A new report from New York City Comptroller Brad Lander found that approximately 77% of asylum seekers are living in hotel rooms, which will cost the city more than $980 million between September 2022 through August 2024.
The report analyzes the the cost of approximately 9,500 rooms — nearly half of the total hotel rooms in use contracted by the Department of Homeless Services (DHS) to house asylum seekers across New York City, according to a news release.
“Procuring in an emergency can lead to fluctuating prices and rampant overspending, yet this contract is an example of how to manage keeping costs in check,” said Lander. “Our office will continue to conduct oversight of this contract, all emergency procurements, and any shelter and services contracts that will provide cost-effective care for asylum seekers going forward."
In late spring 2022, an unexpected and sustained migration of asylum seekers required the city to seek out emergency shelter options. Since the start of the influx, over 207,000 asylum seekers have come through the city’s system.
There are approximately 65,000 asylum seekers live in the emergency shelter system, on top of the roughly 54,000 people already housed in the DHS system prior to July 2022, the report said.
Lander’s office estimated that around 77% of asylum seekers live in approximately 15,750 rooms across 157 hotels in New York City — around 11.5% of the overall hotel inventory of 136,000 rooms in New York City.
DHS entered into a new contract with Hotel Association of New York City (HANYC) for 5,000 rooms for up to $237 million for September 2022 through August 2023. The City then extended and increased the contract's total value to $987 million for up to 14,000 rooms from September 2022 through August 2024.
Under the HANYC contract, DHS paid an average of $156 per day per hotel room, in line with market data of comparable hotels. The daily all-in cost of DHS emergency hotel shelters of $332 is substantially lower than the cost of the emergency shelter and services contracted by other city agencies, estimated to be $404.
The combination of the non-emergency DHS service per diem and the average HANYC hotel rate, for a total of $306 per day, likely represents a floor for the provision of shelter in hotels, still 24% less than the current estimated cost for the non-DHS emergency shelters – a significant savings opportunity, the report said.
