New York city can terminate homeless program: court

Pedestrians walk past a man as he panhandles for money while sitting with a puppy on a sidewalk in the financial district of New York March 3, 2011.

NEW YORK (Reuters) - In a blow to homeless people in New York, a judge on Tuesday ruled that the city can terminate a program that offered rent subsidies to help people transition from emergency shelters.

In a 21-page ruling, Supreme Court Justice Judith Gische ruled that the city did not enter into binding contracts with recipients of the Advantage Program, which provides rent subsidies for up to two years.

"(No) matter how laudable its goals, (the Advantage Program) is nothing more than a social benefit program, which defendants had the right to terminate, based upon the lack of funding available for its continuation," Gische wrote.

The Legal Aid Society, which sued to stop cuts to the program on behalf of existing recipients, said it would appeal the ruling.

"This certainly seems like a case in which the city loses when it wins, since it will have to pay far more to shelter these families and individuals than by continuing to make the rental payments," Legal Aid's attorney-in-chief, Steven Banks, told Reuters in an interview.

In a five-day trial before Gische, the city argued that it had no legal obligation to make the payments.

"We believe that the judge made the correct decision based upon the facts and the law," the city's top attorney, Michael Cardozo, said in a statement after the ruling. "The Advantage Program is a social program and not a series of contracts entered into by the City."

Payments under the program will not end immediately. The city must first move to vacate an order issued by an appeals court in June.

(Reporting by Noeleen Walder; Additional Reporting by Jennifer Golson; Editing by Jesse Wegman)