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PAReport.Advantage

PAReport.Advantage

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Published by Bill de Blasio

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Published by: Bill de Blasio on Mar 30, 2011
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Under the Table:Illegal Rent Gouging in the AdvantageProgram
September 30, 2010
Visit the Office of the Public Advocate on the web at advocate.nyc.gov,call the Office at 212-669-7250 or email at GetHelp@pubadvocate.nyc.gov
 
1
OFFICE OF THE NEW YORK CITY PUBLIC ADVOCATE
Bill de Blasio
Public Advocate for the City of New York 
Prepared By:
DeNora M. Getachew, Esq.
Policy Director 
Jacqueline Sherman, Esq.
General Counsel
Ursulina Ramirez
Senior Policy Associate
Irum Taqi, Esq.
Deputy General Counsel
Wiley Norvell
Press Secretary
Jeremy Buchalski
Brooklyn Law Fellow with the Office
 
2
EXECUTIVE SUMMARY
The Department of Homeless Services‟ Advantage
program is a City-funded subsidy programthat assists many homeless New Yorkers in their transition from shelter to permanent andindependent housing. In recent months, tenants enrolled in Advantage have contacted the Officeof the Public Advocate to report being pressured by their landlords to pay additional rent, beyondwhat is required under the terms of the program. This practice is colloquially referred to as a
side-deal,
and may in some instances even rise to the level of rent gouging, a crime under statelaw which prohibits payments in excess of the contracted rent.Many of the individuals who contacted the Public Advocate had also alerted the Department of Homeless Services that they were being pressured to pay additional rent, but found no recoursewith the agency to stop the practice. Fear of eviction and returning to a shelter compelled manyAdvantage recipients to pay exorbitant amounts under the table.The Advantage program is currently
the City‟s princip
al tool for helping homeless families andindividuals get back on their feet. The Department of Homeless Services
budget for Fiscal Year2011 includes more than $130 million for rental assistance and housing placement. Such asubstantial investment requires strong oversight to ensure side-deals do not undercut theeffectiveness of programs like Advantage. Currently, 14,000 individuals participate inAdvantage; once they have passed through the program, they are responsible for paying their fullrent without the Advantage subsidy. This is their singular chance at independence, which maybe undermined when landlords exact additional payments from tenants and diminish their abilityto save their earnings.The Office of the Public Advocate has investigated the prevalence of side-deals by interviewinga sample of Advantage program participants. The key findings of the Offi
ce‟s investigation are:
 28% (19 individuals) of respondents stated they have been pressured by their landlord tomake payments beyond their contracted rent (also known as side-deals);In 89% (17 respondents) of cases where a landlord pressured a program participant for aside-deal, the individual paid the additional amount;Respondents reported paying between $30 to $500 per month more than the rentspecified in their Advantage leases;If the Advantage recipients were able to save the additional monthly payments over thecourse of the maximum two years of the Advantage subsidy, on average these individualscould have saved approximately $4,272, in addition to accrued interest, to help themafford permanent housing when the subsidy expires;35% (6 respondents) of individuals who were pressured to enter side-deals stated thatthey were also pressured for additional payments prior to moving in. These paymentsreportedly ranged from $30-$2,400; and

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