New York City's $368 Million Homeless Problem

Last week, New York State Comptroller Thomas DiNapoli released a report revealing that New York City spent $368 million on services for its unsheltered homeless population in FY2025. That works out to roughly $81,000 per person, rivaling the city’s median household income.

To put that into perspective, in 2019, the city was spending about $28,000 per unsheltered person. In six years, that number has nearly tripled. And the result? The unsheltered population grew 26%, from 3,588 people to 4,504.

The spending is projected to climb even higher. The comptroller’s office estimates it will reach $456 million by FY2026, pushing the per-person cost closer to $100,000. These figures only cover the Department of Homeless Services’ Street Homeless Solutions division, which accounts for roughly 9% of the agency’s total budget. The full department’s full budget totaled just under $4 billion in FY2025.

So where is the money actually going?

Over 96% of DHS’s budget flows through contracts with outside organizations, mostly nonprofits. These groups, which run the shelters, staff outreach teams, and manage drop-in centers, are part of more than 600 shelter-related contracts worth over $21 billion, making it one of the largest contract portfolios in city government.

In October 2024, the city’s own Department of Investigation released a 94-page report that painted a troubling picture of who’s on the other end of those contracts. Of the city’s largest nonprofit shelter providers, 51 had at least one compliance concern. Many others had several.

Investigators found that multiple nonprofit executives were earning more than $700,000 a year, with some even exceeding $1 million in total compensation. According to IRS tax filings reviewed by the DOI, Acacia Network president Raul Russi took home $916,359, and CAMBA president Joanne Oplustil earned $704,895 in fiscal year 2021. These salaries were funded, in whole or in part, with taxpayer dollars, and the city has no enforceable cap on what constitutes reasonable compensation at these organizations.

SEBCO Development, which holds roughly $35 million in city shelter contracts, was purchasing security services from a for-profit company it also owned. Between 2018 and 2021, the nonprofit directed $11.6 million to that security firm. SEBCO’s chief operating officer, Salvatore Gigante, reported no salary from the nonprofit to the IRS but was separately paid $194,000 in 2020 through the security company, which was funded mostly by city contract money. Four additional companies tied to the husband of a SEBCO executive were also hired to provide extermination, maintenance, and cleaning at city-funded shelters.

As of today, Acacia Network, CAMBA, and SEBCO hold contracts with the City of New York.

These findings are damning on their own. But the comptroller’s report uncovered something even more troubling: DiNapoli’s analysis shows DHS “currently does not publicly report details on expenses in a way that would allow for clear analysis of unit costs, cost effectiveness, or the impact of programs.” Without this data, outcome measures such as cost per person served, program impact, or improvements remain unknown. After reviewing $368 million in public spending, the state’s top fiscal officer concluded that the city has made it essentially impossible to determine whether the money is being used effectively.

The city does not differentiate between placements into permanent housing and placements into transitional housing, nor does it track how long individuals remain housed after placement. It does not publish data on housing outcomes or contract performance, limiting transparency. Additionally, all unit cost data is blended, making it impossible to compare expenses across different shelter types, such as traditional shelter beds, hotel rooms, or low-barrier “Safe Haven” beds for those who avoid traditional shelters.

The city placed 10,841 people into some form of housing in FY2025, up more than 400% from FY2017. However, the unsheltered population still grew 26% over the same period. This means people are returning to the streets after being housed or becoming newly unsheltered faster than the system can absorb them, but the city does not track which is more common or the reasons for these trends.

DiNapoli recommended that DHS begin publishing the amounts paid to each contracted organization, the percentage of payments returned due to improper use, and the number of contracts terminated for cause. He also urged the city to track outcomes for people who accept housing referrals, specifying metrics such as length of stay, transition rates to permanent housing, and return rates to homelessness. Currently, none of these measures is in place.

On March 13, two days after DiNapoli’s report, the Mamdani administration signed a $1.86 billion three-year contract with the Hotel Association of New York City Foundation to house homeless families in hotels. That $1.86 billion sits on top of the $368 million for unsheltered street homeless services and the roughly $4 billion annual DHS budget.

At the same time, the Mamdani administration announced it would shut down the city-owned, 250-bed Bellevue men’s shelter on East 30th Street in Manhattan. While closing a public facility it already owns, the city is committing nearly $2 billion to renting hotel rooms. None of this new spending includes the outcome tracking or transparency that DiNapoli says is lacking in the existing system.

To recap. New York City has built a homeless services system in which providers are incentivized to keep beds full rather than move people into permanent housing. Despite compliance concerns at all 51 of the largest providers examined, the overwhelming majority kept their contracts. The fundamental question remains: Is the city’s spending actually addressing homelessness or perpetuating misuse of taxpayer funds?

If the city paid nonprofits only for each person they moved into permanent housing, not for each bed they filled, the incentive structure would shift immediately. Nonprofits would be driven by results, not capacity, giving taxpayers measurable progress against New York City’s homelessness crisis. Instead, the city spends $81,000 per unsheltered person annually, yet street homelessness rises. For those profiting from this broken model, the system works exactly as intended.

We’d love to hear your thoughts on this, so reply back. The reporting in this article draws primarily from two government reports. We encourage you to read them for yourself.

New York State Comptroller Thomas DiNapoli’s Report & Press Release, released March 11, 2026.

New York City Department of Investigation’s Report, released October 17, 2024.

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On Monday, Nick Shirley released a 40-minute investigation alleging over $170 million in fraud at California’s taxpayer-funded daycare centers, hospice companies, and home health care facilities. The video has been viewed millions of times, and what has happened since is just as revealing as the investigation.

Within hours, Governor Gavin Newsom’s press office responded with an AI-generated image depicting Nick Shirley at a daycare, surrounded by cameras, with a speech bubble that read, “Hey, can I see your kids?” The caption said, “Nick Shirley, right now.”

Nick responded: “You do realize I’m trying to help America eliminate fraud and waste, right? No need to try to make me look like the bad guy for exposing fraud. People are over it. Start working for the people and not against them.”

That reply has pulled in over 250,000 likes. Newsom’s post was radioed into the ground and deeply criticized by thousands.

Nick also appeared on Fox News @ Night to address the governor’s response directly, calling the Governor of California “an enemy to the people” and saying he is “literally working to support the fraudsters when he could be exposing the fraud.”

This was the governor’s official press account responding to $170 million in alleged fraud by implying Nick Shirley is a predator. The account disputed none of the claims and did not address issues such as empty hospice centers, daycare fraud, or missing Medi-Cal spending.

The most notable response came from Senator John Fetterman, a Democrat from Pennsylvania. On the All-In Podcast, Fetterman called out Newsome’s post directly: “Why can’t you celebrate any journalist or activist doing that?” He also said, “Governor Newsom put out a disgusting video implying he’s a pedophile. Shouldn’t we agree to eliminate all the waste?” Fetterman added, “Fraud can happen on both sides, but if it’s found, I don’t care if it’s in a Democratic state. We should all acknowledge there may be a problem here.”

A Democratic senator’s public criticism of a Democratic governor for attacking a fraud investigation instead of addressing it suggests the investigation struck a nerve in the golden state.

The facts are not on Newsom’s side. Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services (CMS), visited Van Nuys and reported the discovery of a $3.5 billion hospice fraud ring in Los Angeles, involving 42 providers registered within a four-block radius. In 2022, California’s state auditor officially warned the Newsom administration about hospice fraud. However, instead of increased enforcement, the fraud problem worsened, as seen in Nick Shirley’s 40-minute video.

On the day the investigation went live, President Trump signed an executive order creating an anti-fraud task force led by Vice President Vance and FTC Chairman Andrew Ferguson. More on this below.

We said in our first edition that Minnesota wasn’t an isolated case. California is proving that right, and we don’t think it stops here. If you have tips, stories, or information about fraud happening in your community, reply to this email. That’s what the Anti Fraud Club is for.

On Monday, President Trump signed an executive order establishing the Task Force to Eliminate Fraud. Vice President JD Vance will chair the task force, with the FTC chairman serving as vice chair and representatives from over a dozen federal agencies participating. The order lays out a 90-day timeline for member agencies to submit implementation plans and directs the group to develop minimum anti-fraud requirements for programs that distribute federal money through state and local governments.

The executive order highlights several states that have allowed practices such as self-certification of eligibility, skipping individual verification, and refusing to share data with the federal government. For example, Minnesota is mentioned due to the high-profile childcare fraud ring in the state, which diverted hundreds of millions of dollars overseas. Nick’s investigation into Minnesota’s daycare fraud brought the issue to national attention and helped prompt this federal response.

This is a welcome step, and the structure looks serious on paper. But whether it actually changes anything will come down to execution. The states named in the order have already shown they’re willing to fight back in court, so the political battle on fraud is far from over. We’ll be watching this one closely.

We want to hear your take: Will this executive order truly reduce fraud, or is it just political theater? Share your views and let us know what action you think should be taken next.