Mayor Mamdani signs $1.9 billion deal to put homeless in hotels

A massive shelter deal just got approved

New York City approved a $1.86 billion, three-year contract with the Hotel Association of New York City Foundation to house homeless families in hotels. The Department of Homeless Services will manage the deal.

A city spokesman said $1.86 billion is the maximum the city can spend, not a guaranteed figure. The city pays only for rooms it actually uses, and officials expect total spending to come in below that ceiling.

New deal replaces an older, smaller contract

This contract replaces an existing $929 million agreement that runs from January 2025 through June 2026. More than $626 million has already been paid out under that deal, according to the city comptroller’s office.

The current contract covers up to 10,651 hotel rooms for homeless families.

Hotel Association CEO Vijay Dandapani said the contract exists for emergencies and lets the city add capacity quickly when the need spikes.

Hotels became shelters during COVID-19

The city’s hotel shelter model started in 2020 under Mayor Bill de Blasio, when hotels sat empty and the city needed ways to thin out crowded shelters during the pandemic.

The Hotel Association had no city contracts before that year, when its foundation landed an initial $78 million deal that eventually grew to $617 million.

The model expanded sharply under Mayor Eric Adams when the migrant crisis hit and the city needed to house thousands of new arrivals fast. At the peak, roughly 4,000 asylum seekers arrived in New York City each week.

The migrant surge slowed, but the need stayed

The wave of migrants that strained the shelter system has slowed since its peak.

Mayor Zohran Mamdani ordered DHS in January 2026 to develop a plan to phase out the separate migrant shelter system. The agency no longer runs any hotels or sites dedicated solely to asylum seekers.

Migrants are now housed alongside other homeless New Yorkers in the broader shelter system.

Over 100,000 people sleep in shelters each night

In January 2026, an average of 100,437 people slept in New York City shelters each night, according to the Coalition for the Homeless.

The shelter population includes about 33,000 children and tens of thousands of families. Advocacy groups say these are the highest shelter numbers since the Great Depression.

The Coalition for the Homeless points to the lack of affordable housing as the main driver of homelessness in the city.

A brutal winter made the crisis impossible to ignore

More than 20 people were found dead outdoors during a cold snap that began in late January 2026. Temperatures dropped sharply on Jan. 23 and stayed below freezing for about 10 straight days.

The city declared an Enhanced Code Blue, opened shelters to walk-ins without the usual intake process, and expanded street outreach.

The deaths prompted a City Council oversight hearing in February, where lawmakers questioned whether the city’s response was adequate.

Critics say the deal skips normal competition

Nicole Gelinas, a senior fellow at the Manhattan Institute, called the contract bad precedent and essentially a no-bid arrangement.

She argued that what started as a short-term emergency fix has turned into a semi-permanent parallel shelter system run by a single industry group.

Gelinas said hotels should compete against each other on price instead of operating through the Hotel Association as a go-between.

She also said pulling thousands of hotel rooms off the market pushes up costs for tourists and business travelers in a city that already has some of the highest hotel rates in the country.

Advocates say the city has no legal choice

David Giffen, executive director of the Coalition for the Homeless, called the city’s reliance on hotels far from ideal. But he said the city carries both a legal and moral obligation to shelter everyone who needs it.

Giffen pointed to the winter deaths as proof that maintaining enough beds is not optional. New York City’s 1981 right-to-shelter consent decree, established through the Callahan v. Carey case, legally requires the city to provide shelter to anyone who asks.

A 1979 lawsuit set the rules cities still follow

In 1979, attorney Robert Hayes sued the city on behalf of homeless men, arguing the New York State Constitution required the city to house them.

The case settled in August 1981, with a consent decree requiring the city to shelter all homeless men who apply. Later cases extended that right to women and families with children.

Because of that mandate, city officials have little flexibility to cut shelter capacity, which often pushes them toward costly emergency options like hotel contracts.

Manhattan’s oldest men’s shelter will close in April

The Mamdani administration announced in March 2026 that it would close the 30th Street Shelter, also known as Bellevue, by the end of April. The building opened in 1931 and currently houses about 250 residents.

It has served as the main intake center for homeless single men and adult families for more than 40 years. Intake operations will move to 8 East Third St. for men and 333 Bowery for adult families starting May 1.

The city said it will keep the same total number of shelter beds across the system.

The strategy raises questions about direction

The Mamdani administration is committing nearly $1.9 billion to hotel shelters while at the same time ordering DHS to reduce hotel use for families with children.

A city spokesman said hotels lack the full range of services that traditional family shelters provide but that the transition will take time.

The city also plans to shut down the last large-scale migrant shelter in the South Bronx by the end of 2026.

This winter, Mamdani opened 300 Safe Haven beds, which are lower-barrier shelters designed to reach people who avoid the traditional shelter system.

What comes next for the city’s shelter system

The three-year contract gives the city the ability to open hotel shelter units quickly during emergencies.

The administration says it will keep phasing out hotel use while holding enough capacity to handle future spikes in need.

How close actual spending gets to the $1.86 billion limit will depend on how fast the city can move families out of hotels and into traditional shelters or permanent housing.

New York City already has some of the highest hotel rates in the country, and keeping thousands of rooms off the market affects both tourism and affordability.

This article was created with AI assistance and human editing.

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