Court Sides with City Council on CityFHEPS Fight

An appellate court on Thursday ruled that City Hall must move forward with the expansion of New York City’s housing voucher program.

The panel of five judges found that four laws approved by City Council in 2023 were not preempted by state law, reversing a 2024 lower court’s decision in Mayor Eric Adams’ favor.

The unanimous decision, written by Justice John Higgitt, concluded that rental assistance is within the purview of the City Council, even as the state retains oversight. The four laws that expanded eligibility under the City Fighting Homelessness and Eviction Prevention Supplement, FHEPS, still must be reviewed by the state’s Office of Temporary and Disability Assistance. The order directs the Adams administration to submit the expansion package to the state for approval.

CityFHEPS provides rental assistance to those experiencing homelessness. The City Council measures called for a number of changes to the program, including increasing income eligibility for vouchers, from a maximum income of 200 percent of the federal poverty level to 50 percent of the area median income. Another change repealed a rule that required individuals and families to spend at least 90 days in homeless shelters before they could apply for CityFHEPS.

The other two measures sought to expand voucher eligibility to those at risk of homelessness or eviction and bar the reduction of rental subsidies provided to voucher holders due to the cost of utilities.

The panel found that while the state Department of Social Services has oversight of rental assistance policy, that doesn’t preclude “local problem solving innovations,” in the form of City Council legislation.

“On the other hand, accepting the Mayor’s contention that the State has occupied the entire field of rental assistance would undermine the State policy of allowing for local input into rental assistance policy and intrude upon the City’s home-rule prerogative to have a say in matters pertaining to the health and well-being of its citizens,” Higgitt writes.

City Hall spokesperson Liz Garcia said the administration is exploring its legal options and reiterated that expanding voucher eligibility will drive up competition among current voucher holders for a limited amount of housing. She said 13,000 voucher holders are still trying to find permanent housing.

“Adding more vouchers will only make it harder for people to leave homeless shelters,” Garcia said in a statement. “The affordable-housing crisis won’t be solved by making people compete for nonexistent housing; it will be solved by building more housing — which the Adams administration has done at record levels — and actually connecting people who already have vouchers to homes.”

“It is unfortunate that for two years Mayor Adams’ administration stood in the way of removing barriers to housing vouchers that keeps New Yorkers in their homes and moves them from shelters to permanent homes,” Rendy Desamours, a spokesperson for the City Council, said in a statement. “We urge the mayor to finally prioritize implementation of the reform laws to help more New Yorkers find housing stability.”

The fight over these changes has dragged on for years. The City Council approved the measures in May 2023, and the mayor vetoed them the following month. The Council successfully overrode that decision, but when the administration failed to implement the laws, the Legal Aid Society filed a lawsuit on behalf of four tenants, seeking to force the administration to move forward with the laws. The City Council subsequently joined the lawsuit.

A state Supreme Court judge threw out the lawsuit in August, agreeing that the City Council lacked the authority to expand CityFHEPS eligibility. Legal Aid and the City Council appealed.

The program served 52,000 voucher holders and cost the city more than $1 billion in fiscal year 2025, according to a Citizens Budget Commission report, which also concluded that over the long term, the program cost far more than providing temporary shelter. The Adams administration has argued that the four measures would cost the city $17 billion in the first five years of their implementation. The Council pegged the cost at $11 billion.

Thursday’s ruling comes as the Adams administration tries to rein in voucher costs in other ways. The administration proposed requiring CityFHEPS voucher holders who have had their rent subsidized for five or more years to contribute 40 percent of their income toward rent, rather than the standard 30 percent. The proposal was opposed by both landlord and tenant groups.

Meanwhile, potential cuts to federal housing assistance also loom large. The Trump administration alerted local housing agencies in March that funding for the Emergency Housing Voucher program would run out by 2026. The president has proposed cutting $26 billion in funding for rental assistance voucher programs and transforming the Housing Choice Voucher Program, or Section 8, into limited grants.