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Forgotten Families: Department Of Investigation Finds 'Multiple Flaws' With SOTA Program

NEW YORK (CBSNewYork) – Our nearly year-long reporting on the "forgotten families" has prompted change.

They're homeless families relocated from New York City shelters into squalid conditions in New Jersey.

The same week New Jersey's largest city sued New York over the controversial program, the woman tasked with rooting out corruption releases a damning report about the program.

CBS2's Lisa Rozner was the first reporter to sit down with her Thursday.


Landlord Sean Young
Landlord Sean Young following court appearance in New Jersey., (credit: CBS2)

In February, landlord Sean Young ran from Rozner, after CBS2 found he was taking money from New York City and renting New Jersey units to relocated families with no heat, hot water or lights - plus vermin infestations.

Around that time, New York City's Commissioner of Homeless Services Steve Banks told CBS2 "I learned about this as a result of your reporting."

"We're working with law enforcement," he added.

That law enforcement was New York City's Department of Investigation, or DOI, which is the city's independent watchdog.

Thursday, that agency released a report on the SOTA - the Special One Time Assistance - program which gives landlord's like Young a year's rent up front for a lease to house homeless families.

New York City workers were supposed to inspect the apartments before handing over the money.

But Margaret Garnett, commissioner of the DOI, says the report found they were "under trained, not very knowledgeable housing specialists."

One filled out a near-perfect report for a New Jersey apartment without going inside. Another approved a home even though there were 52 open violations.

"Some of these forms were falsely filled out by DHS staff," Rozner said.

"That's right," Garnett said.

"Did the Department of Investigation look at whether this was a widespread problem?" Rozner asked.

"Yes. So I will say we have several ongoing investigations into housing specialists and the housing specialists program," Garnett said.

WATCH: Can New York City's SOTA Program For Homeless Families Be Fixed?

Young rented 19 unites to SOTA recipients in Newark and East Orange. The average SOTA lease is $17,000.

"For someone like Sean Young, that amounts to more than $300,000 that he took from New York City taxpayers," Rozner said. "Are we going to recoup that money?"

"I know the city currently is in legal action," Garnett said.  Rozner found out the NYC Department of Social Services Office of Claims and Collections is trying to recoup some of the money from Young and other landlords.  A DOI spokesperson said if that fails, the NYC Law Department may become involved.

In East Orange, New Jersey, Young eventually pleaded guilty to multiple housing violations in East Orange, New Jersey. But there will be no criminal charges.

DOI found Department of Homeless Services paperwork didn't require landlords outside of New York City to affirm their apartments were habitable. But brokers, who were on average paid by New York City more than $2,500 per unit, did sign that the apartments were OK.

Rozner asked about SOTA clients being pressured to move into these units.

Rozner asked about SOTA clients being pressured to move into these units, and whether DOI looked at the strategies DHS used to relocate families.

Garnett again said there are a number of investigations ongoing into housing specialists and the housing specialist program so she couldn't comment on that.

Rozner asked if her investigation would potentially encompass kickbacks, and Garnett replied "potentially, yes," but wouldn't address whether it could also touch on contractors that work on DHS. She said "we are looking at a range of misconduct in the housing specialist program."

Rozner asked why DOI didn't recommend that DHS work directly with cities like East Orange or Newark, where their housing inspectors are familiar with local laws.  Garnett said "What we do is recommend changes that can address corruption vulnerabilities or waste of funds."

Rozner followed up asking "But in investigating corruption, a lot of these towns in New Jersey didn't find out about these corrupt practices until these tenants came to them with horrible conditions.  They're argument is 'if we knew we could have prevented this kind of corruption.' Don't you think that New Jersey municipalities or any municipality outside of New York should be more involved?"

Garnett said "That is probably true and certainly greater cooperation with where tenants are being placed is a good idea….part of the problem is there was no reliable mechanism in place even for the people at HRA [the agency that oversees DHS] who would be the people to make that contact in Newark, or East Orange, wherever the property is located, to be aware that a client had been shown or placed in an unsuitable or unsafe housing."

Homeless Services says it's following the recommendations, and since strengthened its inspection process and is piloting handing over rent in installments to landlords instead of a full year up front.

As for how this will make a difference, DOI says it will monitor its recommendations.

A spokesperson for DHS said "We agree on the need to continually strengthen our programs, which is why we made addressing these very points our top priority over a year ago, during the first twelve months of the program. We have since implemented comprehensive apartment review standards––and we provide continual training to staff regarding the program, its enhancements, and the steps they are required to take to ensure clients are connected to safe apartments as they get back on their feet. "

Earlier this week, Newark filed a lawsuit against New York City, Mayor Bill de Blasio and HRA Commissioner Steve Banks over SOTA. Elizabeth Mayor Chris Bollwage said the city is considering joining the suit, as well.

MORE: Forgotten Families: Instead Of Faulting Flawed Program, De Blasio Slams Mayors Suing NYC For Dumping Homeless In New Jersey

"So, the intention of this initiative is very decent, very humane, and there has been a recognition that has to be made better all the time. And in fact in our conversation with Newark, the whole discussion was how do we make it better and everyone was proceeding with that understanding. That's why I find these actions so confusing," Mayor Bill de Blasio said.

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