New York Seeks To End Last Vestige Of Pandemic Emergency Renter Protection

New York State plans to end its Emergency Rental Assistance Program early next year, a move that housing experts say will likely cause evictions in the state to rise.

The state’s Office of Temporary Disability Assistance filed a request with a judge last week to end the ERA program after it was compelled to keep the application portal open following an injunction earlier this year. Once tenants have filed applications, even if the ERA fund is exhausted, they cannot be evicted until a decision has been made about their eligibility for rental assistance.

“We know that this ERA program, both in New York and everywhere else around the country, has been a lifeline for renters and for the landlords in keeping bills paid,” Peter Hepburn, an assistant sociology professor at Rutgers University-Newark and a research fellow at Princeton University’s Eviction Lab, told Bisnow. “It's almost inevitable that eviction filing numbers will go up as that program is phased out.”

After the state’s eviction moratorium expired in January, a New York County  Supreme Court judge granted a preliminary injunction that forced the OTDA to reopen the ERAP portal and begin taking new applications.

To end the program prematurely based on lack of funding was arbitrary at that point in time, Judge Lynn Kotler ruled. The U.S. Treasury Department gave New York’s OTDA $119M for rent relief in March this year.

But on Nov. 23, OTDA Executive Deputy Commissioner Barbara Gunn filed a request asking the judge to remove the injunction and allow the state to dismantle ERAP. This time, the judge likely has grounds to grant the request, Rosenberg & Estis member attorney Deb Riegel told Bisnow.

“In her initial decision, what the judge basically said is, 'It's anybody's guess whether OTDA is really going to run out of money,'” Riegel said.

Almost a year has passed since that decision, making it harder to argue — as the Legal Aid Society did at the time — that the state might get more federal dollars to fund ERAP, she said.

“I think it's much harder to say now, ‘you're speculating as to what you may or may not get from the federal government,’” Riegel said.

While the March infusion into ERAP was a far higher number than the $27.2M received previously, it was well below the $1.6B requested by Gov. Kathy Hochul in January, Crain’s New York Business reported at the time.

Even though the state approved additional ERAP funding in the state budget, OTDA has already approved more applications than it can afford to pay out, even with additional federal infusions, Gunn wrote in an affidavit.

"While Treasury may reallocate additional amounts to the State, OTDA does not anticipate that any additional reallocations that OTDA may receive will exceed OTDA's existing commitments and liabilities given the relatively small amounts that Treasury has reallocated to the State in each of the five allocations to date," Gunn wrote. 

Real estate industry figures told Bisnow that while ERAP has been a useful tool, its lack of future funding capability means the government should focus on more permanent solutions.

“We need to move beyond ERAP,” REBNY Senior Vice President of Policy and Planning Basha Gerhards said in an emailed statement. “It is now critical for the State Legislature to focus this year on putting forth real policy solutions on targeted voucher support to help people pay their rents and supply-side tools to address the worsening housing crisis.”

It’s unfair to grant protections to tenants on the basis of possible assistance if there is no chance it will come, Community Housing Improvement Program Executive Director Jay Martin said in a statement.

“ERAP without funding is just pedaling false hope to renters. It is clear that it will not be fully funded, so the only reasonable thing to do is shut down the portal,” he wrote in an email. “The next step is for everyone who wants better housing to work together to implement policies that will actually help renters, like the Housing Access Voucher Program."

The number of applications for ERAP have dwindled during 2022, but thousands of New Yorkers are still applying, an OTDA spokesperson told Bisnow.

The agency declined to comment on Gunn's affidavit, but said it received more than 24,300 applications for rental assistance during the 28 days immediately following Kotler’s injunction. It has received 50% fewer, just over 11,700, during the most recent four weeks, the agency said.

New York City's eviction numbers are still below their pre-pandemic levels, unlike the vast majority of jurisdictions tracked by the Eviction Lab, Bisnow previously reported.

The city's newly available right to counsel, mandating that anyone facing eviction in housing court in the five boroughs has legal representation, has kept its eviction numbers down, Eviction Lab’s Hepburn said. But they are still likely to rise with the end of ERAP.

“Data from the census poll survey suggests that a larger-than-normal fraction of households are still either behind on rent or are struggling to keep rent paid,” Hepburn said. “I think it's difficult to assess the sort of long-term impacts that will have on housing markets, too, if landlords aren't able to get paid for back rent through that program, and what that does to their bottom line.”

The program has helped landlords make ends meet, but any owner who was going to sink under the costs of maintaining their properties during the pandemic has likely already done so, Riegel said, and those remaining are unlikely to be reliant on an extension of ERAP.

“It was something,” said Lincoln Eccles, a landlord with 11 rent-stabilized and three market-rate units in Crown Heights. But receiving 12 months rent when a tenant owes 18 months only goes so far. “It helped, but it didn't make me whole.”