City Hall officials say NYC has trimmed migrant-related costs by $1.7B

The city is on track to trim projected spending on migrants by $1.7 billion through next June, according to Mayor Eric Adams’ administration, which attributed the savings to its policies like capping most migrants’ stays to 30 or 60 days.

The new cost projection, shared with the City Council in briefings Monday and Tuesday, brings the total for caring and sheltering migrants to about $10.5 billion through the end of June 2024, down from an earlier estimate of $12.3 billion. That sum includes $1.45 billion in spending from the prior fiscal year, which ended in June 2023.

Budget-watchers disputed whether the administration’s policies were the reason behind the cost savings, contending the city has repeatedly overestimated or inflated the cost of providing for the migrants, mostly asylum-seekers. More than 180,000 migrants have flowed into the city in an influx that began in April 2022.

Jacques Jiha, the mayor’s budget director, testified in a hearing that the city’s efforts to reduce the number of migrants staying in shelters — including by implementing controversial 30- and 60- day limits on shelter stays — played a major role in cutting costs. The shelter population has decreased in recent months, from about 69,000 at the start of the year to under 65,000, Jiha said.

“It’s a big piece of the strategy that we have in terms of driving down the population,” Jiha said of the stay limits in a Monday hearing. “Because if you don’t drive down the population, I don’t know how we’re going to sustain this in the long run.”

The proof of our progress is in the results.

Molly Schaeffer, director of the Office of Asylum Seeker Operations

Molly Schaeffer, the director of the Office of Asylum Seeker Operations, touted the projected cost savings as a success in another hearing on Tuesday.

“The proof of our progress is in the results,” Schaeffer said, pointing to the $1.7 billion savings. “And we were able to do that without compromising services.”

But City Comptroller Brad Lander, who has repeatedly criticized the city administration for inefficient and wasteful spending throughout the crisis, said that there were “wild swings” in the city’s projections for migrant spending.

“Those dramatic variations make it difficult to accept their projections with confidence,” Lander testified.

He said the administration may have deliberately overestimated asylum-seeker costs in order to justify large spending cuts proposed for city agencies, only to be largely reversed “in a show of magnanimity.”

There was no immediate response to the charge from Adams administration officials.

Josh Goldfein, staff attorney at Legal Aid tracking the city’s management of migrants in shelters, said he was skeptical as well.

“Is that a savings?” Goldfein told Gothamist. “Or is that a correction of a previously inaccurate description of the situation?”

Jiha said $1 billion in savings is expected to come from a decrease in the number of migrants in city shelters, and another $700 million from a reduction in per diem costs, in part by shifting from for-profit to non-profit contractors to provide shelter and other services.

Jiha also said that after the stay limits were imposed, a greater share of migrants exited city shelters and didn’t return. Only a quarter of single adults who reach their stay limits—and half of families with children—reapply for shelter beds, Schaeffer testified in another City Council on Friday.

The administration also announced plans to slash spending on migrants by an additional 10%, or $600 million, to further reduce costs.

The Independent Budget Office released projections on migrants spending in December that were as much as $4.8 billion lower than the mayor’s prior August predictions.

The IBO estimated that the city would spend $7.5 billion to $9.3 billion on migrants through June 2025, in part due to a decrease in migrants in shelters.

At this point, we don’t have enough data.

Claire Salant, independent budget analyst

But Claire Salant, an IBO analyst, said the full impact of the shelter limits remains unclear, adding the city doesn’t track potential added costs, such as for additional school bus transportation.

“At this point, we don’t have enough data,” Salant said.

In responses to questions about added costs of shelter limits, Schaeffer testified on Tuesday that the migrant intake center in Midtown is open around-the-clock, and cutting down on staff there hasn’t affected operations.

Lander, who has criticized the shelter limits, said there are better ways for the city to cut costs.

He has for months called on the city to use a competitive bidding process rather than no-bid emergency contracting process. A recent investigation from the comptroller’s office recently found that some for-profit contractors providing staffing at migrant sites charged “exorbitant rates” that “varied wildly” from company to company, with little oversight.

Adams administration officials said the stay limits are necessary to ensure shelter beds are available for the newest-arriving migrants. Adams has repeatedly called for more financial support from the state and federal governments.

Administration officials also testified that the city is re-evaluating its contracts with service providers with an eye toward further reducing costs.

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