June 17, 2025

NYHC Updated Analysis on President's

Budget Request

In recent weeks, President Trump released additional details on his budget request to Congress reinforcing the deeply harmful cuts and policy changes originally proposed in his "skinny" budget. Overall, he proposes to slash the HUD budget by nearly 44%, with complete elimination of some programs and policy changes designed to undermine remaining programs. If enacted, it would jeopardize the housing safety net for over a million people across New York State and could significantly decrease landlord rental payments. It would also place an incredible financial burden on the state and localities to fill in the gap.

In a new analysis updated with FY24 data, NYHC estimates New York could lose over $4.4 billion in HUD funding or nearly half of federal housing funds.

If President Trump’s plans for HUD were enacted into law, they could lead to an increase in evictions in New York as well as a substantial increase in mortgage defaults concentrated in multifamily buildings in low-income neighborhoods, creating radical consequences for lenders, FHA and ultimately for Fannie Mae & Freddie Mac.

Block Grants and Time Limits Would Wreak Havoc on Low-Income Tenants and Destabilize the Housing Market

The President's budget proposes to combine all programs that directly house low-income tenants and serve individuals experiencing homelessness into two block grants and impose two-year limits on assistance. The administration argues that this approach would, "strip away bureaucracy and allow federal funds to flow more efficiently," but in reality, it would destroy the existing housing safety net and create fiscal crises for states.

Rental Assistance Programs

President Trump proposes rolling the Section 8 Tenant and Project Based Voucher Programs, Public Housing, and Housing for the Elderly and Disabled into one block grant program and cutting them by over $30 billion - or almost half. This could force termination of assistance in these fully subscribed programs. The President further proposes two-year time limits on assistance for non-elderly or disabled households.

Half a million households throughout the state are stably housed through these federal programs. In FY24, over $8.7 billion was obligated to NY for these programs - 15 percent of the national appropriation. NYHC estimates under this proposal, New York would only receive about $4.8 billion to continue serving these households - a 46 percent cut. This would leave state and local governments to make up the $4 billion difference, an amount that far exceeds available resources. This estimate is based on New York's historic share, but the budget request gives the Secretary major discretion in determining formula language for the new program.

Time Limits on Rental Assistance

On top of already steep funding cuts, the President's proposal instructs the HUD Secretary to "establish program requirements to incentivize self-sufficiency, as appropriate, including but not limited to two-year time limits on assistance for households in which neither the elderly or persons with disabilities reside."

Imposing time limits on low-income Americans will create homelessness rather than self sufficiency. 24% of HUD-assisted people in New York are elderly and 30% are disabled. Three quarters of non-disabled households are working but they are earning too little to afford market rent. There is simply a shortage of rental housing affordable to low income renters in New York and in most states.

In New York, the average income for households receiving HUD assistance is about $22,000, enough to afford $550 in rent. However, the HUD determined Fair Market Rent (FMR) for a two-bedroom in the New York Metro Area is $2,752. The average HUD assisted household would need to increase their income 5X to afford that rent. All of these factors lead to an average tenure of 15 years on HUD assistance but under the President's proposal, if some of these households do not find a way to quadruple their income in two years, they would be evicted. Forcing families into a cycle of homelessness sabotages self sufficiency rather than promotes it.

Further analysis is needed to determine how many assisted households would be exempt from time limits but up to 200k households could be forced to move after two years of assistance, flooding housing courts and homeless shelters.

Impact on NYCHA

Through various programs, NYCHA serves over half a million residents - the equivalent of a large city - and its preservation strategy is dependent on having a reliable federal partner. PACT is slated to convert 62,000 apartments; 24,584 apartments have already converted since the program’s inception. Out of the remaining 37,416 apartments, 14,082 apartments at 48 developments are in active planning and are slated for comprehensive repairs and upgrades in the upcoming months and years. This successful preservation strategy is at risk with deep cuts in a proposed rental assistance block grant.

The Preservation Trust is authorized to convert 25,000 apartments, and three developments have already voted to participate in it. Without federal rental assistance, NYCHA cannot reasonably plan a pipeline for either preservation strategy.

NYCHA’s traditional Section 9 public housing is also at risk with a proposal from the Trump Administration to eliminate public housing capital funding entirely. This funding is used to make repairs and capital upgrades to roofs, facades, elevators, heating plants, and security systems, as well as lead and mold remediation and apartment upgrades, to comply with progress goals set in the federal monitor agreement.

Additionally, time limits would upend housing stability for thousands of families who live in public housing for 26 years on average.

HUD Budget for Rental Assistance Programs (in millions)

Rental Assistance Programs	FY25 Final	FY26 President's Request	Difference
Section 8 Tenant-Based Rental Assistance	$ 36,048	$ -	$ (36,048)
Section 8 Project-Based Rental Assistance	$ 16,890	$ -	$ (16,890)
Public Housing Capital	$ 3,410	$ -	$ (3,410)
Public Housing Operating	$ 5,501	$ -	$ (5,501)
Housing for Persons with Disabilities (811)	$ 256	$ -	$ (256)
Housing for the Elderly (202)	$ 931	$ -	$ (931)
State Rental Assistance Program	$ -	$ 31,787	$ 31,787
Foster Youth to Independence**	$ -	$ 25	$ 25
Total	$ 63,036	$ 31,812	$ (31,224)

*The table above excludes $4.4B in an "advance appropriation" for the state rental assistance program that would not be available until FY27. **Represents new foster youth housing funds proposed by Trump Administration.

Homeless Assistance Programs

The Budget proposes to consolidate Continuum of Care (CoC) and Housing Opportunities for Persons with AIDS (HOPWA) programs into a more targeted Emergency Solutions Grant (ESG) program that provides short- and medium-term housing assistance, to homeless and at-risk individuals with a 2-year limit on assistance. In FY24, New York received $409M in these programs ($27.6 million ESG, $54.9 million HOPWA and $326.5 million CoC). Based on New York's past allocations, NYHC estimates New York would receive about $387 million - a 5% cut from FY24.

While this is not a large funding cut, the policy change would fundamentally shift how New York addresses homelessness by forcing dollars to go towards the most temporary solutions instead of permanent housing. The CoC program allows funding to be used for a wide range of activities such as permanent supportive and transitional housing and supportive services, including providing long term rental assistance and costs to build or rehab housing. In contrast, ESG funding may be used for street outreach, emergency shelter, homelessness prevention and rapid re-housing assistance, with rental assistance limited to 2 years.

The Supportive Housing Network of New York found that $146 million - almost half of the state's CoC dollars fund rental assistance to keep 8,700 households permanently housed. Imposing time limits on this funding would close supportive housing and throw their tenants back into homelessness.

HUD Budget for Homeless Assistance Programs (in millions)

Homeless Assistance Programs	FY25 Final	FY26 President's Request	Difference
Emergency Solutions Grants (ESG)	$ 290	$ 4,024	$ 3,734
Continuum of Care	$ 3,492	$ -	$ (3,492)
Youth Homelessness Demo	$ 107	$ -	$ (107)
New Permanent Supportive Housing	$ 100	$ -	$ (100)
Victims of Domestic Violence	$ 52	$ -	$ (52)
National Homeless Data Analysis Project	$ 10	$ -	$ (10)
Housing Opportunities for Persons with AIDS (HOPWA)	$ 505	$ -	$ (505)
Total	$ 4,556	$ 4,024	$ (532)

Key HUD Programs Eliminated

The President's full budget request maintains the elimination of key programs that would result in a loss of hundreds of millions of dollars for New York:

Community Development Block Grant (CDBG) program – In FY24 NY received over $320 million in CDBG. The program funds a variety of housing and economic development programs across the state. In NYC, CDBG funds many planning functions and code enforcement, including addressing hazardous conditions and emergency repairs.

HOME Investment Partnerships Program – In FY24, NY received over $116 million from HOME. The program helps fund finance new construction and preservation of affordable housing for rent or homeownership and rental assistance to low-income people. In NYC, it’s used to help finance supportive and senior housing.

The Fair Housing Initiatives Program (FHIP) - In FY24, $2.5 million in FHIP grants went to NY organizations to fund their fair housing work. Fair housing organizations are critical to uncovering and remedying instances of housing discrimination. In 2019, the Fair Housing Justice Center and Newsday exposed systemic discrimination against potential homebuyers of color in Long Island leading to a package of fair housing bills passed in Albany. According to the National Fair Housing Alliance, in 2023, nonprofits processed 75% of a record 34,000 fair housing complaints across the country, half of which were filed for disability discrimination. The President's budget request does not fund FHIP, rather directs funding to the Fair Housing Assistance Program (FHAP), which supports state and local agencies.

The President's proposal requests full funding to maintain USDA rental assistance and Tribal HUD-VASH, which supports Tribal veterans experiencing or at risk of homelessness.

HUD Budget for Other Key Programs (in millions)

Other Key HUD Programs	FY25 Final	FY26 President's Request	Difference
CDBG	$ 3,300	$ -	$ (3,300)
HOME	$ 1,250	$ -	$ (1,250)
Fair Housing Grants	$ 86	$ 26	$ (60)
Lead Hazard Reduction and Healthy Homes	$ 345	$ -	$ (345)
USDA Rental Assistance	$ 1,608	$ 1,720	$ 112
Indian Housing Block Grant (IHBG) Formula	$ 1,111	$ 872	$ (239)
IHBG Competitive	$ 150	$ -	$ (150)
Tribal HUD-VASH	$7.5	$10	$2.5

Next Steps on Policy Analysis and Advocacy

To see funding levels proposed for other HUD programs, view the National Low-Income Housing Coalition's budget chart.

View estimates on how much funding HUD funding goes to your Congressional District at the Urban Institute's Federal Housing Funding Tracker.

Over the next weeks and months, New York Housing will also be engaging the NY Congressional Delegation on the impact of HUD cuts on the ground. If you have impact examples to share, please reach out.

SIGN-ON TODAY TO OPPOSE HUD CUTS, BLOCK GRANTS & TERM LIMITS!

Join NYHC in a letter to the NY Congressional Delegation in opposing President Trump's budget proposal for HUD cuts, block grants and term limits, while supporting full funding for federal housing programs. We urge the participation of tenant and community organizations, developers, landlords, lenders and elected officials to join us in explaining what is at risk with drastic cuts and policy changes and how extensive the harm will be to renters, landlords and lenders.

PLEASE SIGN ON HERE BY JUNE 30TH!

Sign-On Here

LIHTC CONTINUES WITH STRONG SUPPORT IN BUDGET RECONCILIATION

Yesterday, the Senate came out with their version of the budget reconciliation bill and they seek to make the 50% test permanent, which would be great news for affordable housing and in stark contrast with the President's budget proposal for HUD. The Senate proposes the following LIHTC provisions:

9% LIHTC allocation increase: The allocation increase will change to a 12% increase (instead of 12.5% in House bill) but will be permanent.
Bond test: The 50 percent test will be lowered to 25 percent permanently (House allows this temporarily from 2026-2030).
Basis boosts: The rural and Native basis boosts are no longer included as they are in House.

The WSJ Editorial Board wrote last week in opposition of LIHTC expansion in Budget Reconciliation. However, support continues to grow among members of Congress whose constituents are struggling with housing affordability in every state. Of course any benefits of LIHTC expansion could easily be overshadowed by the destruction of the HUD budget. NYHC strongly supports both expanding LIHTC and preserving HUD funding to meeting housing needs in NY.

While there is still work to do for the House and Senate to reach agreement on their differences between the two bills, there is some hope that LIHTC expansion in something they both agree on.