New NYC housing voucher program to be created as part of city budget deal
Credit: Ed Reed/Mayoral Photography Office on Flickr
New York City will create a new program for housing vouchers that will expand rental assistance under a handshake budget agreement announced on Tuesday. The mayor and the City Council announced a $125.8 billion budget deal, which invests $300 million over two years in a new voucher program that could reach about 30,000 more New Yorkers. The agreement also requires Mayor Zohran Mamdani to drop his appeal of a court ruling ordering the expansion of the voucher program known as CityFHEPS, ending a legal battle that began under former Mayor Eric Adams over ballooning costs.
Under the agreement, the Council will vote on a preconsidered introduction, sponsored by Council Member Pierina Sanchez, to create a new rental assistance program aimed at reaching more New Yorkers facing eviction and those in shelter who are not currently eligible for the existing CityFHEPS program.
Administered by the city’s Department of Housing Preservation and Development, the new voucher program will establish a “sustainable framework” for annual evaluation moving forward, with “guardrails” on the program that impose cost controls.
The Council has committed $175 million in fiscal year 2027 and $125 million in fiscal year 2028.
Once passed, the Mamdani administration will drop its appeal of the lawsuit, marking the culmination of a lengthy legal battle that has threatened housing support for thousands of families that would have been eligible for vouchers.
“Every New Yorker deserves a safe, affordable home, and this agreement will help more families avoid eviction and homelessness,” Council Speaker Julie Menin said. “Housing vouchers are a smart investment that save taxpayers money by preventing homelessness before it happens.”
“Keeping families in their homes means children can remain in their schools, parents can stay connected to work, and communities remain stable.”
The new program would increase the income eligibility threshold for New Yorkers living at or below 50 percent of the area median income. It would also extend eligibility to individuals living in non–Department of Homeless Services shelters, including runaway and homeless youth, justice-involved individuals, and New Yorkers displaced by fires or other vacate orders.
CityFHEPS currently serves roughly 65,000 households, or 140,000 people, making it one of the largest rental assistance programs in the nation. The program allows low-income New Yorkers to pay 30 percent of their income toward rent, with the city covering the remainder.
The program was established by former Mayor Bill de Blasio in 2018 as a consolidation of several voucher programs to provide rental assistance to people living in shelters or at risk of homelessness.
In 2023, the Council passed a legislation package that expanded eligibility for the program by raising the income eligibility threshold, eliminating the shelter-stay requirement, and removing select work and source-of-income requirements.
The changes were meant to make the program more proactive by keeping families at risk of eviction in their homes, rather than requiring them to enter shelters before becoming eligible for assistance.
Adams vetoed the legislation, prompting the Council to override the veto. The administration then filed a lawsuit over policy concerns and the program’s estimated $17 billion price tag. According to the Council, housing vouchers cost as little as $54 per day per family, compared with as much as $270 per day for shelter costs.
Last July, after securing the Democratic nomination, Mamdani called Adams’ opposition to CityFHEPS a “ridiculous waste of time during a housing crisis” in a post on X. His (now defunct) campaign website also pledged: “Zohran will drop lawsuits against CityFHEPS and ensure expansion proceeds as scheduled and per city law,” as 6sqft previously reported.
However, in February, while facing a projected $7 billion budget deficit, Mamdani suggested he no longer intended to support the program’s expansion. After failing to reach a deal with housing advocates over the program, Mamdani appealed the court ruling in March, setting the stage for another drawn-out legal battle.
The new program includes cost-saving measures aimed at addressing prior fiscal concerns. Under the agreement, the mayor and Council will be required to negotiate the program’s scale annually.
Robert Desir, a staff attorney at the Legal Aid Society, called the deal a major victory for New Yorkers in shelters and those facing eviction and homelessness.
“This agreement secures a $175 million appropriation, modernizes the city’s rental assistance framework, and brings this needless litigation to a close,” Desir said in a statement. “More New Yorkers will now be able to access the support they need before losing their homes, reaffirming what we’ve long known: investing in real assistance is both the humane choice and the fiscally responsible one.”
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