A massive divide between the City Council and Mayor Zohran Mamdani over how to fund an expensive housing voucher program almost kept the city’s budget from being passed on time.

Surprisingly, the socialist mayor argued it was too expensive for the city to keep paying for it — while the City Council got him to agree to add a new program that lawmakers say will actually curb cost increases.

What You Need To Know

Mayor Zohran Mamdani and City Council Speaker Julie Menin agreed on millions of dollars for a new program covering New Yorkers facing eviction

The council estimates 30,000 people could be eligible, but City Hall was more conservative, telling NY1 it’s more like 5,600 households accounting for 14,000 New Yorkers

Mamdani promised to drop the city’s lawsuit blocking a council-backed expansion of an existing voucher program, known as CityFHEPS

“We are helping to keep thousands of families in their homes and out of the shelter system,” Council Speaker Julie Menin said on Tuesday during a budget agreement press conference at City Hall.

But days earlier, progressive council members surprisingly split with the socialist mayor.

Some were noticeably absent from the budget agreement victory lap.

It’s because Mamdani agreed with fiscal watchdogs — and surprisingly — his predecessor, former Mayor Eric Adams, who had said when he was mayor that lack of cost controls could bankrupt the city.

Instead, he and Menin agreed on millions of dollars for a new program covering New Yorkers facing eviction.

“This new bill creates a fiscally responsible structure for housing vouchers that contains costs,” Menin said.

The council estimates 30,000 people could be eligible, but City Hall was more conservative, telling NY1 it’s more like 5,600 households accounting for 14,000 New Yorkers.

Also, Mamdani promised to drop the city’s lawsuit blocking a council-backed expansion of an existing voucher program, known as CityFHEPS.

It was launched under former Mayor Bill de Blasio to reduce the city’s homeless shelter population and get people into apartments.

Under this year’s rules, the city could pay up to $3,000 for a family of four’s two-bedroom apartment. Depending on poverty level and total rent, the family could cover up to 30% of the costs out of pocket.Households are reassessed every five years.

“By ensuring this new program is not an entitlement, it’ll allow the city to manage it in a fiscally responsible and sustainable way, and they’re expanding it to some high need populations. That’s the right move,” Andrew Rein, CEO of the fiscally conservative Citizens Budget Commission, said.

In 2023, the city’s migrant crisis helped explode the homeless shelter population.

So the council passed bills loosening voucher eligibility requirements beyond those in homeless shelters to include people facing eviction.

Adams vetoed the bills and the council overrode those vetoes. Then, Adams refused to implement the legislation, drawing a council-backed lawsuit.

Although Mamdani backed the council’s position on the campaign trail, once in office, he upheld the city’s lawsuit, citing high costs.

In 2019, the program spending was $176 million annually. But this year, spending is estimated to hit $1.79 billion and by 2030, balloon to a whopping $3.26 billion.

Now, under the current budget deal, the old program will remain.

Some caution it could still hurt the mayor and his spending plans in future years.

“The city still has to take active steps to manage CityFHEPS, or it is going to be a budget buster. A $2 billion program, growing at 14% a year is going to blow the budget,” Rein said.

“They need to bend that cost curve or it’s going to sap 100s of millions of dollars from other programs,” he added.