Rent program blocks landlords and protects non-paying tenants

0

(iStock/Illustration by Kevin Rebong for The Real Deal)

When New York’s rent relief program launched early last summer, landlords saw a light at the end of the tunnel.

For landlords June and Lance Margolin, it had been eight months since they had received payment from the tenant renting an apartment in their Long Island home.

The $2.4 billion program promised to cover the tens of thousands of dollars their tenant owed.

A year later, those hopes turned to despair.

The couple say their tenant’s application has been in the ‘pending review’ category for more than six months. According to the rules, a pending application protects a tenant from eviction even if the landlord never gets paid.

So tenants continue to apply, even though program funding ran out in November and may not be replenished enough to pay claims. Landlords have had no choice but to house tenants who have not paid rent for months or even years.

Blocked by a state law supposed to save them, the Margolins create a investigation to ask other owners about their experience with the Emergency Rental Assistance Program.

They aim to gather enough anecdotes from owners to motivate the legislator to do something. By the end of June, 59 had submitted responses. But Albany’s next regular legislative session won’t be held until January.

Doomed from the start

Some 340,347 ERAP applications had been filed as of June 28. The state paid less than half of them, according to the Office of Temporary Assistance and Disability, the agency that runs the program.

Part of the problem is that the program didn’t have enough money to start. When Congress passed a bill in late 2020 that provided $25 billion in rental assistance — an amount it would later match to a second allowance — it based states’ shares on total population. , rather than their number of tenants.

New York, which has an extremely high percentage of tenants, was destined to be harmed.

Last August, just two months after the portal opened, State Assemblywoman Linda Rosenthal said The real deal“That’s probably not enough money.”

In November, Governor Kathy Hochul shut down the program, saying the $2.4 billion had run out, although only 60% of applicants had been approved.

But weeks later, a judge ordered New York to reopen the gate, ruling that the state’s eviction moratorium was due to expire on Jan. 15 and that the federal government would soon replenish the program with unspent funds from other states.

An endless wait

Seven months later, that promise has largely gone unfulfilled. State figures show the allocated amount remains $2.4 billion.

Since the re-opening of the application portal, governments have allocated funds twice. In mid-March, the US Treasury Department announced it would send New York an additional $119 million – a small fraction of the estimated $2 billion the owners still owed. (Hochul had requested $1.6 billion.)

The following month, New York set aside approximately $800 million in the state budget for ERAP. But this money has not yet been made available. An OTDA spokesperson said the funds would be used to pay for some of the existing apps in the coming weeks.

There’s more federal funding that New York could tap into. In April, the Treasury reported that states had earmarked or distributed more than $30 billion of the $46 billion, leaving about $15 billion to redistribute to states in need.

But no one knows how much New York will receive, or when.

Federal rent relief dollars are divided into two tranches. In March, the Treasury announced that it would soon publish a request for the last round of reallocation of the first tranche of funds and that at the end of the month it would begin to disperse the unspent money from the second.

But the first-round process is still ongoing, a Treasury official said Friday. An OTDA spokesperson said the agency had requested more money from that tranche, but did not specify the amount. Given that Hochul only got 7% ​​of what she asked for last time, the owners have little reason to be optimistic.

The second-round process is moving just as slowly. The Treasury Department has not yet released a form for the state to apply for this funding.

Owners of purgatory

With the fate of the portal’s total funding stream uncertain, the program is still accepting new applicants and protecting those tenants from eviction.

A recent update from the OTDA said it won’t be able to review the most recent applications, raising the possibility that tenants who don’t qualify are still inescapable. A spokesperson for the OTDA said the agency screens applications for basic eligibility and flags those deemed ineligible.

As of June 24, the agency said it will review and process eligible applications submitted through March 31 this year and announce whether it receives funding to pay for those submitted after that date.

Since April 1, according to the OTDA, 16,667 claims have been filed. Like previous filers, these tenants will be able to stay in their units indefinitely without paying rent.

Even landlords whose tenants applied before the March deadline say they don’t know if those filings are being considered.

Holly Meyer, an upstate landlord who rents an apartment in her single-family home, said her tenant filed for ERAP on March 7, after filing an eviction suit. The tenant, although employed and not in financial difficulty, had stopped paying rent two months earlier, after Meyer informed her that she planned to sell the house and would not be renewing the lease.

The tenant has since moved to a new address in Poughkeepsie. Meyer said she told her story to ERAP’s fraud department. The response, she said, was, “Oh, that sounds like fraud; we’re going to have to look into that.

If the state decides to give him assistance, he told her, that would be posted on the state’s website.

“I just have to check the portal like I do every day, as many times as possible,” Meyer said.

Frustration mounts

Landlords whose claims have been pending since last summer say their tenants have continued to take on debt, much of which will not be able to cover the state.

Jerry Waxenberg, a third-generation landlord with an interest in about 850 units, said a tenant in an eight-family apartment building in Brooklyn paid his last rent in March 2020. As of July 1, the tenant owed more than 35 $000.

In late August 2021, Waxenberg said the tenant had requested relief, preventing the landlord from pursuing an eviction once the moratorium ends in January. Almost a year later, Waxenberg said he doesn’t know when he might hear an update.

“We are continuing to check with ERAP,” he said, “and the request is still pending.”

Even if the tenant is approved, the State will cover a maximum of 15 months of arrears. That would leave Waxenberg short by $15,600.

There is no ERAP equivalent for landlords to pay their own fees, he noted.

“I would like to know where a landlord could file an ERAP request so that we can pay our property taxes, water and sewer charges, utilities, heating costs, etc. ,” Waxenberg wrote in an email.

His situation is not unique, according to a recent survey conducted by a group of homeowners, the Community Housing Improvement Program. Landlords of 84,000 apartments reported that 100,000 tenants in rent-stabilized buildings were more than two months behind on rent – ​​after receiving PARE funds.

About 65,000 of these tenants were over a year late.

“Allowing tenants with massive arrears to continue applying for an ERAP, when there is no money available, only sells them false hope,” said CHIP executive director Jay Martin. “Meanwhile, owners are losing hundreds of millions of dollars in revenue.”

“Please share”

The owners took to Twitter to vent their frustrations and call for reforms.

“Oh look, another month has passed where ERAP is still undecided on countless applications for countless months,” Meyer tweeted on Friday. “One more month, landlords must pay for squatters to live for free while landlords suffer. When will this end?!”

Another owner, Kimberely Catalao, responded with a graphic that reads: “ERAP IS FRAUD”.

His Biography Twitter declares that his tenant has not paid rent for two years. “ERAP, politicians, nobody helps me,” he says. “GOD, please help me.

Others have claimed OTDA to close the gate for real.

In February, OTDA appealed the decision that forced the agency to reopen it, Law360 reported.

She was granted a reprieve allowing her to close the portal, but she decided to “continue to voluntarily comply with the terms of the interim order until the OTDA decides to invoke” the reprieve.

An agency spokesperson told The Real Deal that the OTDA was unable to say whether it planned to stop submitting applications.

Meanwhile, June Margolin has arrived somewhere with state lawmakers. Or one, at least.

In a June 23 Facebook post titled “PROGRESS!!!”, the owner wrote that she had met State Assemblyman Steve Stern, who she said was the “one and only” state official to have helped her thus far.

Together they created a list of suggestions Modify the program, including removing automatic deportation protection for applicants and fully funding the ERAP.

But until the legislature convenes next year, sweeping reforms are unlikely to be made. Hochul called an emergency session last week, but only to act on gun control and abortion rights.

Still, Margolin ended the post with a call to action: “Our job is to get as many owners as possible to respond to the survey so [Stern] can provide other lawmakers with the answers and stories of landlords from their own districts,” she wrote. “Please share.”

Share.

Comments are closed.