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New York’s $2.4 billion rental assistance fund has nearly run dry, prompting state officials to scramble for more federal funding to cover a backlog of thousands of applicants — and leaving cash-strapped tenants and landlords in limbo.
Earlier this month, the Empire State made the surprise decision to halt new applications for its Emergency Rental Assistance Program (ERAP) program — an outgrowth of the controversial federal eviction moratorium that was ruled unconstitutional by the Supreme Court.
Designed to help renters and landlords pay expenses amid the fallout from COVID-19, Governor Kathy Hochul announced on Nov. 12 that her administration was asking for an additional $996 million in federal funding from the U.S. Treasury Department to try and keep the program running.
“While New York accelerated getting rent relief out the door and moved from the back of the pack to the front amongst other states, there are still many individuals in need of assistance,” Hochul said.
The funding crunch comes at a time when the eviction moratorium is set to expire on January 15th, leaving thousands without aid. After a weak start marked by system delays and inefficiencies, the ERAP program finally began to make strides in August in distributing the funds to low-income tenants who were unable to pay rent due to the pandemic.
As of November 9th, nearly 280,000 households have submitted applications to the program, and the state has paid out $1 billion to 81,209 landlords who haven't been paid rent. Meanwhile, between 70,000 to 80,000 applications remain pending.
However, days prior to Hochul’s announcement, the state posted a warning on its website informing would-be applicants that funds are almost gone — except in a few smaller counties where funds have not yet exhausted their pool of aid.
That further exasperated building owners — some of whom recently challenged New York's moratorium in court and haven't been paid in over a year. Despite the Big Apple's recovery, which has seen rent prices surge anew, landlords and tenants are still suffering from the overhang of the pandemic's worst days.
“I am beyond frustrated,” Jill Berman, a New York landlord who owns an 8- family apartment building in Park Slope Brooklyn, told Yahoo Finance in a recent interview.
“The way the process has been handled is very [anger] making," she added.
Following the state’s move to stop taking most requests for its pandemic rent relief, it prompted Berman to write a letter to Governor Hochul about her situation, which she shared with Yahoo Finance. According to Berman, both she and her tenant — who owes over $30,000 in unpaid rent dated back to May 2020 — had applied for rental assistance in June when the portal was opened.
“That's significant money. I am lucky that the other tenants in my building are paying their rent but I know other landlords who are not that lucky and are desperately in need of rental assistance funds or they might go under,” Berman said.
After months being in limbo with the state’s Office of Temporary and Disability Assistance (OTDA) — which initially said her case was under “pending quality control” — Berman's application was approved, and she’ll be receiving her funds soon. However, she faulted a time consuming and opaque process.
“There seems to be a lack of communication between the people answering the phone and those people involved in the quality review unit and process,” Berman said. “The situation is extremely worrisome because OTDA could say, well, the application has been reviewed and it has not been accepted.
No relief for tenants
Meanwhile, several members of New York’s congressional delegation also sent a letter to the Treasury Department emphasizing the need for additional help, explaining the state continues to receive 10,000 new applications per week.
“We haven't seen a slow down of applicants,” Ellen Davidson, staff attorney at the Legal Aid Society, told Yahoo Finance in an interview.
“It would seem to us that if you want to make a strong case to Treasury, that we need the additional money, closing down the application portal makes the need seem artificially low,” the attorney added.
The nonprofit tried to help people with the application but couldn’t because the portal was “closed down.” The hiccups were due to “ technological problems,” according to Davidson.
“There's no paper application so in order to apply, you really have to be comfortable with technology,” Davidson said. “Many of the people who've been left out are people who don't have email addresses, or don't have email addresses that work and find technology challenging.”
While thousands of applicants remain in limbo, the OTDA continues to work to ensure all applications are completed in their entirety.
“In six short months, New York’s rental assistance program has provided more than $1 billion in direct payments to landlords and protected roughly 168,000 households from eviction,” a spokesperson told Yahoo Finance in a statement.
The spokesperson added that the Empire State was "in a good position" to get more funding to clear its backlog, "and to continue helping struggling renters and landlords alike."
Without additional federal funding, OTDA doesn’t expect to be able to pay all of the applications already received due to the high demand in ERAP payments.
For applicants who were hoping to apply, but no longer can’t. There is a form available on the ERAP web page so that individuals can provide their email address in order to receive notification if the application portal reopens to all areas of the state.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv