When Siobhan lost her job and apartment, she began struggling with depression and alcohol abuse. “Siobhan” is not her real name—she asked to remain anonymous because many people in her life are not aware of her situation. She knew that to get sober and back on her feet, she needed to find a stable place to live. So when a friend told her about Interline, an outpatient treatment program that also operated seven residential buildings, she signed up. Early last June, she moved into a creaky two-story house on a lonely block in Jamaica, Queens.

On her first day at Interline, Siobhan asked her housemates about the curfew and the other rules she should follow. They told her the building was not a state-licensed halfway house or a sober home, but rather, a three-quarter house. Siobhan, like many New Yorkers, had never heard of three-quarter houses. But she didn’t have a chance to acclimate to her surroundings. Interline closed two weeks after she arrived.

“We woke up one day, we were all getting ready to go to group [therapy], and the house manager called and said, ‘Interline shut down. They just got indicted for Medicaid fraud. The police are at Interline right now. We don’t know what’s going on with the house,’ ” Siobhan recalled.

The city defines three-quarter houses as unlicensed, unregulated buildings, generally two or three-family homes, “where many of the city’s most vulnerable and economically disadvantaged people live.” Operators rent beds, often bunk beds, to single, low-income adults desperate for housing. Tenants are typically recruited from places like psychiatric hospitals, prisons, and detox centers. According to the city, the descriptor “three-quarter house” is derived from the view that they exist somewhere between regulated halfway houses and actual homes. In a report released last March, the city identified a total of 108 three-quarter houses in the city.

Most three-quarter house tenants pay rent with their $215 monthly shelter allowance from the state—an amount that has not changed since 1988. In New York City, where the median gross rent is over $1,200, $215 isn’t much, and many operators overcrowd apartments to turn a profit, subjecting tenants to unsafe conditions. The city says that some operators also fail to maintain their properties, “thereby creating unhealthy or undesirable living environments.”

According to the city’s Human Resources Administration (HRA), from June 1st, 2015 to December 31st, 2017 the Department of Housing Preservation and Development (HPD) issued 2,273 violations to three-quarter house operators. Common violations issued to these houses include mold growth, lack of essential services like heat and hot water, vermin infestations, and fire hazards due to overcrowding. While the mayor has described the three-quarter house industry unfavorably, the city gives landlords tacit approval to operate these buildings, knowing that without them, many tenants would be homeless.

Matthew Main, a staff attorney at Mobilization for Justice, an advocacy and legal service organization that represents three-quarter house tenants, describes the industry as a convergence of the homelessness crisis, the opioid epidemic, mass incarceration and the war on drugs. Main says the vulnerability of the three-quarter house population tends to suggest that house operators have ulterior motives for participating in the industry.

"While the exploitative practices of some three-quarter house operators are shamefully unjust, tenants have always emphasized that the houses provide vital housing of last resort for people who might otherwise be homeless," Main said.

Over the past three years, at least four three-quarter house operators have been indicted for exploiting tenants in Medicaid fraud schemes. In the most infamous case, a man named Yury Baumblit operated a row of houses on New Lots Avenue in Brooklyn where over a hundred tenants lived.

The recent indictments against three-quarter house operators are evidence of the state’s efforts to clean up the industry. But indicted operators often allow their properties to decay, even as they continue to receive rent. Court records show that in the Interline case, many tenants have been threatened with eviction. Advocates argue that adequate planning to protect three-quarter house tenants is critical when operators are prosecuted. Without sufficient support from government agencies, many tenants believe they have no other choice but to halt their recovery efforts, leave their homes, and return to the instability of the city’s already overburdened homeless shelter system.

“We heard of situations where people were really down and out because of the instability that was caused [by the Interline indictment].” Main recalled. “Relapse can result in real tragedy in the midst of the opioid crisis.”

The basement of a former-Interline house in Jamaica, Queens. (Clarissa Sosin / Gothamist)

Interline was a state-licensed drug and alcohol treatment center run by Robert Corrado. His daughter, Kristina Corrado, operated seven three-quarter houses which they called “Care Houses.” In a press release announcing the Interline indictment, Attorney General Eric Schneiderman accuses the Corrados of providing housing to clients on the condition that they attend treatment at Interline. Schneiderman alleges Robert Corrado was kicking back Medicaid dollars to his daughter Kristina, who managed the houses from Interline’s offices. This arrangement violates several state laws, including the Patient Bill of Rights, which states that patients have the right to receive medical care wherever they want. Allegedly, the Corrados submitted over two million dollars in fraudulent claims to Medicaid.

When the Interline indictment was announced, some tenants left immediately. Others, like Siobhan, had nowhere else to go and decided to stay. As winter approached, conditions in the houses worsened, and tenants started receiving notices from utility companies warning that their heat, water and electricity would soon be turned off.

HPD is the agency responsible for restoring essential services when landlords fail to maintain their properties. After the notices began arriving, Siobhan contacted the agency, hoping they could intercede before it was too late. HPD informed her that they could not take any action until services at the house were shut off. Over the past ten months, tenants at the former-Interline properties that Gothamist visited said they have lost heat, water, and electricity.

When Siobhan’s building finally lost water and electricity, Siobhan said she lived at the house for over a week before HPD, working with the Red Cross, moved her and the other tenants to temporary relief housing in the Bronx.

“We would only flush the toilet if it had to be done,” she said. “Even with the bathroom door closed and the toilet seat down and spraying Clorox, you could still smell urine.”

Siobhan said she was frustrated that HPD could not preemptively restore services to the property, especially in winter. But the department told Gothamist that while services are still on, “There is no emergency warranting HPD intervention.”

Main said that after the Interline indictment, there was no planning for tenants, many of whom need stable housing to prevent relapse.

“It was all about ending the alleged Medicaid fraud and recovering the taxpayer dollars,” Main said. “But the human consequences, the individuals who were really the cash crop here, were an afterthought and remain an afterthought.”

Amy Spitalnick, a spokeswoman from the state Attorney General’s office, said in cases like Interline, her office notifies the relevant city and state agencies with the information they need to address potential health or safety issues.

Adding further complexity to these situations is the fact that, in many cases, the operators of a three-quarter house do not actually own the building. They simply lease it from a third-party. Operators will often stop paying their rent to building owners, who then initiate eviction proceedings against tenants, many of whom have never met the actual landlord.

Case files from Queens County Court reveal that a company called Hillside Realty initiated eviction proceedings against at least three tenants in a three-quarter house the Corrados were managing directly above their treatment clinic in Jamaica, Queens. Hillside Realty did not reply to multiple calls and emails.

Broken pipes in the basement of a former-Interline house in Jamaica, Queens. (Clarissa Sosin / Gothamist)

In addition to using the courts, tenants say some landlords use intimidation tactics to push them out after the government takes action. At a former Interline building owned by the Corrados in Bushwick, a middle-aged man, who asked to be called Mr. B, said that on one occasion he came home from work to discover the lock on his front door had been removed. He said on another occasion it appeared that someone had knocked holes through the building’s roof, letting in the cold winter air.

“I have to deal with all the stuff that’s going on in this apartment. Like, I gotta buy heaters because they turned the heat off at night,” B said, as an M-train roared past his window. “And the bed bugs, I gotta constantly go to the laundromat four, five times a week and [buy] garbage bags to put my clothes in. I have to boil my shoes to go outside.”

B works full time as a security guard on Coney Island. He said he originally came to Interline after his ex-girlfriend routinely kicked him out of their apartment for drinking excessively and smoking marijuana. “I said to myself I gotta clean up to get back to being productive,” he said. “So you know, I came here and tried to better my life.”

B credits the Interline program with keeping him sober for two years. But once he completed the program and the Medicaid payments stopped, he said the Corrados tried to kick him out. After months in housing court, the court dismissed petitions to evict B and other tenants at the property after the Corrados did not show up for trial. B said that the stress of it all led him to start drinking again.

The Interline case isn’t the first time multiple agencies have been called upon to support three-quarter house tenants during an indictment. In 2015, Mayor Bill de Blasio created the city’s interagency Three-Quarter House Task Force, in the wake of a New York Times investigation of Narco Freedom, an outpatient treatment center that, like Interline, was entrenched in the three-quarter house industry. In a statement, Mayor de Blasio said the Task Force was intended to “accelerate inspections and enforcement, relocate residents where necessary, and make recommendations to end this terrible practice.”

A city report shows that in the years following the Narco Freedom indictment, the Mayor’s Three-Quarter House Task Force helped hundreds of three-quarter house tenants secure permanent housing. Tenants and advocates hoped that the city would administer similar support to former Interline tenants.

Jaclyn Rothenberg, a spokesperson for HRA, told Gothamist that since the Interline indictment, the city’s Three-Quarter House Task Force has “responded to complaints, filed through 311 or by advocates, regarding lack of services and maintenance conditions, issued violations and conducted appropriate emergency repairs when the owner failed to respond to correct those conditions.”

Aside from the living conditions, a pressing concern for tenants like Siobhan and B is finding stable, long-term housing. In August, advocates from the Three-Quarter House Tenant Organizing Project (TOP) and former Interline tenants staged a rally outside an HRA office in Queens to demand a path to permanent housing. In October, after meeting with former Interline tenants, HRA Commissioner Steven Banks decided to grant Special Exit and Prevention Supplement, or SEPS, vouchers to tenants still living in the buildings abandoned by Interline.

The city created the SEPS voucher in 2015 to help adults without children who live in shelters or are at risk of becoming homeless. To be eligible for the SEPS voucher, individuals must currently live in a shelter, have a history of shelter use or be at risk of homelessness due to eviction. Three-quarter house tenants who have never lived in the city’s shelters and have not been evicted in court by their landlord typically do not qualify for SEPS.

Main said that the HRA’s decision to grant former Interline tenants vouchers, regardless of whether or not they met all eligibility criteria, was a victory with one important caveat.

“There’s one necessary component that has to happen before you can use your SEPS voucher and that is finding a landlord who will accept the voucher,” Main said.

A cross above a badly damaged door in a former-Interline house in Jamaica, Queens. (Clarissa Sosis / Gothamist)

In New York City, it is unlawful for landlords or brokers to decline to rent to someone because they have a voucher. But Main says he frequently hears reports of landlords turning down SEPS vouchers. HRA declined to say how many of the 57 SEPS vouchers administered to former Interline tenants were being used.

B said he has been unable to use his voucher—adding that he has been turned down many times. “What do you want me to do?” he asked, referring to the eviction proceedings against him. “I got a voucher, I got a job, I save my money. If I could find somewhere, I wouldn’t be here,” he said. “You know I blame a lot of it on the city because you're giving out vouchers that nobody will take. So how are you fighting homelessness?”

Tenants and TOP advocates asked the city for help placing tenants from housing specialists with knowledge of the market and relationships with brokers. So far, they say no such help has been offered. HRA spokesperson, Jaclyn Rothenberg, said that such requests are evaluated on a case by case basis.

The state’s Office of Alcoholism and Substance Abuse Services, or OASAS, regulates treatment programs like Interline. Main said they, too, have a responsibility for ensuring patients don’t suffer when programs shut down. The tenants Gothamist spoke with said that after the Interline indictment, OASAS provided a list of other treatment centers but did not mention housing.

“Does the state agency in charge of overseeing drug-treatment and recovery services in New York need to be reminded that we are in the midst of a homelessness and opioid crisis?” wrote Jasmine Monk, a former Interline tenant and TOP member, in a City Limits op-ed describing her struggles after the indictment. “By not dedicating resources to help us obtain safe, decent housing, people will inevitably slip through the cracks. They already have.”

Siobhan said that this ordeal has delayed her recovery.

“I’ve always worked. I just fell on hard times, and it just got worse and worse,” she explained. “The people that were supposed to help me get back on my feet abandoned me. I went into this hoping to do the program and look for a job and it just didn’t happen because it was just one thing after another.”

Though she has been unsuccessful so far, Siobhan said she is still determined to find an apartment with the SEPS voucher, and a job after that. But for now, she’s back in the same three-quarter house where she started, and the HRA is sending her $215 shelter allowance to 148 Hillside Avenue, the address of Interline’s old treatment center.

"Until there is a robust and sincere political commitment to connect very low income New Yorkers to safe, stable and truly affordable housing, the three-quarter house industry will remain a necessary evil in New York City," said Main.