By Emma Whitford

Law360 (April 5, 2021, 4:32 PM EDT) -- New York State legislators are near finalizing a program to disburse more than $2 billion in federal rent relief funds with one year of protections against rent hikes and certain evictions as a condition for taking the money, according to legislators familiar with the negotiations.

Likely called the Covid-19 Emergency Rental Assistance Program, or CERAP, it will include $2.35 billion set aside in two federal stimulus bills, signed in December and March. State legislators are also considering including $100 million in state funds in the program for tenants and landlords who do not meet federal qualifications for relief.

The U.S. Department of the Treasury's guidance for eligibility states that tenants must make no more than 80% of the area median income in order to qualify for relief. In New York City, that's $81,920 for a three-person family. Tenants must also demonstrate pandemic-related financial hardship and housing instability.

In New York, the state Senate and Assembly and Gov. Andrew Cuomo's office have been negotiating how to get the money distributed efficiently and what additional conditions participating landlords might have to agree to.

Stanley Davis, a spokesperson for Sen. Brian Kavanagh, a Democrat who heads the Senate Housing Committee, told Law360 Monday that "the senator will refrain from commenting until negotiations are finalized."

Gov. Andrew Cuomo's counsel Beth Garvey told Law360 Monday afternoon "we are finalizing the language on rent relief," adding that "we think this is a very generous program." 

State Assemblymember Harvey Epstein, a Democrat who represents parts of Manhattan, reviewed bill summary text obtained by Law360 Monday and said it tracked with his understanding of what the program currently looks like, though the bill had not been printed as of Monday morning.

A state senator also confirmed the summary language on background, declining to comment on the record citing directives from body leadership. The language was circulated on Friday, they said.

"This is a done deal," the senator added. "This is exactly what we expect to see as soon as the bill is printed and we vote on the final budget."

Under the near-finalized deal, a qualifying tenant or landlord could apply to CERAP to cover up to a year of past rent stretching back to mid-March 2020 and up to three months of future rent, according to the summary.

Likely conditions on the landlord's participation include not raising rent for one year as well as a one-year protection against no-cause evictions. Participating landlords would still be able to pursue eviction for nonpayment of rent or nuisance behavior, the summary said.

"It's not like [tenants] get another year for free. They are paying the rent, and if they are a nuisance, they can be evicted," Epstein said.

Tenants would be able to apply individually, and landlords could apply on behalf of their tenants with written consent. Awarded funds would be paid directly to the landlord.

Whether tenants will be able to receive the funds directly without landlord contact or cooperation has been a "sticking point" with Gov. Andrew Cuomo, who has opposed direct payment to tenants, according to Epstein.

An option being considered for tenants whose landlords don't cooperate is the state holding funds "in reserve" for the tenant for 180 days, the summary said. If their landlord tries to evict them in that period, the tenant could use the reserve fund as a defense in housing court.

Garvey, Cuomo's counsel, told Law360 Monday that "we are ... building in protections to ensure that for landlords that do not participate, that the tenants are nonetheless protected if they were eligible and had funds allocated to them under the program."

The Legislature is also considering putting $100 million in state funds toward tenants who make between 80% to 120% of the area median income, as well as landlords whose tenants moved out in the past year.

For context, the state Senate's initial budget proposal included $400 million for tenants who make more than 80% of the median income.

CERAP is being finalized amid prolonged state budget negotiations, stretching several days beyond the April 1 budget deadline.

It is likely to include major lobbying priorities that tenant and landlord groups agree on. For example, tenants will likely be able to apply regardless of immigration status and will likely be able to attest to their financial hardship without lots of paperwork to back it up.

"My message for undocumented New Yorkers is this is a program they should be applying for," Epstein told Law360 Monday morning.

Calls for self-attestation and clear language welcoming undocumented New Yorkers intensified after a smaller 2020 rent relief program distributed less than half of its allotted $100 million. That program, which was criticized for demanding too much paperwork, closed to new applicants in February.

Representatives for Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins, both Democrats, did not immediately reply to requests for comment Monday.

CERAP will be administered by the state's Office of Temporary and Disability Assistance, according to the summary reviewed by Law360. It will prioritize tenants who make 50% or less of the area median income and those who have been unemployed for 90 days prior to applying.

Other priority categories include veterans, victims of domestic abuse and human trafficking, landlords who own 20 or fewer units, mobile home park residents, and tenants with pending eviction cases.

Eviction cases for nonpayment of rent, lease violations and expired leases will be stayed while applications for rent relief are being processed, the summary said.

The impending rent relief deal comes after months of mounting stress among tenants and landlords. A September U.S. Census survey estimated that New York's statewide rent shortfall could be at least $2.5 billion as of January. Meanwhile, statewide protections against most evictions are currently poised to expire on May 1.

"We either have to extend the moratorium or get this running quickly," Epstein said.

Cea Weaver, an organizer with the statewide tenant coalition Housing Justice For All, told Law360 Monday that while aspects of the program are promising, she's concerned about its execution.

"I think that the final bill reflects a lot of the things we've been fighting for for over a year, especially that it's explicit that undocumented people have access to this and [there is] certainly a nod to longer-term eviction protections," she said. "I am incredibly skeptical and concerned about the implementation of the program and hope that it works." 

James Whelan, president of the Real Estate Board of New York, called for swift action in a statement to Law360. 

"It is now critically important that the funds are distributed as quickly and effectively as possible," he said. "REBNY stands ready to be a partner in outreach to tenant households and property owners alike." 

--Editing by Philip Shea.

Update: This story has been updated with comments from tenant and landlord groups. 

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