New York City Retreats on CityFHEPS ‘Unit Hold’ Incentive; What Realtors Need to Know

In a significant shift, New York City has reversed course on its plan to eliminate a key CityFHEPS (the City Fighting Homelessness and Eviction Prevention Supplement) landlord incentive—the payment of one month’s rent to hold a unit for voucher tenants while applications are processed. This policy reversal comes after legal challenges, and now the rule change will go through public review under the City Administrative Procedure Act (CAPA)—a win for due process and housing stability.

In late May, the Department of Social Services (DSS) notified stakeholders that it planned to eliminate the “unit hold” incentive, citing expected processing improvements from new systems. But advocates and Legal Aid questioned the move—arguing it sidestepped required public notice and process.

A court granted a temporary restraining order in late June, followed by an injunction blocking the change, and mandated it go through CAPA. Now, if adopted, there will be at least 60 days for public feedback before any elimination takes effect—and until then, the incentive remains in place.

This incentive has long been a vital program support. By offsetting potential vacancy costs while applications are pending it makes landlords more willing to participate in CityFHEPS. Without it, brokers and property owners say the already complex program could lose further traction—hampering housing access for voucher holders.

In FY 2025, CityFHEPS grew substantially, assisting more than 15,000 households moving into housing, for a total of nearly 59,000 households supported—up 17% from the previous year.

• The stability and usability of CityFHEPS directly affect brokers, landlords, and tenants alike.
• Consistency in program rules matters. Sudden shifts without public notice make planning and advising clients harder.
• The one-month “unit hold” helps preserve listing availability and protects owner revenue during often-lengthy application reviews.
• Ensuring CityFHEPS remains a viable path to stable rentals preserves housing access for low-income populations and maintains a critical bridge between shelters and permanent housing.

DSS intends to begin the CAPA public hearing process imminently, as per remarks by the City Law Department in court.

After the review—and pending outcome—the rule may remain, be modified, or be eliminated. But until then, the incentive stays intact.

Legal Aid and advocates have pledged to continue challenging any removal of the incentive as “arbitrary and capricious.”

HGAR’s Government Affairs team will continue to monitor the CAPA process closely and keep members informed about next steps. As Realtors, our role is not only to connect clients with housing, but also to advocate for policies that ensure programs like CityFHEPS are workable, transparent and sustainable. Together, we can help shape a housing system that supports stability for families, protects owner investments and strengthens New York’s housing market.

About the author: Dr. Jermaine Meadows is the Director of Government Affairs for the Bronx for the Hudson Gateway Association of Realtors.