There are some 16,000 scattered-site supportive housing units across the city, rented and overseen by nonprofits contracted to provide services to tenants. But outdated contracts that trail actual market rents mean the organizations—and the state and city agencies that fund them—are propping up some of the city’s worst housing.

Inside their old apartment building on Intervale Avenue in The Bronx, Nicole Luna and Zelda J. bonded as they battled black mold, heat outages and unsafe conditions that threatened their children’s health. The two women, aided by a case manager from the organization Bailey House, urged the landlord to make repairs as the housing code violations mounted.

Luna’s doctor wrote letters explaining that the mold was making her daughter sick and worsening her asthma. “It was awful,” she said.

“The building was so dilapidated,” added Zelda J, who asked not to use her full name because she is a survivor of domestic violence. “Our housing agency complained so much and nothing was being done.”

Bailey House, which merged with the nonprofit HousingWorks, rented the apartments from the landlord, subleased them to the two women, who had been living in homeless shelters, and assigned them case managers to conduct regular home visits. After the problems at the Intervale Avenue building persisted, Bailey House found them apartments elsewhere in the city—Luna in Harlem and Zelda in another Bronx neighborhood.

The arrangement, known as scattered-site supportive housing, is a common one. There are around 16,000 such apartments across New York City. Under the model, city-, state- and federally-contracted nonprofits rent units in privately-owned buildings to house people with mental illness, adults with HIV, young adults who have aged out of foster care and formerly homeless New Yorkers with special needs. Case managers and clinicians make house calls and the tenants are supposed to have the same legal protections as any other renters.

But the problems that Luna, 24, and Zelda, 27, encountered are also common.

Scattered-site supportive housing units are frequently found in deteriorating buildings owned by negligent landlords, fostering dangerous and uncomfortable conditions for tenants, according to interviews with more than 25 supportive housing tenants and activists, attorneys from five nonprofit legal groups and staff and administrators from more than a dozen supportive housing providers. At the same time, funding constraints can incentivize nonprofits to place multiple tenants into apartments—a problem for many people with mental illness or substance use issues.

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The scattered-site program differs from the more familiar congregate supportive housing model frequently touted by city and state leaders as a core solution to the homelessness crisis. Congregate sites feature clinicians and case workers inside a residential building, but take years to develop before they open and tend to benefit people with more intensive case management or healthcare needs. In contrast, the scattered-site model offers more independence while allowing nonprofits to rent an apartment and move a person or a family in quickly.

But outdated scattered-site contracts that trail actual market rents mean the nonprofits—and the state and city agencies that fund them—are propping up some of the city’s lousiest housing. In interviews with tenants, providers and attorneys, City Limits identified 22 buildings with scattered-site supportive housing units, accounting for at least 1,702 open Housing Preservation and Development (HPD) code violations. The buildings have a combined 1,060 apartments, but it is unclear how many are scattered-site units.

“We often have to go to the usual suspects,” said Kevin Blank, the vice president of Bailey House’s affordable and supportive housing programs, referring to landlords and property managers of substandard buildings.

“A regular repair is needed and the landlord can’t be found,” he added. “The amount of time and energy it takes dealing with landlords who are eager to take our checks but not do the work is a load.”

At least three of the buildings City Limits identified with scattered-site supportive units belong to property owners who have appeared on the Public Advocate’s annual “worst landlord list.” There are almost certainly more, advocates say. In at least eight buildings, including the complex on Intervale Avenue, apartments were once leased by the Department of Homeless Services (DHS) for use as cluster-site homeless shelters—places notorious for their squalid, and at times deadly, conditions. Under the cluster program, DHS paid exorbitant rates for apartments in privately owned buildings but began to phase out the model in 2016, following advocacy by people experiencing homelessness. The city ended the Giuliani-era program last year.

The interviews and apartment visits revealed other issues:

• Three tenants in a Fordham Heights building with units rented by the nonprofit Postgraduate Center for Mental Health went more than seven months without cooking gas before the utility was restored for some. The building management gave them hot plates and electric burners to use from June to February, they said. The building’s front door does not lock and one of the tenants, a mother of two young children, showed City Limits a letter from a doctor urging the property owner to fix the exposed radiator after her son was scalded by steam from a valve. The building is owned by the limited corporation Valentine Realty Associates.
• A tenant in a studio apartment rented by the organization Institute for Community Living (ICL) was told he would have to leave the unit and move in with a roommate at a building on Pacific Street. That building is owned by Isaac Schwartz, a landlord twice named to the public advocate’s watchlist and charged in 2018 with conspiring with disgraced cops to turn his buildings into brothels. The tenant disputed the forced move and managed to stay in his Bay Ridge apartment.
• Another ICL tenant was moved last year into a Ditmas Park building owned by Yechiel Weinberger, number three on the public advocate’s 2015 landlord watchlist. In October 2021, the city sued Weinberger, charging that he “allowed his buildings to deteriorate to the point where they pose an imminent threat to the health and safety of the tenants and the public.” The tenant, who asked to remain anonymous, said they went five months without a stove before being transferred to another apartment. A representative for Weinberger said he rents out hundreds of units for scattered-site supportive housing. 
• One Bowery Residents Committee (BRC) scattered-site tenant who spoke with City Limits lives in a building on Davidson Avenue in The Bronx used until recently as a cluster-site shelter. Their former landlord, Joseph Friedman, was twice cited by city comptrollers for maintaining ​​“numerous hazardous and unsanitary conditions.” In June 2021, the city facilitated the purchase of the building and other Friedman-owned clusters by nonprofit developers now tasked with fixing problems left behind, including 229 open HPD violations, mostly for paint and plumbing issues, at the Davidson Avenue building.

City Limits reached out to each of the landlords and their attorneys named in housing court documents. An attorney for Valentine Realty declined to comment on building conditions. Weinberger’s lawyer Arun Perinbasekar said his client rents many apartments to ICL and other nonprofit organizations for use as scattered-site housing and maintains proper conditions. “The units are affordable and maintained in good repair”—exactly what the city needs more of, Perinbasekar said. “It’s a good system that provides housing to people who need it, and one that works well at his properties.”

BRC’s Executive Director Muzzy Rosenblatt acknowledged the issues at the buildings under the previous landlord, but said he was “more optimistic than ever that the needs of our apartments and our tenants will get addressed” under the new nonprofit owners, following the city’s purchase of the units. 

ICL Executive Director Jody Rudin said the organization employs a team of 25 maintenance workers to handle repairs when landlords are not responsive. “ICL strives to have a strong relationship with all of the landlords who own the buildings our clients in scatter site apartments call home,” she added. “Our priority is ensuring our clients have a safe, comfortable place to call home.”

Postgraduate Center did not respond to phone calls seeking comment. 

The units also fall under the oversight of various city agencies, which sign off on the rentals and occasionally do inspections. Advocates, including a group of supportive housing residents who formed a first-of-its-kind tenant association last year, say the providers and the government agencies that fund them should step up with more “assertive advocacy on behalf of tenants” and take legal action to hold bad property owners accountable.

But nonprofit providers say they are doing the best they can in the face of rising rents and years-old contracts that trail actual market rents, leaving them little choice but to lease cheap apartments in neglected buildings, usually concentrated in New York City’s poorest zip codes. 

The set-up can leave them beholden to property owners who control lease renewals in non-regulated units or who can provide additional housing in a tight rental market. At the same time, the organizations are competing against low-income renters, including voucher holders, for a limited number of apartments. Landlords, management companies and brokers tend to rent units to whoever can pay the most, and while some are very responsive to tenant needs, others are slow or totally negligent, said Sarah Carbone, a scattered-site program director at the organization BronxWorks.

“There’s a housing shortage,” Carbone said. “So it’s often like trying to find the lesser evil to deal with.”

‘Bottom of the barrel’

No place in the country has committed to supportive housing more than New York City, where the model originated. The five boroughs are now home to around 35,000 units of supportive housing with another 3,000 in the approval and development stages, according to the Supportive Housing Network of New York (SHNNY), a trade group representing nonprofit providers. 

Mayor Eric Adams has pledged to turn unused hotels into an additional 25,000 new supportive units to tackle the homelessness crisis. Gov. Kathy Hochul’s proposed budget calls for creating 7,000 additional units while preserving 3,000 others. Hochul increased that goal last month, saying the state would commit $12 million for 500 additional units of supportive housing to help New Yorkers move from the streets to permanent apartments. 

When leaders talk about supportive housing, they are almost always referring to the congregate model, where entire buildings are dedicated to housing people with special needs, like mental illness or substance use issues, assisted by on-site case managers, social workers, clinicians, psychiatrists, recreation specialists, front desk staff and maintenance workers.

But about 46 percent of the city’s supportive housing units are the scattered-site variety, located in privately owned apartment buildings, unidentifiable even to next-door neighbors. The scattered-site supportive housing model began in the mid-1980s as a way to allow people with mental illness to live independently in the community with some consistent support. 

The model has a crucial function for addressing homelessness: While a congregate building takes years to go from proposal to move-in ready, scattered-site units can be rented rapidly—so long as a provider can find an available apartment in an exceedingly tight low-income rental market.

“Tenants and clients want scattered site housing and the concept is great,” said Lynden Bond, a homeless policy expert and a former scattered-site supportive housing program manager with BRC. “People should be in the community living where they want to, but finding high-quality apartments in neighborhoods where they want to live isn’t easy.”

In fact, many providers want to get out of the game.

Nonprofit administrators interviewed for this story said they have stopped taking on new scattered-site supportive housing contracts because the rates rarely cover the cost of rent, repairs and staff salaries. Some said they have contemplated ending their scattered-site programs but did not want to abandon their clients, many of whom have mental illness that they manage with some assistance. 

Fortune Society President and CEO JoAnne Page likened state and city contracts with lengthy terms and few funding increases to “planned obsolescence.” The older contracts provide a lump sum grant intended to pay for clients’ housing and service costs, like a portion of staff salaries, but in reality often fail to even cover monthly rent, though tenants also pay a portion of their income. Newer agreements better reflect market rates—including a city contract tied to 2017 fair market rents with 2 percent annual increases—but providers are locked into their existing contracts and cannot opt into stronger deals, she said. Those constraints limit housing choice.

“We scrape the bottom of the barrel,” said Page, whose organization rents more than 230 apartments in privately owned buildings for use as supportive housing.

Zelda would know: She said she decided to leave a Fortune Society scattered-site apartment  in Far Rockaway in 2015 after two robberies, including a violent home invasion that left her infant with a concussion. The thieves were able to enter the apartment through a front door that would not lock and the owner never repaired, she said. 

Nonprofit providers like Fortune Society and Community Access say they’re left to make up the cost differences through private fundraising. 

Community Access CEO Cal Hedigan said the organization has 66 units in its scattered-site program, but most of those are in Community Access-owned buildings or rent-stabilized apartments that they first started renting out in the early 1990s. Those lower-cost units, including a handful in the East Village, offset the higher rates that the organization pays per month in lower-income neighborhoods like East Harlem and the South Bronx. The lowest rent is $1,900 per month, Hedigan said.

“Essentially, it’s impossible to rent apartments and provide support staff at the current funding model,” Hedigan said. “It’s simple math.”

Fred Shack, the CEO of Urban Pathways, which has more than 400 scattered-site units, said the organization has moved clients into shared apartments to pool funding from outdated contracts years.

“We try to do as many one-bedrooms as we can manage,” Shack said. “But it’s impossible to find units, it really is.”

A 2015 SHNNY report found that its members gave up leases at more than 500 apartments because their fixed contracts did not keep pace with rising rents. The SHNNY report focused on contracts issued through a state and city agreement known as NY/NY III, which bundled rent and service funding into the same pot of money. Annual contracts worth $16,000 to $17,000 per single adult were supposed to cover a year of housing and social services, but that equates to around $1,400 a month—or about $400 less than federal fair market rent for a one-bedroom in New York City.

READ MORE: NYC Council Considers Bill to Probe Why Homeless Are Denied Supportive Housing

Seven years after that legislative report, SHNNY administrators have continued urging the state and city to increase contract payments in the patchwork of funding agreements that prop up supportive housing, so providers would have more rental options. Newer contracts have higher annual base rates—up to $25,000 per household—that more closely reflect fair market rent in New York City while separating the cost of rent from the cost of services. A budget proposal from Gov. Kathy Hochul would potentially add a 5.4 percent Cost of Living Adjustment to state-funded scattered-site contracts and reimburse providers for the actual cost of rent.

“Supportive housing providers have been struggling with chronically underfunded scattered site contracts for years,” said SHNNY Executive Director Laura Mascuch. “Although the state’s commitment gets us moving in the right direction, more financial resources are needed to fix long-standing inequities.”

James Plastiras, a spokesperson for the state’s Office of Mental Health (OMH), countered that the agency has invested more than $60 million over the past five years to increase contract rates.

“Funding rental stipends and services out of the same pool of money allows providers to accommodate variations in tenant needs,” Plastiras said. “OMH does not designate or control the location of scattered-site supportive housing apartments.”

A spokesperson for the city’s Department of Health and Mental Hygiene (DOHMH), which funds more than 2,850 scattered-site units, said the agency has increased funding for some apartments secured through older contracts. Nevertheless, the spokesperson said, “we believe a more systematic approach is required to sustain” nearly 1,700 units funded by the outdated contracts. 

“DOHMH expects providers to place tenants in units free of violations, and to work with landlords/property managers directly to ensure needed repairs are addressed,” the spokesperson added.

Sharing the blame

Nonprofit staff and administrators interviewed for this story say they work hard to address problems in the apartments they rent. Most said they employ their own maintenance teams. “We make up for their deficiencies by doing our own work,” said Myung J. Lee, president and CEO of the organization Volunteers of America-Greater New York. 

Carbone, the scattered-site program director at BronxWorks, said she oversees a full-time staffer whose only job is to follow up with landlords and management companies about repairs and disputes at the 45 South Bronx buildings where they lease units. “Often it comes down to threatening to suspend rent until the jobs are done,” she said.

Not everyone is willing to let the providers off the hook, however.

The citywide tenant association Supportive Housing Organized and United Tenants (SHOUT) has focused on problems in scattered-site units, including illegal lockouts and dilapidated housing, and called for supportive housing tenants to have more direct control in the system.

SHOUT members and their advocates say they have encountered providers who do little to compel repairs. They suspect their concerns get lost in the administrative process or that nonprofits worry about rocking the boat with landlords, who control whether or not they can rent more units.

“The supportive housing provider who should be assisting the tenant to get necessary repairs instead takes a passive approach and can sometimes actively obstruct the ability to get repairs,” said Sandra Gresl, an attorney with the legal service organization Mobilization for Justice. 

She said nonprofits, which frequently seek to evict their tenants, should spend those housing court attorney fees on improving apartment conditions instead.

“They regularly hire legal counsel to evict tenants,” she added. “They could be going to legal counsel to get repairs.” 

She also urged city and state agencies to step in to address building problems.

“They fund supportive housing providers and look the other way as these organizations lease up units in buildings with numerous violations,” she said.

It’s unclear how much scrutiny the scattered-site apartments receive from the city and state agencies that fund them. The apartments are located in thousands of buildings across the city and the addresses frequently change. No single entity appears to compile the locations in one central database, making it hard to track trends in property ownership, housing code violations or even the average cost of rent across providers.

SHNNY, the trade group, said it does not have that information. Assemblymember Linda Rosenthal recently pulled legislation she introduced that would have mapped the locations of supportive housing units, citing concerns over tenant privacy and community backlash.

New York City’s Departments of Social Services (DSS) and Housing Preservation and Development said they do not compile addresses in any sort of uniform list, though a DSS attorney said the agency can access specific addresses for clients they referred to supportive housing. A spokesperson for the state Office of Mental Health, which funds the majority of scattered-site units in New York City, said officials can also access specific address information but would not share it due to privacy laws. 

Luna, the tenant who left the Intervale Avenue building and now lives in Harlem, said the program demands more oversight and accountability. She is living in her third scattered-site apartment and said this one is by far the best, though she still has to fight for heat and repairs.

She said she decided to speak out to improve conditions for other supportive housing tenants who have been neglected by their landlords—especially families moving out of shelters.

“I was homeless and pregnant and in the shelter system and it was killing me,” she said. “But then I moved and that was unsafe for my daughter too.”