Objective

To determine whether the New York City Department of Social Services (DSS) is administering the City Fighting Homelessness and Eviction Prevention Supplement (CityFHEPS) program according to the rules and regulations, thereby assisting residents in the community served by Homebase providers to secure permanent housing. The audit covered the period from July 2021 through July 2025.

About the Program

New York City has long faced a lack of affordable housing, one of the many issues driving the homelessness crisis. According to the Coalition for the Homeless, the court-appointed independent monitor of the municipal shelter system for single adults and the City-appointed monitor of shelters for families, in June 2025, 105,373 people slept each night in NYC shelters, with thousands more sleeping unsheltered in public spaces, and more than 200,000 sleeping temporarily in the homes of others.

In October 2018, the New York City Department of Social Services (DSS) launched the City Fighting Homelessness and Eviction Prevention Supplement (CityFHEPS) rental assistance program intended to help New Yorkers living in homeless shelters and those at risk of homelessness secure permanent housing. According to DSS officials, since the launch of CityFHEPS in 2018, through March 2025, the program has processed 57,888 new cases, helping 123,762 individuals to secure permanent housing. Officials also reported that between fiscal years 2019 and 2024, CityFHEPS expenses increased from $176 million to $834 million. In fiscal year 2025, the program’s projected costs were $1.2 billion.

DSS is composed of two administrative units: the New York City Human Resources Administration (HRA), the largest social services agency in the country, and the New York City Department of Homeless Services (DHS), whose mission includes homelessness prevention and assisting New Yorkers experiencing homelessness to find suitable housing. In 2004, DHS launched a homelessness prevention and aftercare services program, referred to as Homebase, to assist individuals and families experiencing a housing crisis and at risk of homelessness. To provide these services, DSS contracted with seven providers, and, since the contracts’ inception in 2017, their estimated total cost has been approximately $671 million, though no figures for actual expenditures were available. Households at risk of homelessness can apply for CityFHEPS at one of the 26 Homebase locations throughout the City’s five boroughs. As of February 2024, individuals and families in New York City who are eligible for CityFHEPS can use the Statewide CityFHEPS program to move into permanent housing anywhere in New York State. Current CityFHEPS recipients may also relocate to any location within the State.

Key Findings

Consistent with our findings from prior audit 2023-N-1, completed in October 2024, we found DSS lacks adequate oversight and monitoring of the CityFHEPS program intended to assist individuals and families served by Homebase providers. As a result, program applicants were exposed to apartment units with immediately hazardous violations despite preclearance and inspection requirements. Further, insufficient support for program eligibility verification and payment calculations has resulted in a lack of assurance that all approved applicants are eligible for the program and that the correct rent amounts are being paid. Given the lack of affordable housing, the vulnerability of the homeless population, and rising program costs, increased monitoring and oversight of safety and habitability requirements as well as program spending are critical to meeting CityFHEPS goals and assisting approved recipients to move into permanent housing. Our findings included the following:

• In five of 45 sampled cases, DSS had approved housing units for the CityFHEPS subsidy that had open New York City Department of Housing Preservation and Development (HPD) hazardous violations. In three of the five cases, there was at least one open immediately hazardous violation, including a defective window guard and rat and roach infestations. In one example, we found that DSS staff approved a client to move into an apartment with significant habitability issues, despite previously approving another CityFHEPS client’s transfer out of that same apartment due to habitability issues. We reviewed HPD housing violation data and found that the apartment had 20 open violations and, upon further review, found that DSS approved CityFHEPS clients to move into three other properties owned by the same landlord with similar issues. These three properties had 110 open violations at the time of our review in March 2025. While DSS may ban a landlord from participating in the program for violations of various landlord requirements, DSS has not established any policies or procedures to create a landlord disqualification list or included unresolved safety and habitability issues as grounds for disqualification.
• Thirty of 75 CityFHEPS case records sampled showed no evidence that income was verified, leaving no assurance that only eligible applicants received the housing subsidy.
• DSS does not have sufficient procedures related to verification of landlord-broker relationships, creating the risk of inappropriate payments. In one case, DSS paid $6,800 in broker’s fees before later finding that the landlord and broker were both owned by the same parent company.
• DSS is required to verify that the rent is reasonable in comparison to other similar units within the vicinity. DSS officials could not provide evidence that a rent reasonableness test was completed for any of the 30 sampled Statewide CityFHEPS cases we reviewed. In 11 of the 30 sampled cases, we found the approved rent was greater than the rent for comparable units in the area, on average by $525, with one approved monthly rent being $1,647 more than the rate for comparable units. Failure to perform required rent reasonableness tests and approving rents exceeding comparable rates within the market without explanation raises questions related to how reasonableness is being determined as well as issues related to transparency and fairness.
• As a result of insufficient monitoring of landlord payments and DSS issuing inaccurate Internal Revenue Service (IRS) Form 1099s to landlords, there is less assurance that accurate rent payments are reported to the IRS.

Key Recommendations

• Establish policies and procedures to check for all violations during preclearance, and expand preclearance checks for all CityFHEPS cases.
• Establish a landlord disqualification list and develop written procedures for the addition and removal of landlords from the list and monitor for compliance.
• Comply with policies and procedures to verify eligibility, including income, for all members of a household who are age 18 and older and ensure that all eligibility (including income) documents are retained.
• Develop adequate written procedures and monitor for compliance to confirm that no substantiated relationship exists between landlords, brokers, and managing members for all CityFHEPS cases and that rent payments are issued to the correct parties.