NEW YORK — The Federal Emergency Management Agency (FEMA) has withdrawn over $80 million in funding allocated to New York City, intensifying an ongoing conflict between the Trump administration and the city regarding financial support intended for housing migrants in hotels. This action coincided with a recent federal court ruling that allowed the administration to proceed with reclaiming the funds.
The rescinded funds include a substantial $59 million grant that was challenged earlier in the week, along with an additional allocation of $21.5 million, as announced by City Comptroller Brad Lander. The sudden loss of these funds caught Lander off guard, as his office was not aware that the federal government had the authority to access the city’s bank accounts.
Mayor Eric Adams, who serves as a Democrat, stated that city officials have reached out to the White House to discuss the retrieval of the funds, are seeking an urgent meeting with FEMA, and are looking into legal recourses. Adams also indicated he would address this issue with Tom Homan, designated as Trump’s point person on border matters, during their meeting in New York on Thursday.
This situation represents a significant test for the relationship between Adams and the Trump administration, particularly after the U.S. Justice Department ordered the discontinuation of corruption charges against Adams earlier in the week. Officials in the Justice Department expressed a desire for Adams to remain unencumbered in his role, aimed at supporting the Republican president’s immigration policies.
The grants were both applied for and approved during the administration of President Joe Biden, yet the disbursement did not take place until the previous week, according to the city’s officials. Out of the blue, Trump adviser Elon Musk flagged the $59 million expense on social media, claiming that the funds were utilized to accommodate migrants in “luxury hotels,” though he failed to provide any evidence for his assertion.
In court documents submitted on Tuesday, FEMA’s acting administrator expressed concerns surrounding “illegal activities” at one of the hotels, prompting the decision to reclaim the funds. Lander, however, questioned the legality of this action, stating that he had never encountered a case where a government entity was empowered to access and withdraw money from bank accounts due to shifting political scenarios.
“This is a significant test of whether we still have autonomous leadership at City Hall,” noted Lander, who is preparing to challenge Adams in the Democratic primary scheduled for June. Meanwhile, the White House press secretary, Karoline Leavitt, remarked during a briefing that covering hotel expenses for migrants was not a priority for the administration, especially as FEMA manages other costly disaster recovery efforts.
Homeland Security Secretary Kristi Noem tweeted that she had reclaimed the full payment that she attributed to “FEMA deep state activists” who had approved funds for NYC migrant hotels without proper authorization. A ruling from a federal judge on Wednesday confirmed that the Trump administration can continue its attempts to withhold funds from the city, noting that these funds are not protected under a prevailing order that prevents the administration from halting federal funding.
Additionally, on Tuesday, the government dismissed four employees accused by the Department of Homeland Security of circumventing the established leadership to approve these financial transactions. Historically, such payments have been part of a program designed to help manage the expenses associated with an influx of migrants.
In recent years, New York City has transformed various budget hotels into shelters for migrants, with many of these establishments being populated primarily by families with children. Most of these accommodations would not be classified as “luxury” under typical travel standards. In 2023, the city also began leasing the former Roosevelt Hotel as an intake center for migrants seeking city services after it closed in 2020 due to the COVID-19 pandemic. This landmark hotel, while historically renowned, had become an affordable lodging option prior to its closure.
New York City law mandates that the city must provide shelter to anyone in need. Given that traditional homeless shelters have been overwhelmed by new arrivals, the Roosevelt Hotel now functions as both a services intake location and a temporary shelter for hundreds of families, offering accommodation for a limited stay of 60 days.
The Shelter and Services Program, which receives funding from Congress and is overseen by FEMA, has become a contentious issue among critics, particularly Republicans who falsely assert that it diverts necessary resources from individuals affected by natural disasters such as hurricanes or floods.
