Unable to Reach Deal Before Court Deadline, Mamdani Appeals in Rental Voucher Expansion Case – City Limits

The Mamdani administration is appealing a court decision compelling the city to expand the CityFHEPS rental assistance program—a suit he said he’d drop—after negotiations with advocates and City Council leaders failed to produce a compromise in time.

In another development in a protracted saga over the city’s housing voucher program, the Mamdani administration announced late Tuesday that it’s appealing a court decision compelling City Hall to expand eligibility for the rental assistance.  

Housing advocates and the City Council have maintained that expanding the City Fighting Homelessness and Eviction Prevention Supplement (CityFHEPS) is crucial to moving New Yorkers out of city shelters and into permanent homes. The Council passed a series of laws in 2023 that would allow more low-income New Yorkers to qualify for the aid.

But former Mayor Eric Adams refused to implement the bills, citing costs. The program had a budget of $1.25 billion last fiscal year, and is a contributor to a larger-than-expected city budget deficit, casting doubt on further expansion.

On the campaign trail, Mayor Zohran Mamdani promised to drop the city’s opposition to the expansion, only to backtrack when faced with a nearly $6 billion budget hole. Mamdani said he was pursuing a settlement in the case last month. But faced with a court deadline Wednesday, the city opted to appeal.

“We are committed to reaching a settlement that keeps New Yorkers stably housed and delivers a balanced budget. We came to the table in good faith. But in the absence of an agreement so far, we are proceeding in accordance with the court’s timeline,” said Joe Calvello, press secretary for Mayor Mamdani, in a statement.

Housing advocates, who have been critical of the mayor’s reversal, were disappointed in the move, but remained open to finding a path forward.

“It is unconscionable that the mayor would even propose ideas that weed out people who are languishing in shelter because they don’t qualify for benefits,” said Christine Quinn, CEO of Women In Need, one of the city’s largest shelter operators.

Both sides expect negotiations on some sort of compromise to continue through the state and city budget seasons, which are due in April and June respectively.

More than 65,000 households are enrolled in CityFHEPS, where tenants—often people moving out of the city’s homeless shelters—pay 30 percent of their income in rent for a private market apartment and the city picks up the rest. 

The saga dates back to 2023, when the City Council passed a package of laws expanding CityFHEPS eligibility to households earning up to 50 percent of the area median income ($73,000 a year for a family of three, up from around $55,000). The expansion also included people facing eviction but not yet in the shelter system, and removed work requirements, among other reforms.

Mayor Adams’ administration refused to implement the laws, citing their high cost, and the expansion has been held up in court since. It’s an uncomfortable position for the new Mayor Mamdani, who criticized his predecessor and pledged to drop the suit altogether.

The appeal from the city’s Law Department critiqued former Mayor Adams, but echoed arguments made by the previous administration, which said that the City Council did not have the authority to legislate on CityFHEPS.

“When the mayoralty changed hands in January, there was no plan to fully fund CityFHEPS in its current form, let alone in an expanded form. This case is not about the policy merits of expanding CityFHEPS. It instead concerns who holds authority to determine whether and how to do so,” lawyers for the city wrote in their brief.

On appeal, the city is constrained to using arguments it used in the lower court. The Legal Aid Society, which led the original suit, rejected those.

“The arguments raised by the City in its appeal are unsound and were already rejected unanimously by the lower appellate court. It is regrettable that the Mamdani Administration has chosen to continue this litigation rather than focus on ensuring that vulnerable New Yorkers can access the housing support they urgently need,” the group said in a statement Tuesday night.

City Hall, the City Council, advocates and legal groups have tried to negotiate a path forward for the program, which is both crucial to housing New Yorkers and increasingly costly. Comptroller Mark Levine suggested that implementing the full expansion could add up to $20 billion to the city’s budget deficit in the next five years.

According to sources close to negotiations, the administration proposed keeping income eligibility the same, at 200 percent of the federal poverty level, maintaining work requirements and expanding eligibility for vouchers to people in rent stabilized apartments.

But City Council and legal aid groups declined that offer, sources said, leaving the administration, which has not budgeted for a full expansion of CityFHEPS, looking to buy more time.

On the table could be some change in the size of the population eligible under the expansion—including the possibility of a cap on the number of vouchers, similar to Section 8—or some sort of phase-in of a larger pool of eligible New Yorkers.

“We always stand ready to have conversations and to be mindful of the fiscal situation,” said Quinn. “If that means we have to do some appropriate level of tweaking, of course, we’re never going to say no to those conversations.”

She and other advocates have maintained that vouchers are actually cheaper than shelters for the city, which can cost hundreds of dollars a night. With higher than ever homelessness over the past few years, “either what you’re spending on shelter is going to go up, or what you’re spending on vouchers is going to go up. One or the other,” said Quinn.

The other player in passing a balanced budget this year is the City Council, which stood by its expansion thus far.

“Every day this appeal continues, more families are harmed. We remain at the table and ready to reach a resolution—but the City must reverse course,” said Councilmember Pierina Sanchez, chair of the committee on housing and buildings, in a statement.

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