The Adams administration has entered into a nearly $1 billion agreement with the hotel industry to provide emergency shelters.
Taxpayers are now on the hook for $929.1 million with the Hotel Association of New York City, covering around 86,000 individuals, which includes both homeless people and asylum seekers.
“The hotel units are used by social service providers to house those entering the emergency shelter system,” the Department of Homeless Services stated in a notice released Wednesday.
This updated contract is effective from January and will last until June 30, 2026. Interestingly, it was granted without going through competitive bidding, labeled as “negotiated acquisitions.” The original contract was secured towards the end of 2025, as was previously reported.
Nicole Gelinas, a senior fellow at the Manhattan Institute, expressed some confusion regarding the necessity of this arrangement. She questioned, “Why do we need to rely on so many hotels to manage daily homelessness?” Gelinas pointed out that many city hotel rooms are quite expensive and suggested that transforming emergency programs into long-term solutions might not be the best approach, impacting the availability of these rooms for tourists.
She argued that the hospitality industry should have competed among itself rather than operating under what she sees as a “monopoly” agreement.
Under the new deal, the Hotel Association acts as a “financial agent,” helping connect hotels with cities interested in reserving rooms for homeless individuals and families, in exchange for rental payments.
The reported nightly cost to house immigrants is $352, with $130 allocated for hotel room rentals, according to city officials last year. The association takes only “nominal fees” for administrative expenses, according to its CEO.
“This agreement extends the nonprofit’s ongoing efforts since Covid to connect city funds with hotels to meet the need for emergency services in New York,” remarked Vijay Dandapani, CEO of the Hotel Association.
He added that the figure of $929.1 million represents the maximum set under the contract but isn’t guaranteed to be spent, noting that city expenditures on these services have decreased significantly over the past two years. The contract comes as lobbyists advocate for a reduction of the hotel occupancy tax for tourists from 6% to 3%.
During the Covid-19 pandemic, the city increasingly relied on emergency accommodations and shelter hotels to help control the spread of the virus.
The Adams administration defended extending this emergency contract, emphasizing that the city is still addressing the shelter population which has risen significantly compared to 2019, when 61,415 individuals were in shelters. As per a report by state secretary Tom DiNapoli, that number soared to 140,134 in January 2024, a staggering increase of 127% over two years.
City sources indicated that, under New York’s shelter rights, emergency shelter must be provided to all who need it.
Currently, around 95,000 people rely on taxpayer-funded shelters in New York City.
Since the onset of the crisis in 2022, the city has expended $3.12 billion on shelters and related housing immigration costs, including hotel room rentals.
“As the shelter system faced immense pressure from new arrivals, the Adams administration took prompt steps to tackle the crisis effectively, ensuring emergency shelter availability for families in need,” officials stated.
“The government’s response has significantly reduced the count of families in shelters, even though overall shelter numbers remain above pre-pandemic levels.”
At the height of the immigration crisis, around 150 hotels across the city provided accommodation for thousands of migrants. The historic Roosevelt Hotel has become emblematic of the urban struggle to manage the influx of immigrants. It served as an intake center near busy tourist areas, while some nearby “tent cities” faced challenges including rising crime rates.
Nevertheless, Mayor Eric Adams has moved to phase down and close the city’s largest emergency shelter, including substantial tent camps located at Randall’s Island and Floyd Bennett Field. This decision has reportedly led to a decline in the arrival of new migrants, with some asylum seekers left in difficult situations.
The current administration’s handling of the situation enters a complex political landscape, particularly as tensions arose after the Trump administration cut federal funds, leading to accusations of mismanagement regarding resources allocated to what some criticized as “luxurious hotels.” City Director Brad Lander noted that federal funds previously authorized have been withdrawn, spurring legal action by Adams to recover millions.
In this murky climate, a portion of the federal funds aimed to reimburse $12.50 per night for each hotel used, while officials denied claims that immigrants were receiving luxury accommodations.
