Mayor Zohran Mamdani’s administration is pulling out of a federal program meant to help veterans transition out of homelessness, alleging the Trump administration would have required New York City to discriminate against transgender vets seeking shelter to receive the funding.
But federal officials are denying that claim, and say the city walked away from the program after the veterans agency notified the Mamdani administration the city would receive less money than it had in the past.
The size of the funding discrepancy was not immediately clear, but the city will no longer participate in the U.S. Department of Veterans Affairs’ Grant and Per Diem program as of Oct. 1, the start of the federal fiscal year. The Borden Avenue Veterans Residence shelter in Long Island City has benefited from the program for nearly two decades and was not on the list of GPD grantees released last week. The department announced $318 million in those grants to hundreds of organizations nationwide for three-year periods beginning next month.
In response to The City Reporter’s inquiries, the city Department of Homeless Services confirmed it is dropping out of the program — introducing uncertainty around future funding for the Borden Avenue shelter, which serves more than 200 veterans through a combination of federal and city dollars.
“The agency did apply for the grant, but the U.S. Department of Veterans Affairs only awarded a small portion of the previous awards while requiring that the agency discriminate against certain veterans by excluding transgender veterans from seeking shelter in VA-funded beds,” DHS spokesperson Neha Sharma said in a statement late Tuesday. “As a right-to-shelter city, we decided it was in the best interest of the veterans we serve to ensure access to shelter for all veterans experiencing homelessness.
Veterans Day parade goers move up Fifth Avenue in Manhattan, Nov. 11, 2025. Credit: Alex Krales/THE CITY
“There has been no disruption to critical services for veterans residing at this site, and the city is actively assessing and planning next steps,” she added.
The city’s longstanding right to shelter generally guarantees a bed for anyone who needs one. DHS did not directly answer specific follow-up questions, including how the VA was purportedly requiring the department to discriminate against trans vets and whether DHS raised any concerns about this with federal officials.
Quinn Slaven, press secretary for the VA, said in a statement that the city’s allegation “is false.”
“VA has limited resources and distributes these awards based on past performance, demonstrated need and ability to provide high-quality service to veterans,” he said. “With these factors in mind, VA evaluated the Borden Avenue facility and determined that it could not justify a larger award.”
An Aug. 7 letter obtained by The City Reporter and signed by the acting executive director of the VA’s Veterans Health Administration said the city’s grant would end on Sept. 30, as DHS had “chosen not to pursue continuation of the grant.” According to the VA, the city agency relayed that intention after U.S. officials provided a preliminary award amount for the next grant period.
The revelations follow a cordial meeting between Mamdani and President Donald Trump at Gracie Mansion on Monday, after which the mayor said they had spoken about “how to improve the lives of New Yorkers,” especially when it comes to the city’s high living costs — a key driver of local homelessness.
Lawmaker Demands Answers
City Councilmember Joann Ariola (R-Queens) sent a letter Tuesday afternoon to DHS Commissioner Erin Dalton, demanding answers about the agency’s decision to quit the GPD program.
Councilmember Joann Ariola (R-Queens) attends a full Council meeting, Oct. 10, 2025. Credit: Ben Fractenberg/THE CITY
“The city has a responsibility to pursue every reasonable resource available to support our veterans,” Ariola wrote. “Federal funding opportunities should not be disregarded without a compelling, transparent justification, and the burden should not fall on veterans who depend on these services.”
Ariola’s office estimates the current amount at around $4 million a year for between 125 and 150 beds. It is unclear whether the Borden Avenue shelter is the only city shelter that currently benefits from the GPD program.
“This should not be an either-or choice,” Ariola told The City Reporter in a statement Wednesday. “We can make sure transgender veterans have a place to stay without walking away from millions of dollars that could help other veterans in need.”
In her letter to Dalton, the councilmember requested a “detailed written response” within two weeks about why the department was ditching the program, including supporting documentation and whether DHS “intends to reconsider its decision and pursue future federal grant opportunities.”
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