The prospect of steep cuts to federal housing assistance is creating an unlikely alliance in New York City.
Tenant advocates and nonprofit leaders are now working with a group they are often at odds with: the Real Estate Board of New York, whose members include developers close to President Donald Trump.
The two groups, along with other top housing leaders and city officials, gathered at a government office in Lower Manhattan last week to devise a plan in the event of a major reduction in federal housing aid, according to a presentation obtained by Gothamist and interviews with nine attendees.
Policy signals from the Trump administration and its allies indicate that drastic spending cuts are forthcoming. The participants projected that the changes could result in the loss of hundreds of millions of dollars in funding for public housing, rental assistance and development programs.
But at the meeting, it was decided that the most effective way to fend off those cuts wasn’t to focus solely on their effects on low-income residents who directly benefit from housing programs, but on how housing instability, canceled development deals, and market uncertainty could affect business and the broader national economy.
“I came away from that meeting thinking about how interconnected everyone is,” said Ellen Davidson, a Legal Aid attorney who has helped shape tenant-friendly legislation at the state level. “We rise and fall together as a city.”
The Real Estate Board’s Vice President Basha Gerhards was also present at the city’s Housing Development Corporation last Wednesday. Other attendees included Housing Preservation and Development Commissioner Adolfo Carrión, the city’s Executive Director for Housing Leila Bozorg and three other city agency heads, the president of the New York State Association for Affordable Housing, and a top official from Enterprise Community Partners, a major affordable housing investor.
Affordable developments across the city are either under construction or in the planning stages. If those projects are canceled or undermined due to federal spending cuts, Davidson said, the impact could be felt far beyond the Hudson River. For example, New York City developers and affordable housing landlords purchase materials from factories hundreds of miles away in southern U.S. states.
“Harm to New York will end up hurting vendors in Alabama,” Davidson said. “It’s like pulling a thread on a sweater.”
The risk to the city could be significant. City housing officials presented an analysis in the meeting showing previous congressional spending bills could decrease the amount of money the city received for Section 8 rental assistance by up to $357 million, roughly the cost of aiding more than 17,000 households.
Those earlier proposals would have also reduced funding to the New York City Housing Authority by up to $111 million, according to the analysis.
The future of block grants that fund affordable development and city housing staff were also a concern. New York City received more than $66 million through one such grant last fiscal year, according to federal data, and $263 million through another during the current fiscal year, a review by the city comptroller’s office found.
A conservative policy blueprint called Project 2025, developed in part by new White House Budget Director Russell Vought, has proposed putting political appointees in charge of the grants.
It also calls for new rules that would cut off rental assistance to households if one member of the family lacks legal residency status and introduce work requirements for rental assistance recipients.
During his first term, Trump also proposed rent increases for tenants who use Section 8 subsidies or live in public housing.
Iziah Thompson, a senior policy analyst focused on affordable housing at the Community Service Society of New York who was present at the meeting, said the gathering “felt like a funeral.”
“There was nothing happy,” he said. But he believes larger economic arguments could help sway lawmakers to preserve federal funding to housing programs.
“It does feel like there may be a moment for a lot of pushback from not just advocates, but the industry,” Thompson said. “It needs to be shown and understood that if you start slowing down deals, there’s a whole industry of people affected.”
Officials from the federal Department of Housing and Urban Development did not respond to a request for comment. The agency responded with an automated message to an inquiry about potential budget reductions.
Its new secretary, Scott Turner, has launched a task force to “eliminate waste, fraud and abuse” in federal housing programs. Earlier this month, he said his team has identified $260 million in savings.
Despite city housing officials’ concerns, New York City’s fiscal outlook isn’t yet clear. A new budget resolution from the Republican-controlled House of Representatives includes major spending reductions, with cuts expected to affect the food stamps and Medicaid programs, but an analysis earlier this week by the National Low-Income Housing Coalition found Congress did not identify rental assistance as a target.
Still, the policy group said, even slashing non-housing-related safety net programs would devastate the finances of low-income Americans, leaving them with less money to cover rent.
Ilana Maier, a spokesperson for the city’s Department of Housing Preservation and Development, said the agency plans to convene future meetings with representatives from across the city’s housing sector.
“Significant cuts to HUD funding would severely harm New York City with ripple effects felt across the region,” Maier said. “A housing market struggling with uncertainty harms everyone. You can’t hurt one part of the real estate market without it impacting everything.”
Michael Horgan, a spokesperson for the New York City Housing Authority, said NYCHA “continues to evaluate the potential impact of cuts to vital resources and support amid the current housing crisis.”
All nine attendees who spoke with Gothamist said the convening was an important step to hear from an array of experts and prepare for changes amid the city’s current housing crisis.
“On housing needs, everyone needs to be pulling in the same direction,” said the New York State Association for Affordable Housing’s President and CEO Jolie Milstein, who attended the meeting. “Private companies, nonprofits, labor all have to be working together to protect New Yorkers.”