Timothy Pena is a service-connected disabled Navy veteran for PTSD and has written about his experiences with mental health, homelessness, and the judicial system. Suffering mental illness, he initially visited NYC to collaborate on a documentary for veteran suicide but decided to stay after realizing he would rather be homeless in NYC than dead in Phoenix. He has been writing stories and blogs about his journey from “homeless to homeness” in the NYC Dept of Homeless Services system and possible corruption within DHS and Veterans Affairs Grant & Per Diem Transitional Program.
VA-Funded Transitional Program for Veterans Undermined by NYC Shelter Policies
Timothy Pena • July 29, 2025
NYC Department of Homeless Services in Violation of Federal Public Law that Provides Veterans Affairs Benefits to Eligible Veterans in MICA Homeless Shelter in Long Island City
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
