Besty Idelfonso spent months sleeping on the floor of her mother's Bronx apartment. Homeless and on a regimen of antiretroviral drugs, she needed a stable place to stay. A social worker referred her to the city's HIV/AIDS Services Administration (HASA), which provides rental assistance to poor New Yorkers with the disease, and Idelfonso pinned her hopes on the program. Having her own apartment would mean she could be reunited with her four-year-old twins.

But then, last spring, HASA decided to start paying only 50 percent of the normal fee for apartment brokers.

"The brokers expected me to pay the other half," says Idelfonso, whose sole source of income is the monthly $359 in cash she gets from HASA. The broker's full fee equaled one month's rent; her half would have come to $550. "I didn't have the money. I kept looking for places where they would accept the half fee, but it was a big problem." Finding an apartment under the HASA program took her seven months.

Stories like Idelfonso's are at the center of a bitter dispute between the Bloomberg administration and AIDS housing groups over the effects of a nine-month-old policy shift that slashed fees for real-estate brokers. The groups say that now brokers are refusing to find apartments for their HASA clients, mostly homeless people whose compromised immune systems require them to avoid shelters. Landlords, they add, are also reluctant to accept a HASA voucher instead of an upfront security deposit.      

HASA serves nearly 46,000 people, and more than half live in private apartments paid for in whole or in part by rent subsidies. The city says the new policy changes have had no impact on housing homeless people with symptomatic HIV or AIDS. Idelfonso and others claim the city has created a crisis. The resulting standoff has taken a surreal turn, as the two sides describe different worlds.

A broad shift in policy

The changes came as the Bloomberg administration lost legal and political battles to reduce HASA spending. Earlier this year a federal judge stopped an effort to trim the number of HASA caseworkers, and over the last two years the City Council restored $7 million in cuts to supportive housing services. Nonetheless, while the city's caseload climbed 6.5 percent in the last three years (a rise of about 2,000 people), spending per case declined 3.3 percent in 2011, according to the Independent Budget Office.

In March, the city's Human Resources Administration (HRA), which oversees HASA, implemented the new rule on brokers' fees and security deposits, hoping to save an annual $4.8 million. The policy affected all of its housing programs and was not aimed specifically at HASA. "HASA has seen little change in the number of requests to approve new housing since the policy went into effect," says a HASA spokesperson.

But nonprofit service providers insist that the city is out of touch with reality. "Many clients do housing searches on their own or with community-based case managers, not with their HASA case managers," says Kristin Goodwin, director of policy and organizing at Housing Works. "It seems disingenuous to me for them to claim that it is a rare occurrence when we hear it daily from our case managers and our clients in housing searches."

Differing realities

The dispute came to a head at a July 26 meeting of AIDS service providers, when Shubert Botein Policy Associates presented the findings of a survey conducted for Housing Works after the first two months under HASA's new rule. Of the 238 case managers who responded, 94 percent called the change a significant barrier to finding housing, more than half said it had prevented the placement of at least one client, and 61 percent said it was taking significantly longer to find apartments than the previous year.

A "bizarre interaction" then unfolded between the survey's author, attorney Virginia Shubert, and HASA's new deputy commissioner Jacqueline Dudley, recalls Sean Barry, executive director of VOCAL-NY (formerly the New York City AIDS Housing Network). "The deputy commissioner said, 'Look, we haven't heard this is a problem from clients or providers,' and she was saying that in a roomful of housing providers. The room erupted. She just wouldn't hear it."

Harriet Cohen says the effects of the policy change were immediate. "Over a period of four or five weeks, 35 brokers dropped us," says Cohen, housing director for the AIDS Center of Queens County. "Many of the brokers that we were dealing with just don't want to deal with us anymore. It's a terrible problem. I haven't done the count since, but I hear all the time from my people who say, ‘I made five calls, and no one wants to work with me.'"

The policy's fallout convinced the group Harlem Works, one of the city's largest service providers, to raid its own funds. Since March, the number of apartment brokers willing to deal with its HASA clients plummeted from 85 to 5. In desperation, the group began to pay full fees to brokers. As of last week, Harlem Works had spent $27,623 for brokers' fees to secure 41 apartments.

In an August follow-up meeting with HASA officials, service providers asked for the contact information of brokers who were still working with the agency. "We got a list of four brokers," says Goodwin. "The list wasn't even given to us in writing, but was dictated to someone." Housing Works distributed the phone numbers. "Everyone who tried to contact these brokers has not been successful in even getting a hold of them. One broker's office had an outdated phone number," Goodwin says. "We asked again, and the HASA advisory board also asked, and so far we have not seen a real list of brokers."

In response to a City Limits inquiry, HASA said "about three dozen" brokers are currently working with its clients, but "due to legal consideration" it would not provide the list. "If they have a list," Goodwin asks, "why are they not sharing with the community?"

Part of the trouble is that many brokers are unlicensed, explains Cohen, and therefore do business through the offices of permitted agents. "You're already splitting your fee with that licensed broker, so let's say you find a new HASA apartment: You'll get 50 percent of the 50 percent. Who wants to do that? How hard do you want to work? Will you work with us at all?" There's also the bureaucracy and delay involved in getting paid from the city. "We lose apartments all the time to people who can pay upfront," Cohen says.