Mayor Zohran Mamdani and City Council Speaker Julie Menin agreed Tuesday to a $125.8 billion budget, including an additional $175 million for rental help, following tense negotiations in the final days over funding for housing vouchers.
The 11th-hour deal comes on the final day before the budget is due, and will be voted on later by the Council.
“We have worked together to usher in a new era of fiscal health for our city,” Mamdani said at a City Hall press conference.
Menin also praised the “transformative” budget agreement, noting that she and the mayor “have come together in the spirit of collaboration with the shared interest of wanting what is best for our city, and that is the essence of this handshake.”
Budget negotiations were at a standstill days before the deadline over funding for the city-funded housing voucher program known as CityFHEPS, as well as the mayor’s continued lawsuit to stop the program’s expansion.
As part of the budget deal, the administration agreed to drop its lawsuit, which was filed under former Mayor Eric Adams after the Council voted to expand the program’s eligibility in 2023.
Under the agreement, the city will create a new rental program to assist more New Yorkers who are currently not eligible for the existing CityFHEPS program, and are facing eviction.
That program will be created under a bill sponsored by Councilmember Pierina Sanchez, who led the charge for more money for CityFHEPS in the budget.
“This is a historic win for vulnerable New Yorkers — and a turning point in our city’s approach to homelessness,” she said in a statement.
Former Council speaker Christine Quinn, who is now the president and CEO of shelter and supportive housing provider WIN, praised the deal.
“Expanding CityFHEPS will help thousands more individuals and families leave shelter and move into permanent, stable housing, while making smart use of taxpayer dollars,” she said.
Ballooning Costs
CityFHEPS is considered a lifeline to the approximately 67,000 New York households that rely on it to move from shelter into permanent housing. The voucher allows households to pay about a third of their income towards rent.
But the program’s cost has ballooned at a rate many have warned was unsustainable: from about $26 million in 2019 to almost $1.8 billion in 2025. That’s before the expansion dictated by a 2023 law, which would have made more New Yorkers eligible for the voucher — bringing program costs to over $4 billion by 2030, according to an estimate by the Independent Budget Office.
The Adams administration did not implement that law, and Mamdani continued his legal fight against doing so despite his campaign promise to expand the program.
The current voucher program applied to people in shelters working at least 10 hours weekly but making no more than roughly $31,920 for an individual or $66,000 for a family of four.
The 2023 law would have expanded voucher eligibility to people facing eviction — not just those in shelters — and households earning at a slightly higher income: about $56,700 for an individual and $81,000 for a family of four.
With the newly negotiated budget, CityFHEPS will apply to New Yorkers at that increased income level, as well as to those facing eviction from rent-stabilized apartments, and those in shelters beyond what the Department of Homeless Services runs — like runaway youth and people displaced by fires or vacate orders.
Robert Desir, Legal Aid Society staff attorney, in a statement lauded the deal that brought the “needless litigation to a close.”
“More New Yorkers will now be able to access the support they need before losing their homes, reaffirming what we’ve long known: investing in rental assistance is both the humane choice and the fiscally responsible one,” he said.
The budget is the first negotiated between Mayor Mamdani and Speaker Menin, and came after help from the state to plug a more than $12 billion deficit.
It also increased funding for Fair Fares by $54 million, which provides discounts on MTA subway and bus rides, and more permanent funding for libraries at $31.7 million.
Mamdani also announced the creation of a portal to release documents related to the air quality and health impacts after the Sept. 11, 2001 attacks, which will cost more than $34 million next year. Previous mayoral administrations had refused to release the documents, sparking a years-long advocacy campaign that this week criticized the city for continuing its delay.
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