The coupon program, known as Special One-Time Assistance (SOTA), covers a year’s rent for New Yorkers with a steady income who move out of the city’s shelters – and usually all the way out of NYC. Newark’s lawmakers accused the Big Apple of outsourcing their homelessness reaction while pushing New Jersey’s own supply of affordable housing.
Officials in Newark, New Jersey, voted Wednesday to lift a controversial ban on homeless families moving there with a New York City-issued rent coupon, potentially opening up new housing options as the fight for the program continues in federal court.
Faced with a legal challenge, Newark City Council agreed to pass part of a 2019 executive order that has effectively banned apartment seekers from using rent subsidies paid for by New York City. The coupon program, known as Special One-Time Assistance (SOTA), covers a year’s rent for families and individuals with a fixed income who move out of Department of Homeless Services (DHS) shelters – and usually all the way out of New York City.
But the program met with sharp criticism from Newark lawmakers, who said the Big Apple outsourced its response to homelessness while pushing New Jersey’s own supply of affordable housing.
“You just can not send people to Newark, give them a check for a year and just say you’re alone,” said Mayor Ras Baraka in 2019. “What happens after that?”
An early recurrence of the program was also marred by negligent landlords and horrific apartments, which New York City approved for lease without conducting thorough inspections.
Newark sued New York City for blocking the vouchers and passed a decree banning anyone from bringing “a needy person” to New Jersey’s largest city “with the intent of making him or her a public indictment.” Newark officials also targeted SOTA by preventing third parties, such as New York City, from paying one year’s rent in advance on behalf of the tenants.
New York City opposed and terminated the prepayments in 2020, but agreed to stop moving people to Newark while the legal process unfolded.
Newark, however, faced increasing pressure to overturn the regulation following a 2020 federal lawsuit by the Legal Aid Society and law firm Lowenstein Sandler on behalf of tenants and coupon holders who accused the city of discriminating against them and restricting their constitutional right to travel. The council voted to strike the ban on “needy people” on Wednesday.
The bill is now awaiting Baraka’s signature. Baraka’s office asked a spokesman for the city on Thursday. The spokesman provided the text of the amended order, saying the city continues to pursue its lawsuit, but did not respond to a question about beating its ban on SOTA coupons.
Newark First Assistant Corporation Counsel Gary Lipshutz also said the city has no plans to withdraw its lawsuit against New York.
“The lawsuit claims that the SOTA program is creating a public nuisance for the citizens of Newark. The amendment of the executive order does not change that lawsuit,” Lipshutz said. “Order or not, the lawsuit remains.”
New York City’s Department of Social Services, which oversees DHS and issues the coupons, welcomed the vote in a statement Wednesday.
“We are pleased that Newark has taken the important and statutory step of removing its manifestly unconstitutional ban on bringing a person in need to Newark, but we are disappointed that Newark continues to pursue its worthless lawsuit against New York. City over SOTA, “said a spokesman for the Department of Social Services (DSS), which oversees DHS. The agency did not respond to a question about whether they plan to resume relocations to Newark.
Some Newark councilors appeared to be downplaying the vote Thursday. “The legal language needs to change,” said Councilman John Sharpe James, adding that he continues to oppose the program.
“New York just started the program and didn’t tell anyone in New Jersey, and all of a sudden we got an influx of homeless people,” James said. “We almost considered it dumping them here … We have our own homelessness and economic crisis over here. We can not accept New York.”
Aide to Councilor LaMonica McIver shared the amended text of the ordinance, but questioned the impact of the changes to a city spokeswoman.
New York introduced the SOTA program in 2017 as part of an effort to address ongoing and interconnected homelessness and affordable housing crises. To qualify for SOTA, New Yorkers must spend at least three months in a DHS shelter while earning a regular income from work or federal programs. The voucher was designed to fill a gap for shelter residents who earned too much to qualify for a more common municipal rent subsidy, CityFHEPS, but who earned too little to afford an apartment in the five boroughs.
From 2017 to October 2021, more than 7,500 households moved from shelters to apartments with SOTA coupons, City Limits reported last year. About 60 percent of them took place outside of New York City, with about 1,200 people moving to Newark, according to court documents.
The program worked for many of these families, but also supported poor landlords who were eager to accept a lump sum for rotting apartments without heating or legal certification. A 2019 report from the New York City Department of Investigation found that some “SOTA families located in homes outside of New York City lived in misery under the roofs of unscrupulous landlords who collected tens of thousands of dollars in rent payments in advance.”
The time-bound nature of the program also meant that many tenants were unable to pay their rent after the subsidy expired. By early 2021, nearly 7 percent of recipients had rejoined New York City’s shelter system during the first three years of the program – a return that far exceeded any other municipal support over a three-year period, the Coalition for the Homeless reported.
In response to these issues, DHS eliminated prepayments and later adopted amendments to ensure that apartments are secure, landlords are responsive, and tenants are likely to retain their housing after their subsidies expire. The new rules limit SOTA rent to 40 percent of a household’s income and allow some tenants at risk of eviction to receive another, six-month subsidy.
“New York City has made significant improvements to the SOTA program so that it can now be useful to many people who want to move out of shelter and resume their lives in the community,” said Josh Goldfein, a staff attorney with Legal Aid’s Homeless Rights Project. told City Limits in October 2021.
The rule change could clear the way for some of the 8,500 families with children in DHS shelters to find permanent housing in another city just a short train ride with PATH from Manhattan.
SOTA consumption has plummeted since 2019, when local restrictions in Newark and nearby Jersey City limited housing options, and the COVID pandemic took a heavy toll on the housing search and certification process.
Nearly 2,000 SOTA recipients secured permanent housing in the 2020 fiscal year, including 913 who moved to apartments outside of New York State, according to DHS data shared with City Limits last year. That number was halved during fiscal year 2021: Fewer than 950 households secured apartments with SOTA grants from July 1, 2020 to June 30, 2021, DHS said.
Both figures paled in comparison to the financial year 2019, when 2,741 households used SOTA to rent an apartment.
DHS has refused to share data on where the recipients have rented in recent years. City Limits submitted a request from the Freedom of Information Act for information on obtaining a listing of relocation sites in October 2021, but DHS has not yet provided this information.
DHS did not say how many SOTA recipients returned to the city’s shelters in fiscal year 2021 when asked last year. The board instead pointed to the mayor’s management report for 2021, which highlights an overall decline in the number of households returning to the shelter system after using a grant, but which does not distinguish between different vouchers.