The Office of Temporary and Disability Administration (OTDA) has sent out more than 26,000 notices informing property owners that they will miss out on money they qualify for because they haven’t claimed the cash within 180 days.

Sadef Kully

The scene from a June protest by Housing Justice for All.

New York could soon redistribute more than $250 million in rent relief checks not yet claimed by landlords, state officials said Tuesday.

Barbara Guinn, executive deputy commissioner of the Office of Temporary and Disability Administration (OTDA), said her agency has sent out more than 26,000 notices informing property owners that they will miss out on money they qualify for because they haven’t claimed the cash within 180 days. Under New York’s Emergency Rental Assistance Program (ERAP) rules, low-income tenants can apply for funding to cover arrears that built up as a result of the COVID-19 pandemic, with the money going directly to their landlords. To receive the money, landlords must send in an application of their own.

In some cases, property owners have opted not to make an application, but in many other instances, the state has struggled to match renter and landlord submissions, tenant and property owner groups say.

About 20,000 tenant applications submitted between June and August and approved by OTDA have not yet been connected to a landlord, according to agency data. The payouts for those applications would cover roughly $250 million in arrears.

Regardless, Guinn said the state could redistribute unclaimed checks to a backlog of applicants still awaiting payment if property owners do not claim the money they are approved for.

“The goal is to continue with outreach over that period to resolve those arrears,” Guinn told assemblymembers at a hearing on homelessness Tuesday. “To the extent that doesn’t happen, those funds are certainly available.”

The agency said it will not automatically clawback the approved money after 180 days and will instead consider each application on a case-by-case basis.

“Each rent relief application is unique and the process of getting both the proper landlord and tenant submissions can be time consuming,” said OTDA spokesperson Justin Mason. “OTDA continues its outreach efforts to connect landlords to provisionally approved applications. We do, however, anticipate that a majority of these provisionally approved applications will ultimately result in a payment to a landlord.”

Gov. Kathy Hochul ordered OTDA to close the ERAP portal last month after the amount of money owed to applicants exceeded the program’s $2.4 billion allotment, which mostly came from the federal government. More than 288,000 households applied for ERAP funding before the portal closed, and the state has so far paid $1.13 billion to property owners, according to a Dec. 6 ERAP report from OTDA. The agency has approved another $924 million on behalf of 73,884 tenant households, but has not yet sent that money to their landlords. 

Hochul has asked the federal government to replenish the ERAP fund with nearly $1 billion to at least cover applicants who got their submissions in before she closed the portal. Guinn said Tuesday that the unclaimed money will go to applicants stuck on what amounts to a waiting list for unpaid property owners. 

“We have a number of applications in house that cannot be covered by the funds available,” she said. 

Guinn also told lawmakers that if the state does receive substantial funding from the federal government, it would only take “a few days” to reopen the portal. That pledge may encounter skepticism from New Yorkers who recall the program’s slow start as well as persistent failures by the politically-connected firm contracted to stand up and operate the web portal.

Tenant advocates and state lawmakers have urged Hochul and OTDA to reopen the portal immediately even without a federal infusion, in part because an ERAP application serves as a defense against eviction in Housing Court.

The Legal Aid Society sued OTDA in Manhattan Supreme Court on Monday to force the agency to resume accepting ERAP applications. 

The class action lawsuit earned the support of Assemblymember Linda Rosenthal, chair of the Social Services Committee that held the hearing Tuesday.

“The state’s closure of the program, particularly in light of the fact that it has requested and is likely to receive billions in additional ERAP funds from the federal government, is baffling as it unfairly denies tenants this protection,” Rosenthal said in a statement.

Legal Aid Housing Attorney Ellen Davidson said she fears tenants blocked from applying for ERAP may end up getting evicted before the program reopens at a later date. The state’s eviction protections expire Jan. 15.

“I think we’re going to see people who are eligible for the program get evicted and then the program will reopen,” Davidson said. “And people who would have been eligible for rental arrears payments will be homeless.”

An OTDA spokesperson said the agency does not comment on pending litigation.

The vast majority of tenant applicants in New York City are among the most vulnerable to homelessness, OTDA reports show.

Across the five boroughs, 90 percent of ERAP applicants earn less than 50 percent of Area Median Income (AMI), or no more than $53,700 for a family of three. About 71 percent of all ERAP applicants reported earning less than 30 percent of AMI—or $32,200 for a family of three.

Still, an untold number of eligible renters did not apply before the portal closed, BronxWorks Assistant Executive Director Scott Auwarter told City Limits last month.

“I am very concerned that some of the most needy tenants have not yet applied and won’t until the eviction moratorium is lifted,” said Auwarter, whose organization received a $5 million city contract to help Bronx tenants apply for rent relief.

Landlord groups have also asked the state to reopen the application portal to ensure their members can recoup money lost during the pandemic, and to get a clearer picture of just how many tenants owe rent statewide.

“That’s the only way that the government will know the extent of the need, and then we can have a bigger conversation about permanent solutions,” said Jay Martin, president of the rent-stabilized landlord group Community Housing and Improvement Program.

Martin said few of his members have elected to forego money available to them. Instead, he said, ERAP has failed to match many tenant applicants with their landlords, leaving them unable to collect the cash. Those owners could miss out on funds they may never be able to replace, he said. 

“There may be a handful of owners who aren’t trying to get this money, but there are tons of tenants and tons of owners who are trying to get it,” he said. 

Under ERAP rules, property owners who accept the state payment must renew their tenant’s lease for at least another year—a provision that has made some property owners think twice about the program. But a housing court backlog and the pace of proceedings mean tenants can likely stay in place another year with or without the ERAP money, which makes rejecting the cash a bad business strategy, Martin added.

“If you’re getting an eviction, you’re not getting that money,” he said.