New York City has filed a lawsuit against the Trump administration for reclaiming $80.5 million in federal grants meant to assist with housing costs for migrants.
The complaint, filed in Manhattan federal court on Friday, challenges the claim by federal officials that the city misused the funds and argues that the February 11 clawback undermined Congress’ original intent for the appropriations.
City officials were caught off guard when the funds, which had been deposited into a city bank account on February 4 by the Federal Emergency Management Agency (FEMA), were suddenly withdrawn. The money had been allocated by FEMA, a division of the Department of Homeland Security, to help support the city’s growing migrant population.
Homeland Security Secretary Kristi Noem confirmed the move in a February 12 post on the social media platform X, stating: “I have clawed back the full payment that FEMA deep state activists unilaterally gave to NYC migrant hotels.”
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The White House has yet to comment on the lawsuit, but New York City is seeking the return of the funds along with a court order to prevent further withdrawals.
President Donald Trump has been vocal about what he sees as FEMA’s misallocation of taxpayer money, particularly in Democrat-led cities. His adviser, Elon Musk, echoed these concerns in a February 10 post on X, alleging—without evidence—that $59 million of the funds were used to house migrants in “luxury” hotels.
“Sending this money violated the law and is in gross insubordination to the President’s executive order,” Musk claimed.
Noem and a FEMA official also alleged that New York City had misused federal funds to convert the Roosevelt Hotel in midtown Manhattan into a migrant shelter. Furthermore, they claimed that the Venezuelan gang Tren de Aragua was using the hotel as a base of operations.
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City officials pushed back against these assertions, calling Musk’s claims “filled with inaccuracies” and stating that allegations of criminal activity at the Roosevelt Hotel were “unsupported.”
New York City’s Democratic mayor, Eric Adams, condemned the Trump administration’s actions in a statement announcing the lawsuit. “Our immigration system is broken,” Adams acknowledged, “but the cost of fixing it should not overwhelmingly fall on the city alone.”
He emphasized that New York City has spent over $7 billion in the past three years addressing the migrant crisis, and that the rescinded FEMA funds represented “the bare minimum our taxpayers deserve.”
The lawsuit underscores the ongoing battle between federal and local governments over immigration policy and financial responsibility. As the legal fight unfolds, it raises critical questions about the allocation of federal resources, the role of cities in managing immigration challenges, and the political power struggles shaping these debates.
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