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City to require working homeless shelter residents to save around 30% of their income for future housing

2019-08-23

Department of Social Services Commissioner Steven Banks (Go Nakamura/for New York Daily News)

Working New Yorkers staying in city shelters will soon be required to set about third of their monthly income in a savings account they can only access once they find permanent housing.

The new savings program being rolled out on Friday is mandatory under state law in a deal that exempts the city from charging income-earning homeless rent for staying in a shelter.

“For decades the New York State social services law has required homeless people with earned and unearned income to pay rent for shelter,” said Steven Banks, who oversees the city’s homeless programs as commissioner of the Department of Social Services. “New York City was given the ability to not charge rent for shelter in 2010 but in a way in which really important tools were not provided to help people get back on their feet.”

The savings requirement was written into the 2018 state budget as a way of continuing the city’s exemption.

The first phase of the program will apply only to single adults staying in city shelters. Of the 58,980 total people who spent the night in a shelter this Tuesday, 16,276 were counted as single adults, according to Department of Homeless Services statistics.

Roughly 10% of those single adults have jobs and earn an income above the public assistance level, Banks said.

The residents will be required to deposit roughly 30% of their income to a savings account maintained by the city. The deposited funds will be made available, with interest, once they exit the shelter system — or if they need assistance transitioning out of a shelter. The rule will begin to apply to families with a working adult next year.

“To save up the amount of money that they would otherwise pay monthly for rent and give that back to them upon shelter move out, we think, helps people with long-term stability,” Banks said.

If a participant fails to make the required deposits, DHS will work with them and even connect them with financial counseling as needed, officials added.

Homeless advocates said while the city is simply complying with state law, the program will do little to alleviate the root causes of the homeless crisis.

“Having a savings plan is certainly better than a plan whereby someone is forced to pay rent to stay in shelter but at the end of the day people aren’t homeless because they’re mismanaging their money or because they can’t save,” said Coalition for the Homeless policy director Giselle Routhier. “It’s because fundamentally they don’t have enough money to afford rent in New York City so it really doesn’t help get at the crux of the problem.”

Routhier and other advocates believe that providing permanent, affordable housing for the thousands of New Yorkers living in shelters and on city streets is the only solution to the current crisis.