New York City is walking away from federal money meant to shelter homeless veterans rather than agree to grant rules the city says would exclude transgender veterans from the beds.
Quick Take
- New York City’s Department of Homeless Services is leaving the Department of Veterans Affairs’ Grant and Per Diem program starting October 1.
- City officials say the grant required following two Trump executive orders they feared would force them to turn away transgender veterans.
- The Department of Veterans Affairs denies that claim and says the real issue is reduced funding tied to performance reviews.
- The dispute centers on the Borden Avenue Veterans Residence shelter in Long Island City.
- A Republican City Council member who chairs the veterans committee called the city’s move “reckless.”
City Cites Anti-Trans Rule as Reason for Exit
New York City’s Department of Homeless Services confirmed it is dropping out of the Department of Veterans Affairs’ Grant and Per Diem program as of October 1, the start of the federal fiscal year. The program helps pay for shelters like the Borden Avenue Veterans Residence, which has served homeless veterans in Long Island City for years.
Department of Homeless Services spokesperson Neha Sharma said the Department of Veterans Affairs only awarded a small share of the funding the city received in past years. She said the grant also required the agency to exclude transgender veterans from shelter beds paid for with that money. Sharma said two of President Trump’s executive orders were behind the new conditions attached to the grant.
“As a right-to-shelter city, we decided it was in the best interest of the veterans we serve to ensure access to shelter for all veterans experiencing homelessness,” Sharma said. City officials framed the exit as a civil-rights decision rather than a simple budget choice, arguing that accepting the money would mean turning away some veterans based on gender identity.
Federal Officials Say Money, Not Policy, Drove the Decision
The Department of Veterans Affairs rejected the city’s explanation. A spokesperson called the discrimination claim “false” and said the agency evaluated the Borden Avenue facility and decided it could not justify a bigger award. Federal officials said grant decisions are based on past performance, demonstrated need, and the quality of care provided to veterans, not on gender-related conditions.
Federal officials said the city chose to leave the program only after learning it would get less money than before, not because of any new eligibility rule. The Department of Veterans Affairs’ general grant terms do reference an executive order on “biological truth,” but the agency insists that language did not drive this particular funding cut.
The Grant and Per Diem program is the Department of Veterans Affairs’ largest transitional housing effort for veterans without homes. Nationally, the agency says it housed nearly 52,000 homeless veterans in the last fiscal year, the highest number in seven years. That success record makes the sudden exit of one of the country’s largest cities notable, regardless of which side’s explanation is accurate.
Veterans Caught Between Competing Claims
City Council member Frank Morano, a Republican who chairs the Committee on Veterans, publicly demanded an explanation and called the decision reckless. His criticism reflects a broader frustration shared by residents across the political spectrum: that veterans in need are losing shelter access while officials argue over who is telling the truth.
I joined @ToddPiro on @foxandfriends First to discuss the Mamdani Administration’s decision to walk away from federal funding that has helped homeless veterans in New York City for nearly two decades. pic.twitter.com/ZhHkYRjCXW
— Councilman Frank Morano (@CMFrankMorano) September 30, 2026
Neither side has released the full grant paperwork showing exactly which conditions were attached to the funding offer. Transgender veterans already face housing instability at nearly three times the rate of other veterans, according to published research, raising the stakes for whichever explanation holds up. Until the underlying documents become public, the dispute remains a standoff between a city claiming a civil-rights stand and a federal agency pointing to its own budget math.
What is not in dispute is the outcome. A shelter that has housed homeless veterans in Queens is losing its federal funding stream starting October 1, and the city and the Department of Veterans Affairs are offering flatly contradictory reasons why.
Sources:
redstate.com, thecityreporter.nyc, nyc.gov, council.nyc.gov, va.gov
