Department of Social Services Human Resources Administstion| Department of Homeless Services Molly Wasow Park Commissioner 4150 Greenwich Streot New Yerk, NY 10007, (920 221 7315 tl wt 0423 December 15, 2023, Diana Ayala, Deputy Speaker New York City Council 250 Broadway New York, NY 10007 Dear Deputy Speaker Ayala: Thank you for your letter of November 22, 2023, regarding Local Laws 99,100, 101 and 102, While I am happy to respond (o the questions you have outlined below about the administration of our programs, including CityFHEPS, we must disagree with the assessment that implementing this bill package would spend City taxpayer dollars more wisely and effectively. DSS and OMB met earlier this year with Councilmembers and staff and explained in detail our analysis of the legislation, including providing citations and backup for the costs and assumptions. DSS’s analysis showed a $17 billion net five-year City cost. This cost included an assessment of potential savings, which we showed to be minimal because our data clearly show that most DHS shelter entrants do not become homeless due to a formal eviction, even where they are a secondary tenant. As a result, there is a mismatch between households newly eligible for vouchers and those entering shelter. The Mayor and City Council share a strong interest in addressing the City’s affordable housing crisis and related homelessness crisis. This Administration has made expanding access to permanent housing a top priority and has implemented numerous reforms to the CityFHEPS program to expeditiously facilitate exits from shelter, We have repealed the 90-day minimum length of shelter stay requirement, and allowed New Yorkers to use a CityFHEPS voucher anywhere in the State. In addition, we reduced the number of hours required for a family to work from 30 hours a week to 10. We ensured that single adults working a minimum wage job would not lose access to the voucher, ensured that families with a child receiving SSI qualified for a CityFHEPS voucher, and adjusted the maximum room rental rate to ensure it reflected the market rent. Most recently, the Administration announced the Unlocking Doors initiative, which provides grants for the rehabilitation of vacant rent-stabilized units that are set aside for CityFHEPS voucher-holders. These initiatives are aimed at expanding both eligibility to receive a voucher and the pool of housing New Yorkers in shelter can access, In addition, we have aligned utility allowance adjustments for CityFHEPS with utility allowances authorized under the Federal Section 8 program, consistent with the aims of Local Law 99 of 2023 (although planning and implementation of this initiativebegan before the legislative package was proposed). Systems investments and training at the Department of Social Services have also allowed us to increase permanent housing placements from shelter by 17 percent relative to FY22. At the same time, with limited state and federal aid, the City has been forced to undertake difficult service reductions and other cuts to balance its budget, as required by law The Administration remains committed to working with the Council to ensure the continued success of important programs such as CityFHEPS while balancing the fiscal obligations of the City. During the course of negotiating the bills that became Local Laws 100-102 of 2023, this Administration made numerous good faith efforts to negotiate with the Council to meaningfully expand CityFHEPS eligibility in a fiscally responsible way. For example, in March 2023, we offered to expand CityFHEPS by offering vouchers to households with pregnant persons or newboms, as well as families seeking services through the Mayor's Office to End Domestic and Gender Based Violence, and those represented by a community guardian who were not APS. clients. This would have been a significant expansion of CityFHEPS eligibility, targeting those populations we believed most needed assistance and were not reached by current rules, The Administration remains open to exploring these and additional ways of expanding the CityFHEPS programs, subject to appropriation decisions by the Mayor and Council As we have previously communicated, Local Laws 100-102 raise substantial financial, operational and legal issues, which are discussed in greater detail below. Based upon these issues, including the significant legal concerns described below, these local laws cannot be implemented at this time. Financial, The approximate cost of the City-funded rental assistance programs was $550 million in Fiscal Year 2023, with costs projected to increase in the years thereafter due to rent increases and additional households accessing the program. The Administration's cost estimate of these changes is $17B over five years. Even the Council’s own fiscal impact statement for these Local Laws projects that they carry a total cost of as much as $10.6 billion over five years. Yet, the adopted budget for FY2024 not only does not cover the cost of these Local Laws, but contained no increases at all above the agency’s baseline funding needs. The significant expansion of the CityFHEPS program apparently envisioned by these Local Laws, assuming that they are construed to mandate issuance of vouchers to all who are eligible, is simply not reflected in the budget adopted by the City Council. Further, the City’s worsening financial outlook, which has precipitated several rounds of PEGs, renders infeasible an expenditure of such magnitude.Operational. The Local Laws limit the City’s ability to target CityFHEPS vouchers to those most in need. Most households who are facing eviction proceedings in housing court do not enter shelter, yet many of those people would be eligible for a CityFHEPS voucher as a result of these Local Laws. The Local Laws thus expand eligibility to people who would otherwise remain housed or find permanent housing without a City- funded voucher. This expanded eligibility will result in increased competition for a limited number of apartments — a competition that will disfavor those individuals and families in shelter, unnecessarily prolonging their stay in shelter. Further, as the gap between the number of people eligible for a voucher and the funding for the vouchers grows, DSS will be required to create and maintain a waitlist for vouchers. Legal. The Local Laws also seek to legislate in an area in which authority is reserved to the State. Rental assistance programs are govemed by the Social Services Law (SSL), which gives plenary authority 10 DSS to develop and administer these programs, subject to oversight by the State Office of Temporary and Disability Assistance. The SSL generally gives no role to the City Council in the administration of these programs, The SSL largely divides responsibilities between the State Commissioner and the local social services districts, and grants ultimate authority over policy and administration of public assistance and services to the State Commissioner of Social Services. See Beaudoin v. Toia, 45 N.Y.2d 343, 347 (1978). Section 131-a of the SSL contains the legislative authorization for monthly grants of public assistance, and State regulations implementing section 131-a of the SSL specifically authorize local districts to develop their own local rent supplement programs, subject to OTDA’s review and approval See 18 NYCRR § 352.3(a)(3). See also SSL § 20(3)(a). Pursuant to that State authority, which conveys discretionary power upon social services officials at the State and local levels, DSS developed its CityFHEPS rules and submits them to OTDA for its review. By imposing eligibility requirements on the CityFHEPS program, Local Laws 100-102 subvert this planning role delegated to local social services districts and undermine the State's oversight authority of its local agent. Because they contravene a specific State delegation to DSS and restrict the manner in which DSS exercises that discretion, they are preempted under the SSL and its implementing regulations. In addition, if these Local Laws are indeed construed to impose a vast cost upon the City outside the budget adoption process by requiring issuance of a voucher to every newly eligible person, they would raise significant concerns as to their binding effect ‘upon the discretionary powers of the Mayor and the City Council itself in preparing and adopting the annual expense budget, and the need for a referendum under applicable law to adopt local laws with such an effect. In any event, because theadopted budget does not reflect appropriations sufficient to provide a voucher to every newly eligible person, the Local Laws simply cannot be implemented in this manner. In the event of litigation, the Administration may of course present additional arguments founded in law and public policy. However, litigation is not the only course that is available. In view of our shared goals of making sure that as many people as possible remain stably and permanently housed, we hope to avoid the protracted time and expense of litigation and work collaboratively with the Council to address the City’s ongoing homelessness crisis. We very much appreciate and share the Council’s expressed intent to work as a constructive partner with the Administration, and look forward to productive dialogue. Attached as an addendum, please find answers to specific questions raised in your ‘November 22, 2023 letter. If you have any questions, please do not hesitate to reach out, Sincerely, Molly en Pierina Ana Sanchez, NY City Council Member for District 14, Bronx. Tiffany Caban, NY City Council Member for District 22, Queens ‘Marricka Scott-MeFadden, Deputy Commissioner of Intergovernmental Affairs, DSS Connor Martinez, Director, Mayor's Office of City Legislative Affairs AddendumAddendum to December 15, 2023 Letter from DSS Commissioner Molly Wasow Park Headcount Questions What is the current budgeted and actual headcount within DSS for all agency staff involved in the administration of CityFHEPS benefits? In which units of appropriation and budget codes can these positions be found? For each budgeted and actual headcount, what is the breakdown by title/position for such staff? Are any of these positions excluded from the hiring freeze? If so, please detail A. The DSS Homeless Prevention Administration (HPA) processes all Rental Assistance programs, including CityFHEPS. We do not disaggregate CityFHEPS from other rental assistance at this level so that we can maximize our resources and operate as efficiently as possible on behalf of our clients. Within HPA, in budget codes 0307 and 0342 in U/A 203 there are 313 budgeted positions and 228 staff onboard in these areas that work on rental assistance as of October 2023. The units include housing court liaisons, mobile shelter unit, landlord ombudsman team, the rental assistance unit and others. In addition, staff within DHS and its provider partners work on all aspects of rehousing including apartment search, lease signing, packet preparation and moveouts. Many other staff across HRA also support CityFHEPS and other rental assistance applicants {and tenants in general, whether they are staff in FIA who are opening cash assistance cases that support CityFHEPS rent and access to moving expenses or staff that oversee the Homebase programs and/or answer client inquiries that can include CityFHEPS issues. The Office of Supportive and Affordable Housing (OSAHS) has staff that process master lease ‘moves including CityFHEPS subsides; the Office of Domestic Violence Services assists domestic violence survivors move from HRA shelter; and the Public Engagement Unit (PEU) a has a specific division who helping to engage landlords for all types of housing, including CCityFHEPS, DSS/HRA titles that are exempt from the hiring freeze and that are related to these areas are shown below: = HPA and FIA: ABOS/BOS = HPA/DVS: Caseworker/Supervisor Social Services |, land Ill What are the budgeted and actual headcounts at each DSS-contracted Homebase provider relating to the administration of CityFHEPS benefits? Are there any restrictions on the contracted providers that would limit their ability to fill vacancies? ‘A. Homebase programs offer a range of services, from administering program financial assistance to benefits advocacy to landlord mediation. Due to the broad scope of services ‘voilable by the program, the Agency is unable to reliably isolate each contracted Homebase provider's budgeted and actual headcount performing duties related to the administration of Addendum 1 of 3ityFHEPS application. There are no DSS imposed restrictions on providers that limit their ability to fil vacancies. Budget Questions © What is the current budget in Fiscal 2024 for the CityFHEPS program? A. The FY24 rental assistance budget, the majority of which is City funded, as of the November Plan is $405 million. DSS works closely and consistently with OMB to re-estimate and adjust. the budget as needed throughout the year. This budget supports households exiting shelter and specific cohorts of high-risk community clients through CityFHEPS, its predecessor programs and other smaller City-funded subsidy programs such as FHEPS B for survivors of domestic violence. Since 2014, 70,000 households have been placed in permanent housing through these City programs. Including the other subsidies and supportive housing programs that DSS has access to for homelessness prevention and to move households from shelter, that number is well over 100,000. ‘© What is DSS’ current estimate for the budgetary impact of the package of CityFHEPS legislation for Fiscal Years 2024 and 2025? A. in response to your questions about projected costs, we have not updated our projected $17 billion five-year cost projection. This remains our best estimate. The five-year projections that we previously shared with the Council are below: New Costs Cases receiving Annual Annualnew Cumulative subsidy spending cases____newcases __(endofyear) _(in millions) _ Year - 1 47,000 47,000 47,000 $749 Year 2 47,000 94,000 89,300 $2,127 Year 3 47,000 141,000 108,335 $3,474 Year 4 47,000 188,000 161,633 $4,794 Year 5 47,000 235,000 192,470 $6,091 Total $17,235 5 Year City Shelter savings $228 General Questions ‘* Currently, how many households are enrolled in and actively receiving CityFHEPS benefits? A. There are currently more than 36,000 households receiving a CityFHEPS subsidy. Addendum 2 of 3Does DSS have an updated uptake projection of the additional households that will become eligible for CityFHEPS in DHS shelters when the CityFHEPS bill package goes into effect? A. No, we do not have an updated projection outside of our cost analysis and table, above. Compliance Questions ‘The Council had previously passed legislation related to this recent CityFHEPS bill package that, when viewed holistically, would work collectively to more efficiently and effectively connect unhoused individuals to stable affordable housing. On numerous occasions, the Council has ‘engaged the Administration for status updates on these laws, but no substantive response has been received to date. Please provide an implementation update on the following local la Local Law 45 of 2023 - This law requires HRA to designate housing specialists within all ‘temporary shelters and took effect on August 14, 2023. A. The report will be compiled and sent in mid-January 2024 as per the requirements ‘outlined in the legislation. Local Law 118 of 2020 - This law requires DSS to execute a contract that will provide for the status of a rental assistance application or renewal request to be made available ‘online to the applicant or provide. A._DSS rolled out online renewals for CityFHEPS recipients on 12/10/23. Clients can now complete and submit their CityFHEPS renewal via AccessHRA, upload documents related to the renewal, and request a good cause extension after 5 years. Clients who link their CityFHEPS case will also be able to see the status of their CityFHEPS renewal. Clients have already been able to see whether a rental assistance payment was made on their behalf through the issuance screens in AccessHRA. Addendum 3 of 3