National News

New York City Sues Landlords Who Refuse Government Vouchers

Posted June 20, 2018 6:11 p.m. EDT

NEW YORK — For the past four years, New York City has tried to persuade landlords and real estate brokers to rent apartments to low-income people and homeless people with bonuses and pledges that rent would be guaranteed with government vouchers.

The incentives have helped thousands of people move into permanent housing throughout the city. But some landlords have still refused to accept vouchers, city officials said, which is against the law for buildings with six apartments or more.

Last year, the city created a unit to combat such violations, and on Wednesday, the unit took its first legal action, filing lawsuits against the manager of Seaview Estates, a complex on Staten Island, and a real estate broker who rented apartments in two Bronx buildings.

In the lawsuit against the property management company, the city says that investigators called about leasing apartments at the Staten Island complex and were repeatedly told that vouchers were not accepted. In the Bronx case, investigators found that ads by the broker representing two buildings explicitly advertised that vouchers were not accepted, according to the lawsuit against the broker. The city attached the ads to the lawsuit.

It is difficult for the city to calculate how many landlords and their agents are turning away prospective tenants with vouchers. But Steven Banks, the commissioner of the Department of Social Services, hears complaints from homeless people at town halls and during visits to shelters.

While many landlords have welcomed vouchers, others remain uncooperative and are breaking the law, he said. “For those who don’t want to be our partners, we’re coming,” Banks said. “For those who have not been partners, these two lawsuits should put them on notice.”

Everton Campbell, a broker named in one of the lawsuits, was surprised by the city’s action. He said he placed ads but did not know the two landlords named in the lawsuit with him.

Campbell said he acts on behalf of landlords who are wary of accepting vouchers because they have been burned in the past by tenants who do not pay their portion of the rent even when there is government assistance. He said some landlords also have disdain for people coming from shelters.

“I don’t agree, but some landlords, once they hear shelter, they think they’re not good people,” Campbell said in a phone interview. “I’m not discriminating. I don’t own the apartment. I cannot force a landlord to do what they don’t want to do.”

A call for response to the office of Seaview Estates, which is also the address for St. Marks Hamilton LLC and Oxford Realty Group LLC, the defendants in the other lawsuit, was not immediately returned.

Advocates for affordable housing and low-income residents have long criticized the city for not aggressively enforcing the law requiring most landlords to accept vouchers. They say the lax enforcement has allowed landlords to flout the requirements and that has undermined the city’s efforts to reduce homelessness. About 77,000 people are homeless in New York City, according to the most recent estimates available from the federal Department of Housing and Urban Development. Homelessness began to balloon in 2011 after the state, citing a budget crunch, pulled funding from a rental assistance program called Advantage. The city, under then-Mayor Michael R. Bloomberg, decided the city alone could not fund the program.

Landlords, stuck with renters who could not afford their apartments in 2011, were wary when Mayor Bill de Blasio began introducing a new set of vouchers mostly funded by the city in 2014.

The de Blasio administration has used vouchers and legal assistance for tenants facing eviction as its primary tools to combat homelessness. The administration plans to open 90 shelters over five years to accommodate the homeless. On its worst days, about 60,000 people — about 40 percent of them children — are in the system that uses traditional shelters, hotel rooms and private apartments.

The city wants to stop using hotels and apartments, which are costly and make it more difficult to get services to people so they can move out of the shelter system. But the city has been slow to open the new shelters.

The city offers substantial incentives to brokers and landlords. Brokers can earn a commission equivalent to 15 percent of the annual rent. Landlords can now receive a $3,500 bonus for every apartment rented to a voucher recipient, up from $1,000 offered four years ago. Landlords can also receive a month’s rent to hold an apartment while the city conducts a safety inspection, and the city pays the first year of rent in advance.

The incentives have spurred more landlords to accept vouchers and the spending on the subsidies has risen to nearly $165 million in 2017 from $40 million in 2015. About 90 percent of the funding is from the city, with the rest coming from the state and federal governments.

But people still complain that it can take months to find landlords who will accept the vouchers. Landlords have been confused because the city has at least nine different rental assistance programs, in addition to helping to facilitate a half dozen federal and state assistance programs. There is an alphabet soup of vouchers that Banks said will be streamlined soon.

In the meantime, however, the city is cracking down. The special eight-person unit has received more than 50 referrals over the past year.

According to one of the lawsuits, investigators called about apartments in the Seaview Estates in March and April and were told that vouchers were not accepted. The calls were recorded. In April, an employee who identified herself as an assistant property manager said, “Oh, we don’t actually take vouchers.”

When asked why, she said, “Because the requirement for the apartment, you have to make $43,000 yearly and normally with the vouchers you don’t, you are, you aren’t able to get the voucher if you do make $43,000 annually.”

In the other lawsuit, an advertisement for a one-bedroom apartment on read: “The apartment is not accepting vouchers.” Another ad on read: “No vouchers are being accepted for this apartment.”

The apartments were $1,450 and $1,500 a month, within reach of the amounts of several different vouchers. The city’s lawsuit says Campbell was advertising apartments owned by Yaakov Miller and Oscar Ramos.

Campbell said he did not know Miller or Ramos. He said he puts false addresses, ones near the apartments he is really representing, so that potential tenants can’t evade his broker’s fee by looking at units without him.

Ramos said he had not worked with Campbell. He said he had not advertised his apartments, which he said are filled with longtime, older tenants. “I advertised nothing,” he said in a phone interview. “If the city comes with that, the city is full of it. They can talk to me and talk to my lawyer.”