Billions Facing The Axe

According to a report released Thursday by the NYU Furman Center, the federal government provides $6.3 billion for housing and homelessness services in New York City. Trump’s proposed budget aims to cut $2.7 billion from that figure, wiping out over 40 percent of the funding meant for vital services like housing vouchers, public housing operations, home repairs, and outreach programs for the homeless. “I can tell you that a 43 percent cut for any agency would be disastrous,” said NYCHA CFO Annika Lescott-Martinez during a panel at NYU Law School. NYC Department of Social Services Commissioner Molly Waslow Park agreed, adding, “I don’t see a world where we take a 43 percent cut and it doesn’t affect all of our services.”

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Key Programs At Risk

The proposed budget threatens to eliminate major initiatives such as Section 8 housing vouchers, public housing under Section 9, and project-based rental assistance, which together support over 350,000 city households. The plan would replace these with a “State Rental Block Grant,” a smaller pool of funds distributed by individual states. “The devil of that is in the details,” noted Furman Center Director Matthew Murphy. “So they’re proposing to move to that model, but also proposing to cut funding.” Experts warn the reductions will disproportionately harm very low-income residents and those in physically distressed neighborhoods reliant on federal repair programs.

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Federal Cuts, Local Consequences

New York City’s Department of Housing Preservation and Development (HPD) relies on federal funding for 54 percent of its operating budget, nearly $1 billion. These funds support housing vouchers, code enforcement, and emergency repair programs, crucial in areas like Bedford-Stuyvesant, East New York, and the Northwest Bronx. Citywide housing code violations surged by 24 percent in the last fiscal year, City Limits previously reported. Although the budget is still a proposal, there’s little optimism about a positive outcome. “I hope that the worst of the worst doesn’t come about, but I’m not optimistic at all,” said Andrew Scherer, professor of law and policy director at the Wilf Impact Center for Public Interest Law.

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Dire Future For NYCHA

The hardest hit would be NYCHA, home to over 300,000 residents across 244 developments, where more than 75 percent of the budget comes from federal funds. Public Housing Committee Chair Councilmember Chris Banks called the cuts “a doomsday scenario for NYCHA, or for public housing, period.” At a May 14 City Council hearing, NYCHA officials stressed that only Congress controls federal funding, and while a president’s proposal reflects policy priorities, lawmakers finalize spending plans. “NYCHA and New York City have weathered D.C.’s political storms before, and the present tempest won’t be an exception,” said NYCHA CEO Lisa Bova-Hiatt. Still, Lescott-Martinez confirmed, “We’re doing contingency planning across all of our programs.” The City Council is considering a $2 billion capital allocation over four years to help plug funding gaps. “But the holes are pretty big when those types of cuts come through from the federal government,” Banks admitted.

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Tax Breaks Over Aid

While slashing direct housing support, the budget expands tax incentives like the Low Income Housing Tax Credit (LIHTC) and the Opportunity Zones program, aimed at encouraging private development. “These are different programs and targeted to different people, and while they intersect, it’s nowhere near going to offset [the other proposed cuts],” said Murphy. Although LIHTC assists low-income households, Opportunity Zones, launched during Trump’s first term in 2017, favor market-rate housing in previously upzoned high-income areas. The Furman Center found Opportunity Zones’ housing stock grew over 2 percent in 2023 and 2024 compared to less than 1 percent elsewhere. “An expansion of the LIHTC is great, but it does not help us,” remarked Lescott-Martinez.

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Evictions And Homelessness Fears

Local and state officials fear the proposed cuts could trigger a wave of evictions and homelessness. The Congressional Budget Office (CBO) projects that the budget would increase the federal deficit by $2.4 trillion. “It’s about redistributing the wealth upwards,” said Scherer. The administration also seeks to reduce funding for Medicaid and SNAP benefits, increasing financial pressure on local and state governments already stretched thin. “Those are hitting the government budgets as well as low-income household budgets,” Park warned. Especially concerning is the proposed two-year cap on rental assistance for able-bodied adults, excluding seniors and people with disabilities. “If these cuts come to pass, evictions will come,” Scherer predicted.

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Future Services At Stake

Plugging federal budget holes might force the city to sacrifice other crucial services, such as CityFHEPS, the largest discretionary housing voucher program in NYC. “There is absolutely the potential for a meaningfully increased homelessness rate,” said Park. Officials emphasized that while the city is preparing, the scale of federal disinvestment, particularly in public housing, has been decades in the making. “The already significantly deteriorated public housing stock will continue to deteriorate,” Scherer added.

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