City Cuts Key Incentive For Landlords to Take CityFHEPS Housing Vouchers

In an effort to reduce program costs, landlords will no longer receive one month’s rent as incentive while the city processes housing voucher applications, a change that could make it less likely for property owners to rent to voucher holders.

In a cost-cutting measure, New York City’s Department of Social Services (DSS) will end an incentive for landlords to take city housing vouchers that offered them one month’s rent while the city processes tenants’ applications.

Landlords, advocates, and voucher holders say the change will make using the already hard-to-use vouchers even more difficult.

Families moving out of New York City shelters with a City Family Homelessness and Eviction Prevention Supplement (CityFHEPS) housing voucher pay 30 percent of their income on rent, with the subsidy covering the rest.

But finding an apartment can be a real challenge for voucher holders because of discrimination and a tight housing market. Landlords sometimes hesitate to accept tenants who use the program because it can require waiting for the city to inspect a unit and process a housing voucher application, forgoing rent from a market-paying tenant who could move in sooner.

With the “unit hold incentive,” the city paid landlords one month of rent if they held a unit off the market while the Human Resources Administration (HRA) processed the tenant’s housing voucher application.

“My worry is just fewer [landlords] will be as interested in participating in the program, because it’s one piece that’s been taken away. So it just potentially reduces the pool of people available, willing to rent to people with vouchers,” said Laura Lazurus, CEO of Anthos Home, a group that works with the city to recruit private landlords to rent to voucher holders.

The CityFHEPS program has recently come under scrutiny from budget groups and City Council members over spiraling costs. Its budget grew from $253 million in fiscal year 2021 to $1.25 billion in fiscal year 2025, as it serves more people than ever, with 55,000 households currently enrolled. A record 10,200 households moved out of shelter with CityFHEPS in fiscal year 2024, up 56 percent from the prior year, according to DSS.

“The unit hold incentive served as a stop-gap solution to address the lack of robust mechanisms for processing rental subsidies to secure housing that is quickly leasing up,” said DSS Spokesperson Neha Sharma in a statement to City Limits.

DSS added that new technological systems for rental assistance rolled out last year will improve efficiency and make the unit hold incentive less of a necessity.

But the end of the practice came as a surprise to landlords and advocates working on CityFHEPS applications, who found out via email in late May.

“The landlord unit hold for all subsidies will be ending on July 1st,” HRA’s Deputy Chief Legal Affairs Officer Allison Gill Lambert said in an email. 

In order to get one last unit hold incentive for leases beginning July 1, DHS case managers have to submit their clients’ application packets before June 20. The June 3 deadline for applications from all other agencies already passed. 

“We were on a crunch to get packages passed and applications in as quickly as possible and approved,” said Joel Gil, a housing services specialist at Neighbors Together who works with New Yorkers on CityFHEPS applications.

Variable processing times

Application processing times have frustrated both tenants and landlords who say it can take months, making the extra money to hold the unit crucial. DSS has invested in trying to bring them down.

“Today, processing takes around three weeks on average, and we’re connecting a record number of New Yorkers to deeply affordable homes thanks, in part, to vital investments in technology and wide-ranging reforms to strengthen access to CityFHEPS vouchers,” said DSS’ Sharma.

Courtney Posey has a voucher and found an apartment but is still waiting for the city to finish processing for her application, first submitted in April.

Posey currently lives in a Brooklyn women’s shelter, and expressed trepidation about the delays and rule changes, worrying it could jeopardize her move out. 

“It could push everything back and especially if you’re in the system, you’re really anxious to just move on with your life,” Posey said. “I understand that place is just temporary. I’m just passing through. It’s not a home.”

At a hearing before the City Council in January, DSS Commissioner Molly Waslow Park said that the average application processing time was 24 days, but conceded “there is variation around that average,” pointing to delays or errors in applications that require back and forth between housing specialists that put together packets, and applicants and their advocates.

A report from the New York City Council released Tuesday also suggested that minor errors can result in restarting the process from the beginning.

“(DSS) also waits until an applicant household is verified as income-eligible for a specific housing unit before processing their CityFHEPS application, effectively doubling the approval timeline from initial application to shelter exit,” the report said.

It recommends DSS review applications and verify income “in parallel,” among other changes, including a call for the city to expand its staffing capacity by allowing more community-based groups to assist with CityFHEPS applications.  

“They need to streamline the process,” said Brian Blitzer, a broker who works with the program. “I could bring a regular person in here within less than a week. Why is it taking the city two months?”

“I do think New York City should be really commended for the work that they’ve done to build the CityFHEPS program,” said Anthos Home’s Lazarus, pointing out that that the size of city rental assistance programs make DSS’ the second largest program in the nation after New York City’s own Section 8 program. “I think there’s still work to do to make it more efficient, quicker, easier to access.”

In explaining the change, DSS pointed to a January 2024 Program to Eliminate the Gap (PEG), through which the Adams administration ordered city agencies to implement cost-cutting measures. It shows $16.5 million in savings in Fiscal Year 2025 from upgrades to a landlord and provider agency portal for rental assistance. The documents do not mention ending the unit hold incentive specifically, but DSS said the cost savings would come from eliminating the measure.

Sharma added that 90 percent of regular CityFHEPs packages are now being submitted through the new data system, called CurrRent.

Blitzer, a broker with Compass, is currently trying to lease a renovated one bedroom in a  Harlem condo building to a voucher holder. The landlord wanted to accept a voucher, but is considering putting the rental back on the general market, Blitzer said, due to delays with the application and uncertainty around the month’s rent from the hold incentive. He’s been waiting on approval for the current applicant since April.

“Typically, the city process and … the time that it takes to move forward is just ridiculous. I mean, why would a landlord hold an apartment empty for two months when they can have it rented?” said Blitzer.

Building trust

New York City’s tight housing market makes it hard for voucher holders to compete for apartments. They tend to find homes concentrated in specific neighborhoods, a City Limits investigation found in February, and vouchers often do not pay enough to make it feasible to rent in high-rent neighborhoods.

“I’ve talked to landlords, especially ones that have apartments within the price range that the city pays, and they don’t want to even hear about,” Blitzer continued.

Landlords sometimes reject voucher holders out of hand just because they use a rental subsidy, a practice that has been illegal in New York City since 2008, but remains a common form of housing discrimination. 

“You’re not incentivizing any landlord to work with the city, and a lot of people already don’t,” added Blitzer.

As a result, building trust with landlords has been essential to the success of housing vouchers. The program, when operating smoothly, can be a win-win.

“Landlords have no problem working with the program, because they know they’re getting their rent on time. It’s a guarantee for them, and typically, the people will stay for an extended period of time,” added Blitzer.

Providing extra support can help. Anthos Home provides wraparound services for voucher holders and recruits property owners to participate. It “took a lot of work to convince landlords to continue to rent people with a city issued voucher,” said Anthos Home’s Lazarus.

But delays and changes like ending the incentive may undermine that trust. “”t’s gonna make it even more difficult to even market CityFHEPS to landlords,” said Neighbors Together’s Gil.

Landlord groups agreed. “This decision is concerning,” said Kenny Burgos, CEO of the New York Apartment Association, a trade group for building owners. “Without this assistance, many owners will no longer be financially able to hold units for months.”

‘No good choices‘

With the Trump administration proposing funding cuts for the city’s housing programs by 42 percent, state and local governments may need to step up to fill gaps, making CityFHEPS’ fiscal future all the more important.

The New York State budget passed last month included $50 million for a statewide rental voucher program. But that amount was far less than the $250 million called for in the Senate and Assembly’s budget proposals, and appears even smaller compared to the $1.25 billion the city spends on vouchers.

“The fact that [the state] made their first foray into vouchers in this way is a great first step,” said Lazarus.

But it still leaves the city with a big financial responsibility.

“The demand is greater than the city’s ability to pay for [CityFHEPS],” said Sean Campion, director of housing and economic development studies at the Citizens Budget Commission.

“They’re gonna have to make hard choices about how to fund the program as it exists today, but also on the expansion going forward, and there really are no good choices,” he added. (Mayor Adams’ administration has yet to implement City Council laws expanding eligibility for the program passed in 2023).

One of those choices is a proposed rent hike for a subset of CityFHEPS voucher holders renewing for their sixth year and beyond. Instead of the usual 30 percent, these tenants would pay 40 percent of their income toward rent under the rule change.

Commissioner Molly Park said that the reform is necessary for the program’s long-term sustainability, while some groups claim it may backfire by increasing other costs, such as emergency rent aid for voucher holders who can’t afford the increase.

While the rent contribution changes were subject to public review and a virtual hearing on May 30, DSS said that the city’s administrative procedures allowed them to cut the unit hold incentive without public review because the agency never included it in official rules.

Campion suggested CityFHEPS needs to be paired with other interventions that can reduce shelter populations, like increasing housing supply and financing more affordable housing.

“[CityFHEPS] is a big impact on the budget,” said Lazarus. “But I also think homelessness is a huge impact on the budget. We have to compare the impact of all these people not being housed and all the things that they’re now able to do because they are housed. They can focus on their employment, focus on their education, focus on their health, which they cannot do when they are in shelter.”

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