New York Freezes Housing Funds as Sullivan County Legislature Stalls on Gateway Housing Location

Sullivan County legislators still can’t agree on where to put a gateway housing shelter. Some critics warned that the clock was ticking to apply for funding for the facility before state funds were gone – but that funding is no longer available.

On Wednesday, New York’s Office of Temporary and Disability Assistance, or OTDA, suspended accepting funding applications for the state’s Homeless Housing and Assistance Program, or HHAP, the key program Sullivan County was planning to apply for.

Thursday’s Sullivan County Legislature meeting ended tensely as legislators failed to pass a resolution to set a public hearing for a potential gateway housing shelter on Sunset Lake Road in the Town of Liberty.

Legislators Cat Scott, Matt McPhillips, Luis Alvarez, and Nadia Rajsz raised their hands to vote in favor of setting the hearing. Legislators Terry Blosser-Bernardo, Amanda Ward, Joe Perrello, Nicholas Solomone, and Brian McPhillips all voted against it.

Before the split resolution vote, several attendees held big white signs in support of the shelter. One sign read ‘Gateway Housing Today. No More Delay.’ Other community members offered public comment, urging lawmakers to pick a site.

“The legacy is going to be how ‘Not In My Backyard’ ruled a day rather than basic human rights,” said Sullivan County resident Martin Colavito. “The legacy is going to be that come this time, when people decide to do something about this, it’s going to be too late because the money is not gonna be there. That’s gonna be your legacy.”

The suspension notice from OTDA noted that program funding is currently “oversubscribed” and that the state was taking this action to prevent applicants from expending time and resources. OTDA is only accepting applications for existing shelters.

“OTDA has suspended applications for the Homeless Housing and Assistance Program (HHAP) in anticipation of soon awarding up to $125 million in available funding that was included in the SFY 2026 Budget. HHAP expects to resume accepting such applications when additional funding is available,” an OTDA spokesperson told Radio Catskill.

With HONOR – the nonprofit that runs the housing shelter in Middletown – ready to operate the Sullivan County facility, and over 290 children and adults unhoused in August, residents are asking: what’s the delay?

Legislators divided on how to move forward

For more than 15 years, the county has relied on temporarily placing unhoused individuals in hotels and motels in Liberty and Monticello. Sullivan County shelled out $3.4 million in 2024 alone for the hotel-for-housing model, which doesn’t include any wraparound social services, like emergency food assistance or mental health support.

The legislature came close to approving a 20-bed facility on Pittaluga Road in Thompson in April, but they failed to pass it by a supermajority vote. Five months later, legislators have yet to agree on where to build the facility.

READ: Sullivan County Legislature Scrambles for a New Housing Shelter Location

District 3 Legislator Brian McPhillips, who voted against setting a public hearing, said that what’s been presented has been “inadequate.” He says the high cost of building the facility, along with finding the right location close to other social services, raised concerns for him and other legislators.

But District 5 Legislator Cat Scott pushed back on those claims, pointing out that the project, originally a $3 million project four years ago, has ballooned into an $8 million project from rising costs and inaction by previous legislatures. She called out the legislature for rallying behind economic projects, such as the $585 million casino deal, rather than addressing the county’s housing crisis.

READ: Sullivan County Taking a $585 Million Gamble on Resorts World Catskills Casino

District 6 Legislator Luis Alvarez agreed. “Think who voted for it and remember who did not vote for it,” he said. “Keep that in mind because when the time comes for voting, remember who they are.”

Scott worries the funding could disappear as the state shoulders anticipated costs slashed by the One Big Beautiful Bill, but she’s hopeful that legislators will find a compromise.

“We will continue to work on finding a project, preparing a grant application, so that if and when this grant is available and it opens up, that on day one we have an application put in.”

Image: A community member holds a big white sign that reads ‘Sullivan County needs Gateway Housing.’ (Photo Credit: Kimberly Izar)