SROs on Strike

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They may not be carrying picket signs, chaining themselves to doors at City Hall or chanting anti-government slogans that rhyme, but without a doubt the protest by owners of single room occupancy hotels has caught the attention of the city’s AIDS services agency.

Since New Year’s Day, 33 of these for-profit hotels and residences have refused new tenant referrals from the Human Resources Administration’s Division of AIDS Services and Income Support (DASIS), claiming that the city owes them about $3 million in back rent. Not until late March had tempers cooled enough for owners and HRA officials to start preliminary talks.

This $3 million is an index of DASIS malfunction. In about 40 percent of the cases, homeless or inadequately housed people who come to DASIS for help get placed in commercial SROs–usually in Manhattan or the Bronx–while the agency decides whether or not they are eligible for help. These residence hotels are like dormitories for the poor, offering cheap, bare-bones rooms in buildings that range from modest to criminal.

Eligibility review has always been slow and in the last few years, as staff growth has lagged behind a burgeoning caseload, it has grown even slower. If a caseworker decides not to open a person’s case, the city’s automated billing system won’t pay the SRO landlord. But after 30 days, SRO residents assume tenancy rights, and are protected by the city’s housing laws. So owners wind up in Housing Court trying to collect unpaid rent or evict tenants, and often they simply have to swallow the costs.

“The city takes the position that they can’t pay if the case is not open,” says Kenneth Murphy, director of the three-year-old SRO Housing Association. “And the hotels owners’ position is that they’ve provided a service.” SRO owners get fed up with this game every few years and come to the city looking to collect, says Murphy, who along with former Assembly speaker Mel Miller is negotiating with the city on the association’s behalf. In 1992 and 1995, the city settled for part of the arrears, he says, but failed to correct the underlying problem. So this year, the SRO owners are fighting with the city again.

At risk in this face-off are the 1,650 city-referred AIDS patients living in for-profit SROs each year. Observers say DASIS’ immediate response to the crisis has been to tell applicants with inadequate housing to stay put, and to shunt the homeless to HRA’s already overtaxed emergency assistance units, which are ill-prepared to handle the complex needs of people with AIDS. The agency did not respond to phone calls for this story.

The boycott, now dragging into its fifth month, has brought the city’s dependence on SROs into sharp relief for AIDS advocates like Mindy Nass and her colleagues at the Citizens Advice Bureau. Their study found that the number of DASIS clients in 10 Bronx SROs fell by 26 percent between December of last year and March of this year. Says Nass: “The problem is, where are these people going?”


Using SROs was initially supposed to be a stopgap measure, explains Maureen Friar, executive director of Supportive Housing Network of New York, an association of nonprofits that offers housing and services to homeless or special needs tenants. “But there’s not enough permanent, appropriate housing. So what’s supposed to be temporary oftentimes [lasts] a lot longer.”

More than half of DASIS clients who need housing get placed in nonprofit SROs or apartments with on-site services like case management and counseling. But the city has a growing need for such supportive housing and hasn’t done much to close the gap. Three years of interagency fumbles between HRA and the Department of Housing Preservation and Development left $32 million in federal funds for AIDS housing construction and services unspent until last fall (see City Limits, December 1997).

In the absence of enough appropriate housing, DASIS has rented rooms from commercial SROs to house homeless people with AIDS. This arrangement is necessary for the city–and lucrative for the hotel owners. In all, city and state governments spend about $20 million each year to house AIDS patients in these SROs, a business that, for some owners, offers hefty cash flow with few responsibilities attached. Because of the deal they’ve struck with the city, SRO landlords are able to charge around $1,100 a month per room, far above the rent-stabilized rate of $350 to $450 a month. “The fact that they are owed money from arrears, I don’t doubt for a second,” says Betsy Kane, executive director of the West Side SRO Law Project. “But the amount of money they receive above the stabilized rate should make up for it.”

The city has tried to cut itself a better deal. Back in 1995, the city shaved 10 percent off its tab with the SROs, and said it would start enforcing building code and state regulations to protect hotel tenants. More recently, HRA officials said that $1.5 million from savings in SRO payments would go to new contracts for services in supportive housing.

Advocates speculate that anger over the reduced profit margins may have sparked the walk-out. Murphy denies this claim, but says the association members, recalling past city concessions, are willing to lose tenants temporarily for what could be a big payoff. “Some hotels are taking a financial hit with vacancies. People move out, and they’re not getting new tenants,” he says. “The hotels didn’t want to take this action, but [the lost payment] has been going on for years. We’re hopeful that negotiations can continue.”


AIDS advocates point out that the city could have averted this problem if it had only invested more money in service-based nonprofit housing. Tenants with AIDS would be better off too, they argue.

“The city pays about the same amount to commercial SROs just for the bed” as it does for rooms in service-rich nonprofits, Friar says. Worse yet, “these buildings may be in poor condition, there are no services on site, and there are often drug dealers hanging around.”

Questionable conditions and exorbitant prices aside, DASIS’ housing problems can’t be blamed solely on negligent SRO owners, Nass says. She says it should be City Hall’s job to determine and monitor the best way to house people with AIDS.

“Yeah, sure, SROs are getting paid a lot of money, and yeah, they should be providing the services,” Nass says. “But the responsibility is on the city. The city should be providing more appropriate housing.” Until that happens, much of the homeless AIDS population will be subject to the whims of commercial SRO owners, whose primary concern is their bottom line.