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Race Against The Moratorium: Pressure Mounts To Get Relief Out To Renters, Landlords

New York’s multibillion-dollar rent relief program aimed at restabilizing renters and landlords affected by the coronavirus pandemic is closing in on its fourth week.

But with over 90,000 applicants so far and lingering complaints of a burdensome application process, there are fears the program isn’t running smoothly enough to prevent a myriad of social and economic problems as rules forbidding evictions reach their end date.

New York City

“We're in a race against the eviction moratorium,” said Jessica Katz, the executive director of the Citizens Housing Planning Council, a nonprofit that examines housing policy in the city. “The eviction moratorium is an incredibly important public health tool, but it's not going to get us very far if, at the end of the eviction moratorium, everybody is still in arrears and everybody gets evicted.”

Katz said the moratorium should buy time to allow the people to access offerings like the state’s Emergency Rental Assistance Program, which was launched on June 1.

Her concern, however, is that the program is not designed to move as rapidly as it should. The city’s housing ecosystem, she said, depends on funds getting out quickly.

“We're trying to reset to a more typical housing market, but we can't do that without a really robust rental subsidy program,” said Katz, formerly the associate commissioner for new construction for the New York City Department of Housing Preservation and Development.

This week, the federal ban on residential evictions, which had been due to end June 30, was extended for another month, but officials with the Centers for Disease Control and Prevention said it would be the final extension. Lawmakers had urged the agency and President Joe Biden to make the extension, saying there are some 6 million renters at risk of eviction right now — largely located in areas with lower vaccination rates.

In New York, a statewide ban is in place through to Aug. 31, with lawmakers taking the view that barring evictions would allow time for relief programs to ramp up. But since its launch on June 1, the $2.4B program has met with a wave of criticism for being too hard to access.

“Hopefully, within a certain period of time, they will approve those applications, and then the funds will start to flow, and as a result, we will get those monies and tenants’ rental arrears will be wiped off our ledger,” Nelson Management President Robert Nelson said.

The funding pays for as much as a year of unpaid rent and three months of future rent payments for eligible tenants. Landlords and tenants alike can apply — the program doesn't mandate that landlords accept the money, but those who do take the funds can't evict the qualifying tenant for 12 months, except in some circumstances.

While landlords can start the application process, tenants have to sign an online application, per The New York Times, and an application cannot be saved and edited later, which has caused headaches for renters.

So far, more than 100,000 completed applications have been submitted, Anthony Farmer, the director of public information at the Office of Temporary and Disability Assistance, told Bisnow in an email.

The office expects that cases will be processed between four and seven weeks from the date of submission, though that time frame may vary "based upon the completeness of the application, by both the tenant and landlord, and all the correct documentation being submitted."

Jessica Katz

Katz had hoped the state would take a similar approach to the federal government's measures with stimulus checks, which moved quickly to get the funds out to the community. By contrast, she said, this program has enormous administrative burdens.

"It's going to screen out the most vulnerable people rather than supporting them to get the help that they need," she said. 

Lemor Development Group Managing Member Kenneth Morrison said he has heard anecdotally it could be around 90 days until he can access funds, though he said he hasn't heard that from the state. His firm owns 1,000 market-rate and affordable units in Harlem and the Bronx, and he said he estimates 10% of the portfolio is significantly in rental arrears.

As soon as the program launched, he said he began reaching out to tenants and working to get applications lodged. In the past few days, tenants have told him they’ve been receiving contact from the state for further documentation.

“Some of these renters, being three, four or five months behind — and some even further than that — there's no way for them to pay if this program doesn't pay for them,” he said.

He said he doesn't expect housing court judges will lean toward granting evictions, even if the eviction moratorium does lift at the end of August.

“Judges and courts are just going to give folks time to pay it, so I think you're just prolonging the problem,” he said.

Lemor Development Group's Kenneth Morrison

However, landlord group the Rent Stabilization Association is continuing to try and have the ban on evictions overturned by the courts, arguing in a motion before the 2nd Circuit Court of Appeals that measures of the earliest days of the coronavirus pandemic should no longer apply, Law360 reports.

RSA Executive Vice President Frank Ricci said that, even without a pandemic, there are tenants in the city for whom the fear of an eviction suit is the main motivating factor to get their rent paid. Trying to end the moratorium earlier than August, he said, is worth the effort because it would allow landlords to at least have cases heard once again.

“There are tenants there who are taking advantage of the system, they're taking advantage of the moratorium, and they have the wherewithal and the means to pay the rent, yet they're not paying the rent,” Ricci told Bisnow.

He said he believes lifting the moratorium would actually help the rent relief program, as those who do have the means to pay would withdraw their applications, easing the burden on the system.

Without the ability to start court proceedings against tenants, he said, landlords have no ability to weed out those who are falsely claiming to be unable to pay their rent — lessening the support they can give to those who are really facing hardship. He noted evictions in New York take months and would likely take years with the current court backlog. Most eviction cases settle as a result, he added.

The National Multifamily Housing Council has a similar take, saying the current moratorium at a federal level is no longer helpful, and the focus should now be getting the $46.5B in rental aid approved by Congress into the hands of the people who need it rather than holding up evictions.

Ricci said he has anecdotal evidence there are some renters abusing the system.

“A lot of our owners are small owners. They know their tenants. They see them go out to work each day. There are tenants who are actually working out of their homes so that they didn't lose their jobs,” Ricci said, adding that many members are reporting difficulties applying for support. “There are tenants getting plenty of relief, yet they choose not to pay their rent, because they don't have to.”

Nelson, whose company owns thousands of New York apartments, said he believes the cooperation that the state's relief program required between tenants and landlords is an obstacle. 

“There are probably, you know, a lot of tenants out there that, from a psychological standpoint, don't want to be helping landlords,” he said.

From an administrative point of view, he said filing the applications has become easier in recent weeks. His company has submitted close to 100 applications for rent relief and is continuing to contact tenants about providing information or making applications.

“I'm hoping 100% of my tenants take advantage of this free money. I'm hoping that I don't have to evict anyone," he said. "At a certain point, I think that we have to go back to normal and be able to protect our rights as property owners in court.”