New York City has been crumbling under the pressure of a homeless crisis — but an innovative experiment could turn the tide

• New York City has the largest homeless population in the United States with 77,000 homeless people.
• The De Blasio administration is tackling the issue by closing hundreds of low-quality shelter sites and building 90 new ones, including an innovative Bronx facility that combines a 200-bed shelter with more than 100 units of affordable housing.
• Experts say that the newly-opened building, and other shelters like it, may be "a step in the right direction," but the money may have been better spent directly on affordable housing.

With around 77,000 homeless people, New York City has the largest homeless population in the country.

And while that constitutes a crisis, most who work on the issue say homelessness is really two problems: a lack of quality homeless shelters and a lack of affordable housing.

Those two issues feed the larger vicious cycle of homelessness, where many people become homeless because they can't find an affordable home and then stay homeless due to shelters that don't deliver adequate services to get people back on their feet.

Muzzy Rosenblatt, the CEO of nonprofit shelter provider Bowery Residents' Committee, and Steven Banks, New York's commissioner of social services and the man tasked with alleviating the crisis, think they have a solution. Or at least a start.

In February, BRC and the City opened the Landing Road Residence, a $62.8 million facility in the Bronx that uses a 200-bed homeless shelter to subsidize 135 low-income apartments.

Landing Road is able to do that because BRC developed, owns, and operates the building. Most other shelters are housed in buildings owned by private developers who rent the space at market rates to nonprofits, who ask the city to reimburse its costs.

Rosenblatt told Business Insider that several years ago he had an epiphany: why not own the actual building, take out the income that a landlord would have kept as profit and use it to subsidize permanent housing. 

"[This model] takes the cycle and makes it virtuous," said Rosenblatt, who contends that by creating permanent housing, the demand for shelter shrinks, which allows the city to spend less on emergency housing and avoid spending on low-quality shelters simply to meet demand.

Rosenblatt and the De Blasio administration are hoping that Landing Road becomes the city's model for shelters, as the administration seeks to revamp the shelter system by closing more than 360 sites and building 90 new facilities as part of its Turning The Tide program. 

But some experts have questioned the efficacy of funneling hundreds of millions of dollars into building new shelters, even those like Landing Road, when the federal government's Department of Housing and Urban Development and a vast cross-section of researchers say the best solution to homelessness is skipping shelters altogether and placing homeless people directly in affordable housing and providing support services, a strategy known as Housing First.

"It looks good on paper. It's not that it's a bad idea, but there are better ideas that cost less," Dr. Deborah Padgett, a New York University professor and leading researcher on homelessness, told Business Insider. "That's what baffles me."

Business Insider recently got an inside look at the Landing Road Residence — here's what it's like:

Landing Road is the city's newest homeless shelter, located on a cul-de-sac overlooking the Major Deegan expressway in the Bronx. The bottom two floors are a 200-bed shelter for single men. The rest of the building is affordable apartments ranging from $470 to $1000 a month.

The facility's model is based on the commonly accepted idea that the city's homelessness issue is tied to a lack of affordable housing. "The new face of homelessness," Banks told Business Insider, is working people who fall into the shelter system because their income can't cover their rent.

Since 1994, homelessness has exploded by over 100% in New York, while rents have gone up around 19% in real dollars, household income has actually gone down 6.3%, and the city has lost hundreds of thousands of rent-stabilized apartments.

Source: DHS