Proposed Cuts to HUD Would Cripple NYC's Affordable Housing Safety Net

A proposal to slash federal housing assistance programs and impose limits on housing aid will devastate many parts of New York City where residents rely on housing vouchers to rent apartments, according to a new report.

In addition, landlords who take in renters who rely on federal assistance would also feel the ripple effects, with many landlords, lenders and even banks to face defaults, according to a policy brief released by the nonprofit  New York Housing Conference on Tuesday.

President Donald Trump’s fiscal year 2026 budget request to Congress proposed a 44% cut to funding for the U.S. Department of Housing and Urban Development (HUD), which threatens the rental assistance of millions of low-income Americans. It also seeks to convert critical housing programs, like Section 8 and Public Housing, into state-controlled block grants, while proposing a two-year term limit on aid for non-elderly, non-disabled households — a radical shift that would make housing support temporary and unpredictable, the report said.

“If enacted, this plan will drive more people into homelessness and dismantle the federal safety net, shifting the burden of housing our country’s lowest-income renters onto states and the private sector, and abandoning millions of people in need," Rachel Fee, executive director of the New York Housing Conference said in a statement. "By cutting off critical housing support and a crucial source of revenue for landlords, developers, and lenders, this plan has the potential to undermine the entire structure of affordable housing in America.” 

NYHC estimates HUD funding would drop from $8.7 billion to $4.8 billion — a 46% decrease that threatens the housing of more than one million New Yorkers. 

In New York City alone: 

• Up to 200,000 households could be kicked off of HUD assistance due to the implementation of two-year term limits. 

• The average HUD-assisted household earns just $22,000/year, while a modest two-bedroom apartment rents for $2,752/month. 

• In some neighborhoods — such as Brownsville, Harlem and Mott Haven — nearly 40% of households rely on Section 8 assistance. 

• The city and its partners have more than $10 billion invested in affordable housing deals tied to long-term HUD contracts.

The loss of subsidy at this scale would not only lead to evictions and empty buildings but also raise borrowing costs, jeopardize city finances, and stall future affordable housing development across the five boroughs, the report said.