The head of the firm running New York’s Emergency Rental Assistance Program touted the company’s earnings as the program struggled to distribute aid to vulnerable renters and ran out of funds.
Video obtained by The Washington Post of a November presentation by Guidehouse CEO Scott McIntyre shows him celebrating the consulting firm earning $115 million in fees from its contract with the state. He congratulated employees, saying the company made “38 percent margins” on the contract.
The state’s rollout of rent relief was one of the slowest in the nation and the program struggled from its debut. Eventually, the state was able to disperse $2.4 billion in aid, but payments didn’t start going out until August. The program ran out of funds in November and the portal was closed to most advocates, triggering a lawsuit filed last month by local tenant and housing advocates.
The system was plagued by technical glitches interfering with applications and payment processing. A spokesman for the Office of Temporary and Disability Assistance, which oversees the program, told the Post the chief executive’s comments were “beyond troubling,” given the initiative’s widespread issues.
“It is beyond troubling that a company partially responsible for recurring technical issues in the processing of applications and payments for New York’s Emergency Rental Assistance Program would allegedly boast of its success in profiting off the misfortune of tens of thousands of New Yorkers adversely affected by the pandemic,” spokesperson Justin Mason said.
Jay Martin, the executive director of landlord group Community Housing Improvement Program, posted a link to the story in a tweet, writing: “I am f*****g livid.”
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Guidehouse said in a statement to the Post the reference to “38 percent margins” didn’t mean the company made the figure in profits, but instead indicated “an internal management reporting metric.” A spokesperson for the company said profits were about 13-16 percent, in line with competitors. A former executive of the company who was at the meeting, however, told the Post he left with the impression the company made 38 percent on the contract.
In January 2021, the state received proposals from eight companies to manage the state’s federal fund pot, according to the Post. The state ultimately canceled the bidding process and awarded the contract to Guidehouse at the beginning of May, more than three months before the first payments were disbursed.
Guidehouse is seeking an extension of its contract with the state, which would pay the company another $30 million, according to the Post. That request is still pending.
Gov. Kathy Hochul closed New York’s rent relief portal late last month after exhausting most of its funding. A judge ruled earlier this month for the state to reopen the portal, giving renters a chance to secure eviction protections before the state’s eviction moratorium expired.
Hochul last week proposed $2 billion in pandemic relief as part of the state’s budget, which the legislature has until April 1 to sign off on.
[WaPo] — Holden Walter-Warner