City Budget Deal On Hold Over CityFHEPS Housing Voucher Expansion

Speaker Julie Menin cancelled a budget handshake with Mayor Zohran Mamdani Friday after the two sides couldn’t agree on funding an expansion of the city’s housing voucher program, CityFHEPS.

Mayor Zohran Mamdani’s first spending plan hit a bump in the road Friday, when Speaker Julie Menin cancelled a handshake on a budget deal after the two failed to agree on funding for the city’s voucher program.

The voucher program, CityFHEPS, became a sticking point for several progressive Council members who said they would not vote for a budget that does not include a significant expansion, putting pressure on Speaker Menin, City Limits reported last week.

But the speaker and councilmembers rallied together Friday morning to turn that pressure onto the mayor to expand the program.

“We appreciate [Speaker Menin] having our backs,” said Councilmember Pierina Sanchez. “The handshake could have been today.”

The saga stretches back to 2023, when the City Council passed a series of laws that would have expanded eligibility for the vouchers to people with higher incomes, and to some households facing eviction. CityFHEPS voucher holders pay 30 percent of their income in rent, while the city picks up the rest. Approximately 70,000 households use the program.

The mayor had promised to expand CityFHEPS during his campaign, but backtracked earlier this year while trying to fill a budget deficit. The program’s costs have expanded rapidly in recent years, eclipsing a billion dollars last year and alarming some budget groups as well as City Comptroller Mark Levine, who says its budget is growing at 4 percent a month.

Neither the mayor nor the speaker included an expansion of the program in their previous budget plans. The mayor’s executive budget called for $500 million less for CityFHEPS than his preliminary budget, savings that the administration said would come from program reforms.

Menin has called on the administration to drop its opposition to a City Council lawsuit compelling the mayor to implement the 2023 expansion (originally filed against former Mayor Eric Adams, who also refused to carry out the laws).

“We have made it clear from day one that this is one of our biggest budget priorities and we expect the administration to help us fund the program’s expansion,” said Menin at a rally Friday morning.

City Hall said they want to find a compromise that the city can afford. 

“Mayor Mamdani has been clear that this Administration believes that CityFHEPS is a lifeline for thousands of New Yorkers leaving the shelter system and seeking stable housing. 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,” said a spokesperson for the mayor in a statement.

Lawmakers do not expect to reach a budget that funds the full expansion, but are hopeful that the Council and the mayor will reach a deal that expands the program in the spirit of those 2023 laws.

A previous analysis by Women In Need (WIN), the city’s largest provider of family shelter, floated a compromise: $500 million to expand eligibility for people in shelter, as well as people in rent-stabilized apartments who are facing eviction.

Some advocates say that expanding vouchers will save the city money in the long run by reducing shelter costs.

“There is not a choice to do nothing in the city of New York,” said WIN CEO Christine Quinn, referring to the city’s longstanding obligation to provide shelter for everyone that asks for it. “The choice is, do you spend close to $300 a night for WIN to house someone in a shelter, or $54 a night for someone to use a voucher in permanent housing.”

The Citizens Budget Commission, a government watchdog group, disputes those savings claims, saying that while vouchers are cheaper than shelter per night, the cumulative costs for CityFHEPS are greater over the long term since the majority of participants retain their vouchers for at least five years (the average shelter stay, by contrast, is 15 months, the organization says). 

The city budget handshake—a tradition where the mayor and Council speaker shake on a budget deal before it gets voted on—has been moved to Monday, according to the speaker’s office. The City Council’s stated meeting was moved to Tuesday.

To reach the reporter behind this story, contact Patrick@citylimits.org. To reach the editor, contact Jeanmarie@citylimits.org

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