New York City sues Trump administration over $80M FEMA migrant funding clawback
Mayor Adams seeks more funds for migrant crisis
New York City Mayor Eric Adams traveled to Albany on Tuesday to ask state lawmakers for $1 billion to help cover the costs of the ongoing migrant crisis in New York City. FOX 5's Morgan McKay has the story.
NEW YORK - New York City is suing the Trump administration after FEMA revoked more than $80 million in migrant funding, citing concerns over "illegal activities" at a hotel.
The lawsuit argues that the federal government violated regulations and seeks to prevent future clawbacks of approved funds.
What we know:
The lawsuit claims that FEMA unlawfully withdrew $80 million in approved funding meant for migrant assistance. The funds were initially disbursed on February 4, 2025, but were removed from a city bank account on February 11, 2025, without prior notice.
RELATED: Feds cut $80M FEMA grant to NYC over allegations of luxury housing for migrants
The money was originally awarded under the Shelter and Services Program to assist with the city’s efforts in housing and supporting migrants.
City Comptroller Brad Lander raised concerns over the legality of FEMA’s move, stating that his office had no knowledge that the federal government could access and remove money directly from the city’s account. FEMA officials later cited "illegal activities" at a hotel as a justification for the clawback, though details remain unclear.
Allegations migrants were staying in ‘luxury hotels’
The backstory:
Since the spring of 2022, New York City has spent more than $7 billion to provide shelter and services to an influx of migrants. The federal government initially approved FEMA grants to assist with these efforts, but recently reversed course under the Trump administration.
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Lawyers for the city say that on February 19, 2025, a week after the withdrawal, federal officials sent the city a letter citing unspecified "concerns" about compliance, though no specific violations were identified. City officials claim the decision was politically motivated.
Critics, including Elon Musk, claimed the money was misused for "luxury hotels" for migrants. However, city officials have pushed back, clarifying that the funds were part of the federally authorized Shelter and Services Program and were never meant for disaster relief. According to city officials, the rates paid for migrant housing were far from "luxury."
What they're saying:
Mayor Eric Adams expressed frustration over the funding removal:
"Without a doubt, our immigration system is broken, but the cost of managing an international humanitarian crisis should not overwhelmingly fall onto one city alone," Adams said. "With very little help from the federal government, our administration has skillfully managed an unprecedented crisis, which has seen over 231,000 people enter our city asking for shelter. The $80 million that FEMA approved, paid, and then rescinded—after the city spent more than $7 billion in the last three years—is the bare minimum our taxpayers deserve."
Corporation Counsel Sylvia Hinds-Radix added that the lawsuit aims to ensure due process is followed and that funds are not arbitrarily taken from the city’s budget:
"The federal government cannot approve, award, and disburse funds, only to later remove them without explanation. This lawsuit is about holding them accountable."
Elon Musk, now heading the Department of Government Efficiency (DOGE), accused the city of misusing funds, but provided no evidence to support his claims.
How much was NYC paying for migrant hotel stays?
By the numbers:
- $80.4 million: Amount FEMA originally awarded and later removed from NYC’s bank account.
- $7 billion: Total cost New York City has incurred managing the migrant crisis.
- 231,000: Estimated number of asylum seekers who have arrived in NYC since 2022.
- 45,000: Current number of migrants receiving city shelter services, down from a peak of 69,000 in January 2024.
- 24,000: Reduction in daily asylum seeker numbers in city care since January 2024.
- $152 per night: Average cost NYC has paid for migrant hotel accommodations, significantly lower than luxury rates in Manhattan.
Were migrants staying in luxury hotels?
City officials have rejected claims that migrant families were housed in five-star hotels. According to a report from City Comptroller Brad Lander, the average cost per night for rooms has been around $152, with some Manhattan locations costing around $200 per night—well below the $400 to $1,000 rates of luxury hotels.
One of the highest-profile facilities used to house migrants is the former Roosevelt Hotel, repurposed as an intake center in 2023 after it closed in 2020 due to the COVID-19 pandemic. While it once had historical significance, it was never considered a luxury destination by modern standards.
What's next:
The lawsuit, filed in the U.S. District Court for the Southern District of New York, seeks an immediate court order to:
- Require FEMA to return the $80 million to New York City’s bank account.
- Prevent the federal government from withdrawing additional migrant-related funds.
- Ensure future FEMA grants are not withheld without due process.
The Source: This article was written using information from FOX 5 crews in the field.