Long Island fair housing watchdog loses $1M in DOGE spending cuts

Federal spending cuts are targeting nonprofits that combat housing discrimination on Long Island, slashing funding for watchdogs that investigate complaints and enforce fair housing laws.

Long Island's only local nonprofit dedicated to investigating housing discrimination said it has lost $1 million in funding over the next three years after the Trump administration terminated its federal contract as part of a nationwide slashing of federal spending.

Long Island Housing Services received a letter last week from the U.S. Department of Housing and Urban Development notifying the Bohemia-based organization that it will lose its federal funding  — effective immediately — because the money no longer carries out the agency's priorities or the goals of the federal Fair Housing Initiatives Program, said LIHS Executive Director Ian Wilder.

"We have to figure out how to fill that hole in our budget to continue with current staff and the level of services we've been providing to Long Islanders," Wilder said. 

HUD said in the letter that it terminated the organization’s grant at the direction of President Donald Trump’s Department of Government Efficiency, an organization headed by Elon Musk that Trump created by executive order on his first day in office.

The agency did not respond to questions about the cuts on Wednesday.

Wilder’s nonprofit investigates housing discrimination complaints and provides education and training on fair housing laws for the real estate industry, government officials and the public. The federal Fair Housing Act, which LIHS was tasked with enforcing under the HUD grant, prohibits discrimination based on race, color, national origin, sex, religion, familial status and disability.

Last year, LIHS reached an $105,000 settlement with an operator of five Suffolk County apartment complexes accused of racial and disability discrimination.

The grant termination letter was the first Wilder heard from HUD about any concerns with the organization's work, he said. The grant represents about 20% of the nonprofit’s annual budget.

Kassie White, a spokesperson for Gov. Kathy Hochul, said in a statement to Newsday that the federal money cut by the Trump administration helps support nonprofits that are critical to ensuring New York families can access safe and affordable housing. She noted that Hochul’s proposed budget includes an additional $11 million to boost staffing at the state Division of Human Rights, which enforces discrimination law.

"Allowing DOGE to take a red pen to vital programs like these will cause real harm to communities statewide," White said.

'Cases that aren't going to be prosecuted’

Long Island Housing Services is one of dozens of nonprofits around the country hit by the cuts as the U.S. Department of Housing and Urban Development canceled about half of its 162 fair housing grants.

Nonprofits field the majority of housing discrimination complaints in the U.S., and handled three-quarters of the 34,150 complaints filed in 2023, according to the latest data from National Fair Housing Alliance.

LIHS wasn’t the only fair housing agency serving Long Island hit by the DOGE cuts.

The Fair Housing Justice Center, based in Long Island City, Queens, lost about one-third of its federal fair housing funding, or $260,000, but did not lose its grant to enforce federal fair housing laws, said Fred Freiberg, the center’s co-founder and national field consultant. The agency handles complaints in Nassau and Suffolk counties as well as New York City and five other counties.

"Fair housing, in general, has historically enjoyed bipartisan support," Freiberg said. "This is a departure from that and it does appear this administration is saying this is not a priority for them."

The funding cuts will make it more difficult for fair housing organizations to initiate investigations in response to individuals' complaints, he said.

Freiberg emphasized that the undercover fair housing testing conducted by the organizations is critical to prove housing discrimination claims that will stand up in court. Newsday conducted similar testing in its 2019 Long Island Divided series, which demonstrated widespread separate and unequal treatment of minority homebuyers. Freiberg served as a consultant on Newsday's three-year investigation. 

Long Island Housing Services served a critical role in providing education for the real estate industry after Newsday's investigation and has upped its enforcement efforts in recent years, said Derek Stein, policy director at Syosset-based civil rights nonprofit ERASE Racism. 

"It really threatens to undo the progress over the past few years," Stein said. "If they don't get other grants that could provide that funding, it means that there's going to be cases that aren't going to be prosecuted." 

Wilder said LIHS will tap into its cash reserves to continue funding its housing programs and does not plan to lay off any of its 12 employees at this time. But the organization will have to reevaluate its financial situation at the end of March if funding is not restored.

LIHS had received a three-year enforcement grant worth $425,000 annually under the federal Fair Housing Initiatives Program. The nonprofit had $1,075,000 remaining on its current award through July 2027, including $225,000 in funding through the end of this program year, which ends in July, Wilder said.

Under the grant, LIHS committed to assessing 300 consumer complaints annually for potential housing discrimination. Through the first six months of the grant, the agency had already helped 349 people and was on track to serve 600, Wilder said. 

The Trump administration is considering cutting half of HUD’s employees, about 4,000 jobs, The Associated Press reported Feb. 21.

That could further jeopardize programs across the U.S. focused on disaster recovery, rental assistance, and first-time homebuyer grants, many of which are funded by the federal government but administered by local governments. A HUD spokesperson told the AP the plans were not final. 

Wilder said he fears his nonprofit could lose even more funding if HUD cuts other housing aid to state, county and town governments that enter contracts with LIHS to provide services.

“With everything that’s in motion with the federal government, we don’t even know the full impact yet,” he said.

With AP

By Jonathan LaMantia

jonathan.lamantia@newsday.com@jonlamantia

Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.