Accounting for Asylum Seeker Services

The City has adjusted funds in its Financial Plan over the last fiscal year to cover the expenses associated with providing shelter to people seeking asylum. Costs are primarily driven by two variables: the growth in the number of households seeking shelter and the average per diem rate of providing shelter and services.

Funding for Services to People Seeking Asylum, OMB Financial Plans

Source: Mayor’s Office of Management and Budget

The City of New York spent $1.47 billion for asylum seeker shelter and services in the fiscal year that ended in June 2023, with $438 million to be reimbursed by the State.

Funding for Services to People Seeking Asylum, Preliminary 2024 Financial Plan

Source: Mayor’s Office of Management and Budget

Note: FY 2024 excludes $18 million in Intra-City funds

In its March 4^th Comments on New York City’s Preliminary Budget, the Comptroller’s Office projected that total FY 2024 spending would be $4.0 billion, or $197 million lower than the Administration’s projection of $4.2 billion, primarily from lower than expected growth of asylum seekers in City shelter. Following its release of the budget, the Administration stated it will reduce City funds for asylum seekers by 10% in the Executive Budget, which the Comptroller’s Office estimates the new FY 2024 asylum seeker budget will be $3.9 billion.

Spending

Spending for asylum seekers can be portrayed over different time periods and by different methodologies. Monthly, the Administration publishes an estimate of the amount spent by type and agency through the City Council’s Terms and Conditions. Traditionally, the City’s Financial Management System (FMS) is the primary source for spending information. The Terms and Conditions are used to share timely and regular information of the Administration’s estimate, since FMS is subject to delays from processing, particularly given delays related to the emergency procurement process.

FY 2023 and FY 2024 Asylum Seeker Spending

Note: All information is through February 29, 2024. Administration Estimated represents the Administration’s estimated expenditure amount on asylum seekers as reported to the City Council. Liquidated represents the expenditure amount that has been distributed, including drawdown of the prior year payable. Remaining Prior Year Payable is the FY 2023 payable amount that has yet to be distributed. Remaining Committed is the expenditure amount shown in FMS and includes and pre-encumbrances, encumbrances, and unliquidated. The Remaining Budget in FY 2024 is the total amount included in the most recent City budget for asylum seekers and subtracts commitments and liquidations.

Of the total FY 2023 expended amount, $563 million was set up as a payable, meaning it was anticipated to be paid to vendors for services received that year but had not yet been paid at the time of the fiscal close. As of the end of February, only $44 million of that amount was cleared.

Per FMS, $1.99 billion has been spent in FY 2024 through February, compared to the $2.6 billion reported as expended in the Terms and Conditions.

State and Federal Funding

The FY 2025 New York State Executive Budget proposes an additional $2.4 billion in funding to support the asylum seeker response – bringing the total paid over State Fiscal Years 2023 – 2026 to $4.3 billion, of which approximately $3.4 billion would flow directly through the City’s budget. This amount is $112 million less than the January 2024 Financial Plan’s estimated State aid.

The January Plan includes $156 million in Federal Emergency Management Administration (FEMA) funding in FY 2024 – $10.5 million more than in the November Plan. Of this budgeted amount, $48.9 million is from the Emergency Food and Shelter Program (EFSP), and $106.9 million from the Shelter and Services Program (SSP). As of February 29, 2024, the City has received only the $48.9 million in EFSP funding.

The SSP program has multiple stringent reimbursement requirements, including that the eligible municipality provide identification data and limit services to within 45 days following release from the U.S. Department of Homeland Security.[1] Therefore, the Comptroller believes the City may receive less federal funds than budgeted, for more information please see the Comptroller’s Comments on the NYC Preliminary Budget for FY 2025.

Projections of Asylum Seeker Shelter Census

In its December 15^th, 2023, Annual State of the City’s Economy and Finances, the Comptroller’s Office developed three possible scenarios for asylum seeker population growth (shown below).  Due to uncertainty and volatility around national and local trends the Comptroller’s Office did not change its growth projections with the Preliminary Budget. Since January 1, 2024, the population of asylum seekers has decreased at a rate of 53 households per day, from 68,400 to 64,600 as of March 10, 2024.

Updated Comptroller Projection of Asylum Seeker Shelter Census (Households)

Source:  Office of the New York City Comptroller; Mayor’s Office of Management and Budget

Note: Shelter census includes all households seeking asylum in City shelters including those in DHS-operated shelters, HERRCs, and other facilities. Number of households are estimates based on shelter census and average household sizes provided by the Office of Management and Budget.

Note: A household can be a family with children, adults living together as a family (adult parent with an adult child or adults living as partners without children) or a single adult living alone

Per Diem

DHS manages contracts that house 50,600 individuals as of March, 10, 2024, accounting for 78 percent of asylum seekers currently in City-funded shelter. DHS has procured 161 emergency shelters in former hotels through a combination of nonprofit service providers and a hotel contract administered by the Hotel Association of NYC (HANYC). While a small number of the nonprofit providers subcontract directly with a hotel provider, most of the registered contracts are for services only and the hotel rooms are procured separately via the HANYC contract. The below table shows the average room rates by borough (plus the city of Yonkers). The average HANYC per diem is $156, as shown below.

HANYC Hotel Room Rates by Borough

Source: New York City Mayor’s Office, Office of the New York City Comptroller

The Comptroller’s Office further analyzed 54 DHS contract budgets, and the average service cost for all items other than rent (security, food, fringe, overhead, etc.)  the average DHS per diem was $172. When adding in the average HANYC rents and the DHS per diem for sites following this model, the per diem is approximately $328, less than the average the administration cites, $388 from July 2022 through January 2024.

Looking Forward

On February 21, 2024, the Mayor stated that the FY 2025 Executive Budget will include an additional ten percent reduction to city-funded asylum-seeker spending, in addition to the 20 percent reduction in the FY 2025 Preliminary Budget. The Comptroller’s Office will evaluate the Administration’s proposed reductions in the FY 2025 Executive Budget. On March 15, 2024, the Adams Administration entered into a stipulation of settlement agreement with the Legal Aid Society and Coalition for the Homeless regarding the City’s Right to Shelter law, as it applies to single adults. Under the stipulation, newly arrived single adults 23 and older will be granted a shelter stay for 30 days, and newly arrived single adults between 18 and 23 will be granted a shelter stay for 60 days. Those seeking an extension of their stay must prove they have a disability or extenuating circumstances.

[1] On January 12, 2024, the New York City Comptroller and Chicago Budget Director wrote a letter to the U.S. Department of Homeland Security (DHS) requesting flexibility in meeting the reimbursement requirements for DHS’ SSP. Letter from NYC and Chicago Chief Fiscal Officers to DHS Secretary Mayorkas : Office of the New York City Comptroller Brad Lander