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‘A Complete Disaster’: Cuomo Overhauls Rent Relief System After Tenants and Landlords Left Hanging

Gov. Andrew Cuomo speaks about the need to increase vaccination rates during a press conference at Yankee Stadium on Monday, July 26, 2021.
Gov. Andrew Cuomo speaks at a Bronx news conference Monday.
Ben Fractenberg/THE CITY

The state’s badly needed $2.7 billion pandemic rent relief program has given out less than $1 million and approved fewer than 5,000 applications — forcing Gov. Andrew Cuomo Monday to announce an overhaul.

The latest changes to the program came after Sen. Chuck Schumer (D-New York) blasted the state’s failure to release money with the pandemic-spurred eviction moratorium set to expire Aug. 31.

“Tenant relief now. No more delay,” Schumer, the Senate majority leader, declared Sunday at a news conference attended by some families needing assistance.

Mass evictions could send countless New Yorkers into a spiral in the wake of the human and financial toll wrought by the pandemic. Billions in unpaid rent, bankruptcies by landlords and a wave of evictions also would pose enormous risks for the city’s economic recovery, which remains far weaker than most other major cities’, with an unemployment rate far higher than the national average.

Cuomo attempted to deflect some of the heat by announcing that, effective Tuesday, he would implement new procedures to relax documentation standards for tenants and landlords, and launch a streamlined process for submission of missing information for owners of multiple buildings. Specific details, however, were not released.

The governor also contended that the company hired to create the applications, Illinois-based Guidehouse, had assigned 1,000 people to process New York claims and that the state was recruiting 350 volunteers from state agencies to assist the Office of Temporary and Disability Assistance with getting the money to approved applicants.

Guidehouse had received a $115 million no-bid contract to run the program.

Crucial Deadline Looms

The numbers released Monday show the extent of the program’s problems.

Cuomo said that $700,000 has been sent to landlords in recent days on top of $117,000 paid to owners last week in what his administration called a test of the system.

By comparison, according to a U.S. Treasury report of spending through May, Virginia had disbursed over $155 million and Texas $450 million.

New York State officials said they had “reviewed and verified’’ 4,828 cases and pledged landlords would receive the money by Aug. 2. The state received 100,000 applications in June, when the system opened, and another 60,000 since.

“It’s a complete disaster,” said Joseph Strasburg, president of the Rent Stabilization Association.

A bedsheet hung in Crown Heights, Brooklyn speaks to tough economic times during the coronavirus outbreak, May 29, 2020.
A bedsheet hung in Crown Heights, Brooklyn, during the height of the pandemic.
Hiram Alejandro Durán/THE CITY

The landlords’ group had urged the state Legislature to approve a rent relief program shortly after passage of the Biden federal aid bill that provided the bulk of the money, to keep documentation to a minimum and consider using systems other states had developed.

All the suggestions were brushed aside by lawmakers and the Cuomo administration, which sealed the rent relief deal in April.

Despite Cuomo’s announcement, tenant advocates insisted more needs to be done as many residents struggled to deal with applications.

“It is good news that additional resources will be targeted at processing applications and sending out approvals,” said Ellen Davidson, a staff attorney in the law-reform unit of The Legal Aid Society. “However, we hope that those resources will also go to repairing the glitchy website and simplifying the application process.”

The governor promised that all applications would be processed by Aug. 31 — a crucial date since the state’s residential eviction moratorium is scheduled to end then. Tenants with approved applications are protected against eviction for a year.

“The process should have been streamlined from the beginning, but later is better than never,” said Michael Johnson, a spokesperson for the Community Housing Improvement Program, which represents mostly small and mid-sized landlords with rent-regulated units. “Thousands of renters and housing providers need this money to be distributed immediately, and we sincerely hope these changes get that done.”

Full Debt Unknown

No one knows how much money is owed, leaving it unclear whether the $2.7 billion earmarked for New York will be enough. One estimate by National Equity Atlas, a research group associated with the University of Southern California, says 830,000 households in the New York State are in arrears on their rent for a total of $3.2 billion.

It also isn’t known how much damage has been done to landlord finances. But an earnings report from a bank with big portfolios of apartment residential loans suggest the hit has been severe. M&T Bank earlier this month said its total of loans more than 90 days past due had reached $535 million, four times the figure before the pandemic.

The Cuomo administration previously botched a much smaller effort at the end of 2020 when it implemented such strict guidelines that less than half of the $100 million provided reached tenants.

If such a scenario is repeated, warns Strasburg, other states will begin lobbying the federal government to divert the money to states that have been able to get the cash out the door.

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