NYC budget deal includes new $2B housing investment, reverses all library cuts: sources

Mayor Adams and Council Speaker Adrienne Adams are expected to announce a deal on a city government budget Friday that averts various cuts pushed by the mayor — including to libraries — and allocates a fresh $2 billion in spending on affordable and public housing, the Daily News has learned.

The capital housing allocation is expected to bankroll programs focused on both preserving and creating affordable apartments across the city, sources familiar with the budget negotiations between the Council and the mayor’s office said Thursday afternoon.

Later Thursday, the mayor announced the budget deal reached with the speaker will reverse a combined $111.3 million in cuts he enacted and proposed for local cultural institutions and the city’s three public library systems.

The $58.3 million library funding reduction has forced the systems to operate without Sunday service at their branches since late last year. The mayor’s agreement on undoing that cut comes after Council Democrats as well as national figures, including Hillary Clinton, publicly pressured him to reverse himself.

“These institutions are a critical part of New York City’s social fabric, which New Yorkers depend on for their children’s growth and the vibrancy of our city,” the mayor said in a statement announcing the library funding restoration.

Though exact details were unclear as talks continued into the evening Thursday, a source told The News that the two sides have also agreed to use city taxpayer dollars to reverse cuts to the city’s free pre-K and 3-K programs and restore at least some more expiring federal funding for those initiatives.

Adams’ executive budget bid released this spring proposed to let the federal funds expire without replacing them with city dollars, a suggestion that stirred outrage from Council Dems and education advocates, who argued it would deprive New Yorkers of access to the popular early childhood education programs.

The mayor’s thumbs up for the new housing investment also comes after Council Democrats have for weeks pressed him to commit $3.66 billion in additional affordable housing capital spending over the next five years.

The new $2 billion infusion is committed over two years, with $1 billion earmarked for the 2025 fiscal year and the remaining $1 billion set aside for the 2026 fiscal year, according to the sources, who spoke on condition of anonymity to preempt an announcement on the budget deal set for Friday.

Of the $2 billion capital investment, $700 million is for NYCHA repairs and new construction, the sources said. The remaining $1.3 billion is for a variety of Department of Housing Preservation and Development initiatives, including $272 million for construction of housing for extremely low and low-income New Yorkers and $470 million for multi-family affordable housing construction, according to the sources.

There’s also tens of millions of dollars baked in for the department’s Neighborhood Pillars program, which funds efforts to refurbish dilapidated buildings and turn them into affordable rentals, as well as the agency’s Open Door initiative, which bankrolls construction of affordable co-ops and condominiums, the sources said.

The new $2 billion commitment comes on top of $2 billion that’s already allocated in capital housing spending for the 2025 and 2026 fiscal years.

The ramped up housing spending comes as the city remains in a severe housing crisis , with skyrocketing rents and a shortage of available apartments.

Adams spokesman Fabien Levy declined to confirm the new housing investment but said the mayor’s team is “at the end of a productive budget process” and looks “forward to announcing, together, with our partners how we are investing in the future of our city.”

Brendan Cheney, a policy director at the New York Housing Conference who has been involved in the housing budget talks, credited the Council with securing the new $2 billion investment.

“We’re really grateful that the Council fought for more housing funding,” he said. “We’re in a housing crisis that keeps getting worse and we need this additional money to make sure we continue to build affordable housing.”

The deal on the 2025 fiscal year budget is coming together in the 11th hour. The Council must by law adopt the city budget by midnight Sunday, when the 2025 fiscal year starts.

On Friday afternoon, the mayor and the speaker are expected to do a ceremonial handshake on a budget agreement, and the Council is then expected to gavel in for an unusual Sunday session to vote on the deal before the midnight deadline.

This year’s negotiations have been unusually tense, and the speaker’s Democratic leadership team privately told Council members last week they were concerned the budget might be late this year . Adams said earlier this week he was confident the budget would be completed on time.

The speaker’s Democratic majority have repeatedly accused the mayor’s team of seeking unnecessary cuts to various city services, like libraries, childhood education programs and parks, while over-prioritizing spending on the NYPD.

The mayor previously argued the cuts were necessary to offset the billions of dollars the city has spent on the local migrant crisis. His office has also justified the cuts by releasing tax revenue projections that are less optimistic than the Council’s, though the mayor’s team has since last year adjusted its analyses and brought them more in line with the Council’s.