How Will NY Implement the Emergency Rental Assistance Program?
State lawmakers recently introduced a newly amended bill that’s intended to meet the federal requirements of the COVID-19 rent-relief measure enacted in December 2020. The federal rent relief package included $25 billion in emergency rental assistance. New York State is expected to receive at least about $1.3 billion.
The proposed program punts the notion of canceling rent and attempts to pair tenants and owners together with funds to keep at-risk tenants in their units, in effect protecting owners from losing their businesses. The emergency rental program is a short-term stopgap for both renters and owners, but questions remain on how effective the program will be considering the amount of debt accrued by New York City renters from missed rent payment during the pandemic.
The amended bill provides some details on how the state will distribute New York’s $1.3 billion in rent relief. The legislation, sponsored by Senator Brian Kavanagh and Assembly Member Steven Cymbrowitz, will roll over any unused funds from the state’s initial rent relief program. The bill currently resides in the Senate’s Housing, Construction, and Community Development Committee. If both houses of the state legislature pass the bill, and Governor Cuomo signs it into law, tenants and owners would be able to apply for funds beginning March 1, according to the bill [Section 605].
The proposed bill authorizes the commissioner the NYS Office of Temporary and Disability Assistance (OTDA) to implement standards for determining eligibility. Under the federal guidelines, households and individuals will need to show that their household income is below 80 percent of the area median income (AMI) and that at least one person in the household:
- Has qualified for unemployment benefits or can attest in writing that he or she has experienced a reduction in household income, incurred significant costs, or experienced other financial hardship due, directly or indirectly, to the pandemic; and
- Can show that he or she is at risk of eviction or housing instability.
Income determination will be based on either the household’s total income in 2020, or the monthly income the household is receiving at the time of application. If income determinations are made based on the applicant’s monthly income, the proposed bill says the household will be eligible for assistance for only the months the individual was financially affected by the pandemic.
Priority in processing. The proposed bill would let applicants jump further ahead in the line if they meet certain qualifications. The bill mandates the OTDA to establish preferences in processing applications. The following preferences are required at a minimum:
- Households whose income doesn’t exceed 50 percent of AMI; and
- Those who are unemployed and have been unemployed for 90 days.
The bill also says the commissioner may grant additional preferences for applicants:
- Whose household includes one or more individuals who are victims of domestic violence;
- Who apply jointly with their landlord; or
- Who have eviction cases that are pending on or before Feb. 1, 2021.
Section 605 of the amended bill details the program’s application process. The application would be available by March 1, 2021, both electronically and by phone, for a period of at least six months, unless funding runs out before then.
The OTDA Commissioner would designate nonprofit organizations to help households apply and may submit applications on behalf of tenants. And owners would be permitted to apply on behalf of their tenants. If the owner applies, the owner must:
- Obtain the signature of the tenant on the application;
- Provide the tenant with documentation of the application;
- Use any payments received to satisfy the tenant’s rental obligations to the owner; and
- Keep confidential any information or documentation from or about the tenant in keeping with the application process.
The bill directs the commissioner to establish procedures to provide documentation in support of their application. According to the bill, documentation may include but is not limited to:
- Signed lease;
- Paycheck stubs;
- Earning statements;
- Bank statements;
- Tax records;
- W-2 or 1099 forms;
- E-payment application transaction history;
- Written statements from a former or current employer;
- Telephone or in-person contact with a former or current employer; and
- Self-attestation by the applicant (used when applicant has no other documentation available).
Section 607 of the proposed bill restricts eviction proceedings against applicants for the program unless or until a determination of ineligibility is made. In other words, if eviction proceedings are started against a household that subsequently applies for benefits under this program, all proceedings for missed rent payments during the covered period would be paused until a determination of ineligibility is made.
Section 608 provides for up to 12 months of rental arrears and utility arrears to be paid for eligible applicants. It also permits up to three months of additional assistance to be paid for prospective rent or utility costs if there are funds available after initial applications for arrears have been processed and funded. The bill defines “rental arrears” to mean unpaid rent owed to the owner that accrued on or after March 13, 2020.
Payments for rental arrears or prospective rent would be the lesser of the monthly rent for the household or 150 percent of the fair market rent. Assistance would generally be paid directly to the owner and/or utility, though payments may be made directly to tenants if owners or utility providers are uncooperative or unresponsive.
By accepting payment for rental arrears, the owner agrees to waive any late fees on rental arrears, keep rent constant, and not seek to evict tenants for one year after the first payment is received.
Notice and Outreach
According to the bill, notice of the program must be given to tenants at various points. While applications are being accepted for assistance, notice must be given:
- When an eviction proceeding is filed;
- With any written demand for rent;
- With any other written notice required by the lease, law, or rule; and
- With any notice of petition served on a tenant.
Last, the DHCR will give notice of the program to all applicants for assistance who applied for assistance under the Emergency Rent Relief Act of 2020, the assistance program passed by state lawmakers last May for disbursing $100 million from the state’s CARES Act money to eligible renters.
The bill also sets priorities for outreach, including communities:
- With a median income of less than 80 percent of AMI;
- With the highest unemployment rates;
- That experienced the highest rates of COVID-19 infections; and
- To the extent practicable, with high rates of ownership of rental housing by small landlords.