Confronted with a grim fiscal situation in his second month as New York City mayor, Zohran Mamdani no longer intends to back the growth of a more-than $1 billion initiative intended to help struggling tenants pay rent.
Mamdani had staked his candidacy on making life more affordable in the five boroughs on the initiative, known as CityHEPS, The New York Times reported.
Mamdani’s pullback comes despite a plan passed by the City Council and upheld in court.
The Times said the reversal marks the clearest example yet of the clash between the ideology of his democratic socialist campaign and the tough realities of managing a sprawling, costly bureaucracy.
The Times noted that during a recent news conference, he suggested the program’s full expansion might be too expensive. He lamented a looming budget deficit that on Wednesday he pegged at $7 billion over two years.
Now, Mamdani’s administration is negotiating with housing advocates on how to settle a lawsuit that sought to ensure that growth in the program occurred. His lawyers recently requested that the case be adjourned while they worked to find a solution with the City Council and the Legal Aid Society, which brought the suit.
Program Expansion Would Increase its Costs by $17B
Roughly 65,000 households, representing 140,000 people, use the vouchers, according to city data.
If the program were to be fully expanded, The Times noted that some 47,000 households would become newly eligible, potentially adding $17 billion in costs to the city over five years, citing a rough estimate from city budget officials in January 2024.
Proponents of the voucher program say that City Hall greatly overstated its potential cost to the city.
Joe Calvello, a spokesman for Mamdani, said that the city was “aiming to prevent homelessness while delivering a budget that is responsible and sustainable.”
But Tiffany Cabán, a City Councilwoman who sponsored a bill to expand the program, questioned Mamdani’s shift in position.
“We passed the bills at the size and scale that they were needed to address the crisis that we’re facing, and that is going to save us money in the long term,” she said. “Yes, it is expensive. It is also going to make our city safer and healthier.”
The Times noted that the rental assistance program is one of the city’s most significant ways of addressing its housing and homelessness crisis, which has left thousands of people living on the streets and more than 86,000 people in shelters.
Rents have risen sharply in recent years, the publication stated, and the share of apartments that rent below the citywide median and are available to rent is less than 1 percent, according to city data.
CityFHEPS is one of the largest rental assistance programs in the nation and works similarly to the Section 8 housing voucher program, The Times reported. Renters contribute 30 percent of their income to rent, with the city covering the rest.
Legislation Made People Eligible for Vouchers
As the city’s affordable housing shortage has worsened, The Times said its cost has grown substantially, from about $25 million in 2019 to more than $1.2 billion in 2025.
Most of that increase took place before the Council passed its expansion into law in 2023.
That legislation made people eligible for vouchers if they had received written demands from their landlords for rent owed and raised the income level for voucher eligibility.
“This program is growing at an unsustainable clip,” said Ana Champeny, Vice President for Research at the Citizens Budget Commission, a nonpartisan budget watchdog, which has raised concerns about the program’s cost for years.
Mamdani’s predecessor, Eric Adams, vowed he would not enforce most of the bills passed by the Council, and cited his worries about their cost. When Legal Aid, representing tenants, brought a lawsuit to compel Adams to implement the laws, he fought back.
As a candidate, Mamdani admonished Adams for the pushback, The Times noted.
“What a ridiculous waste of time during a housing crisis,” Mamdani said in a social media post last July, when he was the Democratic nominee for mayor.
“Zohran will drop lawsuits against CityFHEPs and ensure expansion proceeds as scheduled and per city law,” his campaign website read.
The case, which is being litigated in the New York State Court of Appeals, has been delayed for another month while the parties aim to negotiate a deal that would narrow the scope of the program, according to legal papers.
By moving to settle the lawsuit, Mamdani is signaling he will not comply with the bills the Council passed into law to widen the program.
City officials projected that even without the expansion, the program will cost nearly $2.4 billion more than Adams budgeted for the remainder of this fiscal year, which ends June 30, and the next one.
