Mamdani, Menin Reach $126B Budget Deal, Expand CityFHEPS

12 minutes read

A New York City budget totaling $125.8 billion is poised to pass ahead of a looming deadline, ending a heated battle between the Mamdani administration and City Council over CityFHEPS rental assistance vouchers.

Mayor Zohran Mamdani and Council Speaker Julie Menin announced a compromise to expand voucher access for up to 30,000 additional New Yorkers facing eviction or experiencing homelessness, contingent on the mayor dropping the past administration’s appeal of a lawsuit that sought to compel CityFHEPS expansion.

Under today’s deal, Mamdani agreed to drop litigation in exchange for a new program to take its place under the Housing Access Voucher Program. The CityFHEPs expansion will sit under this umbrella as a new rental assistance program that will expand access to more people.

Menin and the City Council were looking to receive between $300 million and $500 million to expand the program over the next two years. Mamdani in his initial budget aimed to cut the program by $500 million. The handshake deal reached in the City Hall rotunda Tuesday includes at least $300 million over the next two years to expand rental assistance, intended to decrease reliance on shelters cited by lawmakers as a costly and inferior alternative to funding the voucher program. The program will received $175 million from the city in fiscal year 2027 and then an additional baseline $125 million the following year.

“There is nothing fiscally responsible about balancing the budget on the backs of working people,” Mayor Mamdani said. “We have worked together to usher in a new era of fiscal health for our city, one that is sustainable, one that is durable and one that makes needed investments in a safer, more affordable New York.”

“This new bill creates a fiscally responsible structure for housing vouchers that contains costs, but above all, protects thousands more vulnerable New Yorkers,” Speaker Menin said.

The City Fighting Homelessness and Eviction Prevention Supplement program’s costs have ballooned over the years, growing from $26 million in 2019 to more than $1.8 billion this year. Lawmakers defending it have pointed to its scale — currently serving more than 65,000 families — as well as the fact that it penciled out to around $54 per day compared to daily shelter costs that can reach up to $270 for each family.

Mamdani’s stance on CityFHEPS when he first entered office was a departure from campaign promises to drop the Adams-era appeal amid an early mayoralty when a $12 billion budget deficit loomed large.

When the Mayor released the executive budget last month, he claimed victory on plugging the gaps through “strong fiscal management” and new tax revenue, while proposing a $500 million cut to the CityFHEPs program focused on reducing the city payouts to brokers.

In the handshake deal, the mayor can now claim support for a popular program that briefly unified an unlikely coalition of Council members across the political spectrum, along with advocates for both tenants and landlords.

The final budget also includes additional funding for parks, the Fair Fares transit discount program, the CUNY system and adds $350 million to the city’s general reserve, while also setting up $1,000 college savings accounts for every public school kindergartner, which Menin called the nation’s largest universal college savings program.

Council member Pierina Sanchez, one of the Council’s most vocal proponents for expanding CityFHEPS, is lead sponsor on a bill that will establish a new rental assistance program to an additional tranche of New Yorkers not currently eligible for CityFHEPs.

The Department of Housing Preservation and Development will administer the new voucher program, which includes a framework for annual evaluation by the Mayor and the Council.

The expansion will increase the income eligibility threshold to include those living at or below 50 percent of the area median income and apply to recipients living in non-DHS shelters.

The new legislation is expected to pass at a City Council vote today following the handshake, at which point the Mamdani administration will drop its appeal in the CityFHEPs legal battle. The new rental assistance program will do its part alongside NYCHA and HPD solutions aiming to compensate for the loss of federal housing assistance vouchers across 7,700 households, representing $125 million worth of vouchers, according to Sanchez.

“We are expanding eligibility, while also maintaining this as a capped appropriation,” Sanchez told The Real Deal. “This is transformative, shifting the giant Titanic that is New York City just one degree over in the direction of keeping people in their homes, focusing our resources on permanent housing.”