The 14-building deal marks the third time the city has purchased cluster site properties to convert into permanent homes. It also illustrates the complicated reliance on bad landlords to provide temporary shelter—and the business of handing those same owners tens of millions of dollars for their buildings.

New York City housing officials have closed on a deal to turn 14 so-called cluster site homeless shelters in the Bronx into permanent affordable housing for hundreds of families.

The $122 million purchase, completed June 23, covers 777 units of affordable housing, including 554 apartments for families experiencing homelessness, according to the city’s Department of Social Services (DSS). Together, those families consist of more than 1,500 people, including hundreds of children, the agency says. Some were already living in the units while others have moved in from other locations, including the recently shuttered Ellington Hotel in Morningside Heights. 

A review of property records shows that 391 units are specifically reserved for homeless families, while the remaining units will go to families or individuals who earn no more than 60 percent of Area Median Income—$50,160 for an individual or $71,580 for a family of four. A DSS spokesperson says homeless families will reside in units not explicitly set aside for families leaving shelters. 

The deal brings Mayor Bill de Blasio closer to his goal of ending the city’s reliance on cluster sites—privately owned apartments rented at exorbitant rates to house families experiencing homelessness. The strategy, which began under Mayor Rudolph Giuliani, has enriched some of New York City’s most notoriously bad landlords, even as they failed to maintain safe living conditions. The most damning failure occurred in 2016, when a burst steam pipe scalded and killed two young girls living in a Hunts Point cluster apartment and fueled the urgency to end the policy. The owner, Moshe Piller, was previously named on the Public Advocate’s Worst Landlord List.

The 14-building deal, which includes one University Avenue complex spanning two addresses, marks the third time the city has purchased a portfolio of cluster site properties and turned them over to nonprofit housing developers to operate as permanent homes. In this case, the buildings will be run by Settlement Housing Fund, Bowery Residents Committee, MBD Community Housing Corp, Fordham Bedford Housing-Corporation, and Neighborhood Renewal HDFC.  Tenants’ rents are paid by city housing vouchers.

The buildings are located in various parts of the Bronx, including sites in University Heights, Longwood and Morrisania.

The city has now converted or closed 95 percent of the roughly 3,650 cluster units that existed at the program’s peak in January 2016, says DSS Commissioner Steve Banks, who oversees the Department of Homeless Services.

“These bold transactions are crucial tools for addressing homelessness and finally ending the Giuliani-era cluster program,” Banks said in a statement. “This is how we are transforming our shelter system and ensuring that New Yorkers experiencing homelessness receive the supports and resources they deserve.”

The conversions come with the number of families living in DHS homeless shelters on a steady decline. There were 8,305 families—with about 11,000 adults and 14,500 children—staying in a DHS shelter on July 15, according to the agency’s most recent daily census. 

The number, while still disturbingly high, marks an improvement compared to the past several years when there were more than 10,000 families with children staying in DHS shelters on average every month from December 2012 through December 2020. The average number of homeless families in DHS shelters peaked at 13,164 in November 2016. 

City officials credit the efforts of agency staff in helping families secure housing and driving down the shelter population, as well as policies, like a right to an attorney in housing court, that have prevented families from becoming homeless in the first place. Eviction protections instituted during the COVID-19 pandemic have also stopped an untold number of families from entering the shelter system.

“Through innovative strategies like this we have finally been able to break the trajectory of growth in homelessness,” Banks says.

The cluster site deals nevertheless illustrate the complicated reliance on slumlords to provide temporary shelter to families experiencing homelessness—and the business of handing those same owners tens of millions of dollars for their buildings.

The city paid the Podolsky real estate family $173 million for 17 properties in 2019—a hefty sum for two brothers, Jay and Stuart Podolsky, who have been charged with harassing low-income tenants, convicted of grand larceny and investigated for tax fraud while renting out cluster site units to the city. Two years later, the Podolskys continue to oversee substandard conditions at another former cluster site converted to permanent housing in Harlem, as City Limits reported earlier this month.

The 14 buildings purchased by the city last month account for 1,105 open violations with the Department of Housing Preservation and Development and more than 13,000 overall. 

Address	Units	Unit Details	Former Owner*	Nonprofit	Open HPD Violations	Total violations
1206 Westchester Avenue aka 1083-1087 Bryant Avenue	104	52 at 60% AMI Homeless Units, 52 at 60% AMI	Westchester Realty LLC – Alan Fried	Neighborhood Renewal HDFC	53	1,863
1410 Grand Concourse	35	18 at 60% AMI Homeless Units, 17 at 60% AMI	1410 HOLDING LLC – Joseph Friedman	Neighborhood Renewal HDFC	54	417
1575 Townsend Avenue	47	24 at 60% AMI Homeless Units, 23 at 60% AMI	YOUNG & BOOBY REALTY CO – Joseph Friedman, Samuel Berger	Neighborhood Renewal HDFC	136	1,083
1454 Grand Concourse	58	29 at 60% AMI Homeless Units, 29 at 60% AMI	1454 HOLDING LLC – Joseph Friedman	Neighborhood Renewal HDFC	76	1088
1097 Walton Avenue	62	31 at 60% AMI Homeless Units, 31 at 60% AMI	1097 HOLDING LLC – Sol Singer Joseph Friendman	BRC	110	607
1245 Findlay Avenue	67	34 at 60% AMI Homeless Units, 33 at 60% AMI	1245 HOLDING LLC – Edwin Biblioni, Joseph Friedman	BRC	105	716
1177 Walton Avenue	64	32 at 60% AMI Homeless Units, 32 at 60% AMI	1173 HOLDING LLC – Joseph Friedman, Acevedo Santiago, Elias Polanco	BRC	64	781
1805 University Avenue	26	13 at 60% AMI Homeless Units, 13 at 60% AMI	UNIVERSITY HOLDING LLC – Joseph Friedman, Joseph Halpert, Juan Belliard	Mid Bronx Desperados Community Housing Corp.	17	421
1815 University Avenue	26	13 at 60% AMI Homeless Units, 13 at 60% AMI	UNIVERSITY HOLDING LLC – Joseph Friedman, Joseph Halpert, Juan Belliard	Mid Bronx Desperados Community Housing Corp.	34	467
1857 Walton Avenue	44	22 at 60% AMI Homeless Units, 22 at 60% AMI	1857 WALTON REALTY CORP – Mark Halpert, Altagracia Escoto, Joseph Friedman	Mid Bronx Desperados Community Housing Corp.	58	766
1881 Walton Avenue	35	18 at 60% AMI Homeless Units, 17 at 60% AMI	1881 WALTON LLC – Joseph Friedman, Christina Luna	Mid Bronx Desperados Community Housing Corp.	85	765
2160 Walton Avenue	48	24 at 60% AMI Homeless Units, 24 at 60% AMI	2160 WALTON LLC – Mark Halpert, Bernardo Pena	Mid Bronx Desperados Community Housing Corp.	85	1054
373 East 188th Street	56	23 at 60% AMI Homeless Units, 23 at 60% AMI	COB HOLDING LLC – Mark Halpert, Hector Gonzalez	Fordham-Bedford Housing Corporation	49	1019
2290 Davidson Avenue	55	28 at 60% AMI Homeless Units, 27 at 60% AMI	2290 DAVIDSON ASSOC. LLC – Joseph Friedman and Sol Gross, Yehuda Fyrer, Adolfo Vasquez	Fordham-Bedford Housing Corporation	109	1334
2344 Davidson Avenue	60	30 at 60% AMI Homeless Units, 30 at 60% AMI	2344 OWNERS LLC – Joseph Friedman, Juan Madrid	Fordham-Bedford Housing Corporation	70	1080

Joseph Friedman, listed as head agent or officer of most of the properties and the signatory on several mortgage documents, did not respond to a phone call seeking comment. Friedman and another LLC officer, Sol Gross, were cited for hazardous conditions in six shelter facilities following a 2010 investigation by then-Comptroller John Liu’s office. Their firm Pilgrim Icahn Realty managed 59 shelter sites at the time, according to Liu’s report.

During the pandemic, the property owners have filed multiple cases in Bronx Housing Court to evict tenants living in buildings also used to house the homeless. The company known as 1363 Findlay Holding LLC, for example, has pursued nine evictions over the past 18 months, according to a review of court filings. 

Advocates, however, say the move to end the use of cluster sites is important for securing permanent housing and for ending payments to bad landlords who charge the city top dollar for dangerous, temporary accommodations. 

“We support converting the clusters to permanent housing but it’s important to make sure residents know what their rights are during these conversions and that all maintenance issues are fully addressed quickly,” says Coalition for the Homeless Senior Policy Analyst Jacquelyn Simone.

So far, several problems persist in at least two of the recently-purchased buildings, according to residents who contacted City Limits following their moves.

One woman said she and her family encountered serious issues the day they moved into a building on Davidson Avenue. There were no knobs on the doors, no smoke detectors and the refrigerator was infested with roaches, she said in an email.

Another woman said she faced similar problems after the city moved her out of the Ellington Hotel—a Podolsky property that the city last month stopped using as a homeless shelter—and into a second site on Davidson Avenue. 

She said the building superintendent charged her $60 for a key and that fire escape windows did not lock. She asked to remain anonymous for fear of retaliation.

When asked about those complaints, a DSS spokesperson said the buildings will be renovated to provide safe permanent housing for the families.