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A city program designed to get homeless families into their own apartments, and into solid jobs, is yanking the rug out from under them, City Limits has learned. The Employment Incentive Housing Program, a joint project between the city’s welfare and homeless agencies, initially operates much like other rent assistance programs, offering low-income families that are leaving the shelter system a sizeable subsidy towards rent. Then comes the catch: If clients leave welfare or hit the two-year time limit, they’re suddenly on their own.

That’s leaving parents like Diana Dorch in the lurch. Dorch, a mother of two who entered the EIHP program about a year and a half ago, said she recently got notice from her landlord that she owed back rent totaling over $2700—and fears she’ll soon be facing eviction. She left welfare in late June, when she landed a job in a law office making about $1500 a month, and lost her subsidy soon after. Until then, EIHP had been paying all of her $980 rent, an amount she says she can’t afford on her own. “Once you get on your own feet, to do something for yourself, you can’t maintain it,” said Dorch. “And you end up back in the system.” In a city where a two-bedroom apartment can run upwards of $1000, expecting formerly homeless families to suddenly find an extra grand is a tall order.

Dorch’s situation underscores a major obstacle to Mayor Bloomberg’s new plan to reduce homelessness by two-thirds over the next five years: If the administration opts to offer temporary subsidies to families, what happens when they run out? “On $25,000 a year, that’s impossible,” says a job trainer who works extensively with homeless families. “Once the voucher is gone, who can afford to pay the rent?”

Since EIHP’s inception, the question of how to serve families as they leave the program—either because of time limits, or because they’ve left public assistance—has been an obvious one. Advocates say possible solutions, like transferring clients onto federal subsidies en masse, simply never materialized. Hildy Dworkin, spokesperson for the city’s Human Resources Administration, which runs EIHP, declined to answer any questions regarding the program.

EIHP was originally designed to open up space in shelters, and thus keep homeless families from sleeping on the floors of the city’s Emergency Assistance Unit. Facing contempt orders from Judge Helen Freedman, the Giuliani administration created the program in 2000 to expedite the process of moving families out of the shelters, said Legal Aid chief attorney Steve Banks, who helped bring the initial suit. As families sit in shelters waiting for public housing or Section 8, city workers approach them with a tempting offer: Join the program, find a job and get a subsidy to help cover the cost of your new apartment. The rental assistance offered is more than what a typical welfare recipient receives, making the private market a viable option. At least temporarily.

Without her grant, Dorch is dutifully searching for a less expensive apartment but says she can’t help but feel the program could’ve done better. “They should have held up their end of the deal, given us our Section 8,” she said. “Right now, I think it was a big setup.”