A new audit from the state comptroller’s office identifies inefficiencies and problems in a key city rental assistance program that drive up costs — potentially complicating Mayor Zohran Mamdani’s pledge to dramatically expand access to housing aid.
The audit released Friday by state Comptroller Tom DiNapoli determined that the city could save money on its CityFHEPS assistance program by increasing oversight, vetting relationships between brokers and landlords to prevent overpayment, and refusing to contract with property owners whose apartments amass hazardous violations. The moves would free extra money to cover rents for more tenants.
“Stronger oversight of the CityFHEPS program is critical to helping individuals and families access safe housing and stay in their communities,” DiNapoli said in a written statement accompanying the audit. “Improving how the program operates will better protect tenants and taxpayer dollars.”
Officials with the city’s Department of Social Services, which manages the CityFHEPS program, disputed the report’s findings.
Spokespeople for Mamdani did not respond to questions about expanding the voucher program.
Since it began in 2017, CityFHEPS has grown to become one of the nation's largest rental assistance programs. Roughly 60,000 households, most of them formerly homeless New Yorkers, now use the vouchers to help pay their rent, according to Department of Social Services data. Few other options exist for low-income families in the city who cannot afford rent without aid, given a cap on federal Section 8 vouchers and the limits of paltry state assistance.
The voucher program currently has a roughly $1.2 billion price tag and serves as a vital tool for helping homeless New Yorkers find permanent housing.
But the comptroller’s audit paints a grim picture of how low-income tenants and taxpayers alike suffer from the city’s affordable housing shortage, where less than 1% of apartments priced under $2,400 are vacant, according to the city’s most recent housing survey. DiNapoli and the audit team say a lack of oversight only compounds the problems.
The auditors reviewed 75 CityFHEPS cases — 45 households using the vouchers in the five boroughs, and 30 who used them to rent apartments outside the city — and concluded that the social services agency “has fallen short on creating sound monitoring processes” for apartment conditions that can endanger tenants and increase program costs, such as vermin infestations, mold and missing window guards.
They found over a third of the 45 city-based households in their review had requested to move due to hazardous conditions in their apartments — a process that requires the city to pay another landlord an incentive to hold an apartment and a broker a fee of up to 15% of the monthly rent. For five cases where families did move, the city paid brokers and landlords nearly $112,000 in additional fees and incentives.
In another case, auditors determined that the city agency had agreed to pay rent for a tenant moving into the same unit it had previously allowed a tenant to transfer out of due to dangerous violations.
For recipients living outside the city, the program also paid rents higher than comparable units for the area in 11 of the 30 cases auditors reviewed, despite rules intended to prevent the city from paying higher prices.
Eliminating larger rent payments and requiring safer apartment conditions would drive down the cost of the program, said Deputy Comptroller Tina Kim.
“These are basic things that will make the program more efficient and effective because you want to serve as many tenants as possible,” Kim said in an interview. “It’s a critical program to the city.”
In a lengthy response, Department of Social Services Accountability Office Chief Bedros Boodanian said the audit was riddled with “inaccuracies and misstatements” about the agency’s quality of oversight.
He also blamed the poor conditions of many apartments on the housing crunch.
“Tenants, especially low-income households with vouchers like CityFHEPS, have very few available units from which to choose,” he wrote in a formal response to the audit. “Restricting voucher use to only pristine landlords would shrink an already microscopic pool of available units, further delaying housing for people who need it most.”
Mayor Zohran Mamdani
Mamdani has vowed to expand the program under the terms of 2023 legislation approved by the City Council. A package of measures would allow more New Yorkers facing eviction to qualify for the vouchers, along with families or individuals considered low-income, but who earn more than the current eligibility threshold.
Former Mayor Eric Adams vetoed the measures, declaring them too expensive for the city to shoulder. After councilmembers voted to override the veto, Adams refused to implement the laws. An ongoing court battle over the future of the measures continues in appeals court.
Some economists and budget watchdogs have sided with Adams, arguing that expanding the program would force the city to pay potentially billions of dollars more in rental assistance. Councilmembers and homeless rights advocates say the added cost will be offset by hundreds of millions of dollars in shelter savings.
Mamdani campaigned on enacting the measures and dropping the Adams administration’s legal challenge.
