New York’s $2.7 Billion Rent Relief Program Cuts First Checks, Amid Scrutiny

New York’s stalled rent relief program has started sending checks to a handful of landlords whose tenants have missed rent payments as a result of the COVID-19 pandemic, with Gov. Andrew Cuomo pledging to pay every approved applicant by the end of August.

The Emergency Rental Assistance Program (ERAP) has issued just $1.2 million to landlords on behalf of low-income tenants who owe back rent, nearly four months after New York lawmakers allocated $2.7 billion in state and federal funding to the initiative. The looming end of state eviction protections on Aug. 31 has frustrated landlords and tenants alike, and fueled intense scrutiny of the program, which has accepted more than 160,000 applications since opening June 1.

Cuomo said Monday that the Office of Temporary and Disability Assistance (OTDA) would “streamline” the application process to ensure every approved applicant receives payment by the end of August. In a statement, Cuomo’s office said OTDA would assign hundreds of state employees to handle the rental assistance applications and loosen submission rules—tenants will be able to prove their income eligibility using additional types of documents, for example.

OTDA will train at least 350 employees from other state agencies to assist with the applications in order to cut checks for 4,828 approved applicants by Aug. 3, he added.

Cuomo also said Guidehouse Inc., an Illinois-based firm that won a state contract to create a web portal and work with OTDA on administering the program, has assigned 1,000 employees to process applications.

“I’ve directed OTDA to work with their vendor [Guidehouse] to disburse payments as quickly and efficiently as possible [so] we can deliver billions of dollars in rental assistance to New Yorkers who have been struggling to pay rent due to no fault of their own,” Cuomo said in a statement.

An OTDA spokesperson said Guidehouse had about 400 employees working on the applications in June. Guidehouse did not respond to a list of emailed questions about its role and staffing numbers.

The $115 million Guidehouse agreement faced criticism after the Associated Press reported that the company employs a former Cuomo advisor. The contract with Guidehouse was not subject to oversight by the state comptroller’s office, thanks to a since-expired executive order enabling the Cuomo Administration to bypass comptroller audits during the pandemic.

More than 40 lawmakers sent a letter to Cuomo on Wednesday citing various “barriers to accessing the much needed money” for tens of thousands of eligible households waiting on rent relief, and seeking more information about the contract with Guidehouse.

OTDA told City Limits it would only provide a copy of the contract in response to a Freedom of Information Law request. City Limits submitted the records request, but such inquiries can take months to fulfill.

OTDA spokesperson Justin Mason said the agency and Guidehouse are working to expedite payments and correct problems that have plagued the application process, including a web portal feature that forces applicants to complete their submission in one sitting.

“As we get further into the Emergency Rental Assistance Program, our staff and the contractor are continually identifying efficiencies that will allow us to distribute this funding quicker and in a secure manner that does not compromise its integrity,” Mason said. “The confluence of additional staffing and our ongoing streamlining efforts will help us process a far greater number of applications and get a much larger portion of this critical funding out as we advance into August.”

Mason also told City Limits that OTDA is “very confident” the state will allocate all of the ERAP money. In recent days, U.S. Senate Majority Leader Chuck Schumer has publicly urged his home state to cut the checks before an October deadline forces New York to return the unused federal funding.

Landlords who qualify for reimbursement through ERAP must rent units to tenants who earn no more than 80 percent of Area Median Income (AMI) and who demonstrate that they could not make payments as a result of the pandemic. Lower income New Yorkers—people earning less than 50 percent of AMI—and renters already facing eviction had priority during the first month of the program. Landlords who receive ERAP money agree to rent their units to the same households for at least another year.

Some New York City landlords say they have begun to receive relief money since Cuomo’s Monday announcement, but problems persist.

“In the last 48 hours, we are getting emails into the office that owners are seeing checks being sent out,” said Community Housing Improvement Program Executive Director Jay Martin, whose organization represents thousands of rent-stabilized property owners.

In at least two instances, however, landlords received less than the arrears amount they had indicated on their ERAP applications, he said. One person was owed $28,000 and received $24,000, he said.

“There was no explanation, so we’re doing the work on the back end to find out what’s going on,” he added.

Martin also said his members have not seen any improvements when it comes to the actual web portal, which features the same cumbersome requirements and an inability to save an application and return to it later.

Ann Korchak, a representative for the group Small Property Owners of New York (SPONY), said her organization isn’t sure what Cuomo means when he says the application process has been “streamlined.” No SPONY members have received ERAP payments, she said.

She said the problems stem from an initial lack of engagement with small landlords. The delays have only further alienated property owners while saddling them with deeper mortgage and property tax debts, she said.

She also cited the experience of landlords whose tenants have left their apartments after missing months of rent payments. They are left holding the bag, unable to qualify for ERAP because the application process demands submissions from both the owner and the tenant, she said. OTDA said the dual submission requirement is a federal mandate.

Korchak said she fears many property owners will be forced to sell, “likely to a deep-pocketed corporation of institutional buyer, putting housing into fewer and fewer hands and robbing future generations of New York immigrants the ability to own and operate housing as a livelihood.”