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The NYU Furman Center Submits Testimony on The Impacts of Federal Budget Cuts on New York City

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The New York City midtown Manhattan skyline with the landmark Empire State Building in the center and contrasting drab brown apartment blocks in the foreground. Shot from across the East River in early spring.

With Congress poised to finalize the Fiscal Year 2026 budget, New York City faces potential spending cuts to the federal housing programs that underpin its affordable housing strategies. In testimony to the New York City Council Committee on Governmental Operations, State and Federal Legislation, the Committee on General Welfare, and the Committee on Hospitals, the NYU Furman Center highlighted the potential impacts of proposed funding reductions on a number of the City’s housing and homelessness programs that are central to the well-being of New Yorkers.

The Furman Center recently released a report, Federal Housing Programs in New York City, which provides a detailed look at the central role of role of federal funding is to supporting local housing efforts. In the report, we find the following:

  • The City relies heavily on federal funding to help achieve its goals around housing and homelessness, totaling $7.2 billion in 2024 (including $833 million in investment via the Low-Income Housing Tax Credit (LIHTC). 
  • Federal funds account for large shares of the operating budgets of New York City’s housing agencies; for example, three-quarters of New York City’s Public Housing Authority’s (NYCHA) operating budget (more than $3.7 billion) comes from the federal government. 
  • These federal funds are targeted to low-income households and impact a large number of New Yorkers. Federally supported rental assistance programs alone serve more than 350,000 households across New York City. 

These programs are especially critical in neighborhoods with large numbers of low-income households and aging housing stock. The proposed House and Senate appropriations bills include cuts to a number of federally funded programs, including the following:

  • Public Housing: The largest proposed reductions to national funding in the Congressional THUD bills are to public housing: the Senate bill cuts $602 million, and the House bill cuts $1.4 billion from the total program. NYCHA provides deeply affordable housing to very low-income households and relies heavily on federal funding. 
  • HOME: The House bill also eliminates funding for the $1.3 billion the HOME Investment Partnerships (HOME) program. The Senate bill would maintain current funding levels for HOME, which represents a reduction in real terms after accounting for inflation. Last year, New York City expected to receive $66 million in federal funding for the HOME program, which supports the development of affordable housing, supportive housing, senior housing, and rental assistance, all serving low-income households. 
  • Tenant-Based Rental Assistance: The House bill would also cut tenant-based rental assistance programs by $773 million (including level funding for voucher contract renewals, which amounts to an effective cut given increasing rent levels), while the Senate bill calls for a $1.3 billion funding increase. The Section 8 Housing Choice Voucher program includes both tenant-based and project-based vouchers and serves very low-income households. In New York City, almost 123,000 households rely on Section 8 Vouchers, about 80 percent of which are tenant-based.
  • CDBG: Community Development Block Grant (CDBG) program  faces a reduction of $200 million under the Senate bill, while the House bill would cut the program in real terms by maintaining funding levels. New York City relies on federal funding from the CDBG program to support housing quality through code enforcement, lead abatement, and emergency relocations and repairs.

A decline in federal funding to key programs would have damaging effects on the City’s housing goals. It will be critical for state, city, and local policymakers to track changes in funding over the next few years. Without backfilling funding, cuts to federal housing programs could widen affordability gaps and put the stability of low-income New Yorkers at risk. The NYU Furman Center will continue to track these developments and provide analysis to help policymakers navigate the tradeoffs ahead.

Read the rest of the prepared testimony here.

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