Feature Story

NYC Just Expanded Its Housing Voucher Program—Here’s Why That Matters for Apartment Investors

On July 10, 2025, a major court decision reshaped New York City’s rental landscape—and it could spell opportunity for multifamily owners and investors.

The Appellate Division (a high-level New York State court that reviews lower court decisions) ruled that Mayor Eric Adams must expand the CityFHEPS voucher program, which helps low-income families pay rent in private apartments.

This isn’t just a legal footnote—it’s a potential game-changer for landlords and investors in workforce housing.

CityFHEPS (City Family Homelessness & Eviction Prevention Supplement) is New York City’s housing voucher program. It’s designed to help families at risk of homelessness by paying their rent directly to landlords—often at full market rates.

In other words, if a qualifying tenant lives in your building, the city becomes the rent payer. For landlords, that can mean fewer missed payments and more predictable cash flow.

What’s Changing?

The recent court ruling ordered three major changes to how the program works:

• More Families Qualify
  The income cap was raised from around $60,000 to $70,000 for a family of three. That may not sound huge, but it brings in thousands of working families who previously earned too much to qualify. Now, more tenants with steady employment can access housing help.
  

• No More “Shelter First” Rule
  Before, families had to spend 90 days in a homeless shelter to qualify. Now, that requirement is gone. The city can issue vouchers immediately—allowing families to stay in their homes or find apartments before things spiral.
  

• Vouchers for Eviction Prevention
  Previously, CityFHEPS mainly helped people find new homes after they lost one. Now, it can help families avoid eviction altogether—making it more of a prevention tool than a last resort.
  

The Bigger Picture

This policy shift isn’t just a New York story. As other cities and states grapple with housing affordability, similar voucher expansions may follow elsewhere. That could make this segment—quality, well-located workforce housing—an increasingly valuable part of any multifamily portfolio.

HUD Budget Faces Deepest Cuts in Decades

The Trump administration's proposed 2026 budget includes a 44% cut to HUD housing programs, the largest rollback since the Reagan era. It would slash $26.7 billion from federal rental assistance—approximately 40% of current funding—and essentially end Section 8 and other housing voucher programs. For multifamily investors, this represents a fundamental shift in demand dynamics across affordable and workforce housing segments.

The Numbers Behind the Cuts

The proposed $32.9 billion total reduction to HUD targets core rental assistance programs that currently support 2.3 million households nationwide. Most federal rental assistance programs administered by HUD would be eliminated and replaced with a new State Rental Assistance Program at $36.2 billion total cost—a net reduction that threatens to destabilize voucher-dependent properties.

The cuts would impact over 3.5 million low-income households, creating immediate pressure on Class B and C properties that rely on voucher tenants for stable occupancy. Properties in secondary markets with high voucher concentrations face the steepest risk.

Capital Strategy Adjustments

Switching from federal housing vouchers to state-run block grants brings new risks that weren’t there when HUD managed everything directly. Some states may run out of money in the next 12–18 months, especially those with tight budgets or less support for housing programs.

For investors, this change has two sides. Properties that rely a lot on voucher income might lose value as buyers worry about tenants not being able to pay rent. But affordable properties in areas with strong job growth could actually do better, since more people may be looking for housing without needing vouchers.

Smart investors are already making changes. Owners with a lot of voucher tenants should run the numbers to see what happens if they lose 15–20% of their tenants over the next two years. The last time Trump was president, he also tried to cut HUD funding, but Congress stopped most of it. This time might be different since Republicans now control both the House and Senate.

It’s more important than ever to spread out where you invest. Areas with strong job growth and limited housing supply—like Nashville, Austin, and parts of Florida—are safer bets than cities in the Rust Belt that rely heavily on housing vouchers.

What to Watch

While Congress still has to decide how the funding will actually work, the message is clear. A proposed 43% cut in funding shows a big shift toward letting states control housing help, which could lead to different rules across the country.

Keep a close eye on state lawmaking—especially in places like Texas, Florida, and other Republican-led states that might push back against new funding. We don’t know exactly when the changes will happen, but properties that rely on vouchers could start feeling the impact by late 2025.

The key takeaway: This isn’t just political talk. If these cuts go through, they could seriously change how affordable housing works for the first time in a long time. Owners should protect themselves if they hold a lot of voucher-backed units, and also look for chances to buy affordable properties where demand from displaced renters might grow.

Where Rent Control is Rising—and Where It's Banned

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Florida: Rent Control Banned Statewide

In 2023, Governor DeSantis signed a law that bans rent control across the entire state. This means cities like Miami, Tampa, and Orlando can’t put limits on how much landlords can raise the rent.

What this means for investors:
Florida is one of the best states for landlords. There’s no worry about new rent rules getting in the way of raising rents over time. This makes it easier to plan long-term and invest in value-add deals with confidence.

California: Rent Control Rules Stay the Same (For Now)

In November 2024, California voters once again rejected a proposal to get rid of the Costa-Hawkins Act. This law protects:

• Single-family homes from rent control

• Multifamily buildings built after 1995

• The right to raise rents to market rates between tenants

What this means for investors:
Newer buildings still avoid rent caps, which helps protect income. But cities like Los Angeles and San Francisco have extra rules that can limit how much you can grow cash flow. Tenant groups keep pushing for stricter rent laws, so investors should still watch for future changes.

New York: Rules Haven’t Changed, But That Could Shift Soon

New York’s rent-stabilized laws are staying the same through the end of 2024. But there’s a growing push for a new law called Good Cause Eviction, which could:

• Add rent limits to market-rate units that are currently unregulated

• Make it harder for landlords to end leases

• Expand rent control beyond older pre-war buildings
  

What this means for investors:
If this law passes, it could wipe out the upside in currently unregulated units. That would change the math for value-add deals in a big way. Cap rates may go up because future rent growth could be limited.

Breaking It All Down

Low-Risk Markets
States like Florida, Texas, and Arizona have laws that stop rent control at the state level. These are the safest places to invest for long-term rent growth.

Moderate-Risk Markets
In California, the Costa-Hawkins Act still offers protection, but it’s under political pressure. It’s safer to buy buildings built after 1995, where you can still raise rents when tenants leave. Be careful in cities like LA and SF, which have extra local rules.

High-Risk Markets
New York could see big changes in 2025 if Good Cause Eviction passes. This law has support from both major parties, so it might happen this time. Investors in unregulated units should prepare for possible rent caps and value drops.

Adjusting How You Underwrite Deals

Smart investors are already adjusting their numbers to account for rent control risk. In high-risk areas, you may want to assume slower rent growth—maybe only 20–30% over several years. In states like Florida and Texas, where rules are stable, you can underwrite more aggressively.

There are also "geographic arbitrage" opportunities. As big investors pull out of high-regulation states, they may overpay for assets in landlord-friendly states. That opens the door for sharp buyers to find better deals and stronger returns.

Bottom Line

Rent control laws now vary a lot between states. Knowing the rules in each market is more important than ever. Picking the right state—and the right type of property—can make a big difference in how much income and upside your deal delivers. Red and blue states are going in different directions, and that’s creating two very different worlds for multifamily investors.

The Voucher Family Profile

They Stay Longer
Families with kids tend to stay in one place for several years—especially if the property is close to good schools, public transit, and childcare. Unlike young renters who move often, these families are focused on staying put so their kids don’t have to change schools.

They Pay on Time
Voucher programs pay a portion of the rent directly to landlords based on local rent levels. This reduces the risk of missed payments, especially during tough economic times. The government’s portion is consistent, making it a steady source of income.

They Need Bigger Units
These households are mainly looking for 2-bedroom, 3-bedroom, or even 4-bedroom units. But most new apartment buildings focus on studios and 1-bedrooms, which means families have fewer options. This gives older Class B/C buildings with larger units an edge.

What’s Happening in the Market

More Demand Than Supply
In many areas, there simply aren’t enough 3+ bedroom units that accept vouchers. That means buildings with these larger units can fill up quickly, even with limits on how much rent HUD will cover. Some housing authorities also offer flexible payment standards based on neighborhood, helping landlords charge closer to market rents.

Less Competition From New Buildings
Newer apartment buildings usually target single renters or couples with smaller units and luxury features. Family-focused properties—with things like playgrounds, laundry rooms, and parking—often stand out instead of being overlooked.

How This Affects Property Operations

Lower Turnover Costs
When tenants stay for 3–4 years instead of just 12–18 months, landlords spend less on advertising, cleaning, and fixing up units between renters. That leads to higher profits.

Stronger Rent Collection
Because part of the rent comes from the government, landlords avoid the biggest risk: missed payments. Even if the tenant’s portion is delayed, the bulk of the rent still comes in reliably.

Higher Occupancy
Voucher-accepting properties often stay 3–5% fuller than average properties, especially in cities where it’s hard to find family-sized apartments.

Multifamily buildings that serve voucher families offer stable, dependable income—something many investors overlook. These properties can stay full, cut down on turnover costs, and perform well even when the economy is uncertain. In a market where new luxury supply is rising and growth is slowing, serving this tenant group could be a smart long-term play.

5 Housing Markets Booming Thanks to Family Voucher Programs

Families using housing vouchers can help stabilize Class B and C apartment buildings by staying longer and paying rent on time. These five cities show strong, consistent demand from voucher families—making them great targets for investors looking for steady occupancy and reduced costs.

Phoenix, AZ

More than 41% of voucher households in Phoenix have children. Areas like South Phoenix (85033) and Glendale (85301) see strong demand for 3-bedroom units.

What’s happening:
New apartments are being built for singles and young professionals, not families. That leaves a gap in the market for larger family units.

Investor takeaway:
Buildings near good school districts—like Paradise Valley and Madison—stay full longer and don’t need to offer rent discounts. Family-friendly properties stand out and often lease up quickly.

Houston, TX

The voucher waitlist reopened in 2024 and added over 18,000 people—many of them families looking for 3-bedroom units in areas like Katy and Northeast Houston.

What’s happening:
Demand for family units is high, and landlords don’t need to offer concessions. Voucher payments from the government reduce missed rent, and longer leases mean fewer turnovers.

Investor takeaway:
Properties near good schools and transit lease faster and hold up well even when the economy slows.

San Antonio, TX

San Antonio has a young population and a lot of families. Around 37% of vouchers go to households with kids, which helps keep units full.

What’s happening:
Apartments near strong school districts like Northside and Southwest Independent School Districts stay occupied year-round. Families want stability and prioritize schools when choosing where to live.

Investor takeaway:
Lower building costs and simple family-friendly features (like parking, laundry, and play areas) give these properties an edge over luxury buildings aimed at singles.

New York, NY

Over 55,000 families are supported by CityFHEPS, New York City’s local housing voucher program. More than 35% of those families have kids.

What’s happening:
A new state program starting in 2026 will allow even more families (up to 50% of area median income) to qualify for help. That could double the number of families looking for voucher-eligible housing.

Investor takeaway:
Family-sized apartments—especially in the Bronx and Queens—are in high demand. Buildings that can process voucher paperwork quickly stay full and avoid long vacancies.

Chicago, IL

In areas like the South and West Sides, many apartments are set aside for families using Project-Based Vouchers. These units stay full because there’s little competition.

What’s happening:
Programs that help tenants stay longer—like local school partnerships and family support services—keep people from moving out. That reduces turnover and keeps rents coming in.

Investor takeaway:
Longer tenancies and steady government payments make these properties more stable than similar market-rate ones, especially during economic slowdowns.

Lower Turnover Costs
When tenants stay for 3–4 years instead of just 12–18 months, landlords spend less on advertising, cleaning, and fixing up units between renters. That leads to higher profits.

Stronger Rent Collection
Because part of the rent comes from the government, landlords avoid the biggest risk: missed payments. Even if the tenant’s portion is delayed, the bulk of the rent still comes in reliably.

Higher Occupancy
Voucher-accepting properties often stay 3–5% fuller than average properties, especially in cities where it’s hard to find family-sized apartments.

What This Means for Investors

Pick the Right Cities
These five markets show strong, ongoing demand from voucher families. Properties with bigger units near schools are seeing higher occupancy and more stable income.

Protect Your Investment
Family voucher tenants help properties stay full—even when the broader market weakens. This makes them a great choice for investors looking to reduce risk.

Look for Hidden Value
Big investors often focus on luxury buildings. That means there are still good deals available in Class B/C properties that serve families—especially those with 2–4 bedroom units.

Bottom Line

Family voucher demand is a powerful but often overlooked driver of performance in the multifamily space. Properties built or repositioned to serve these households offer reliable occupancy, lower turnover costs, and steady rent payments through all parts of the economic cycle. These five markets show exactly where this strategy works best.

Strong Demand Is Keeping the Market Steady

The Economy Is Helping

• The U.S. economy grew 2.4% in Q2.

• Inflation is coming down.

• More people are getting loans and can afford rent.

• Job growth means more people forming households—and needing apartments.

Interest Rates Are Improving

Lower borrowing costs mean:

• Owners can refinance more easily.

• Banks are lending again.

• Buyers are coming back into the market.

Rent Growth Is Back

• Average rent hit $1,636 in June.

• New listings are asking even more—$1,736.

• Rents are expected to grow 2.6% nationally in 2025.

• Strong local markets may see even higher growth.

Key takeaway: Good properties in the right places are growing rents again. Poorly managed ones are struggling.

Yes, There Are a Lot of Empty Units—But It’s Not a Crisis

• Vacancy hit 7%, the highest since 2017.

• But this isn’t because people aren’t renting—it’s because of new construction.

• Stable properties still have 94.4% occupancy, which is historically solid.

Important: Mid-tier properties (Class B/C) still raised rents 1.4%, even with higher vacancies.

New Apartments Are Getting Rented

2025 has seen more apartment completions than any year since the 1970s—but they’re still leasing up faster than expected.

• Supply is slowing down.

• Demand is holding steady.

• That sets the stage for stronger rent growth later in 2025 and into 2026.

Local markets matter more than national trends. Some cities are booming; others are still working through too much new supply.

Money Is Moving Again

• NYC saw $2.21 billion in apartment sales in Q1—up 62% from last year.

• Buyers and banks are more confident now.

• Well-performing buildings are getting loans and investors again.

How to Think About Investing in 2025

Focus on Local Markets

Pick cities where:

• Demand is strong.

• Supply isn’t overwhelming.

These places will recover faster and grow rents more.

Buy from Weaker Owners

Some owners are struggling to refinance. That means opportunities to buy well-located buildings at good prices.

A Market of Winners and Losers

Not every city is doing the same. Success depends on local supply and demand—not national averages.

Winners: Supply Is Tight

• New York City: Rents up 5%, vacancy just 1.4%—the lowest in decades.

• Chicago and Kansas City: Quiet growth of 3–4% with less competition.

• Columbus, OH: 3.5% rent growth driven by job growth in tech and manufacturing.

Why They Win:

• Limited new construction

• Strong job markets

• Affordable cost of living

Losers: Too Much Was Built

• Austin: Rents down as much as -5.4%.

• Denver and Phoenix: Also seeing rent drops.

These cities built too many units too quickly. Now, they need time—18 to 24 months—to fill them.

What Investors Should Do

• In overbuilt markets: Be patient. Expect slower lease-ups and lower returns for now.

• In tight markets: Be aggressive. Push rents, improve operations, and find hidden value.

Diversify by region: Spread investments to reduce risk from any one area.

Sources

1. The Real Deal - "Court says Adams must implement housing voucher expansion" - July 10, 2025

2. National Low Income Housing Coalition - "Trump Administration Releases Additional Details of FY26 Budget Request Slashing HUD Rental and Homelessness Assistance Programs" - June 2, 2025

3. Click Orlando - Florida rent control ban coverage - March 2023

4. Stateline - California rent control proposition coverage - November 2024

5. California Apartment Association - Legislative updates - May 2025

6. Enterprise Community Partners – "Housing Choice Voucher Analysis and Literature Review" – March 2024

7. NYU Furman Center – "Calculating Success Rates for the Housing Choice Voucher Program Using HUD Administrative Data" – 2023

8. Housing Mobility Programs Clearinghouse – "Where Families Use Housing Choice Vouchers" – April 2024

9. HUD User / Cityscape Journal – "Residential Mobility of Families Receiving Housing Choice Vouchers" – Volume 10, Number 1, 2008

10. Affordable Housing Online – "Phoenix Housing Authority Waiting List" – 2024

11. Census Reporter – "Phoenix, AZ Profile" – 2024

12. Axios Phoenix – "Ansari Proposes Sweeping Reform of Federal Rental Aid" – May 1, 2025

13. S8 Acquisition – "Why Section 8 Remains Untouched and Unshaken in 2025" – June 2025

14. National Housing Law Project – "Tenant-Based Vouchers Overview" – Updated 2024

15. U.S. Department of Housing and Urban Development – "Picture of Subsidized Households" – 2024

16. CBRE U.S. Market Outlook 2025

17. Yardi Matrix May 2025

18. Cushman & Wakefield April 2025

19. Avison Young Q1 2025 · RemoteLock · Point Central · BFPM Feb 2025

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