Adams admin questioned on “perplexing” migrant costs

City Council members honed in on ballooning “per diem” costs of sheltering asylum-seekers in New York City at an oversight hearing Monday.

New York City Council Speaker Adrienne Adams at Monday’s Council oversight hearing on costs and projections of asylum-seeker response efforts

New York City Council Speaker Adrienne Adams at Monday’s Council oversight hearing on costs and projections of asylum-seeker response efforts Gerardo Romo / NYC Council Media Unit

New York City is bracing for a round of steep budget cuts that Mayor Eric Adams has said will be forced by the cost of providing shelter and services to tens of thousands of asylum-seekers. But New York City Council members are seeking better, more granular data on how exactly the city has arrived at its eye-popping estimates for the cost of the migrant crisis.

At a City Council oversight hearing with the Committees on Finance, General Welfare, and Oversight and Investigations, lawmakers questioned administration officials on the use of emergency contracts for shelter and other services, as well as the administration’s estimate from August that the city could spend $12 billion on costs related to the migrant crisis between fiscal years 2023, 2024 and 2025.

Now several months into fiscal year 2024, the city has spent a total of nearly $2.5 billion since the outset of the crisis in April 2022.

The Adams administration has said that the city has had to increase cost estimates as the influx of asylum-seekers intensifies. More than 130,000 asylum-seekers have come through the city since spring of 2022, and more than 65,000 remain in the city’s care. As of late, more than 4,000 people are arriving in the city each week, according to Molly Schaeffer, interim director of the city’s Office of Asylum Seeker Operations. 

But council members honed in on one rising metric in particular – the “per diem” cost for asylum-seeking households – questioning why the daily cost of sheltering asylum-seekers continues to rise and so greatly exceeds the cost of sheltering New York’s own homeless population. 

Back in November 2022, the administration provided per diem costs of $254 for Department of Homeless Services shelters, and $400 in Humanitarian Emergency Response and Relief Centers operated by New York City Health + Hospitals, Council Member Justin Brannan said. As of January 2023, the administration was reporting a per diem cost of $363 across all types of shelters for asylum-seekers. And as of the end of September, the per diem cost across all types of shelters for asylum-seekers reached $394 according to a report provided to the council by City Hall.

New York City Council Member Justin Brannan, chair of the Committee on Finance
New York City Council Member Justin Brannan, chair of the Committee on Finance / Photo credit: Gerardo Romo / NYC Council Media Unit

“When we’re providing more services for an increased population, the cost of services per person should be going down,” City Council Speaker Adrienne Adams said at Monday’s hearing, adding that the administration indicated during budget negotiations and adoption in the spring that the per diem cost would be reduced, but it has in fact only increased. “It is perplexing why the projections do not reflect this and continue to rise,” Speaker Adams said. The speaker and other council members also questioned why the per diem costs for asylum-seekers are so much higher than per diem costs in the city’s traditional DHS shelter system, which as of fiscal year 2022 stood at $136 for single adults, $172 for adult families and $188 for families with children.

Administration officials said on Monday that they’re “constantly working” to find ways to reduce the per diem rate. But as the asylum-seeking population increases, higher demand is leading to higher prices, they said. “It is putting enormous pressure on us to find sites in a very supply-constrained environment. And that is raising the price,” said Michael Chimowitz, assistant director at the Office of Management and Budget. “It’s not just that the demand is increasing, but it’s increasing at an accelerating pace.”

Brannan, who chairs the Committee on Finance, pressed the administration for a breakdown of the per diem costs, noting that reports from City Hall don’t detail what percentage of that total can be attributed to food, shelter, security or any of the other services provided to asylum-seekers. 

Administration officials said that they weren’t able to provide the council with such a breakdown, saying that the per diem rate for asylum-seekers is a “holistic” one that takes into account centralized costs like intake facility and transportation costs, and can’t be easily broken down into categories because different people are receiving different services. The “per diem” cost is calculated by taking the whole of the city’s spending on asylum costs and dividing it by the nights that households spend in the city’s care. 

The administration has provided a breakdown in only very broad categories of total spending so far this fiscal year, which reached $1 billion as of the end of September. Services and supplies, which include intake staff, security, laundry, transportation and more, accounted for $464 million; housing, rent and initial outfitting accounted for $333 million; IT and administrative costs accounted for $122 million; food accounted for $64 million; and medical costs accounted for $26 million.