State Comptroller Identifies Inefficiencies and Cost-Saving Opportunities
Audit Reveals Structural Inefficiencies in City Program
A new audit from New York State Comptroller Tom DiNapoli identified significant inefficiencies in CityFHEPS, the city’s main rental assistance program that serves approximately sixty thousand households. The program has become one of the nation’s largest rental assistance initiatives since launching in 2017. Most program participants are formerly homeless New Yorkers who use vouchers to help pay rent and maintain stable housing. The audit suggests the city could save substantial money by implementing stronger oversight mechanisms and changing how the program vets landlords and brokers. These savings could theoretically free resources to serve additional tenants without increasing overall program costs.
What the Audit Found
The state comptroller’s office identified several areas where inefficiencies drive up costs. The audit recommended increasing oversight of broker relationships with landlords to prevent overpayment situations where the city pays excessive subsidies. The audit also recommended refusing to contract with property owners whose apartments accumulate hazardous violations. CityFHEPS has limited mechanisms for vetting properties before approving them for subsidy participation. Some buildings participating in the program suffer from maintenance neglect and code violations that create unsafe living conditions for recipients. The audit suggests that better vetting could both improve quality of housing for clients and reduce costs by excluding predatory landlords from program participation.
Program Scale and Current Beneficiaries
CityFHEPS now serves roughly sixty thousand households, making it a central component of the city’s efforts to house homeless individuals and families. Few alternatives exist for low-income families who cannot afford rent without assistance. Federal Section 8 vouchers have enrollment caps that leave the vast majority of eligible New Yorkers without access. State rental assistance is similarly limited. CityFHEPS fills a critical gap but operates under significant budget constraints. The program carries a roughly 1.2 billion dollar annual price tag.
Mamdani’s Campaign Promises on Rental Assistance
During his campaign, Mayor Mamdani pledged to expand the CityFHEPS program under terms of 2023 legislation that the City Council approved. The proposed expansion would allow more New Yorkers facing eviction to qualify for vouchers. The legislation would also enable families earning more than current eligibility thresholds but still considered low-income to access the program. Former Mayor Eric Adams opposed the expansion measures, arguing that they would cost the city billions of dollars without proven benefits. After the City Council voted to override Adams’ veto, the former mayor refused to implement the laws. The expansion measures remain tied up in appeals court litigation over their constitutionality and implementation feasibility.
Budget and Financial Arguments
Some economists and budget watchdogs have sided with Adams’ concerns, arguing that expanding CityFHEPS would force the city to pay substantially more without clear limits on program growth. They note that if the city guarantees rental assistance to all low-income households, costs could potentially grow to billions of dollars annually depending on how many people qualify and what rents they face. Councilmembers and homeless rights advocates counter that expanded CityFHEPS would generate savings in the shelter system. Currently, the city spends enormous resources maintaining families in shelter facilities. If CityFHEPS placement reduced shelter needs, those savings could offset program expansion costs. The debate hinges on whether forecasted shelter savings would materialize.
How Mamdani Intends to Proceed
Comptroller DiNapoli stated that stronger oversight of CityFHEPS is critical to helping individuals and families access safe housing and remain in their communities. Mamdani campaigned on implementing the oversight measures the audit recommends. He also pledged to drop the Adams administration’s legal challenge to the expansion legislation. Spokesman for Mamdani did not respond to questions about the mayor’s specific timeline for expanding the voucher program. The silence suggests that while supportive of expansion in principle, the administration is evaluating how to proceed given the ongoing litigation and budget realities.
Program Design and Service Delivery
The CityFHEPS program provides vouchers allowing recipients to pay approximately fifteen dollars weekly for housing, a fraction of actual market rents. The city pays the difference between market rent and the tenant contribution. The voucher functions as portable assistance that participants can use at any landlord willing to accept CityFHEPS vouchers. Many landlords participate because the program guarantees rent payment, reducing collection risk. However, some landlords exploit the program by charging excessive rents knowing the city will pay differences. Other landlords rent substandard housing, knowing that voucher recipients have limited bargaining power and few alternatives.
Stronger Vetting and Its Implications
The audit’s recommendation to refuse contracts with property owners having hazardous violations would improve housing quality but might reduce available slots if landlord participation shrinks. The city would need to balance improved quality against program capacity. Similarly, scrutinizing broker relationships could prevent overpayment but might reduce the pool of available apartments if brokers feel their relationships with landlords are being questioned.
The Larger Affordability Context
The rental assistance debate occurs within New York City’s broader affordable housing shortage. Currently, less than one percent of apartments priced under twenty-four hundred dollars monthly are vacant according to the city’s most recent housing survey. The shortage means that rental assistance alone cannot solve homelessness. Expanded production of truly affordable housing is also essential. Mamdani’s broader housing agenda includes multiple initiatives beyond CityFHEPS expansion, including the free 2-Care childcare program and the rent freeze policy. These initiatives work in concert theoretically, but each creates fiscal pressures and implementation challenges. Learn more about CityFHEPS program details and New York State audit findings.
