By Emma Whitford

Law360 (April 1, 2021, 7:15 PM EDT) -- More than three months after the federal government allotted $25 billion in emergency pandemic rental assistance for tenants, New York, which received one of the largest tranches in the country at roughly $1.3 billion, has yet to launch its distribution program.

State legislators are in the midst of final negotiations this week as part of a larger budget deal, hashing out the details of a program that will allow tenants who meet federal income requirements — and their landlords — to apply for money to cover rent that went unpaid last year because of pandemic-related financial hardship.

Robert Mujica, Gov. Andrew Cuomo's budget director, called rent relief a "top priority" during a television appearance on NY1 this week.

But frustration is mounting among tenants and landlords alike in the wake of a smaller 2020 rent relief program that was criticized as overly complex and has distributed less than half of its allotted funds. That program closed to new applicants in February.

Some small landlords told Law360 that they've been waiting expectantly for the $1.3 billion sent to New York from the $25 billion Emergency Rental Assistance program approved in December under the Trump administration. Meanwhile, relationships with their tenants have been deteriorating, and the landlords are opposed to proposed conditions on the money that would not allow them to evict most tenants for a set period of time.

"If it's just getting relief to people … that's OK," said Joanna Wong, a Chinatown landlord and head of the group Small Property Owners of New York. "But I think what's happening is they are trying to add these strings attached, so it's adding more pushback."

Tenant groups, meanwhile, are urging legislators to put conditions on the funds such as multiyear restrictions on evictions and rent increases, and to forgive all pandemic-era debt that isn't covered by the program.

"People are going to get this money, it will clear the back rent, and then people will fall behind immediately again," predicted Cea Weaver, an organizer with the statewide tenant coalition Housing Justice for All. "So conditions to protect against evictions and rent increases going forward are really important."

A September U.S. Census survey estimated that New York's statewide rent shortfall could be at least $2.5 billion as of January. The state is expecting an additional $1 billion in federal rent relief allocated in the major pandemic relief bill President Joe Biden signed in March, likely bringing the total north of $2 billion.

Leadership in both the state Senate and Assembly have indicated they are in favor of a one-year rent freeze and pause on most evictions as a condition for accepting funds, while the Right to Counsel NYC Coalition and Housing Justice for All are demanding five years so long as tenants don't violate a lease term.

Landlords and tenants have found some areas of agreement when it comes to program design. For example, lobbyists for both groups say the program should not require tenants to provide paperwork to prove their eligibility — an issue renters ran into with the previous program — and support explicit language extending the relief to unauthorized immigrants.

Petra Benjamin, a tenant from Crown Heights who has been out of work as a babysitter since the pandemic hit, told Law360 she owes about $14,000 in back rent and is concerned about the impending expiration of statewide eviction protections on May 1.

"Right about now, all of my hair on my head is gray, because you don't know exactly what is going to happen and how we're going to pay the rent," she said. "Every month it keeps on going up."

Benjamin said she tried to apply to last year's program, but hit a roadblock when it came to paperwork.

"It was too much, because they are asking for so many things, and you try your best and still get turned down," she said.

The state "worked intensely for months to ensure rent-burdened households received the assistance for which they qualified," Division of Housing and Community Renewal spokesperson Brian Butry told Law360.

SPONY, the Real Estate Board of New York and nine other groups representing property owners wrote in a Wednesday letter to legislators that "a program that attaches onerous conditions, eligibility criteria, ramifications and restrictions … will only serve to reduce participation."

But unlike tenant groups, landlord groups count future eviction protections among these burdensome restrictions, saying in the letter that they would "over-complicate" the program.

Individual landlords also expressed skepticism. Angela Task, a Brooklyn landlord, said she's at her wits' end with a nonpaying tenant in her two-unit building, who she said runs up the water bill with an informal salon operating in the apartment.

"If I need to keep her for five years to get the money, I won't take the money," Task said.

State Sen. Brian Kavanagh, a Democrat and chair of the Senate housing committee, told Law360 that he "would not support anything that would prevent a landlord from proceeding with a case based on somebody creating a danger to other occupants."

But some landlords said they have little faith in the court process because many cases have been on hold for the past year.

"Courts are slow … so it's ineffective," said Roy Ho, founder of a group called NY Small Landlords.

Disagreements over anti-eviction conditions are indicative of a larger debate playing out nationally after the U.S. Department of the Treasury declined to address the issue in its eligibility requirements for the Trump administration's $25 billion pot of rent relief. Instead, the agency said renters must make no more than 80% of the median income in their region to qualify, which comes to $81,920 for a three-person family in New York City.

The federal guidance also says funds can cover up to 12 months of back rent and three months of future rent.

"It seems obvious that if our goal is to stabilize families who have just lived through this horrific crisis ... the federal government should have included eviction protections," said Amy Schur, campaign director of the Alliance of Californians for Community Empowerment.

California's program, which launched March 15, includes eviction protections until June. Lobbying for this took "time that would be much better spent helping tenants get access to these programs," Schur said.

As of Thursday, 31 states have launched a program to distribute their emergency federal funds, according to a database from the National Low Income Housing Coalition. In 40 states, there are at least city- or county-based programs.

Ellen Davidson, an attorney with the Legal Aid Society who has lobbied on behalf of tenants in New York, said part of the issue is that planning New York's program got lumped into the state budget process.

"As always, there are a million different things that come into making a budget," she said. It's "embarrassing that we live in a state that couldn't manage to get it up and running in three months. But I'd rather have a program that's going to work for the next six months than have it fail like the last one did. There's a tension there."

Gov. Cuomo's office and spokespersons for state Senate and Assembly leaders did not immediately reply to requests for comment Thursday. 

--Editing by Alanna Weissman.

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