New York City’s Democrat leadership quietly signs a staggering $1 billion no-bid contract with hotel industry insiders to house migrants and the homeless, bypassing competitive bidding processes while city residents struggle with skyrocketing living costs.
Key Takeaways
- Mayor Eric Adams’s administration has awarded a massive $929.1 million no-bid contract to the Hotel Association of NYC Foundation for emergency housing.
- The controversial agreement bypasses normal competitive bidding through a “negotiated acquisition” process that lacks transparency.
- Each migrant costs taxpayers $352 per night, with $130 going directly to hotels, totaling over $3.12 billion spent since 2022.
- Despite claims that the migrant crisis is easing due to President Trump’s stricter border policies, the contract extends through June 2026.
- The Trump administration withdrew $80.5 million in federal funding from NYC, citing inappropriate use of funds for luxury accommodations.
Billion-Dollar Backroom Deal Raises Questions
The Adams administration has signed a nearly $1 billion no-bid contract with New York City’s hotel industry to provide emergency shelter space for migrants and homeless individuals. The agreement, valued at $929.1 million with the Hotel Association of New York City Foundation, runs from January 2023 through June 30, 2026, despite claims that the migrant crisis is easing. This sweeping financial commitment comes at a time when ordinary New Yorkers are struggling with inflation and housing costs, yet the city is spending lavishly on accommodations for non-citizens.
“Why do we need to be using so many hotels for day-to-day homeless management?” questioned Nicole Gelinas, senior fellow at the Manhattan Institute.
The contract was awarded through a “negotiated acquisition” process that deliberately circumvented standard competitive bidding procedures. This lack of transparency raises serious concerns about potential favoritism and whether taxpayers are getting fair value. The Hotel Association acts as a fiscal agent, taking a nominal fee for administrative expenses while connecting the city with hotels willing to provide rooms for shelter. This arrangement creates a comfortable financial cushion for hotel owners while taxpayers foot the bill.
Astronomical Costs to House Migrants
The financial burden on New York taxpayers is enormous. The cost to house each migrant per night is an astounding $352, with $130 going directly to hotels for room rental. Since 2022, the city has spent a jaw-dropping $3.12 billion on shelter and related costs for migrants alone. This spending spree continues even as the city faces budget constraints in essential services for citizens, including police, sanitation, and education, which have all faced cutbacks under the Adams administration.
“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,” claimed a Department of Social Services/Homeless Services spokesman.
While the city defends its actions, citing New York’s right-to-shelter policy, the sheer magnitude of spending raises questions about fiscal responsibility. The federal reimbursement offered only $12.50 per night for each hotel room used for shelter, less than 10% of what the city is paying to hotels. This disparity highlights the disconnection between federal oversight and local spending practices, especially concerning migrants who entered the country illegally.
Trump Administration Challenges NYC’s Spending
President Trump’s administration withdrew $80.5 million in federal funding earmarked for migrant housing, leading to a lawsuit by Mayor Adams to recover the funds. Federal officials cited concerns that migrants were being housed in luxury accommodations at taxpayer expense – a claim the city denies despite evidence to the contrary. The withdrawal of federal funds reflects the Trump administration’s commitment to responsible spending and opposition to policies that reward illegal immigration with premium accommodations.
“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,” explained Vijay Dandapani, president and CEO of the Hotel Association of New York City.
While the number of new migrant arrivals has decreased due to President Trump’s stronger border enforcement policies, the city is extending this massive contract through mid-2026. This decision contradicts the administration’s claims that the crisis is easing and raises questions about whether this program is more about providing a financial lifeline to the hotel industry than addressing genuine humanitarian needs. Meanwhile, working-class New Yorkers continue to bear the economic burden of these costly policies with no relief in sight.
