In a significant development, the Department of Homeless Services (DHS) in New York City has been directed to enforce layoffs and cost reductions, an order stemming from City Hall’s efforts to lower overall expenses.
This move comes despite Mayor Eric Adams’ earlier statements indicating that the city’s social support systems were already under significant strain due to a rise in migrant arrivals and an escalating housing shortage across the five boroughs.
Although budget agreements with the City Council are still pending, City Hall has issued the order for nonprofit organizations to reduce previously approved funding by 2.5% in 2024. This decision could invalidate already settled agreements and potentially lead to staff layoffs.
Catherine Trapani, Executive Director of Homeless Services United, expressed concern, indicating that these cuts to essential nonprofit services are being made at a time when demand is overwhelming. She said, “The mayor is moving ahead with a plan to cut critical non-profit services at a time of overwhelming need.” Most contracts between the city and nonprofits are personnel-based, meaning a 2.5% cut would directly impact individuals and programs.
DHS Administrator Jocelyn Carter’s memo explicitly suggested layoffs, increasing social worker caseloads, and curtailing service hours to achieve savings. However, fixed costs, such as rent payments, are exempt from these reductions.
Over 97,000 people are currently accommodated in shelters and emergency relief centers run by the DHS and public hospital corporations. Around half are migrants from the southern border who sought asylum from violence and economic instability in the Caribbean and South America over the past year.
In an effort to manage the overwhelming influx of people, officials have established 160 emergency shelters, primarily in hotels and motels throughout the city. Additionally, nine Humanitarian Emergency Response and Relief Centers (HERRCs) have been opened.
Neha Sharma, a spokesperson for DHS, did not dispute any of the cost-reduction methods detailed in the City Hall memo. She emphasized that while most of the DHS funding is for contracted services, the agency is working to minimize the impact of these savings on its network of providers. Sharma added that contracted providers are being given the flexibility to adjust their budgets to retain quality staff and drive efficiency savings. She said, “Despite the fact that the majority of DHS funding is for contracted services, the agency has worked to ensure that there is minimal impact of DHS savings on our provider-partner network. Which is why we are providing contracted providers the flexibility to shift funding within their budgets to attract, incentivize, and retain quality staff to produce efficiency savings.”
