History of Supportive Housing

History of SROs and homelessness in New York

Supportive housing in New York arose in response to the needs of the homeless population during the 1970s and 1980s. Attributable to a number of factors, the rise in homelessness reflected changes in the economy, reductions in affordable housing and the deinstitutionalization of psychiatric patients.

During the 1970s, New York City experienced a contraction of its low-income housing stock, primarily as a result of property abandonment, neighborhood gentrification and reduced federal funding for housing construction. The fiscal crisis of the mid-1970s also dramatically reduced employment opportunities for the poorest New Yorkers, leaving many without the resources to pay for adequate shelter. These problems were further compounded by the deinstitutionalization of psychiatric patients from New York State hospitals. Between 1955 and 1992, the State’s in-patient psychiatric hospital population fell from more than 90,000 to less than 13,000. Thousands of mentally ill individuals were discharged without the financial subsidies or social supports necessary to secure or maintain stable housing.

In conjunction with these factors, the dramatic reduction of single room occupancy (SRO) units in New York between the 1950s and 1980s meant that the most needy and low-income adults lost their primary foothold in the housing market. First built in response to an influx of migrants and immigrants looking for work in northern industrial cities during the first decades of the twentieth century, SROs have a long history of providing accommodation to single adults and families unable to afford full apartments. Many middle-class New Yorkers also chose to live in SROs early in the century, finding the affordability and convenience of hotels more attractive than alternative arrangements in apartment buildings. Most prevalent on Manhattan’s West Side, these hotels frequently became home to stage professionals and other artists interested in living close to the Theater District.

Following World War II, however, SROs and rooming houses gained a reputation as poor people’s housing, where deteriorated conditions and overcrowding created substandard living situations for tenants. This perception prompted New York City to institute Local Law 24, a measure which banned the new construction of private SRO units and the conversion of apartments into rooming houses. This 1954 law, along with several subsequent measures that tightened building codes and created strict new regulatory standards for SROs, led to a dramatic reduction in the number of private SRO units available to New Yorkers.

SRO hotels in New York City were particularly vulnerable to conversion or demolition because of a city tax abatement program called J-51. Initiated by the city in 1955, J-51 created incentives for converting SRO units into market-rate apartments, commercial hotels, or offices. Federal urban renewal programs like Title I also led to the condemnation and demolition of the SRO stock, particularly in Midtown Manhattan.

While the exact number of SRO units lost in New York City between 1955 and 1995 is difficult to establish with certainty, the most reliable studies show that about 200,000 SRO units (including converted apartments and hotels) existed in the middle of the twentieth century. New York City has retained fewer than 40,000 of these units, of which more than 11,000 are now owned and operated by nonprofit supportive housing sponsors. The remaining units are in commercial SRO buildings, many of which are owned by landlords who fail to provide clean, safe and affordable housing to their tenants.

After the J-51 tax abatement became available, SRO units began to disappear at an alarming rate, particularly in gentrifying neighborhoods like the Upper West Side. The displacement of permanent tenants eventually became so severe that in 1973 Mayor Lindsay established a new unit to focus on the needs of SRO tenants in New York. This unit, called the Mayor’s Office of SRO Housing, took responsibility for monitoring and inspecting SROs, advising the Mayor on policy issues related to SRO housing, and advocating on behalf of SRO tenants facing sub-standard living conditions, eviction, or harassment.

In 1981, as the Mayor’s Office of SRO Housing took on greater responsibility for capital financing programs, it formed the West Side and East Side SRO Law Projects to assume many of its tenant advocacy responsibilities. The shift toward development work within the Mayor’s Office of SRO Housing also corresponded with a seminal consent decree, Callahan v. Carey (1981). This decision required New York localities to provide emergency shelter for those without housing. The city, faced with a mushrooming homeless population and a mandate to find shelter for everyone in need, realized that SROs represented a crucial component of an overall homeless housing strategy.

The Callahan v. Carey decision coincided with a national reevaluation of mental health funding, largely in response to a study by the Institute for Mental Health. The study found serious gaps in services for people who had been deinstitutionalized from psychiatric hospitals. In response, federal and state funding programs began to appear for community outreach to the homeless mentally ill, as well as for the provision of mental health services at non-licensed facilities. By prioritizing housing over hospitalization and social workers over psychiatrists, these new mental health programs offered highly cost-effective alternatives to in-patient psychiatric care, while reaching a broader population.

As visionary nonprofit housing developers across New York City began to develop supportive housing projects during the early 1980s, the Mayor’s Office of SRO Housing responded by creating a rehabilitation financing stream known as the SRO Loan Program. The creation of the SRO Loan Program, in combination with a 1985 city moratorium banning the conversion or demolition of SRO buildings, reflected an emerging recognition on the part of Mayor Koch’s administration that the loss of SRO units led directly to increases in homelessness. Modestly funded at first, the SRO Loan Program moved to the New York City Department of Housing Preservation and Development (HPD) in 1987, and thereafter played an instrumental role in financing supportive housing throughout New York City.

Between 1982 and 1987, New York City’s average daily shelter population increased by more than 250%, from about 3,800 to more than 9,600 single adults. Facing this catastrophic rise in homelessness, the Koch administration attempted to make permanent its 1985 moratorium on SRO conversion and demolition. In spite of the initial success of this effort, the legislation was overturned on appeal by a New York State court in 1989. In the intervening four years, however, the SRO Loan Program, along with new programs such as the federal McKinney Homeless Housing Assistance Program and the Low Income Housing Tax Credit Program (responses to a burgeoning national homelessness crisis), helped attract a new group of nonprofit housing developers to supportive housing. Building on the early experiences of a few pioneering nonprofit organizations, this second generation of supportive housing providers purchased and renovated many buildings around the city that might otherwise have been abandoned or converted. These efforts set the stage for the blossoming of supportive housing projects throughout New York and around the country during the 1990s. By the end of 2012, there were over 45,000 units of supportive housing in New York. The majority were located in New York City, but supportive housing has thrived in communities across the state.

Early precedents

The practice of combining housing with social services had a number of precedents in New York, as did the notion of linking nonprofit sponsors with SRO buildings. As early as 1964, a consortium of community groups performed a six-month experiment in which they offered on-site social services to tenants of an SRO at 207 West 85th Street. In the late 1970s and early 1980s, a number of pioneering nonprofit groups formulated a new model emphasizing good management, the upgrading of facilities and the provision of social services at SROs. Groups like Project FIND, St. Francis Friends of the Poor and the Committee for the Heights Inwood Homeless (CHIH) played instrumental roles in establishing this innovative approach

Project FIND, a community-based organization serving the needs of low-income seniors on Manhattan’s West Side, was the first nonprofit group to manage an SRO in New York. Created as part of a national demonstration project on elderly advocacy in 1967, Project FIND was an early vocal opponent of the destruction of West Side SROs and a leader in the fight to extend tenants’ rights to SRO residents. In 1975, the agency obtained a management and operating lease on the Woodstock Hotel, a former luxury hotel located in the heart of Times Square. Originally featuring such amenities as a fountain pool with live alligators, the Woodstock had fallen into deplorable condition with only 80 of its 320 rooms habitable. Project FIND’s goal was to rehabilitate the building into permanent housing for low-income elderly persons.

Through government job-training contracts and the meager rent roll, Project FIND slowly renovated rooms and built occupancy to a level high enough to sustain basic building operations. In 1979, the agency was able to buy the building using a purchase money mortgage. Given a dearth of government capital and operating funding, Project FIND was forced to operate and rehabilitate the building over the next 20 years on shoestring budgets and an amalgam of small city and state grants, support from church groups and tenants’ rents. Finally, in the early 1990s, the building received funding from HPD’s SRO Loan Progress for a total refinancing and renovation.

The provision of support services in the building began slowly. In 1977, Project FIND opened the Woodstock Senior Nutrition Center, funded by the New York City Department for the Aging. Later, through a liaison with the New York City Human Resources Administration, crisis intervention social workers were placed in the senior center. St. Vincent’s Hospital also began to operate a drop-in medical clinic. With this collection of services, the Woodstock became a scaled-down precursor to the supportive housing model.

Five years after the initial experiment at the Woodstock, two Franciscan priests, John McVean and John Felice, began renovating a building on East 24th Street with the intention of creating 97 units for mentally ill and low-income tenants. St. Francis I, developed in 1981 with private funding, offered on-site supportive services to tenants, thereby creating the prototype of what would later be called supportive housing.

St. Francis Friends of the Poor opened a second project, St. Francis Residence II, three years later, using an Article 8A loan from the city (a funding source targeted to the replacement of building systems) and a Special Needs Housing Act grant from the state Division of Housing and Community Renewal (DHCR). In 1983, the Special Needs Housing Program was transformed into the Homeless Housing Assistance Program (HHAP) in response to an increase in homelessness across the state. HHAP is now a major source of funding for supportive housing projects in communities throughout New York.

As work began on St. Francis Residence II, the Committee for The Heights Inwood Homeless began transforming an apartment building on West 178th Street into 55 units of supportive housing for the homeless. While the St. Francis projects had relied on simple financing packages, renovation of this building, known as “The Heights,” required an extremely complex combination of funding sources, including a low interest Participation Loan from the city (for capital and acquisition costs), a state Special Needs Housing Act grant, private bank loans and federal tax credits.

Operating costs for The Heights were subsidized through a federal Section 8 Moderate Rehabilitation contract, which provided rental support for low-income tenants. Working in partnership with Columbia University Community Services (now called the Center for Urban Community Services), CHIH offered on-site case management to all tenants at The Heights and created a number of tenant employment opportunities within the building. CHIH has since developed four other supportive housing sites in Upper Manhattan -- The Edgecombe, The Delta, The Stella and The Rio.

A variety of other projects also played important roles in the early formulation of the supportive housing model. Between 1982 and 1986, Catholic Charities of Brooklyn and Queens extended the supportive housing movement to Brooklyn, redeveloping four church-owned properties under its Caring Communities initiative. This project involved the conversion of three vacant schools and a convent into 225 units of permanent supportive housing for homeless single adults. Catholic Charities put together 12 separate funding sources to finance the project, including an HPD participation loan, federal Section 8 Moderate Rehabilitation rental support and state Homeless Housing Assistance Program funding.

Between 1983 and 1988, the West Side Federation for Senior Housing assembled a similar patchwork of city, state and federal funding to transform Kowal House, a vacant SRO building, into 72 units of supportive housing. Located at Manhattan Avenue and West 107th Street, the project provides housing and services to single adults over 50 years old, many of whom suffer from mental illness.

Capitol Hall, a 202-unit SRO building redeveloped by a local block association, demonstrates the central role local community organizations can play in preserving and revitalizing SRO housing. Located on West 87th Street, Capitol Hall was a fully occupied commercial SRO, which was rapidly deteriorating because of landlord neglect. Faced with a proposal to convert the building into luxury apartments and displace existing tenants, members of the West 87th Street 100 Block Association approached Goddard-Riverside Community Center and The Settlement Housing Fund in an effort to preserve the building as an SRO. Members of the block association formed the Hotel Preservation Corporation in 1981, purchased Capitol Hall in 1983, and began renovations the following year. The project created new opportunities for homeless housing while preserving and up-grading units for existing SRO residents, thus providing a model which subsequent developers of supportive housing providers would emulate.

Supportive housing takes hold

The emergence of new federal, state and local funding programs since the mid-1980s has resulted in the popularization of the supportive housing model. The passage of federal Low Income Housing Tax Credit legislation in 1986, for example, provided the opportunity for private investors to receive tax breaks in exchange for direct investments in low-income housing. Intermediary organizations like the Local Initiatives Support Corporation (LISC), the Corporation for Supportive Housing and The Enterprise Foundation have played a pivotal role in helping nonprofit developers across the country syndicate these credits, thereby generating much-needed equity for projects.

In 1988, New York established the SRO Support Subsidy Program to provide flexible services funding to nonprofit operators of SRO housing. The SRO Support Subsidy Program currently assists over 75 percent of the supportive housing units in the state with matching funding for New York City-based projects provided by the New York City Department of Homeless Services. A significant joint initiative between the state and the city was signed in 1990 to create thousands of new units of supportive housing for the homeless mentally ill. Called the “New York/New York Agreement,” this program successfully ensured the construction financing and ongoing operation of new projects to address the needs of homeless persons with psychiatric disabilities.

Throughout the 1990s, sustained by government and private resources, supportive housing proliferated and diversified. Project sponsors ranged from large social service agencies such as Catholic Charities and Volunteers of America to small neighborhood groups in communities throughout New York. The nation’s largest supportive housing project, the 652-unit Times Square Hotel, has demonstrated that the complexities involved in negotiating the financing, renovation and management of even extremely large buildings are not beyond the capabilities of innovative nonprofits.

Renovation of the former welfare hotel began in 1991 when Common Ground purchased The Times Square. Because of the project’s size and scale, it was initially met with skepticism by those in the community. Common Ground carried out an extensive outreach effort to secure support from neighborhood groups, business leaders, long-time tenants of The Times Square and city government. With its partner, the Center for Urban Community Services, Common Ground used funding from federal, state and local programs to create a project that unites the most diverse range of tenants imaginable. In addition to housing and social services, Common Ground has created an economic development and job training program, offering on-site and off-site employment opportunities to supportive housing tenants around the city.

Building upon success

The growth of the supportive housing movement has had a profound positive impact on the homeless situation in New York. Nearly 60% of supportive housing tenants in New York City are referred directly from shelters; as a result, the number of individuals in nightly municipal shelters began to fall dramatically.

As the field of supportive housing became more professional, project sponsors recognized the need to form an organization that would advocate on behalf of their needs and through which they could share knowledge and expertise. Organized in 1988, the SRO Providers Group (now the Supportive Housing Network of New York) plays an instrumental role in shaping public policy and promoting effective management and services through a combination of educational and technical assistance programs offered to supportive housing developers, managers and service providers.

With more than 45,000 units of supportive housing, New York continues to lead the nation in providing a permanent solution to homelessness. Offering a wide array of projects and services, New York’s nonprofit providers have developed an extensive knowledge base in the fields of development, management and service provision. As a result, supportive housing boasts remarkably high tenant retention rates. The ability of nonprofits to leverage private and public finding has allowed them to offer the most cost-effective solution to homelessness currently available.

Supportive housing projects in New York provide secure, stable, high-quality accommodations and services to many populations who would otherwise end up in more expensive, institutional settings such as congregate shelters, prisons or public institutions. In New York City, the average daily operating cost of a supportive housing unit is $46, compared to a day in a shelter ($68), jail ($129), a psychiatric hospital ($467) or community hospital ($755) (2002 numbers).

The field of supportive housing continues to mature: In recent years, providers have created supportive housing for families, youth aging out of foster care, ex-offenders and even grandparents raising grandchildren. As it grows, supportive housing will continue to transform and enhance individual lives and communities throughout New York.