An analysis of President Donald Trump’s proposed federal budget reveals potential cuts of up to 42 percent to housing programs in New York City, which could have dire consequences for low-income renters, including tenants of the New York City Housing Authority (NYCHA).
According to a recent report from the NYU Furman Center, the federal government currently provides $6.3 billion in housing and homelessness programs for New Yorkers. This encompasses funding for housing vouchers, public housing operations, home repair programs, and outreach initiatives assisting the homeless.
The proposed budget cuts $2.7 billion, equating to over 40 percent of the total funding the city relies on for these essential services.
NYCHA Chief Financial Officer Annika Lescott-Martinez expressed grave concerns during a panel discussion on Thursday, stating, “I can tell you that a 43 percent cut for any agency would be disastrous.”
Molly Waslow Park, commissioner of the NYC Department of Social Services, echoed this sentiment, emphasizing the inevitable negative impacts such a substantial reduction would have on all services provided by their agency.
The budget proposal threatens to eliminate funding for significant housing programs, including Section 8 housing vouchers, public housing under Section 9, and project-based rental assistance, all of which serve over 350,000 households in New York City. In place of these, the proposal suggests a new “State Rental Block Grant” program, where states would have to allocate a reduced financial pool as they deem appropriate.
Furman Center Director Matthew Murphy commented on this transition, stating, “The devil of that is in the details. They’re proposing to move to that model, but also proposing to cut funding.”
With diminished resources, very low-income households and homeless individuals are projected to bear the brunt of these cuts. The analysis indicates that neighborhoods with deteriorated properties traditionally dependent on federal funds for repairs will suffer the most.
The NYC Department of Housing Preservation and Development (HPD) relies heavily on federal funding, receiving 54 percent of its operating budget, which amounts to nearly one billion dollars. This funding supports crucial services, including housing vouchers, code enforcement, and emergency repair programs.
Emergency repair funds, for instance, have previously flowed into areas experiencing high rates of housing code violations, such as Bedford-Stuyvesant, East New York, and the Northwest Bronx.
Throughout the most recent fiscal year, code violations increased by 24 percent citywide, as reported by City Limits last October.
As the budget remains a proposal, ongoing negotiations in Congress could lead to amendments ahead of the annual spending plan. However, David Walsh, managing director of community development real estate and head of the east coast region at JPMorgan Chase, acknowledged the uncertainty, stating, “We are just a tweet away from changing our position.”
Panelists at the NYU Law School event revealed their skepticism regarding any hopeful turn of events, with Andrew Scherer, a professor of law and policy at the Wilf Impact Center for Public Interest Law, lamenting the grim outlook: “I hope that the worst of the worst doesn’t come about but I’m not optimistic at all.”
The proposed budget cuts could have particularly harsh implications for NYCHA, which stands as the largest public housing authority in the nation. NYCHA houses over 300,000 individuals across 244 developments, with more than 75 percent of its budget derived from federal funding, primarily supplemented by tenants’ rental payments.
Public Housing Committee Chair and Councilmember Chris Banks has described the budget cuts as a “doomsday scenario for NYCHA, or for public housing, period,” while also pointing out that only Congress holds the power to allocate federal funding.
During a City Council hearing on May 14, NYCHA officials acknowledged that the president’s budget plan serves as a guiding document of the administration’s priorities but ultimately leaves funding decisions to lawmakers.
NYCHA CEO Lisa Bova-Hiatt underscored this point, asserting, “NYCHA and New York City have weathered D.C.’s political storms before, and the present tempest won’t be an exception.”
Meanwhile, Lescott-Martinez mentioned that the housing authority is proactively engaging in contingency planning across all programs to mitigate the impact of potential budget cuts.
In response to this projected funding void, the City Council aims to allocate an additional $2 billion in capital over the next four years for NYCHA.
“We want to try to do as much as we can on the city budget to kind of undergird NYCHA,” said Councilmember Banks, who recognized the significant financial gaps resultant from federal cuts.
The uncertainty has left many NYCHA residents feeling anxious, as Councilmember Banks noted, “It’s definitely a lot of uncertainty. Folks are scared.”
NYCHA officials have pointed out that federal disinvestment in public housing has been a long-standing issue, leading to exacerbated conditions where already deteriorating public housing will continue to decline further, according to Scherer.
The proposed budget’s cuts to critical housing programs coincide with the expansion of tax incentives such as the Low Income Housing Tax Credit (LIHTC) program and Opportunity Zones, which aim to encourage development in underserved areas.
Despite the possibility of increasing LIHTC allocations, Murphy declared, “An expansion of the LIHTC is great, but it does not help us.”
Through the Opportunity Zone initiative, which began in 2017 during Trump’s first term, 11 percent of New York City’s land area—affecting 16 percent of its population—has been designated for development incentives.
While housing stock in these zones has grown at a rate exceeding 2 percent in 2023 and 2024, compared to less than 1 percent citywide, the bulk of new development is market rate rather than income-restricted housing, leading to concerns over accessibility.
Hayley Raetz, policy director at the Furman Center, observed, “LIHTC serves low-income households; the Opportunity Zone program is not similarly targeted.”
The ramifications of the proposed budget cuts extend beyond housing, as they coincide with anticipated reductions in funding for Medicaid and SNAP benefits. These cuts threaten to create additional burdens on state and local governments, as Park highlighted during the panel discussion.
“Those are hitting the government budgets as well as low-income household budgets,” she explained.
Low-income renters are poised to feel the greatest strain, as they may find it increasingly challenging to manage their limited resources. Additionally, the budget includes a two-year cap on rental assistance like Section 8 for able-bodied adults, which does not apply to senior citizens or tenants with disabilities.
Scherer warned, “If these cuts come to pass, evictions will come.”
The strain on public resources raises real concerns about a possible increase in homelessness rates, as Park indicated that cuts to critical programs, including CityFHEPS housing vouchers, could jeopardize overall service provision.
“There is absolutely the potential for a meaningfully increased homelessness rate,” she cautioned.
As Congress continues to debate the proposed budget, the stakes remain high for New York City’s most vulnerable residents. The potential loss of housing assistance looms large, and many fear the repercussions of such a significant funding drop will exacerbate existing challenges in an already strained housing market.
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