NY offers $125M to landlords, first come, first serve

Against a background of harsh criticism for the slow and confusing start to New York’s Emergency Rental Assistance Program (ERAP) that was set up to cover back rent owed by tenants to landlords during the Covid crisis, Gov. Kathy Hochul on Thursday announced that funding is being made available to help landlords. The money is in the new Landlord Rental Assistance Program (LRAP).

ERAP requires that tenants apply before landlords are put in line to receive funds. In many cases, tenants have failed to apply to the program or skipped out with unpaid rent bills leaving landlords with mounting losses. Without a tenant application, a landlord is not eligible to collect money from the federally-funded ERAP.

Hochul said $125 million from the state’s new assistance program is now available to help landlords that found themselves locked out of ERAP.

Applications for LRAP were being accepted as of Oct. 7. The new program provides up to 12 months of past-due rent to landlords who are ineligible for ERAP because their tenants either declined to complete an application or skipped out.

Priority is given to those landlords owning a building with 20 or fewer units and who apply within the first 45 days of the program’s opening date. Even with that priority, the assistance is being described as first come, first serve. It is specifically designated for arrears accumulated after the onset of the Covid-19 pandemic in March 2020.

State Sen. Brian Kavanagh, a Democrat who represents lower Manhattan and part of Brooklyn, heads the Senate Housing Committee and sponsored the bill that authorized the new funding.

“The new state funding to pay rent arrears that are ineligible to be paid under our federally funded ERAP program demonstrates our commitment to a truly comprehensive approach,” Kavanagh said. “It’s especially important that property owners whose tenants may have left their apartments after months of not being able to pay their rent will now be eligible for payments, ensuring that unpaid rent debts from this period will not continue to burden either the landlord or the tenant.”

Last month, Hochul signed into law an extension of the moratorium on residential evictions through Jan. 15, 2022.

In a Sept. 21 letter to U.S. Secretary of the Treasury Janet Yellen that was obtained by the Business Journal, Hochul asked for additional federal money for ERAP.

She said that the state continues to receive more than 9,000 applications a month for ERAP and has paid more than $517 million to help cover rent owed by more than 40,000 households. She said that the state has obligations to pay an additional $1 billion under ERAP.