City Eliminates Voucher Program Incentive for Landlords

The hits keep coming for a key housing voucher program.

New York City’s Department of Social Services is set to end the incentive that gave landlords rent money while applications for CityFHEPs, a city housing voucher program, were being processed, City Limits reported.

The so-called “unit hold incentive” ensured landlords would receive a month of rent if they held a unit for an application being processed. Landlords and voucher holders alike fear the change will drive more landlords away from renting to those in the program, which is often used by those coming out of the shelter system.

“The unit hold incentive served as a stop-gap solution to address the lack of robust mechanisms for processing rental subsidies to secure housing that is quickly leasing up,” a DSS spokesperson told City Limits, adding that technological improvement should make the hold incentive less necessary; as of January, DSS commissioner Molly Waslow Park put the average processing time at 24 days, meaning landlords could be stuck for weeks without a tenant locked in.

The incentive is set to be doled out for the last time on July 1 after landlords received a shock update in their email inboxes late last month. Case managers in DHS need to submit applications by June 20 for landlords to be eligible for the final hold incentive.

The City Council has been considering ways to bring down the escalating costs of CityFHEPS. The budget skyrocketed from $253 million in fiscal year 2021 to $1.25 billion in fiscal year 2025 as a record number of households enrolled in the program.

Mayor Eric Adams’ administration is taking the next step towards raising the rent burden on longtime users of CityFHEPS. While recipients of CityFHEPS vouchers contribute 30 percent of their income towards rent, those in the program for five or more years would have their contributions jump to 40 percent under Adams’ proposal.

The unit hold incentive was not part of any official rules and therefore did not have to go through public review, unlike the rent contribution change.

— Holden Walter-Warner