The acting leader of the federal agency overseeing disaster responses announced on Monday that payments intended for housing migrants in New York City are being suspended. This decision follows public criticisms from Elon Musk, who addressed the issue via social media.
Musk, leading the Department of Government Efficiency, which has streamlined many federal operations in an effort to reduce expenses, claimed on X that FEMA had sent $59 million last week to upscale hotels in New York City for the lodging of unauthorized migrants. He indicated that the funds were meant for disaster relief and would be recovered.
Cameron Hamilton, the acting administrator of FEMA, echoed Musk’s comments by announcing that the payments had been put on hold as of Sunday. However, Musk’s assertions lacked substantiation, while information from New York City clarified that the financial support for migrants came from Congress and was allocated to the city via FEMA last year.
According to Liz Garcia, a spokesperson for NYC, the city had not received any notification regarding funding withdrawal and had received federal reimbursements as recently as last week. Discussions between city officials and federal representatives regarding the situation are anticipated. While neither Hamilton nor Musk clarified the nature of the payments under scrutiny, it is believed that Musk’s comments may have related to the financial support provided by the Shelter and Services Program, which assists localities with immigration-related expenses.
FEMA did not immediately address inquiries about the payments. However, a spokesperson for the Department of Homeland Security referenced statements made by Secretary Kristi Noem, emphasizing the need for a complete overhaul of FEMA. “This incident exemplifies the kind of mismanagement we’ve been witnessing,” the spokesperson remarked, indicating that those responsible for the unauthorized payments would face disciplinary actions.
The Shelter and Services Program was created after a surge in migrant arrivals at the southern border, which left local and state governments, as well as nonprofits, to provide for these individuals. Established by Congress in 2019, this program allows federal reimbursements for costs incurred for migrant care. The funds for this program are distinct from FEMA’s disaster relief budget, which primarily supports recovery efforts for communities affected by disasters.
Criticism from Republican circles has centered on the funding of the Shelter and Services Program, which they argue detracts from disaster relief efforts, despite evidence to the contrary. Critics have also raised concerns about whether taxpayer money should assist municipalities that are required by law to provide shelter for all homeless individuals.
Other municipalities receiving funding from this program have similarly not received confirmation from the federal government about any potential clawbacks of their allocated funds.
Musk labeled the alleged $59 million disbursement as “gross insubordination” regarding the President’s directives and asserted that these funds would be reclaimed. The origin of the $59 million claim remains unclear, with officials not providing details when questioned. The New York City mayor’s office confirmed receiving $81 million in federal payments for immigration-related expenses in the previous week, which included the controversially cited $59 million, along with a separate $19 million allocation for hotel expenses.
New York City’s laws regarding the right to shelter mandate that the city provide accommodations for all homeless individuals, historically including the use of hotel spaces. The city has been under pressure due to an influx of approximately 230,000 migrants since spring 2022, with over 46,000 currently sheltered, predominantly in families.
Soon after, Musk reiterated that under the Biden administration, FEMA has diverted funds away from disaster recovery to instead provide luxury accommodations to migrants. Garcia responded to this claim by stating that the city has never resorted to exorbitant pricing, revealing that most lodging occurs outside Manhattan, with the average nightly rate being around $152, in stark contrast to luxury hotel prices in Manhattan that reach $400 to over $1,000 per night.
The $81 million received from the federal government, as explained by Garcia, covers reimbursements for a period extending from November 2023 to October 2024, encompassing housing, security, and food costs. She mentioned that this funding was applied for in April, was appropriated by Congress in the previous year, and allocated by FEMA the same year. The city has additional reimbursement requests pending, she added.
The discussions regarding FEMA’s role come amid growing interest in the agency’s future, particularly after President Trump, during a visit to North Carolina, suggested potential plans to eliminate FEMA completely. He has initiated a task force aimed at conducting a comprehensive evaluation of the agency. Republicans have criticized FEMA for alleged inadequacies in responding to victims of the recent hurricanes, Helene and Milton, amid various unfounded claims about the agency’s actions and funding.
While criticisms of FEMA have intensified following reports of a staff member being dismissed for partisan actions, Hamilton, with experience in emergency management, has been vocal regarding his views on improving security at the southern border and reassessing FEMA’s resource allocation.
Project 2025, a conservative strategy for Trump’s anticipated second term, posits ideas for dismantling the Department of Homeland Security and relocating FEMA, while suggesting a reevaluation of the disaster assistance criteria that could shift the financial burden of disaster responses to state governments.
