Federal rental aid safe for now as White House reverses course
- Trump Administration rescinded a memo that called for federal agencies to freeze spending
- The White House’s budget office previously said a federal funding pause would not apply to rental assistance
- Roughly 160,000 tenants rely on federally funded Section 8 to pay rent in NYC
The White House Office of Management and Budget stated in a memo on Wednesday that “funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused.”
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New York City tenants who rely on federal rental assistance programs will hold onto their benefits—for now—after the Trump administration backed away from a confusing plan to halt federal spending. The move follows a judge’s decision to temporarily block the controversial freeze.
A vague memo from the administration’s budget office ordering federal agencies to temporarily pause spending confounded rental assistance providers nationwide on Wednesday, and some were unable to access two federal portals to secure funds to pay tenants’ rent, Bloomberg reported.
Among the programs in danger of being paused was the Section 8 Housing Choice Voucher program—which subsidizes rents for more than 160,000 renters in NYC, according to the NYC Housing Authority.
[Update: Section 8 payments to some NYC landlords were delayed on Friday, Jan. 31st, due to confusion over the federal funding freeze, according to reporting by Gothamist. Those landlords were missing expected payments as of Monday. NYCHA received its funding Monday morning, and immediately began processing payments, a NYCHA spokesman told Gothamist.]
In an about-face on Thursday, the White House Office of Management and Budget (OMB) rescinded its memo announcing the freeze, The New York Times reported. But in an even more confusing statement, Press Secretary Karoline Leavitt said on X that the reversal was “not a rescission of the federal funding freeze,” but just the memo itself. (A representative for OMB did not immediately respond to a request for comment.)
Still, there are some assurances that rental assistance is safe—though delayed. The OMB stated on Wednesday that rental assistance would not be halted, and a federal judge has blocked the funding freeze until Monday, Feb. 3rd. Democratic leaders and some advocates saw the reversal as a victory, USA Today reported.
Read on for a timeline of what happened, and what NYC renters should know.
What the hell happened?
Late Monday night, OMB issued a memo requiring federal agencies to stop disbursing funds and review “all federal financial assistance programs” to make sure those programs were aligned with President Donald Trump’s agenda to end “wokeness” in America, States Newsroom reported.
A second memo rattled off the programs that would be paused, including Section 8 Housing Choice Vouchers, several homelessness and eviction prevention initiatives, and housing assistance for the disabled and elderly—all of which are administered by the Department of Housing and Urban Development.
That memo would have required HUD to analyze whether programs like Section 8—which helps low-income tenants pay their rent—benefit undocumented immigrants, fund abortions, or support environmental justice, among other things. (FYI: Section 8 recipients need to be U.S. citizens, or non-citizens with an eligible immigration status such as a green card to qualify for the program.)
Housing providers and tenant advocates were alarmed by the news, which came just days before rent payments are due for many on Feb. 1st. Even a short pause could “cause significant harm to low-income families,” said Renee Willis, interim president and CEO of the National Low Income Housing Coalition (NLIHC), in a statement.
But OMB later claimed on Wednesday in a third memo that rental assistance would not be halted. And a federal judge blocked the freeze minutes before it was scheduled to take effect on Tuesday, stalling the potential freeze until Monday of next week.
Finally on Thursday, the OMB rescinded its controversial memo. At the same time, Leavitt maintained that efforts to “end the egregious waste of federal funding” would continue, NPR reported.
While households receiving federal rental assistance “are protected from the funding freeze,” NLIHC expects further attempts to undermine federal housing programs, said Sarah Saadian, NLIHC's senior vice president of public policy and field organizing. The OMB's mixed messages this week already undercut the federal government's reliability, Saadian added.
“If landlords do not feel like they can trust the federal government to make good on its promises, then fewer landlords will participate in the rental assistance program, leaving even more households without a stable, affordable home,” Saadian said in a statement to Brick Underground. “This chaos also put significant strain on nonprofit organizations and state and local governments that administer HUD funds.”
Response from NYC
Tenant advocates in NYC saw the White House’s reversal as a victory, despite the chaotic past 24 hours.
"While we’re relieved the White House reversed its decision to freeze funding, this needless disruption already caused unnecessary chaos and uncertainty for millions of people who rely on critical support for food, housing, and medical care,” Christine Quinn, CEO and president of the shelter provider Win, said in a statement. “This was a political game at the expense of the American people.”
Governor Kathy Hochul criticized OMB’s move and promised to sue over the proposed $3 trillion freeze, she said in a statement on Tuesday. The federal government “must keep their end of the bargain,” when it comes to funding New York state programs, Hochul said.
Meanwhile, Mayor Eric Adams said city officials were working to figure out how OMB’s move would impact New Yorkers, Gothamist reported on Wednesday. (Adams met with Trump at Mar-a-Lago on Jan. 17th, and said he plans to work with Trump in a recent interview with ex-Fox news host Tucker Carlson.)
Editor's note: This story was updated to include an additional statement from NLIHC.
