NYC homeless in shelters will be required to save part of their income for permanent housing

This week, the state changed a rule that will affect how homeless New Yorkers are able to transition into permanent housing.

Following state law, the city will now require individuals sleeping in homeless shelters to save about 30 percent of their income for future permanent housing, the New York Daily News first reported. The funds will be placed in a savings account maintained by the city and can be accessed, with interest, once individuals find permanent housing or are transitioning out of a shelter.

Municipalities are required to charge homeless individuals for rent to stay in shelters under New York state law—except for New York City, which became exempt from that law in 2010. The problem is that the city’s exemption was done “in a way in which really important tools were not provided to help people get back on their feet,” Steven Banks, commissioner of the city’s Department of Social Services, told the Daily News.

The requirement for savings was included in the 2018 state budget in a deal to continue with the city’s exemption.

“The savings plan implemented by the city is something they are required to due pursuant to state law and it is certainly better than the requirement to pay rent for shelter, as is the case in other localities across the state,” Giselle Routhier, policy director at the Coalition for the Homeless told Curbed in a statement.

“However, at the end of the day, people are not homeless because they are mismanaging their money or are unable to save—they are homeless because they cannot afford increasing rents in New York City with the insufficient wages that many low-income workers are receiving,” Routhier added.

According to the Department of Homeless Services (DHS), the program, called Income Savings Plan, will first apply to single adults with earned income who don’t qualify for cash assistance, requiring them to deposit around 30 percent of their income in the savings account, and will begin applying to families in 2020.

DHS will provide assistance and guidance to individuals who fail to make the required deposits and will connect them to financial counseling if needed.

“Our goal is to assist New Yorkers with saving in order to more effectively help them plan for the future and get back on their feet, ensuring they can utilize savings from earned employment income to move out of shelter into housing and setting them up for sustainable, long-term stability,” DHS spokesperson Isaac McGinn told Curbed in a statement.