NYC budget deal includes new $2B housing investment, reverses library cuts: sources

Mayor Adams and Council Speaker Adrienne Adams are expected to announce a deal on a city government budget Friday that averts various cuts previously recommended by the mayor — including to libraries — and allocates a fresh $2 billion in spending on affordable and public housing, the Daily News has learned.

The capital housing allocation is expected to bankroll programs focused on both preserving and creating affordable apartments across the city, sources familiar with the budget negotiations between the Council and the mayor’s office said Thursday afternoon.

Though some details were unclear as talks continued into the evening Thursday, a source with direct knowledge of the matter said the deal is expected to reverse cuts the mayor enacted to the budgets of the city’s public library systems, which have forced them to eliminate Sunday service at most of their branches.

Gothamist reported the full $58 million cut the mayor subjected the libraries to will be reversed, meaning they should be able to resume Sunday service.

In addition, the source told The News that the two sides have as part of the deal agreed to use city taxpayer dollars to supplant expiring federal funding for the city’s free pre-K and 3-K programs, although to what extent was not immediately clear. Adams’ executive budget bid released this spring proposed to let the federal funds expire without replacing them with city dollars, a suggestion that stirred outrage from Council Democrats and education advocates, who argued it would deprive New Yorkers of access to the popular early childhood education programs.

The mayor’s thumbs up for the new housing investment comes after Council Democrats have for weeks pressed him to commit $3.66 billion in additional affordable housing capital spending over the next five years.

The new $2 billion infusion is committed over two years, with $1 billion earmarked for the 2025 fiscal year and the remaining $1 billion set aside for the 2026 fiscal year, according to the sources, who spoke on condition of anonymity to preempt an announcement on the budget deal.

Of the $2 billion capital investment, $700 million is for NYCHA repairs and new construction, the sources said. The remaining $1.3 billion is for a variety of Department of Housing Preservation and Development initiatives, including $272 million for construction of housing for extremely low and low-income New Yorkers and $470 million for multi-family affordable housing construction, according to the sources.

There’s also tens of millions of dollars baked in for the department’s Neighborhood Pillars program, which funds efforts to refurbish dilapidated buildings and turn them into affordable rentals, as well as the agency’s Open Door initiative, which bankrolls construction of affordable co-ops and condominiums, the sources said.

February 9, 2024 Brooklyn, NY Governor Kathy Hochul announces that 18 new housing developments will move forward under the Gowanus Neighborhood Mixed Income Housing Development Program, unlocking more than 5,300 units of housing, including more than 1,400 affordable units in the Gowanus section of Brooklyn. (Susan Watts/Office of Governor Kathy Hochul)
Housing construction in Brooklyn. (Susan Watts/Office of Governor Kathy Hochul)

The new $2 billion commitment comes on top of $2 billion that’s already allocated in capital housing spending for the 2025 and 2026 fiscal years.

The ramped up housing spending comes as the city remains in a severe housing crisis, with skyrocketing rents and a shortage of available apartments.

Spokespeople for the mayor and the speaker did not immediately return requests for comment.

The deal on the 2025 fiscal year budget is coming together in the 11th hour. The Council must by law adopt the city budget by midnight Sunday, when the 2025 fiscal year starts.

On Friday, the mayor and the speaker are expected to do a ceremonial handshake on a budget agreement, and the Council is then expected to gavel in for an unusual Sunday session to vote on the deal before the midnight deadline.

This year’s negotiations have been unusually tense, and the speaker’s Democratic leadership team privately told Council members last week they were concerned the budget might be late this year. Adams said earlier this week he was confident the budget would be completed on time.

The speaker’s Democratic majority have repeatedly accused the mayor’s team of seeking unnecessary cuts to various city services, like libraries, childhood education programs and parks, while over-prioritizing spending on the NYPD.

The mayor previously argued the cuts were necessary to offset the billions of dollars the city has spent on the local migrant crisis. His office has also justified the cuts by releasing tax revenue projections that are less optimistic than the Council’s, though the mayor’s team has since last year adjusted its analyses and brought them more in line with the Council’s.

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