NY’s Slow-Moving Rent Relief Program Will Meet Federal Deadline, State Officials Insist

The Emergency Rental Assistance Program (ERAP) has given funds to about 7,000 households, a fraction of the 158,000 unique applications the state has received. Under federal guidelines, states must send their rental assistance funding back to Washington if they fail to administer 65 percent of the cash by Sept. 30.

The official in charge of New York’s embattled $2 billion rental assistance program says the fund will pay tens of thousands of landlords before next month’s “claw back” deadline—which would force the state to return the funding if the majority isn’t spent—despite so far distributing less than 5 percent of the total pot.

The Emergency Rental Assistance Program (ERAP) has paid out $98.6 million to landlords on behalf of about 7,000 households over the past two weeks, a fraction of the 158,000 unique applications the state has received. Under federal guidelines, states must send their rental assistance funding back to Washington if they fail to administer 65 percent of the cash by Sept. 30, fueling fear among tenants and landlords and pressure from local lawmakers.

Pressed by assemblymembers at a hearing Tuesday in Manhattan, Office of Temporary and Disability Assistance (OTDA) Commissioner Michael Hein said the state will hit the 65 percent target and prevent the federal funding “claw back.”

“We are confident this upward trajectory will continue in the coming days, weeks and months,” he said, adding that the state is ready to distribute another $400 million and “will move through the processing of all the applications that are viable” over the next month.

But even the 158,000 applications currently under review won’t be enough to deplete the entire fund, he said.

“Assuming we approve applications at the rate we are doing, you are in a scenario where the numbers won’t work out. You need more applications,” Hein told lawmakers. 

There is no deadline for renters or landlords to apply for the funding and he encouraged qualifying New Yorkers to submit their forms for reimbursement.

More than 830,000 New Yorkers owe back rent, according to policy researchers at National Atlas Equity. Lawmakers and advocates have criticized the state’s efforts to publicize the rent relief program and Hein pledged to provide a breakdown of where applicants live in order to target outreach. In addition, he said OTDA would share information on the number of applicants in various income bands, including the number of people earning less than 30 percent of Area Median Income (AMI)—$32,220 for a family of three.

Hein also acknowledged “significant challenges” with the online-only application process and said OTDA would continue addressing language access barriers, impediments to outreach and a lack of reliable information from state employees and third-party vendors.

ERAP was created as part of the April state budget and began taking applications on June 1 to cover back rent for low-income tenants who failed to make rent payments as a result of the pandemic. (The program has been billed as a $2.7 billion fund, but portions of that money go to municipalities that opted out of the statewide ERAP and to administrative costs, bringing the amount of money available to landlords through the state fund to about $2.2 billion, Law360 reported).

To qualify for reimbursement, tenants must earn less than 80 percent of AMI—$85,920 for a family of three in New York City—and 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. OTDA Assistant Commissioner Barbara Guinn said 77 percent of first-month applicants were in the priority group, but did not say how many of their landlords had so far received payment.

As problems and delays mount, community-based organizations have warned that the program could lock out these low-income tenants, the very people it was intended to help, many of whom lack consistent internet access or the tech savvy to complete the cumbersome online-only application.

Brooklyn Assemblymember Marcela Mitaynes asked Hein and Guinn how tenants without email addresses would receive notifications. Less than a third of the 151 tenants her office helped with applications have email addresses, she said, highlighting the disparities in internet access and usage.

“Individuals are not required to have an email to apply for the program,” Guinn said. “They can apply online without an email. They can receive notices via US Postal Service.”

The hearing took a surreal turn after news broke of Gov. Andrew Cuomo’s decision to resign in the wake of an attorney general report detailing allegations of sexual harassment and misconduct.

Prior to that announcement—which elicited applause from many of the assemblymembers present—Hein said he did “not have conversations with the governor about [ERAP],” but said he speaks “to the governor’s staff fairly regularly.”

Cuomo said last month that the state would complete payments to all valid applicants by the end of August.

The approaching end of state eviction protections on Aug. 31 has raised concerns about landlords beginning non-payment proceedings before receiving ERAP reimbursements. A federal eviction freeze would last until Oct. 3, but faces various legal challenges.

Hein said about 31,000 tenants have applied for ERAP funding without a corresponding application form their landlords. Under ERAP rules, the state will set aside the money for six months while state officials attempt to reach their landlords. The law could protect those tenant applicants from eviction or money judgement by allowing them to use their ERAP application as a defense in Housing Court if their landlord seeks back rent that would have been covered by the state assistance fund. Some landlords, meanwhile, say their tenants have not cooperated with the application process, preventing them from accessing the funds.

Landlords who receive ERAP funding cannot commence an eviction for at least another year. Tenants can show proof of their submission to Housing Court judges as a defense against evictions, but OTDA has not coordinated with the Office of Court Administration to create a uniform process for that.

Hein refused to say whether he thought the state should extend its own moratorium past the current Aug. 31 deadline, and said that was up to the legislative branch to decide.

Assemblymembers also grilled Hein on the problems with the web application process, the slow rollout of the program and the third-party contractors working on ERAP. “There have been significant—we don’t minimize this—significant challenges with individuals being able to access the portal,” he said. “But the portal has never gone down.”

Several lawmakers pushed back on Hein’s positive spin and said he and others handling the rollout should consider following Cuomo out of Albany.

“Don’t take this the wrong way, but there are a lot of people who would say, ‘If we can’t get the money out the door, the people responsible for getting the money out the door should be out the door,’” said Bronx Assemblymember Jeffrey Dinowitz.

Since its inception, the web portal has lacked a function for saving and resuming an application, forcing applicants to complete the lengthy process in one sitting. Hein said the state added that function on Saturday.

When asked for confirmation, attorneys from the legal service providers BronxWorks and Mobilization for Justice told City Limits that applicants can now save their progress if they have registered an account.

For the first time, Hein publicly answered questions surrounding the $115 million no-bid agreement with Indiana-based vendor Guidehouse Inc. The deal avoided oversight under a since-expired executive order about COVID-related procurement. Hein acknowledged that Guidehouse had failed to adequately process rental assistance applications, forcing the Cuomo administration to shift 350 state employees to handle ERAP applications.

“I think there was the hope and expectation that working with our vendor that they would be able to move through the backlog themselves. When we saw that wasn’t taking place we wanted to be able to take action and take action aggressively because we know that New Yorkers are frustrated and need money and the landlords need dollars and want to be able to move through this process,” he said. “We do this regularly … the state staff flows to where the needs are.”

Hein said Guidehouse has subcontracted with two other companies, Nan McKay and Deloitte, for IT and call center support. A copy of the contract obtained by City Limits through a Freedom of Information Law request lists 11 subcontractors, though the names of all but one company, Nan McKay, were redacted.

An OTDA spokesperson said the subcontractor names were blacked out pursuant to state law shielding “trade secrets” or information “which if disclosed would cause substantial injury to the competitive position of the subject enterprise.” They did not say how many subcontractors were actually working on ERAP.

Following Hein’s testimony, tenant advocates described the problems faced by low-income renters statewide. Landlord representatives also weighed in on the financial burdens that property owners are experiencing.

“We are at the tipping point, on the edge of the cliff—tenants and landlords, alike, frustrated beyond comprehension over the inexplicable and unconscionable delays in getting these funds out the door,” said Rent Stabilization Association President Joseph Strasburg, who represents 25,000 property owners and managers.

“There is no sense of urgency to rescue thousands of New Yorkers from months of rent arrears, or their landlords who are behind in paying city property taxes, water bills, mortgages, and mounting repair and maintenance bills.”