New York City taxpayers are footing a staggering $1 billion bill for a no-bid hotel contract to house homeless and illegal migrants, while Mayor Adams insists the crisis is subsiding.
Key Takeaways
- NYC has signed a nearly $1 billion no-bid contract with the Hotel Association of New York City Foundation for emergency shelter space through 2026
- The city is paying $352 per night to house each migrant, with $130 going directly to hotels for room rental
- The massive contract was awarded through “negotiated acquisition,” completely bypassing the competitive bidding process
- NYC has already spent $3.12 billion on shelter and related costs for migrants since 2022
- The Trump administration withdrew $80.5 million in federal funding after determining NYC was housing migrants in luxury accommodations
Billion-Dollar Blank Check for Hotels
The Adams administration has quietly extended a massive no-bid contract worth $929.1 million with the Hotel Association of New York City Foundation to provide emergency shelter space for homeless individuals and asylum seekers. This extraordinary financial commitment comes despite Mayor Adams’ recent claims that the migrant crisis is easing under President Trump’s stronger border policies. The contract, which runs from January 2023 through June 30, 2026, was awarded through a process called “negotiated acquisition” that conveniently sidesteps competitive bidding requirements that would typically be required for taxpayer-funded projects of this magnitude.
“Why do we need to be using so many hotels for day-to-day homeless management?” Nicole Gelinas, senior fellow at the Manhattan Institute,
Astronomical Costs to Taxpayers
The financial burden on New York City taxpayers is astronomical. Each migrant costs $352 per night to house, with $130 of that amount going directly to hotels for room rental. Since 2022, the city has spent a whopping $3.12 billion on shelter and related costs for migrants. Despite the Adams administration’s insistence that the crisis is abating, this latest contract suggests otherwise. The city claims it’s legally required to provide emergency shelter under New York’s right to shelter policy, but critics argue the administration is mismanaging resources and failing to develop more cost-effective solutions.
“This agreement is an extension of the non-profit HANYC foundation’s ongoing work since COVID to connect city funding with hotels to address New York’s need to provide emergency services to the homeless,” Vijay Dandapani, President and CEO of the Hotel Association of New York City,
Federal Funding Cut Under Trump
Adding to the city’s financial woes, the Trump administration recently withdrew $80.5 million in federal funding for migrant housing after determining that New York was housing illegal immigrants in luxury accommodations. The federal program had offered a meager $12.50 per night reimbursement for each hotel room used for shelter, far below the $130 per night the city is paying to hotels. In response, Mayor Adams has filed a lawsuit attempting to recover these funds, even as the administration claims it never housed migrants in luxury facilities despite evidence to the contrary.
“As the city’s shelter system was pushed to its limits following an influx of new arrivals, the Adams administration acted quickly and decisively to effectively address the crisis and acquire emergency shelter capacity to serve households in need” – Department of Social Services/Homeless Services spokesman,
Declining Crisis or Perpetual Problem?
While the city has phased out some emergency shelters as the number of new arrivals has decreased under President Trump’s stricter border enforcement policies, the massive new contract suggests officials are preparing for a long-term commitment to hotel-based housing. Some hotels previously used for shelters are transitioning back to tourist accommodations, but the nearly $1 billion contract indicates many will continue to house migrants through 2026. The Hotel Association, which takes a nominal fee for administrative expenses, acts as a fiscal agent to connect the city with hotels willing to provide rooms for shelter.
This extravagant spending comes at a time when ordinary New Yorkers are struggling with inflation and housing costs of their own, raising serious questions about the Adams administration’s priorities and fiscal responsibility. With the city’s shelter population significantly increased from pre-pandemic levels, taxpayers are left wondering when, if ever, this billion-dollar burden will end.
