Five-year $17 billion estimate was based on higher average monthly voucher cost per recipient 

City Hall, NY – Today, the New York City Independent Budget Office (IBO) released a report on the City Fighting Homelessness and Eviction Prevention Supplement (CityFHEPS) rental assistance voucher program that includes information showing, for the first time, how Mayor Adams’ administration calculated its cost estimate of Council legislation passed last year to reform the program. This new information reveals the Administration used an inflated per-voucher cost, illustrating why its $17 billion projection so vastly exceeded other cost estimates and raising major questions about its accuracy.

The legislative package of four enacted local laws (Local Laws 99, 100, 101, and 102), which remove barriers to accessing CityFHEPS housing vouchers and go into effect on January 9, 2024, were previously the subject of multiple reports with varying estimates of their costs to the City, including some finding annual savings for the City. Several estimates, including the Council’s own, accounted for certain cost savings from reducing the city’s reliance on homeless shelters. The Council’s cost projection of $10.6 billion over five years was far eclipsed by the mayoral administration’s assessment, which was approximately 70% higher despite using the same estimated number of newly eligible recipients.

The IBO analysis provides new insight into how the mayoral administration may have overestimated the laws’ costs.

Key Takeaways from IBO’s report include: 

  • The Administration used a vastly higher per-voucher estimate in its cost estimate that lacked specificity and increased its overall amount.
    • It lacked an accounting for the varying contributions to rent amongst voucher-holders, instead assuming a per-voucher cost based on 90% of the maximum amount for a three-to-four person household. In contrast, the Council’s per month voucher cost is based on an estimate that incorporates the average tenant contribution, and thus is more accurate.
  • None of the governmental estimates fully account for the long-term economic savings and social benefits of maintaining people in safe, stable housing. The Council previously cited this limitation when highlighting non-governmental cost estimates by Women in Need (WIN) and Community Service Society of New York (CSS) that more accurately accounted for these costs and savings.

A cost-benefit analysis by Women in Need (WIN), the city’s largest provider of shelter and supportive housing for homeless families, found the legislation could achieve an annual savings of $730 million for the City. Its analysis, released in July 2023, relied on a comprehensive accounting for the costs of homelessness, estimating the savings of keeping individuals and families housed instead of experiencing homelessness and entering the shelter system, along with the annual money spent by the city on medical care, juvenile detention, education, and foster care.

The IBO report also identifies challenges in administering CityFHEPS that have been exacerbated by the Administration’s management, including maintaining vacancies at city agencies like the Human Resources Administration (HRA) and City Commission on Human Rights (CCHR) that are pivotal to the program. These underscore how the Administration’s agency and budget management issues have put more New Yorkers at risk of eviction and homelessness. The report highlights that:

  • In 2023, the Human Resources Administration (HRA) processed just 29 percent of Cash Assistance applications on time, which is a prerequisite for CityFHEPS vouchers. The number of employees at the City’s Commission on Human Rights (CCHR), which handles source of income discrimination cases related to housing vouchers, fell from 134 in June 2019 to 103 in June 2023. Three additional positions were eliminated due to budget cuts, and CCHR positions are not currently exempt from the City’s hiring freeze.

Last year, the Council passed and subsequently overrode the Mayor’s veto to enact the package of legislation – now Local Laws 99 to 102 of 2023 – to help address the city’s homelessness and eviction crises by reforming the CityFHEPS program. The laws are set to take effect on January 9, 2024.