Wealth & Poverty Review Homelessness: A Profitable Business
Over the weekend, both the New York Times and the New York Post published exposés on one of New York City’s largest homeless shelter providers, James A. Brown III.
According to these investigations, Brown has turned sheltering the homeless into a lucrative business for himself, reaping more than $1 million a year in profits. By starting and managing his own security guard company, catering company, and management company — all of which service his shelters — Brown keeps money flowing his way.
Those shelters, as it turns out, are poorly managed with dismal living conditions. The most horrifying examples come from Beach House, one of Mr. Brown’s largest shelters.
At Beach House, more than a dozen residents interviewed by The Times criticized the services that CORE’s new companies provided. They said the caterer frequently served them moldy bacon, undercooked meatloaf and powdered eggs, leading to bouts of diarrhea and stomach cramps.
The security guards often slept on the job and failed to stop open drug use and violent fights, some said. Almost all the residents who were interviewed said they had developed coughs and breathing problems from mold and moisture that had seeped into their rooms.
“It’s hell in here,” said Tracey Covington, 58, who said she has lived in the shelter for about a year with her brother.Amy Julia Harris, “Housing Boss Earns $1 Million to Run Shelters Despite a Troubled Past” at New York Times
Worse: It’s all funded by taxpayers. Since 2017, New York City “has awarded more than $352 million to a nonprofit run by Mr. Brown to operate shelters.”
Worse still, Brown is not an isolated case. The New York Times article provides details on several other homeless shelter providers engaging in similar behavior.
This year, the city has directed $2.6 billion to nonprofits to operate homeless shelters, and officials already know they have a problem with some of them. Nine of the 62 groups that run shelters are on an internal city watch list for issues that include conflicts of interest and financial problems, according to records reviewed by The Times. All of them continue to receive city funding.Amy Julia Harris, “Housing Boss Earns $1 Million to Run Shelters Despite a Troubled Past” at New York Times
According to the New York Times, the city is complicit:
In interviews, five current and former officials with the city Department of Social Services, all of whom spoke on the condition of anonymity because they were not authorized to discuss internal matters, said the city is loath to closely scrutinize the finances of nonprofit groups because it is so reliant on them to deal with the explosion in the homeless population.Amy Julia Harris, “Housing Boss Earns $1 Million to Run Shelters Despite a Troubled Past” at New York Times
In response to these breaking stories, Mayor Bill de Blasio said, “It’s not as simple as just get rid of everyone who does anything wrong anytime they do it – because there would be very few [providers] left.”
This story serves to highlight the discouraging corruption that too often exists within government-funded housing and programs for the homeless, which should cool enthusiasm about Housing First and other strategies that are heavily reliant on government. Throwing the homeless into housing will not solve the homelessness crisis. It is a far more complex issue in need of more than a one-size-fits-all bandage — and certainly in need of greater accountability.
One could also surmise that if homelessness is a lucrative business, the actors that profit would have very little incentive to see real solutions implemented in their city. More people empowered to rise above their current homelessness situation would mean less money in those actors’ wallets.