Mayor Zohran Mamdani and City Council Speaker Julie Menin reached a $125.8 billion budget deal at the end of June that pours an extra $175 million into rental assistance, widens who can qualify for the city’s biggest housing voucher, and ends the lawsuit the city had been fighting to keep that voucher from growing. The agreement was first reported by The City, and the Council passed it hours later by a 45-6 vote.

The fight that nearly blew up the deadline was over CityFHEPS, the city-funded voucher that lets a household pay about a third of its income toward rent and covers the rest. Roughly 67,000 households rely on it to get out of shelters and into apartments. In 2023 the Council passed a law to make far more people eligible. Former Mayor Eric Adams never implemented it, the Legal Aid Society sued, and Mamdani, despite campaigning on expanding the program, kept the legal fight going after he took office. In March he appealed to the state’s highest court, arguing the Council had no authority to expand the voucher at all.

The budget deal reverses that. The administration agreed to drop the suit, and the city will build a new rental program, under a bill sponsored by Councilmember Pierina Sanchez, to reach New Yorkers who don’t currently qualify but are facing eviction. Going forward, CityFHEPS will apply to people at a higher income level, roughly $56,700 for an individual and $81,000 for a family of four, up from about $31,920 and $66,000. It will also cover people facing eviction from rent-stabilized apartments, and people in shelters the Department of Homeless Services doesn’t run, like runaway youth and those displaced by fires or vacate orders.