Elon Musk took to X on Monday to assert that the Department of Government Efficiency, which he leads, found that FEMA was improperly allocating millions in funds to house migrants in New York City. According to Musk, the budget was designated for disaster relief for Americans but was instead used for luxurious hotels.
This assertion gained traction across social media platforms, prompting the acting director of FEMA to halt payments intended for migrant housing in New York City and resulted in the termination of four federal employees on Tuesday. However, Musk’s statement misrepresents the funding mechanisms of FEMA, its functions, and its proper usage.
Let’s break down the claim. Musk alleged that FEMA had diverted $59 million to upscale hotels in New York City to accommodate undocumented migrants, which he stated was illegal and against the President’s executive order stipulating that funding should serve American disaster relief instead.
The truth is that FEMA does not allocate funds directly to hotels in New York but does distribute money on behalf of U.S. Customs and Border Protection (CBP), authorized through Congress under the Shelter and Services Program (SSP) established in 2023. This program aims to assist local governments and non-profit organizations in supporting noncitizens released from immigration authorities, as described on FEMA’s official website. It is important to note that these funds are distinct from those used for disaster relief.
According to a statement from Mayor Eric Adams’ office, the city received two federal payments last week totaling over $80.5 million in migrant assistance, which includes one disbursement of $58.6 million and another of $21.9 million, both part of the SSP. These funds are for costs incurred from November 2023 to October 2024, covering expenses such as hotel accommodations, security, food, and other necessary services, with hotel reimbursements amounting to roughly $19 million.
City representative Liz Garcia clarified that the city has never engaged in luxury hotel bookings, corroborated by a previous report from City Comptroller Brad Lander. Lander, now in the running for mayor, stated that the city typically pays an average of $152 per night for hotel stays, predominantly outside Manhattan. Rooms in Manhattan may reach around $200, which does not classify as a luxury rate with five-star hotels charging significantly more.
The Shelter and Services Program, or SSP, is managed by FEMA in conjunction with U.S. Customs and Border Protection and was part of the Consolidated Appropriations Act of 2023. In the fiscal year 2024, Congress allocated $650 million for the SSP, with $640.9 million designated to support the sheltering and related activities by non-Federal entities. The remaining $9.1 million is earmarked for FEMA’s administrative expenses.
Data from the American Immigration Council indicates that the Shelter and Services Program has reimbursed state and local governments and nonprofit organizations in 35 different communities throughout the fiscal years 2023 and 2024.
Social media claims suggested that the funds could instead aid victims of Hurricane Helene, which caused significant damage in western North Carolina. However, disaster assistance funds are processed through entirely different channels.
Yael Schacher, director for the Americas and Europe at Refugees International, noted that Musk’s comments likely referenced the SSP, reiterating that there is no foundation to his claims of disaster relief funds being misappropriated to assist migrants, as these funds are designated separately by Congress.
Schacher explained that the SSP funds would not have been available for disaster relief purposes, stating that these funds are distinctly outlined in the federal budget and do not come from FEMA’s Disaster Relief Fund. Furthermore, Congress allocated 140 times more funding for the Disaster Relief Fund compared to the SSP, emphasizing that the latter program’s grants come with strict spending stipulations.
On Tuesday, four federal employees, including FEMA’s chief financial officer and two program analysts, were dismissed for allegedly bypassing leadership protocols to approve these payments to New York City, according to officials from the Department of Homeland Security. Although no specific details regarding the policy violations were disclosed, FEMA’s acting administrator, Cameron Hamilton, confirmed the suspension of these payments.
In related court documents, Hamilton indicated that funding from the Shelter and Services Program was pulled due to suspicions that it was “facilitating illegal activities” at a New York hotel housing migrants. This comment was made in the context of a lawsuit aimed at blocking a freeze on federal grants and loans initiated by the Trump administration soon after taking office, which had caused widespread uncertainty among states and organizations reliant on federal funding.
Recently, a U.S. District Judge ruled that attempts to retract FEMA funding sent to New York for migrant housing were not subject to an ongoing order meant to prevent the sweeping halt on federal funding characteristic of the previous administration.
