Trump’s Proposed Budget Would be ‘Disastrous’ for NYC Housing Agencies

An analysis of Trump’s proposed federal budget says it could cut housing programs in New York City by up to 42 percent, with the biggest impact on low income renters, including NYCHA tenants.

NYCHA’s Gowanus Houses in Brooklyn. (Photo by Adi Talwar)

President Donald Trump’s proposed federal budget would gut housing programs that low income New Yorkers rely on to keep them housed, according to a new report. The cuts could be particularly devastating for NYCHA, the largest public housing authority in the nation.

The federal government funds $6.3 billion in housing and homelessness programs that serve New Yorkers, according to the report from the NYU Furman Center* released Thursday morning. That includes funding for housing vouchers, operating public housing, home repair programs, and street outreach to the homeless. 

The proposed budget cuts $2.7 billion, or over 40 percent of the $6.3 billion total the city receives for these initiatives. 

“I can tell you that a 43 percent cut for any agency would be disastrous,” said New York City Housing Authority (NYCHA) CFO Annika Lescott-Martinez at a panel conversation on the proposal Thursday morning. 

Molly Waslow Park, commissioner of the NYC Department of Social Services, added, “I don’t see a world where we take a 43 percent cut and it doesn’t affect all of our services.”

The budget proposal would eliminate funding for some of the city’s largest housing programs. That includes Section 8 housing vouchers, public housing under Section 9, and project based rental assistance, programs that serve over 350,000 New York City households. It would replace them with a “State Rental Block Grant” program, where states distribute a smaller pool of money as they see fit.

“The devil of that is in the details,” said Furman Center Director Matthew Murphy. “So they’re proposing to move to that model, but also proposing to cut funding.”

With significantly less money to work with, the cuts would disproportionately affect very low income households and homeless individuals, the Furman Center analysis says. They are also more likely to affect neighborhoods with physically distressed properties that rely on federal programs for repairs.

The city’s Department of Housing Preservation and Development (HPD) gets 54 percent of its operating budget from federal funding, totaling nearly a billion dollars. It funds key services like housing vouchers, code enforcement, and emergency repair programs.

Those emergency repair funds flowed to neighborhoods like Bedford-Stuyvesant, East New York, and the Northwest Bronx—three hotspots for housing code violations, which jumped by 24 percent citywide in the most recent full fiscal year, as City Limits reported in October.

The budget is still a proposal, and the plan could change in the coming months as Congress negotiates its annual spending plan. “We are just a tweet away from changing our position,” said David Walsh, managing director of community development real estate and head of the east coast region at JPMorgan Chase.

But panelists at the Thursday morning breakfast at New York University Law School offered scant hope: “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 of the Wilf Impact Center for Public Interest Law at New York Law School.

An apartment in a violation-riddled building in Washington Heights last year. (Gerardo Romo / NYC Council Media Unit)

Trepidation at NYCHA

The cuts could be felt most acutely in New York City’s public housing. NYCHA, the nation’s largest and oldest public housing authority, is home to over 300,000 people across 244 developments. Its budget is made up of over 75 percent federal funding, with most of the remaining revenue coming from tenants’ rental payments.

Public Housing Committee Chair and Councilmember Chris Banks called Trump’s cuts “a doomsday scenario for NYCHA, or for public housing, period,” in an interview with City Limits last month.

NYCHA officials, in a hearing before the City Council on May 14, also emphasized that only Congress has federal funding power, and while the president’s budget plan “acts as a guiding document of the administration’s priorities,” said Lescott-Martinez, it’s ultimately up to lawmakers to write and pass their own spending bills.

“NYCHA and New York City have weathered D.C.’s political storms before, and the present tempest won’t be an exception,” NYCHA CEO Lisa Bova-Hiatt said at the time. 

Still, Lescott-Martinez said the housing authority is “doing contingency planning across all of our programs.”

The City Council wants to provide an additional $2 billion in capital money for NYCHA over the next four years to help plug the gap. A city budget deal is due July 1. 

“We want to try to do as much as we can on the city budget to kind of undergird NYCHA,” Councilmember Banks said. “But the holes are pretty big when those types of cuts come through from the federal government.”

The brunt of the cuts could fall hardest on NYCHA residents. “It’s definitely a lot of uncertainty. Folks are scared,” said Banks.

NYCHA officials noted that the federal government has been disinvesting in public housing for decades. “The already significantly deteriorated public housing stock will continue to deteriorate,” said New York Law School’s Scherer.

A shift to incentives for development

While the budget cuts funding for housing programs, it expands tax incentives like the Low Income Housing Tax Credit program (LIHTC) and the Opportunity Zones program, which aims to spur development in underserved areas.

“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.

In total, the Furman Center estimated that the city receives $7.2 billion from the federal government when including tax subsidies like LIHTC, according to the Furman Center report.

“An expansion of the LIHTC is great but it does not help us,” said NYCHA’s Lescott-Martinez.

Through the Opportunity Zone program, started in 2017 during Trump’s first term, New York State designated census tracts in 11 percent of the city’s land area, covering 16 percent of its population, as eligible for development incentives.

The Furman Center found that Opportunity Zones grew their housing stock faster, at a rate of over 2 percent in 2023 and 2024 compared to less than 1 percent in the rest of the city. But a greater proportion of the new development was market rate, rather than income-restricted, and new housing in opportunity zones was disproportionately built in high-income areas that overlapped with previous city upzonings.

“LIHTC serves low-income households, the Opportunity Zone program is not similarly targeted,” said Hayley Raetz, policy director at the Furman Center.

(Michael Appleton/Mayoral Photography Office)

Risks of eviction and homelessness

The proposed budget, which the Congressional Budget Office found would increase the deficit by $2.4 trillion, has alarmed local and state governments.

“It’s about redistributing the wealth upwards,” said Scherer.

At the Thursday morning panel, officials sounded the alarm about the compounding impacts of cuts to housing and social services. The Trump administration also wants to slash funding for Medicaid and SNAP benefits, which would leave local and state governments with many holes to plug, DSS’ Park detailed.

“Those are hitting the government budgets as well as low income household budgets,” she said.

The greatest strain would fall on low income renters, who would have to stretch their limited resources even further. The budget proposal also includes a two-year cap on rental assistance like Section 8 for “able bodied” adults (the cap would not apply to senior citizens or tenants with disabilities).

If these cuts come to pass, “evictions will come,” said Scherer.

Plugging those budget holes could put other programs at risk, Park elaborated, including CityFHEPS housing vouchers, DSS’ largest discretionary expenditure. 

 “There is absolutely the potential for a meaningfully increased homelessness rate,” said Park.

*Editor’s note: Reporter Patrick Spauster was previously a data fellow at the Furman Center.

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

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