NEW YORK, March 20 (Reuters) - New York City's decision to end one of its signature housing programs for the homeless was legal, a divided appeals court ruled Tuesday, dealing a blow to homeless advocates who had pressed the city to reverse course.
In a 4-1 decision, the Appellate Division, First Department, upheld a lower court ruling that the city was not contractually obligated to continue the Advantage program after state and federal funding dried up in 2011.
The program moved homeless families from shelters into apartments with a promise from the city to subsidize the rent, as long as the participants maintained employment and met other obligations.
"We sympathize with plaintiffs and recognize that an adverse outcome could place them at risk of again ending up in the New York City emergency shelters for the homeless and battered women," the majority wrote in an unsigned ruling. "Ultimately...all of the surrounding circumstances lead to the ineluctable conclusion that the Advantage program was a social service program no different from any other, and not a contractual obligation undertaken by government."
In a lengthy dissent, Justice Karla Moskowitz wrote that documents signed by the city, landlords and tenants obligated the city to continue the subsidies for two full years for each apartment, as long as the families remained qualified.
"The words that the City chose to use in the Advantage program documents and materials: 'guarantees, 'shall pay' 'will pay' 'will issue' 'assures' and 'commitment' demonstrate an intent to bind oneself contractually," she wrote.
The case represented a rare instance when the interests of tenants and landlords dovetailed, as both groups pushed the city to continue making rent payments.
The city canceled Advantage in March 2011 after the state budget included no funding for the program, which carried an annual budget well in excess of $100 million. Shortly after, the Legal Aid Society filed a lawsuit on behalf of homeless families in the program.
The city spent more than $100 million to continue to fund the program from last April through January while various appeals of its decision have wended their way through the court system. The city stopped making rent payments in February after an appeals court lifted a stay.
The plaintiffs will appeal Tuesday's ruling, according to Steven Banks, attorney-in-chief for Legal Aid, which represented the homeless families.
"We think the dissent was correct, and unfortunately now nearly 8,000 formerly homeless families and individuals will face imminent eviction proceedings and repeat homelessness, which is why we have no choice but to seek a stay and pursue an appeal," he said.
Randy Mastro, who represented the homeless groups that filed amicus papers, said it was "unfortunate that the court has left this vulnerable population exposed to the city's unconscionable conduct."
Seth Diamond, the city's homeless services commissioner, said in a statement that approximately 5,700 households remain in Advantage apartments.
"We lobbied hard to keep the Advantage program in place, but unfortunately without State and Federal partners it was not possible," he said.
For the homeless families: Steven Banks of the Legal Aid Society; Konrad Cailteux of Weil, Gotshal & Manges
For the city: Alan Krams of the New York City Law Department
For the homeless groups, as amici curiae: Randy Mastro of Gibson, Dunn & Crutcher
(Reporting by Joseph Ax)
Follow us on Twitter: @ReutersLegal