Are Private Companies Profiting from Homelessness?

profiting from homelessness

It was a cold and foggy Monday morning when I found myself neck-deep in a 2-hour conversation about the role of capitalism on the homeless crisis. It was barely a quarter past eight when my thumbs found a rhythm it knew too well – coasting through a topic I had generously spoken over, a million times before. On the screen of my trusty smartphone, I clicked and clacked away. As I stood on a crowded bus, during rush hour, the conversation continued.

What sparked such a discussion? Twitter.

Honestly, the only time I find myself on Twitter is to see what’s been said by and about homeless people. I occasionally tweet about homelessness. But I tend to feel a lot more comfortable writing articles and blog posts such as these. There’s just not enough space in a tweet to say all the things that need to be said. And frankly, I’m not great at condensing my thoughts either. I also don’t feel confident I can do so without oversimplifying a complicated issue such as systemic poverty and homelessness.

With that being said, I did do a little bit of tweeting that day.

As a formerly homeless New Yorker with experience navigating the NYC shelter system, any topic relating to the city’s right-to-shelter peaks my interest. In June, our dear Mark, founder of Invisible People, tweeted about how NYC’s right-to-shelter gets a lot of homeless people out of sight, while not really doing much else. However, it costs New Yorkers a hefty sum of tax dollars to shelter an ever-growing homeless population with no relief in sight. In short, New York City has applied a multi-billion dollar band-aid to a very serious issue with no long-term solutions. And yes, I am directly referring to the obvious lack of affordable housing!

Josh Dean of Human.NYC chimed in with some data: New York City is now spending a whopping $3,500/month for each sheltered homeless individual. I know this is fact because I saw the numbers. Plain as day on every piece of Human Resources Administration paperwork I had saved and filed away. According to my food stamps application, the city was spending a whopping $7,000/month to house my husband and I at Park View. Park View is a family (couples) shelter in Harlem, Manhattan. We were transferred to Park View four months after arriving at El Camino, a processing center for homeless families in Jamaica, Queens.

Park View was so atrocious that our own social worker felt bad for us and the placement we were given. Hell, our driver felt bad for us as he dropped us off at the entrance. Rightfully so. Between filthy mattresses, frequently clogged toilets, a rat infestation, and scathingly hot summers with no air conditioning, it was no surprise everyone warned us about this place.

And yet, with $7,000/month, this was the best thing the city could do for us?

Clearly something is not right here. I think there’s a possibility it’s a lot more sinister than a clash between good intentions and bad policy.

My opinion is that systematic poverty, as well as homelessness, is profitable. And in this case, homeless shelters are very profitable.

And, frankly, I think I might actually be on to something here.

In How Private Companies Are Profiting From Homelessness in New York City, author Ben Hattem shares that:

According to the DHS website, the department maintains an open-ended Request for Proposal process’ for nonprofits to open shelters around the city. That’s not enough though, and in a desperate measure in August 2000, DHS introduced an ’emergency’ program to pay per diem, non-contractual rates to landlords to shelter homeless people night-by-night in what they called ‘scatter-site’ shelters.

With the money came the crooks.

The most notorious of the lot were the Podolsky brothers, Jay and Stuart. In 2011, they founded the nonprofit property company Housing Solutions USA (HSUSA). They switched their business from forcibly vacating and renovating single room occupancy hotels to housing the homeless. HSUSA merged with Aguila and took over its contracts shortly after incorporating. In late 2013, then-comptroller John Liu called on the city to stop housing people in Aguila’s facilities after uncovering accounting problems and unsafe and unsanitary practices at their shelters. In August 2014, DHS awarded the company another $15 million contract.

Well that’s disturbing! Additionally, in Why Run a Slum If You Can Make More Money Housing the Homeless? by Andrew Rice, we learn that:

Housing Solutions won an “emergency” contract to operate a shelter on West 95th Street. Since then, it has expanded into a five-year, $47 million deal. The city pays $122 a night — more than $3,600/month — for each cubicle-size room to Housing Solutions. In turn, Housing Solutions directs the rental income back to the Podolskys.

The most exciting bit? Aguila, Housing Solutions’ new name, is the same name of the company on my caseworker’s business card. Aguila ran Park View, too. Yikes!

When I think about the homeless crisis in New York City, I often ask myself: Well, if the homeless aren’t being housed, and things are really only getting worse for not only homeless New Yorkers, but all poor and low-income residents, then why hasn’t there been policy changes? Why aren’t we investing in housing?

Then I ask myself, if homeless people aren’t benefiting, who is?

Well, for starters, it’s capitalists such as the Podolskys.

Jocelyn Figueroa


Jocelyn Figueroa studied Creative Non-Fiction at The New School and is a blogger and freelance writer based out of New York City. Formerly homeless, she launched her own blog discussing shelter life in New York City. Today, Jocelyn is on a mission to build connections through storytelling and creative writing.

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