New York Builds to House Homeless. SOCIAL ISSUES. But the city's critics are concerned that single homeless are getting short shrift.

FINALLY, there is real movement toward remedying New York's severe housing shortage, one that has put an estimated 90,000 people on the streets or in shelters. The crisis has seriously challenged the ability of the city's government to provide a safety net. Now, even critics of the city's past efforts agree on the progress.

``No question, there's an impressive building program going on,'' says Robert Hayes, counsel for the Coalition for the Homeless. After a slow start two years ago, the city's 10-year, $5.1 billion public-private effort to create 47,000 additional subsidized and affordable housing units is moving into high gear.

``I can think of only one other city in the country - Seattle - that spends borrowed money to build permanent housing,'' says Lee Jones, a spokesman for Mayor Edward Koch, who this year faces a tough reelection battle and record-low voter approval ratings. Polls show voter dismay over the housing crunch and the homeless they see everywhere they go, and Mr. Koch knows he must deliver.

This year, $650 million will be spent to rehabilitate many of the abandoned or decaying buildings the city owns. The city's Housing Preservation and Development department (HPD) says several thousand new units are already occupied, with construction started on 17,000 more.

``By 1993, we will have every single vacant building the city owns in a rehabilitation program,'' says Katie Marshall, an HPD spokeswoman.

Although it is expected that 87 percent of the units will go to families earning less than $32,000 a year, there are concerns that little - or even the wrong thing - is being done for the most troubled, helpless citizens: single homeless persons. The 15,000 units planned for the homeless are mostly for families that the city wants out of dirty, dangerous city-funded welfare hotels that have harmed the mayor's image.

The biggest reason for single homelessness, experts say, is a huge number of evictions from single-room-occupancy units (SROs) that developers have converted to luxury apartments and condominiums. Peter Smith, president of Partnership for the Homeless, says the number of SRO units lost in the last 15 years almost exactly parallels the number of single homeless - 35,000.

Still others were burned out of their homes, or have lost a critical asset in their tenuous daily battle to get by, through the loss of a job or welfare benefits, or the death or departure of a spouse. Many are mentally disturbed, suffer from AIDS, or have severe drug and alcohol dependencies, and have been turned away from overcrowded city hospitals. ``We vastly underestimated the crack and AIDS epidemics,'' Mr. Smith says. ``While we were preoccupied with homeless families, reduced attention was paid to single adults' needs.'' Smith warns that unless a broad program is implemented quickly, AIDS and crack will continue to sweep through the homeless population.

A city effort to build additional shelters for the homeless singles angers those who want the money spent on permanent housing. The mayor's office says there will always be a homeless population, and limits to what it can do for them. It plans to move homeless singles out of armories where as many as 1,000 men sleep in one cavernous room. Residents of the shelters complain that violence, drug use and theft of their belongings are commonplace. New, smaller, shelters will cater to specialized groups such as veterans, the employed homeless, or drug addicts who want to kick the habit.

In the face of neighborhood resistance, the city will build some of the new shelters on unoccupied islands in the East River. Over the past two centuries, the islands have served as leper colonies, insane asylums, paupers' cemeteries, prisons, and tuberculosis quarantines. Horrified activists argue that this is a move away from reintegrating people.

``The real danger is, we're institutionalizing homelessness,'' says Doug Lasdon, director of the Legal Action Center for the Homeless. ``When New York spends $100 million to build congregate shelters, we've taken a giant step back 100 years to reproduce the poorhouse.''

Instead, the Partnership for the Homeless is urging a crash program of acquiring and rehabilitating welfare hotels to make SRO units available to singles, as well as stricter enforcement of a ban on ``warehousing,'' or keeping SROs off the market. Smith says a critical need also exists for combined housing and counseling services for mentally unbalanced crack addicts and for subsidies to those with AIDS, so they may stay in their present housing.

Mr. Hayes says that while he applauds the flurry of private low-income home construction, he is concerned it could ``create colonies of very poor people isolated from any community. By and large, middle income housing will be in one place, housing for homeless families in another. That's social planning that violates the most basic tenets of what we're trying to do.''

``We're recreating the welfare hotels in a horizontal rather than a vertical design,'' he says. ``Rather than integrating these people with schools, businesses and support services, it's all housing for people leaving hotels. A lot of these families have been hurt badly, and a community needs a bedrock of stablility to succeed. It's important to get more working families integrated.''