housing has dropped by 10 percent in the last 25 years. A trend toward long-term “rentership” is also seen in Ireland. In the United Kingdom, only a third of millennials own a home, compared with almost two-thirds of baby boomers at the same age. At least one-third of British millennials are likely to remain renters for life.    

High housing costs are particularly burdensome for middle- and working-class families. According to a recent AEI survey, high priced California is home to six of the nation’s worst markets for first time homebuyers; a recent study by economist John Husing found that not one unionized construction worker can afford a median priced home in any coastal California county. Oligarchs may favor more housing in principle, but certainly not near to where they live. In Houston, $350,000 buys you a new 1800 square foot home; in San Francisco, it barely buys a 350 foot studio. No wonder that, as MIT’s David Autor has suggested, dense core cities have become toxic to working class aspirations.    

Policies that make things worse.

In many countries, government policy seems designed to accelerate the trend toward long-term tenancy. Australia, California, the United Kingdom, and New Zealand, all cite environmental concerns to impose a large regulatory noose around new developments, particularly in the periphery. Overall, far fewer Californians, notes demographer Wendell Cox, can afford to buy a median-priced home today than in 2000, even though nationally the percentage of people who can afford homes has actually increased.

The price spike has been worsened by well-funded investors and speculators, who see artificially high prices, guaranteed by regulatory restraints, as a sure bet. All-cash buyers have grown to nearly 23 percent, more than twice the percentage in 2006, according to the California Board of Realtors.

These investors have powerful allies both on the right and left. Libertarians generally favor policies that limit single family zoning, even at the expense of working- and middle-class people. Randall O’Toole, who had been Cato Institute’s land use expert since 2007, notes that libertarians have been working hand-in-hand with left-wing groups in “to force” Californians “to live in ways in which they didn’t want to live.“ That is, in small apartments.

One oft-celebrated driver for eliminating middle-class, family-friendly housing are the so-called YIMBYs (“Yes in my backyard”). YIMBYs, notes an investigation in the leftist In These Times, enjoy fevered support from Wall Street and the tech elite. They also have strong ties with green progressives, like the Democratic Socialists of America. These groups disdain suburbia, promote dense apartment living, and have little interest in expanded homeownership. Indeed  some are open collectivists who reject the very idea of individual ownership and would welcome the prospect of a massive expansion of public housing.

The future battle over ownership.

In the coming decade, the decline in mass ownership of property will have profound implications. For one thing it will remove for most of the current generation—most of whom still believe in creating wealth through ownership—the incentive of capitalist accumulation, owning their own home. They certainly may “own nothing,” as some architects of the “great reset” dream, although this will leave them dependent on finance, or the state, for virtually everything  from rent to transportation and furniture.

This may not be the future preferred by most people, most of whom are out of the market due to costs, but still seek to own a home. Yet the reduction in the chance of ownership is already shaping the politics of the future, particularly among the permanently propertyless young, who naturally opt for socialist policies—like those of Bernie Sanders or France’s Jean Luc Melenchon—that promise subsidizes and control their rents. All this suggest a future where economic autonomy, the key to bourgeois democracy, will barely exist for most families besides the most affluent. Ultimately the battle over land and property will define our future and whether we provide hope to the next generation, or force them to accept a lifetime of rental serfdom and permanent subservience to the state, or big capital, or both.

Joel Kotkin is a Washington Fellow at the Claremont Institute Center for the American Way of Life and the Presidential Fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute. His new book, The Coming of Neo-Feudalism, is out now from Encounter.

https://americanmind.org/salvo/rent-forever-and-love-it/

The Adams Homeless Deluge

 For a few weeks, New York mayor Eric Adams has sparred with Texas governor Greg Abbott over an immigration-related surge in New York’s shelters. The Adams administration claims that around 6,000 “asylum seekers” have arrived in the shelter system since May. Desperate to expand system capacity, Adams declared a formal emergency in early August that will enable local officials to open new shelters at a faster rate. Though some dispute the magnitude of migrants’ contribution to the surge, no one questions that the shelter census, declining when Adams was first sworn in, is again on the rise.

A rising shelter census is the normal state of affairs for homelessness in New York City. The local homelessness emergency, which began when Mayor Ed Koch authorized a “right” to shelter in 1981, is now in its fifth decade. Homeless services face a familiar dilemma: Can New York do anything for the homeless beyond sheltering them when the system is in a constant state of emergency expansion?

This year, the federal government has been apprehending “record numbers” of people trying to cross the border from Mexico without permission. Many seek asylum and get released, pending a determination of their claims’ validity. As the Center for Immigration Studies’ Andrew Arthur has explained, they could be detained while officials sorted out their asylum status, but the Biden administration does not believe that this is the correct approach.

Many then wind up in border cities. Abbott argues that Texas municipalities have borne a disproportionate burden of a fundamentally federal problem. He began sending busloads of migrants to Washington, D.C., back in April, and then to New York in early August.

At this point, charities and the federal government seem to be responsible for most of the 6,000 or so arrivals who have entered shelters. As of late last week, Abbott vouched for sending “over 900” total migrants to New York. But whatever their route, one reason many are staying is the local right-to-shelter law.

News about the availability of free shelter in New York has also made it to the border. The “consent to transport” form, signed by New York-bound migrants, references local shelter programs. Abbott has sardonically cited New York’s right-to-shelter law, as well as its sanctuary-city status, to explain why Gotham is the “ideal destination for these migrants.” According to a report published in The City, “One of the Venezuelan families in New York City . . . decided to come to the city, they said, after overhearing other migrants at the border discuss New York’s guaranteed shelter.”

Adams’s official position is that Abbott’s policies are bad, but that New York is proud to serve whoever does arrive—and that the city also deserves extraordinary federal support because it has been asked to bear an extraordinary burden. More realistically, though, no city welcomes the prospect of a large influx of extremely poor people in need of all manner of assistance. New York, like other deep-blue cities dealing with permanent homelessness crises, has for years operated homeless-exportation programs. The Special One-Time Assistance program pays one year’s rent for homeless people who move to another city. Project Reconnect pays transportation costs for homeless people with friends or family in another city willing to take them in. National media have overlooked the controversies related to these programs—and New York’s operation of them in the first place—in the current Adams vs. Abbott dust-up.

Meantime, a more local dispute is playing out between Adams and homeless advocates, who argue that the mayor has used the asylum spat to deflect attention from his failings on homelessness. They claim that the current surge has more to do with the end of the Covid-19 eviction moratorium in January and under-investment in shelter capacity. New York, however, invests far more in shelter than any other city. Adams’s fiscal year 2023 budget committed $1.9 billion to shelters and another $1 billion-plus to programs designed to keep people out of them. Months ago, Covid eviction moratoria ended nationwide, and yet only New York, with its right-to-shelter law, appears to be dealing with a shelter surge. Yes, homelessness was rising this year before the border people began showing up in May, but homelessness—and family homelessness, in particular—was also declining pre-Covid. Regardless, a growing shelter census means more fights with neighborhoods that don’t want shelters, more pressure to build affordable housing for homeless or extremely low-income individuals, and less opportunity to reform homeless services in New York City.

Shelter exit strategies in New York center around affordable housing, a chronically scarce resource. Every low-income household, regardless of their homelessness status, pursues housing assistance when struggling to secure an apartment on the open, unsubsidized market. The vacancy rate for rental units asking less than $900 a month is 0.86 percent. Illegal immigrants, though they qualify for shelter, are not eligible for federal affordable-housing programs. Some state legislators are trying to expand access to local rental-assistance programs regardless of people’s “immigration status.” Whatever may be the merits of that, migrants’ shelter exit strategy will be even more complicated to engineer than the average shelter client’s. If they keep coming, keeping shelter inflows and outflows in balance will be harder than usual.

Shortly after Adams’s inauguration, I argued that the then-declining shelter census created opportunities for reform. A homeless-services system with integrity would be one that rooted out corruption, seriously evaluated outcomes, and focused more on non-housing-related needs such as employment and behavioral health. An overwhelmed system, though, is not one ripe for innovation and enhancement. Take, for instance, buying and converting hotels for homelessness programs. Though an overhyped idea, hotel conversions held a certain promise for expanding transitional housing. But there will be less opportunity to do novel things with hotels if city government must yet again lease up available hotels to meet emergency shelter demands.

Recall that Mayor Bill de Blasio’s official justification for working with shady shelter providers was that honesty was a luxury he couldn’t afford so long as homelessness kept expanding. Under threat of lawsuits for violating the right to shelter, New York has again started working with “controversial” providers. We’re back in crisis-management mode—thanks at least partly to the “asylum seekers”—and the moment for reform may be passing.

Stephen Eide is a senior fellow at the Manhattan Institute and author of the book Homelessness in America, which was published in June.

https://www.city-journal.org/adams-homeless-deluge