Negotiations over New York City’s next budget have hit a late snag as city councilmembers mount a pressure campaign to convince Mayor Zohran Mamdani to boost funding for the city’s rental voucher program.
The program, called the City Fighting Homelessness and Eviction Prevention Supplement, or CityFHEPS, allows recipients to pay 30% of their income toward rent, with the city paying the rest. It’s the nation’s largest municipal housing assistance program.
More than 26,000 people used the vouchers to move out of shelters in the last fiscal year, according to city data.
Members of the Council’s progressive caucus pushed for CityFHEPS expansion in social media posts on Saturday.
The social media blitz from progressives comes after City Council Speaker Julie Menin and other councilmembers rallied on the steps of City Hall Friday to push the program’s expansion.
“ We must guarantee long-term stability so that families at risk can stay in their homes and families in the shelter system can transition into housing,” Menin said Friday. “And with an expanded CityFHEPS, we can do just that.”
Menin held the rally instead of joining Mamdani to make what would have been a handshake deal on the next budget, according to Councilmember Pierina Sanchez, the chair of the housing committee and a member of the progressive caucus. She said the voucher spat caused the delay.
“ We would have had a handshake on Friday and we would've been all set, all systems go to vote on a budget tomorrow, on Monday, had it not been for this disagreement,” Sanchez said.
CityFHEPS was created in 2018 to help people living in shelters or at risk of homelessness secure housing. The Council voted to expand the program in 2023, but that was met with a lawsuit by former Mayor Eric Adams’ administration, which challenged the Council’s authority and argued the city could not afford the expansion.
Mamdani campaigned on expanding CityFHEPS. Since taking office, his administration has continued the legal challenge begun under Adams and sought to delay the expansion as the city faces a $5 billion budget deficit.
We can't just walk away and settle.
Menin urged Mamdani on Friday to drop the legal challenge.
“ The administration should drop this costly and endless litigation and do it now,” Menin said. “ Work with the council on a responsible path towards implementation. Continuing this lawsuit helps no one.”
Menin did not include a call for expanding CityFHEPS in the Council’s budget response in April, only noting at that time that the Council had offered a settlement of the litigation.
“ We have been ready, willing and able to reach a financially responsible settlement since day one. And in that time, too many New Yorkers who could've been receiving support from the program have been left behind,” Menin said Friday. “Enough is enough.”
Matt Rauschenbach, a spokesperson for Mamdani, said the administration believes CityFHEPS is a critical program but that reforms are needed to protect its future.
"As the stewards of CityFHEPS, and as an administration that firmly believes in its purpose, we want to protect it by placing it on firm financial footing,” Rauschenbach said.
Settlement negotiations in the lawsuit are ongoing. Sanchez is part of those discussions and she said she believes all parties have been working in good faith.
“ Whatever we land at will have a price tag, and that price tag is what we are basically fighting about right now and we can't just walk away and settle,” Sanchez said. “We can't just sign a settlement that then isn't going to deliver that immediate relief that was intended by the original legislation.”
WIN, the city’s largest family shelter provider, estimates expanding CityFHEPS could save the city as much as $635 million in shelter costs over five years by getting or keeping people in their homes and reducing demand for shelter services.
Sustaining growing voucher programs is just something that municipal budgets can't handle.
Menin and other councilmembers have used potential shelter savings as a core part of their argument for expanding the voucher program.
“ Why would we reject this option that costs the city as little as $54 per day when the cost of homeless shelters is as high as $270 per day?” Menin said.
Calls to expand the city-funded program come as the federal government cuts back on its own rental assistance programs, including the elimination of the COVID-era Emergency Housing Voucher program that has helped 7,700 New York City households secure stable housing, and as Gov. Kathy Hochul and state lawmakers refuse to increase funding for a modest state-issued rental voucher program.
Paul Williams, the executive director of the Center for Public Enterprise and a housing policy expert who served on Mamdani’s transition team, said the federal government should be leading efforts to expand programs like CityFHEPS.
“ Municipal budgets are no replacement for the federal balance sheet,” Williams said. “Sustaining growing voucher programs is just something that municipal budgets can't handle, whereas the federal budget absolutely can.”
Critics of expansion warn that the rental vouchers are more costly in the long run because recipients are likely to remain enrolled in CityFHEPS far longer than they stay in shelters, and because the expansion would open the program to people who haven’t been in the shelter system.
The Citizens Budget Commission, a nonpartisan, nonprofit city budget watchdog group, projects CityFHEPS will cost $1.7 billion in fiscal year 2026. The group estimates that if the council’s expansion is implemented, the program will cost between $4.7 billion and $9.6 billion in fiscal year 2030.
The city comptroller’s office, meanwhile, projects an expanded program could cost an additional $6 billion to $22 billion over the first five years the changes are implemented.
Sanchez said CityFHEPS could be reformed to be more sustainable and administered more efficiently, saving money. Beyond the cost concerns, Sanchez said the city has an obligation now to expand the program as the law intended.
“ I don't doubt the intent of the folks on the other side of City Hall, of the mayor, in trying to land this,” Sanchez said. “ But we have made this commitment to fight in every single way that we can for this expansion, and that's what this is ultimately about, and we're not going to stop.”
