Three-Quarter Housing: Council Seeks to Address Blight [UPDATE: City Council Approves Legislation]

UPDATE: On February 1, 2017, the City Council voted 47-0 to approve four bills that would help protect tenants of three-quarter houses in New York City. During the vote, Council Member Donovan Richards called three-quarter houses a wide spread problem that would not be cured by the bills and that the City would need to track progress on the issue to determine future responses. Council Member Ritchie Torres called predatory operators of three-quarter houses the “scum of the earth,” and expressed pride to be involved in the “game changer” legislative package.

Resolution 1035-2016, on which testimony was heard at the same committee hearing, remained in the Committee on General Welfare. The resolution would call on the New York State Office of Temporary and Disability Assistance to promulgate a rule that would increase public assistance rental allowance levels.

The four bills will go to the Mayor’s desk to be signed or rejected in the coming days.

Below report was originally published on October 10, 2016:

Proposed legislation would begin to address the proliferation of Three-Quarter Houses in New York City. On October 6, 2016, the Committee on General Welfare and the Committee on Housing and Buildings held a joint hearing on the devastating problem of three-quarter housing brought to light by a 2013 Prisoner Reentry Institute report. The Committees also considered five Introductions and one Resolution related to the issue.

Background

Three-quarter houses are seen as somewhere between half-way houses and private homes. Three-quarter houses are one- and two- family residential units run by operators who rent beds to single adults. The epidemic of this type of housing is likely the result of several converging factors. A combination of legislation, tax abatements and gentrification in the late 20th century led to a dramatic loss of many of the City’s Single Room Occupancy Hotels. The closing of mental health facilities at the same time increased homelessness in the City in the 1990s and 2000s, stressing the City’s shelter system. The massive incarceration increase from the 1970s to the present resulted in increasing prisoner reentry problems and a concomitant increase need for very low-income housing. This was exacerbated by federal law which requires the Department of Housing and Urban Development to bar individuals convicted of certain crimes from public housing. At the local level, the New York City Housing Authority has promulgated rules enforcing the exclusionary policy and has barred additional categories of individuals with criminal convictions. For example, NYCHA bars the family of a person convicted of a Class B or unclassified misdemeanor as ineligible for public housing until three years after the completion of the sentence. All of these factors have led to the growth of the informal-sector housing known as three-quarter houses.

Three-quarter houses are mostly illegal because the Building Code prohibits the cohabitation of four or more unrelated persons. The houses often receive referrals from a range of governmental agencies and community-based organizations under government contract, however, no government agency officially regulates or oversees the houses. Generally, the people living in these houses are reentering society from jail or prison, recovering from short-term hospital or residential substance abuse treatment, facing street homelessness, or dealing with unemployment, family crises or medical issues.

2013 Prison Reentry Institute Report

There is no comprehensive data on three-quarters houses in the City largely because there is zero oversight on such housing. In 2013 the Prisoner Reentry Institute at John Jay College issued the first comprehensive report on three-quarter houses.

The report found 317 addresses of known locations of three-quarter houses. Almost 90% of the addresses had building code complaints made between 2005 and 2012 that resulted in at least one violation or stop-work order by the Department of Buildings. 66.9% were cited for illegal conversions. 55.8% violated certificates of occupancy. 41 of the buildings have vacate or partial vacate orders issued by Buildings.

The Report found that the owners of these houses profit by packing as many people as possible into rooms. Tenants described small rooms with two to four bunk beds. The subdivision of rooms and blocking of egresses create fire hazards. Owners often failed to perform routine maintenance, leaving minor leads and plumbing problems to fester. Infestations of bed bugs, rats, mice, roaches, and other vermin often plague dwellings, and structural issues commonly remain in dangerous disrepair.

Interviews with residents indicated a systematic pattern and practice of illegal evictions. Nearly all tenants reported that their houses mandated substance abuse treatment as a condition of residency. Referrals were made by landlords with no diagnostic training or authority to impose such mandates. Tenants were illegally evicted upon successful completion of house-mandated substance abuse treatment. Tenants stated that they believed the houses received kickbacks from abuse programs due to the diligence of landlords who stringently required proof of attendance to these programs.

The Report found, however, that despite the serious issues, tenants almost unanimously expressed their preference to live in a three-quarter house, rather than a shelter or on the street. The Report concluded that while the housing is almost always illegal, often dangerous, and too frequently abusive, simply closing down the houses would render their occupants homeless, with potentially devastating results.

Proposed Legislation

Resolution No. 1035, sponsored by Speaker Melissa Mark-Viverito, would call on the New York State Office of Temporary and Disability Assistance to promulgate a rule that would increase public assistance rental allowance levels. Currently a single person qualifying for public assistance in New York City is entitled to a maximum shelter allowance of $215, and a family of four is entitled to a maximum shelter allowance of $450. The schedule of rates has not changed since 1988.

Introduction No. 1164, sponsored by Council Member Corey Johnson, would amend the administrative code of the City, requiring the Human Resources Administration to provide any recipient of a rental subsidy a written statement explaining that persons who lawfully occupy dwelling units for 30 consecutive days or longer may not be evicted by the department.

Introduction No. 1166, sponsored by Council Member Donovan Richards, would require the HRA to produce quarterly reports regarding the actions of the three-quarters houses task force. The report would include: (1) the number of violations issued by the three-quarters houses task force; (2) the number of beds at each building inspected; (3) the number of instances in which HRA stopped rent payments to a landlord due to the findings of the task force; and, (4) the number of people relocated from buildings inspected by the task force.

Introduction No. 1167, sponsored by Council Member Ritchie Torres, would amend the administrative code of the City, prohibiting the Commissioner of the Department of Housing Preservation and Development from imposing a deadline or time limitation in which a tenant may apply for relocation services, provided that a vacate order remains in effect and the applicant is otherwise eligible.

Introduction No. 1168, sponsored by Council Member Ritchie Torres, would amend the administrative code of the City, prohibiting the owner of a dwelling unit from conditioning the right to occupy that unit upon the occupant’s seeking, receiving, or refraining from submitting to medical treatment. Certain State licensed medical provider would be exempt from this requirement. The Introduction would also permit any person lawfully entitled to occupy a unit to apply to bring a claim in housing court pursuant to a violation of the prohibition.

Introduction No. 1171, sponsored by Council Member Jumaane Williams, would amend the administrative code of the City, allowing the Commissioner of HPD to request verification of occupancy from a tenant in order to receive relocation services. The Introduction would also require HPD to secure a tenant’s record from the Human Resources Administration provided that the tenant signs any necessary release.

October 6th Hearing

Council Member Jumaane Williams, Chair of the Committee on Housing and Buildings, opened the hearing. “Obviously this is a horrendous problem,” Council Member Williams stated. “We have the dual problem of trying to make sure we find some fixes while not taking away housing from people who desperately need it.”

Council Member Stephen Levin, Chair of the Committee on General Welfare, stated that the reason for the proliferation of three-quarter houses was the same for the shelter crisis: “The rising gap between income and rents, the scarcity of affordable housing, and until the new units begin to come online, the lack of available supportive housing.” Council Member Levin, on a personal note, described a three-quarter house that he examined a few years prior in his district. “Setting foot into that building, I saw the most harrowing and unsuitable condition for people to be living in that I have ever seen.” He added that “we cannot countenance people taking advantage of our most vulnerable populations.”

Steven Banks, Commissioner of the City’s Department of Social Services which oversees HRA and the Department of Homeless Services, testified first. Commissioner Banks described the recent changes that HRA has made to address the rising homeless crisis—namely the consolidation of the City’s homeless prevention programs into a single unit. He noted that “providing coordinated homelessness prevention programs, including legal services and rental assistance, is much less expensive than the cost of a homeless shelter.” Commissioner Banks described HRA’s actions since 2014 to address three-quarter houses. He highlighted the interagency cooperation that led to the arrests of Yury and Rimma Baumblit on charges of Medicaid Fraud and Money Laundering as a result of kickbacks from forcing residents living in three-quarter houses to attend drug treatment programs. He added that additional investigations were continuing.

Mindy Tarlow, Director of the Mayor’s Office of Operations, testified to the Mayor’s creation of the Three-Quarter Housing Task Force in June 2015. Tarlow described the metric used by the Task Force to identify three-quarter houses—all residences identified by the Human Resources Administration that housed 10 or more unrelated adults who receive the $215 State-set public assistance rent allowance and addresses identified by advocates and through 311 complaints. The inspections can result in a number of City actions such as in the case of overcrowding the task force can conduct voluntary relocations. Some conditions are remedied by HPD’s Emergency Repair program by which the City completes the repairs on the most serious conditions and bill the building’s owner.

Commissioner Banks testified that as of October 4, 2016, the Task Force had conducted 169 inspections in 95 buildings. 428 single adults had voluntarily moved from 44 of those buildings into temporary emergency housing: 139 of those have received permanent housing placement.

Commissioner Banks spoke in support of Introduction 1164 and 1166 which would require HRA to advise tenants of Three-Quarter Houses of the law regarding evictions and to produce quarterly reports on the Task Force’s progress. He was concerned, however, with the metrics mentioned in the reporting requirements and suggested that his office work with the City Council to develop reporting metrics that would be clear in useful. Regarding the Resolution calling on the State to increase the current public assistance rental allowance, Commissioner Banks advised that his office had recently received a proposal by Assemblyman Hevesi, Chair of the Assembly’s Social Services Committee, which would address this issue.

Anne-Marie Hendrickson, Deputy Commissioner for Asset and Property Management at HPD, testified in opposition of Introduction 1167 which would prevent HPD from placing a time bar on applications for relocation services. Hendrickson explained that in 2015 HPD promulgated a rule which provided a 90-day time limit on such applications. Hendrickson stated that the decision to promulgate the rule was informed by HPD’s experiences with the prior rule which had no time limit and was made after considering comments and public input. “Introduction 1167 would effectively overturn the standard that was adopted after careful consideration and hearing from the public, and revert the Department back to older practices.”

Hendrickson also spoke against Introduction 1171 which would codify the documentation required for demonstrating eligibility for relocation benefits. Hendrickson described the current requirements as a flexible administrative process, and warned that the Introduction would prevent HPD from having the flexibility to change as needed for the benefit of tenants. Further, she advised that there was litigation pending before the Court of Appeals regarding the relocation statute which could impact the enforceability of HPD’s relocation liens and its relocation procedures. Hendrickson advised that the City Council wait and assess the outcome of that case before altering the relocation statute.

Council Member Levin, responding to the Report which noted that most of the tenants of the three-quarter houses were referred by a government or licensed entity, questioned what the City was doing to stop the referral practice. Commissioner Banks noted that in May 2013 the City promulgated a rule to prevent referrals by City agencies. Additionally, City agencies are notified by the Task Force of identified three-quarter houses and are directed not to make any placements at those addresses.

Council Member Ritchie Torres questioned HPD’s opposition to the 90-day time frame, asserting that to do so seems to ignore the reality of three-quarter houses. Hendrickson clarified the 90-day timeframe is only in regard to vacate orders issued by HPD. Further, Hendrickson explained that the timeframe does not apply to three-quarter houses because HPD is not issuing vacate orders, HPD is asking tenants to voluntarily relocate. Council Member Torres followed up by asking how HPD would handle a situation where a building has a vacate order but the owner continues to run a three-quarter house. Hendrickson acknowledged that Council Member Torres’ scenario was possible and responded that HPD would take another look at the legislation.

Council Member Williams questioned whether the City has had conversation with the State regarding the State’s referral process. Commissioner Banks responded that when the Task Force was created the State was advised of what steps the City was taking to stop referrals to three-quarter houses. When pressed by Council Member Williams, Commissioner Banks could not confirm that the State has stopped their referral practice. In response, Council Member Williams stated for the record that “again the problems between our Governor and our Mayor are affecting real people in New York City.”

Several representatives from community organization also testified before the Committees. Anthony Coleman, a former three-quarter house tenant and leader with the Three-Quarter House Tenant Organizing Project (“TOP”), testified is full support of the legislation. He described his experience in a three-quarter house where 25 men were crammed into a house that was infested with roaches, bed bugs and rats. Coleman asked the Committee to pass the bills as soon as possible, and that “hundreds of three-quarter house tenants are depending on it.”

Corey Bates, another former three-quarter house tenant and leader with TOP, testified to his own experience as a tenant in a three-quarter house run by Yury Baumblit, one of the most well-known and exploitative house operators. Bates relayed his experience of being forced to attend a treatment program four to five days a week making it impossible to hold a full-time job, and seeing housemates illegally evicted with no notice for missing days of the treatment program. Bates was particularly supportive of Introduction No. 1168 which would prevent landlords from making treatment programs a condition for renting in three-quarter homes.

Representatives from the Legal Aid Society, Gay Men’s Health Crisis, Inc., Homeless Services United, the Osborne Center for Justice Policy and Practice, the Women’s Prison Association, MFY Legal Services, Inc., Safety New Activists and the Coalition for the Homeless, all testified in support the proposed legislation.

The legislation was laid over for the next Committee meeting.

CC: Three-Quarter Houses Hearing (Intros. 1164, 1166, 1167 & 1168; Res. 1135) (Oct. 6, 2016).

By: Jonathon Sizemore (Jonathon is the CityLaw Fellow and a New York Law School Graduate, Class of 2016).