Applications for the new $125 million Landlord Rental Assistance Program (LRAP) opened Thursday, as state officials seek to reimburse property owners who were unable to apply for compensation through the Emergency Rental Assistance Program (ERAP).

Adi Talwar

Homes on Tomlinson Avenue in Morris Park, The Bronx.

More than 1,600 New York landlords locked out of the state’s $2.7 billion COVID rent relief program applied for a fresh pot of money on the first day of a new program designed specifically for building owners, state officials said.

Applications for the $125 million Landlord Rental Assistance Program (LRAP) opened Thursday, as state officials seek to reimburse property owners who are unable to receive compensation through the Emergency Rental Assistance Program (ERAP). Under federal rules, landlords and tenants both have to submit applications to get money from ERAP, which was established by the state earlier this year to cover back rent on behalf of low-income tenants affected by the COVID-19 pandemic but able to stay in their apartments through various eviction protections.

That meant landlords were out of luck if their tenants vacated the apartment without paying their arrears or had otherwise declined to apply for ERAP. State lawmakers passed a measure to create the new landlord fund during a special session last month.

“I am proud that our state’s rental assistance program has already provided much needed relief to tens of thousands of New Yorkers, but there are still many small landlords ineligible for that relief because of federal rules who also need our help,” Gov. Kathy Hochul said Thursday. “This funding is a critical tool to close that gap and help more New Yorkers recover from the pandemic.”

To qualify for the program, property owners must own units priced at or below 150 percent of the fair market rent for their location—the equivalent of $3,039 per month for a two-bedroom apartment in New York City—and have documented the rent they are owed since March 1, 2020. The program will prioritize landlords with 20 or fewer units, Hochul said.

By Friday morning, just over 1,600 property owners had already submitted applications, according to the state’s Office of Temporary and Disability Assistance (OTDA), which administers both rent relief programs.

But landlord groups say the money will evaporate quickly because so many tenants have moved out with outstanding arrears—and because big-time property owners will elbow out smaller owners.

“OTDA has no real way of knowing if a property owner only owns 20 units. There’s going to be a run on the money from any property owner whose tenants have been incommunicado,” said Community Housing Improvement Program President Jay Martin,whose organization represents the owners of roughly 400,000 rent-stabilized apartments. “OTDA is going to have to take the next few weeks and go through all the applications and clear up who actually qualifies, but it’s clear the need is 10 to 20 times more than the $125 million.”

“That’s just a drop compared to the amount of debt that exists from tenants who vacated,” he added.

Since ERAP applications opened June 1, several landlords who spoke with City Limits described a similar predicament: Tenants moved out after not paying their rent for several months and left them holding the bag.

“I’m rushing home right now to fill out the form and upload it,” said Cynthia Brooks, the owner of a four-unit building in Brownsville.

Brooks said two of her tenants owed a combined $14,000 before they moved out of her building. Another resident, who was issued an eviction order prior to the pandemic, has remained in the apartment without paying rent and owes about $18,000, she said.

“That’s a lot for a small landlord,” Brooks added.

The new landlord fund opens as New York seeks to add even more federal money to ERAP, which covers up to 12 months of back rent, three months of future payments and utility costs on behalf of tenants affected by the pandemic and earning less than 80 percent of Area Median Income (equal to $66,880 for an individual and $95,440 for a family of four in New York City).

The program, once the worst-performing rent relief fund in the country in terms of distributing the money, has picked up steam over the past two months, distributing $667 million and earmarking another $1 billion to property owners as of Sept. 30, OTDA reports. That’s the largest combined total of any state in the country, according to a database maintained by the National Low Income Housing Coalition.

In the early days of the program, the vendor tapped to set up an online application portal and process payments struggled to meet various benchmarks, prompting delays, City Limits reported in August. The problems forced New York officials to reassign hundreds of state employees to assist with ERAP applications.

ERAP errors seemed to generate little interest from then-Gov. Andrew Cuomo, however. At an August Assembly hearing on the rental assistance program, OTDA Commissioner Michael Hein told lawmakers he had never spoken to Cuomo about the fund, despite its many early problems.

Hein nevertheless oversaw the program as it began allocating large sums to landlords statewide, successes that coincided with the beginning of Hochul’s tenure.

But by Thursday, Hein was out. He handed in his resignation letter Oct. 5, becoming the latest Cuomo commissioner to leave his post following the ex-governor’s resignation.

“OTDA took on the monumental task of creating and administering an entirely new program to distribute more than $2 billion in federal funding to help tenants at risk for eviction to stay in their homes and help struggling landlords to recoup unpaid rent,” he wrote. “I firmly believe New York’s program has now evolved into the best state plan in the nation.”