New York, NY — A federally funded transitional housing program for homeless veterans in Queens is in violation of federal law and failing to meet even the most basic standards of care. The Borden Avenue Veterans Residence, operated by the Institute for Community Living (ICL) through a contract with the New York City Department of Homeless Services (DHS), has denied legally required transportation to VA-eligible veterans while exposing them to unsafe, unhealthy living conditions—despite receiving millions of dollars in VA Grant and Per Diem (GPD) funds. The VA GPD program set forth in Public Law 109-461 , codified at 38 U.S.C. § 2012 and governed by 38 CFR Part 61 , mandates that providers offer more than temporary housing. Under 38 CFR § 61.80(f), grantees must “assist each veteran in obtaining health care benefits, including providing or arranging transportation to medical appointments as needed.” Borden Avenue fails this requirement entirely.

New York City’s Department of Homeless Services (DHS) is facing mounting criticism for its mismanagement of federally funded transitional programs for veterans. At the center of the controversy is the city’s blending of its MICA (Mentally Ill, Chemically Addicted) shelter model with the U.S. Department of Veterans Affairs' (VA) Grant and Per Diem (GPD) program—an approach that violates federal law and undermines the recovery of the very veterans the program was designed to serve. The GPD program, authorized under Public Law 109-461 (Title II, Section 2061 of Title 38, U.S. Code), was established to help homeless veterans by funding transitional programs that offer structured, sober, and supportive environments. Grantees are required to provide comprehensive case management, mental health and substance use treatment, and referrals to permanent housing. Central to the program is the requirement that grantees maintain a recovery-oriented setting that protects the health and safety of all participants. Despite these federal standards, DHS has allowed GPD-funded programs in New York City—most notably the Borden Avenue Veterans Residence (BAVR)—to operate as MICA shelters. This MICA designation, governed by city-level harm-reduction policies, allows continued residence for individuals who actively use drugs, exhibit violent behavior, or suffer from untreated mental illness. These policies are fundamentally incompatible with the recovery-focused mission of the GPD transitional program. Veterans placed in these facilities are subjected to highly destabilizing environments. Reports from BAVR include widespread drug use, violent assaults, and dangerous residents. Some veterans suffering from PTSD have been forced to sleep under 24-hour fluorescent lighting out of fear, while others have relapsed into substance use due to persistent exposure to heroin and other drugs inside their dormitories. These conditions violate both the letter and the spirit of the GPD program’s legal mandate. Program administrators frequently cite MICA protections as justification for their refusal to discharge disruptive or noncompliant residents. However, GPD regulations under 38 U.S.C. § 2012 clearly state that grantees must take corrective action when the safety or therapeutic environment of a program is compromised. DHS’s failure to enforce these requirements represents not only gross mismanagement but a breach of its funding obligations. This misuse of GPD transitional program funds raises serious concerns about accountability. DHS receives more than $4 million annually in federal GPD grants, yet contracted providers such as the Institute for Community Living (ICL) have failed to uphold compliance. ICL reported $188.6 million in revenue last year and paid its CEO nearly $500,000, while veterans at its sites went without access to proper nutrition, clean facilities, or transportation to medical appointments. The roof at BAVR, for instance, has reportedly leaked for over a decade without repair. The VA’s Office of Inspector General has previously cited discrepancies in discharge tracking and outcome reporting at GPD sites in New York City. By allowing ineligible individuals to reside in GPD-funded programs and failing to follow federally mandated discharge procedures, DHS and its providers may also be submitting inaccurate data—concealing systemic failures and risking further misuse of federal funds. Reform advocates are calling for immediate corrective actions. These include separating GPD transitional programs from city-run MICA shelters, enforcing VA discharge policies, transferring oversight to veteran-focused providers such as Catholic Charities or Samaritan Village, and conducting a full federal audit of GPD fund usage in New York City. The GPD program was never intended to be a general-purpose shelter for the mentally ill and chemically addicted. It was designed as a structured, transitional program to help honorably discharged veterans move from homelessness toward stability and independence. New York City’s failure to respect this mandate has placed those veterans in harm’s way—and undermined a critical national program. To restore trust and integrity in the system, city and federal authorities must act swiftly to bring GPD operations in New York back into compliance with Public Law 109-461. Veterans answered the nation’s call to serve. Now, the programs created to support them must do the same. Printable pdf. MICAshelters_20250725

The New York City Council has recently placed blame on the Department of Veterans Affairs (VA) for the inadequacies in veteran services, particularly in regards to the Grant and Per Diem (GPD) program, without acknowledging that the VA already provides significant resources for veterans. The real issue, however, lies in the mismanagement and corruption within the city’s Department of Homeless Services (DHS), which has consistently failed veterans despite receiving substantial federal funding. DHS is allocated over $4 million annually to provide safe, drug-free housing and support services for veterans. Yet, facilities like the Borden Avenue Veterans Shelter continue to fail those they are meant to serve. The shelter has been plagued by unsafe living conditions, including a leaking roof for over ten years, lack of basic hygiene products, and insufficient transportation to VA healthcare appointments. DHS has also misallocated federal funds intended to support veterans’ transition from homelessness into permanent housing, diverting these resources to other uses that do not directly benefit VA-eligible veterans. The Grant and Per Diem program, which is supposed to assist veterans in securing stable housing, has been hijacked by DHS. Instead of providing veterans with the resources they need, the Borden Avenue shelter has been converted into a MICA (Mental Illness and Chemical Abuse) facility, housing veterans alongside individuals with severe mental health issues and substance abuse problems. This mismanagement exacerbates veterans’ trauma rather than helping them heal. Furthermore, the city’s loose definition of a "veteran" contributes to the issue. Many individuals at Borden Avenue do not meet the federal VA’s eligibility criteria, but are still placed in these facilities, leaving true VA-eligible veterans to suffer unsafe conditions without proper care.