Public Advocate Letitia James is calling on City Hall to terminate more than $98 million in contracts that would keep 11 rent-stabilized buildings in use as homeless shelters after the mayor pledged to phase out the notoriously mismanaged cluster site program.

These privately-owned buildings, located in Brooklyn and the Bronx, have more than 300 apartments between them and are either partially or entirely occupied by homeless families. Rather than convert them to low-rental housing and provide residents with tenant protections, as Mayor Bill de Blasio pledged last January, DHS is planning to maintain them as family shelters.

The Giuliani-era cluster program has placed thousands of homeless families in private apartments.

"These pending contracts attempt to solve one problem by exacerbating another, and I have called on the administration to immediately terminate its policy of converting rent stabilized units into homeless housing," the Public Advocate said in a statement to Gothamist.

Tax records show that 72 units across these buildings are currently registered with the state as rent-stabilized, according to James's office. The 72 figure is likely a lowball, because the onus is on landlords to register their stabilized units with the state annually. Advocates fear that when the shelter contracts expire, there may be little protection against landlords flipping the buildings into market rate rentals, further exacerbating the homelessness crisis.

"One of the concerns is that if they transition these eleven buildings that may have some regular rent stabilized tenants left, the owner can claim a permanent exemption from rent stabilization," said Rajiv Jaswa, a staff attorney with the Community Development Project at the Urban Justice Center.

A spokesman for the Human Resources Administration told Gothamist that the city notifies the State Division of Housing and Community Renewal of all units exiting the cluster program in order to protect their stabilized status. But Jennifer Levy, the Public Advocate's general counsel, says she has no assurance that HCR will follow through with reinstating protections. Reporter Nathan Tempey's recent investigation into this relationship between city and state officials indicated indicated that there seems to be no formal retention plan in place.

Advocates are also concerned the contracts will reward negligent landlords who already benefit from the cluster program's large payouts and lax oversight. There are currently 449 open violations across the eleven buildings, according to the city's shelter repair scorecard for July, 75 of which are immediately hazardous.

James's office would prefer that the cluster site residents be awarded rent-stabilized leases. The Legal Aid Society is currently fighting for this outcome at 60 Clarkson Avenue in Prospect Lefferts Gardens, a former cluster site that the City pulled out of in 2016.

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Mayor de Blasio and city homelessness Commissioner Steven Banks (Michael Appleton/Mayor's Office)

One of the contracts in process covers 1838 Vyse Avenue, in Councilman Rafael Salamanca's district. Salamanca is a longtime critic of shelter proliferation in his district, which covers the South Bronx. He learned about the pending contracts through news reports last month.

"We want to do all we can to help homeless individuals, but to learn from the press that these clusters were being converted to permanent shelters was disappointing," Salamanca said in a statement to Gothamist.

"I value my relationship with [Human Resources Administration] Commissioner Steven Banks, and believe he has good intentions," he added. "But to best combat homelessness in the South Bronx, he and his team have to be transparent with the community, and myself."

Salamanca added that his office is concerned that 1838 Vyse landlord David Green, one of 13 cluster site landlords on the Public Advocate's Worst Landlord list, might benefit from the deal.

Banks has agreed to meet with the Public Advocate regarding her August 30th letter on the subject, which also addressed Mayor Bill de Blasio directly. But an HRA spokesman confirmed Friday that the City is not heeding the Public Advocate's request to drop the contracts in question. He also noted that the shelter conversion option is referenced in the mayor's February homelessness plan.

"We've said repeatedly in 2016 and 2017 that we would also evaluate cluster sites to determine whether they could be converted to either permanent housing or high-quality Tier II transitional shelters," said HRA spokesman Isaac McGinn.

"These conversions will enable us to more effectively help our homeless neighbors get back on their feet, with greater oversight and enforcement of regulations, including requirements regarding conditions, provision of services, and security programming that must be met," he added.

HRA contends that it has reduced the use of cluster sites by nearly 30 percent since early 2016, when roughly 3,600 units were occupied. Of that total, less than ten percent, or 360, have been deemed suitable for shelter conversion, according to McGinn (he did not immediately provide exact figures).

But for members of advocacy group Picture the Homeless, any shelter established in place of a stabilized apartment is suspect.

"We need real housing, permanent housing that's actually affordable to homeless people," said Lisa Milhouse, a PTH member and former cluster site resident. "Not more shelters."