AIDS Complicates the City’s Pledge to House Homeless : Hotels: The bleak, expensive warehouses for the dying are a makeshift answer to a tough problem.

This city is America’s capital of so many things, among them: finance, theater, ruined innocence and social woe. The last of these is the one that is so overwhelming. One in seven New Yorkers collects welfare, and an estimated one in 12 has a serious drug problem.

Social liberalism has had a long tradition here, which, however admirable, is also a fiscal burden. New York now spends $7.2 billion a year on social services--more than the entire budgets of 21 states. Some $500 million goes toward housing the homeless.

In 1981, the city settled a lawsuit by becoming the first--and now the only--major U.S. city to shelter the homeless on demand. A municipal door was opened through which every tempest of human misery was soon to blow.

AIDS has been the worst of them. Group shelters are unfit for people with compromised immune systems. An entirely separate housing strategy was needed.

Early on, when the vast majority of AIDS cases involved gay men, housing did not seem so much of an emergency. The disease may have triggered financial meltdowns, but the sick could most often remain in their apartments with the help of rent subsidies.

The more onerous problem only became apparent later on in the ‘80s, with the accumulation of infected drug addicts, so many of them living in the streets already. The rental market was impossibly tight; apartments were no solution.

Instead, the city “temporarily” hooked up with some notorious bedmates, the SROs, or single-room occupancy hotels. A few years earlier, many of these same places--used as “welfare hotels” for homeless families--had been the focus of a national scandal about horrendous living conditions.

But the city found itself with no other way to turn. Community groups--always the champions of neighborhood safety--refused to permit any new AIDS housing in their midst. That left the SRO landlords free to command exorbitant rents for inferior rooms.

“We didn’t know what to do,” said Nancy Wackstein, who was Mayor David N. Dinkins’ top adviser on homelessness until late 1991. “The hotels were awful, but who else was going to take these people? We were waiting for the shoe to drop on another huge hotel scandal. It was our biggest fear.”

But the local media did not pick up on the story. “With the welfare hotels, there had been pictures of children,” Wackstein reflected recently. “I suppose that’s what turns a tragedy into a scandal.”

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For a year now, the SROs have been full. The city shunts new AIDS clients to offices known as emergency assistance units, where the overflow of the AIDS homeless--as many as 150 a week--await placement with a similar overflow of homeless families from the shelters.

In these makeshift refuges, wayward drug addicts are thrown together with fearful children. There is no screening for tuberculosis. People rest on plastic chairs or the linoleum floor, the room a saddening crush of weary bodies and bags of clothes and baby strollers.

The city’s Division of AIDS Services has grown huge. In five years, its roster of caseworkers has expanded from five to 500, and even that is not enough. “People get placed in the SROs and then get forgotten about,” said Stephen Fisher, who runs the agency.

The low-salaried caseworkers are an uneven lot, hired off a civil service roll, required only to hold a college diploma. Their training program is an “abomination,” said Anita Vitale, the head of case management. Many flaunt their own personal biases, she added, the worst being that “homeless people are less than human.”

The city and state split the high SRO costs, 50-50. The housing market has loosened up, and apartments would be cheaper. Some AIDS clients do find places on their own, though they must then unravel a knot of red tape before the city cuts them a rent check. The AIDS division itself has some apartments to offer in city-owned buildings, but officials are careful about who moves in.

“Some of them are simply unhouseable,” Fisher said. “They can’t manage money. They sell the plumbing. They set fires, extort people, beat them up. We had a client who had to be subdued with a Taser gun.

“My view is, if you’ve used drugs for 10 to 20 years, and now you have AIDS, you’ll go on using drugs.”

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Beset by AIDS, appalled by homelessness, pinched by fiscal hardship, New York may be the obvious target for this confluence of troubles, but it will not suffer alone. There are other cities with large numbers of heroin addicts infected with the AIDS virus, such as Baltimore, Chicago, Newark, N.J., and Washington.

AIDS housing is a new, if ultimately inescapable item on municipal agendas. Clearly, cities need options besides a bed in a hospital ward, which can cost $1,000 a day. Seattle and Boston have begun ambitious programs, though waiting lists remain a fact of life. Los Angeles, like most cities, has a patchwork of facilities funded by churches, AIDS groups and state and county government.

Oddly enough, New York may produce a model of how to do things right as well as how to botch them up. AIDS activists and not-for-profit organizations have opened a limited amount of their own housing here, including individual apartments, group homes with on-site drug treatment and hospices for the very ill. The city has become a laboratory for experiments in AIDS shelter.

Most everyone involved favors the wide use of apartments, with the AIDS-afflicted dispersed around the city rather than collected together. “People want to live independently; they want normal mainstream life, just like the rest of us,” said Regina Quattrochi, head of the AIDS Resource Center. “Even people who are mentally ill or chemically dependent can function OK with the right support,” such as visiting nurses and help in managing their money.

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New York officials point out that most of the nonprofit groups refuse to shelter hard-core drug users. Only the city takes all comers. “The SROs may be bad, but they’re our places of first and last resort,” Fisher said.

The upshot is a maddening loop of cause and effect. Addicts stir up trouble in the SROs, and the SROs stir up drug abuse in people who need to calm down.

Cheryl Jones, a crack-head living at the AIDS Hotel, believes that somewhere inside her is the power to recover an earlier self, to be a mother again to her three kids. She loves getting high, but it is an intricate, hating kind of love. She has tried to overcome it in drug treatment.

“I can’t stop. I just can’t stay stopped, “ she said. “I need more help.”

Already, however, the taxpayers do quite a lot for Cheryl Jones. Besides a free room, she goes to a methadone program in Queens. Each day, a van transports her back and forth, a round trip that costs $75. When Cheryl is busy, she makes the driver wait. Crack always gets priority.

Cheryl collects about $400 a month in general assistance, and most others at the hotel receive Supplemental Security Income, the federal program for people who are disabled, including those with AIDS. SSI is drawn from the U.S. Treasury. The money can be spent as recipients see fit.

Curly, an ex-addict who runs a soup kitchen in the church next door to the hotel, is tired of watching all the freeloading. “You have irresponsibility on two sides: The system wants to grow and grow, and the people say it’s their own bodies, so they can do whatever they want,” he said. “Well then, if you’ve got AIDS, why should I, the taxpayer, have to pay for it?”

Societies have long separated the poor into the deserving and undeserving. Already, there has been some anxious sorting of the people with AIDS, the stoic, fresh-faced schoolboys over here, the promiscuous barflies over there.

How much spending will society tolerate for doomed people who want to take on death, as they took on life, with drugs? In a time of tight budgets, isn’t it a part of good government to put money where it can do the most good?

These questions will become common now in the second decade of the AIDS epidemic, and the answers--a weighing of the political and the economic and the moral--will determine how many of the sick will die in the streets.

Times researcher Anna M. Virtue contributed to the reporting of this story.