Expanding a New York City program to help struggling tenants pay rent seemed like an obvious campaign promise for Zohran Mamdani, who staked his insurgent candidacy last year on making life more affordable in the five boroughs.
Now, confronting a grim fiscal picture in his second month as mayor, Mr. Mamdani no longer intends to back the growth of the $1 billion-plus initiative known as CityFHEPS, despite a plan passed by the City Council and upheld in court.
The reversal marks the clearest example yet of the clash between the ideology of his democratic socialist campaign and the tough realities of managing a sprawling, costly bureaucracy.
During a recent news conference, as the mayor lamented a looming budget deficit that on Wednesday he pegged at $7 billion over two years, he suggested the program’s full expansion may be too expensive.
Now, his administration is negotiating with housing advocates on how to settle a lawsuit that sought to ensure that growth in the program took place. His lawyers recently requested that the case be adjourned while they worked to find a solution with the City Council and the Legal Aid Society, which brought the suit.
About 65,000 households, representing 140,000 people, use the vouchers, according to city data. If the program were to be fully expanded, some 47,000 households would become newly eligible, potentially adding $17 billion in costs to the city over five years, according to a rough estimate from city budget officials in January 2024. (Proponents of the voucher program, though, say that City Hall greatly overstated its potential cost to the city.)
Joe Calvello, a spokesman for Mr. Mamdani, said that the city was “aiming to prevent homelessness while delivering a budget that is responsible and sustainable.”
But Tiffany Cabán, a city councilwoman who sponsored a bill to expand the program, questioned Mr. Mamdani’s shift in position.
“We passed the bills at the size and scale that they were needed to address the crisis that we’re facing, and that is going to save us money in the long term,” she said. “Yes, it’s expensive. It’s also going to make our city safer and healthier.”
The rental assistance program is one of the city’s most significant ways of addressing its housing and homelessness crisis, which has left thousands of people living on the streets and more than 86,000 people in shelters.
Rents have risen sharply in recent years, and the share of low-cost apartments that rent below the citywide median is less than 1 percent, according to city data.
CityFHEPS is one of the largest rental assistance programs in the nation and works similarly to the Section 8 housing voucher program. Renters contribute 30 percent of their income to rent, with the city covering the rest.
As the city’s affordable housing shortage has worsened, its cost has grown substantially, from about $25 million in 2019 to more than $1.2 billion in 2025.
Most of that increase took place before the Council passed its expansion into law in 2023. The legislation made people eligible for vouchers if they had received written demands from their landlords for rent owed and raised the income level for voucher eligibility.
“This program is growing at an unsustainable clip,” said Ana Champeny, vice president for research at the Citizens Budget Commission, a nonpartisan budget watchdog, which has raised concerns about the program’s cost for years.
Mr. Mamdani’s predecessor, Eric Adams, said he would not enforce most of the bills passed by the Council, citing worries about their cost. When Legal Aid, representing tenants, brought a lawsuit to compel Mr. Adams to implement the laws, he fought back.
As a candidate, Mr. Mamdani admonished Mr. Adams for the pushback. “What a ridiculous waste of time during a housing crisis,” Mr. Mamdani said in a social media post last July, when he was the Democratic nominee for mayor.
“Zohran will drop lawsuits against CityFHEPs and ensure expansion proceeds as scheduled and per city law,” his campaign website read.
Now, the case, which is being litigated in the New York State Court of Appeals, has been delayed for another month while the parties aim to negotiate a deal that would narrow the scope of the program, according to legal papers.
By moving to settle the lawsuit, Mr. Mamdani is signaling he will not comply with the bills the Council passed into law to widen the program.
City officials are projecting that even without the expansion, the program will cost nearly $2.4 billion more than Mr. Adams budgeted for the remainder of this fiscal year, which ends June 30, and the next one.
The mayor’s course change has concerned defenders of the vouchers, including Christine Quinn, the president and chief executive of WIN, the city’s largest shelter provider.
She said that narrowing the expansion “shouldn’t even be on the table,” and that she had been surprised to learn that Mr. Mamdani was reversing himself.
“If they do not drop the case, if they really, really narrow the breadth and depth of the laws, it will cause homelessness to continue to be at a growing, highest-crisis level,” said Ms. Quinn, who served as speaker of the City Council from 2006 to 2013.
WIN will release a report on Thursday arguing that it is more expensive to house people in shelters than to invest in housing vouchers, in part because people without permanent housing return repeatedly to shelters.
The shelter provider estimated that using the vouchers to move families into permanent housing could save the city as much as $635 million in shelter costs over five years.
A lawyer at the Legal Aid Society, Robert Desir, who has worked on the campaign to expand the voucher program, called it “a great lifeline.”
“For some, there’s really not a path toward gaining housing or maintaining housing without it,” he added.
The speaker of the City Council, Julie Menin, appeared to agree.
“The Council passed this law to be fully implemented, not endlessly litigated,” she said in a statement. “We remain open to settling this matter with the administration in a way that advances this vital voucher program.”
Sally Goldenberg is a Times reporter covering New York City politics and government.
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