$2B in Hochul budget could fund rent relief

Relief needs approval by the state legislature and would take months

From left: Kathy Hochul, governor of New York; Robert Mujica, director of the budget for New York State (Getty Images, iStock/Illustration by Steven Dilakian for The Real Deal)
From left: Kathy Hochul, governor of New York; Robert Mujica, director of the budget for New York State (Getty Images, iStock/Illustration by Steven Dilakian for The Real Deal)

Gov. Kathy Hochul dangled a bone in front of rent-starved landlords Tuesday, proposing a budget including $2 billion in pandemic relief — money that could fund the tapped-out emergency rental assistance program.

“I’ll work with the legislature to identify the most impactful use of these funds in the short term, whether that’s for struggling, small landlords and their tenants, or the hardest-hurt industries and workers,” Hochul said.

State Budget Director Robert Mujica confirmed that the money could go toward the rent-aid program, which relied on federal funds that ran out.

“Those monies are available for coronavirus relief efforts or spending. ERAP is one of those things,” Mujica said. “There is nothing that would preclude the use of those funds for the ERAP program.”

Rental owners could certainly use the money: $2 billion is what the Community Housing Improvement Program, a landlord group, estimated to be the statewide need.

“Gov. Kathy Hochul clearly gets it,” said Jay Martin, executive director of CHIP. “Now, the state legislature has to follow her lead.”

“If they don’t, renters in arrears will be put at risk of losing their homes. And those renters should blame the state legislature if that happens,” Martin said. All 213 Senate and Assembly seats are up for election this year.

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The legislature has until April 1 to sign off on a budget. The timeline forces owners and renters to endure for three more months, plus however long it takes the state to distribute funds if they are included in the spending plan. Doling out approved funding has been a problem for the state in the past.

The wait would leave both groups vulnerable. Owners, some of whom have gone two years without seeing the rent, must continue to cover bills and maintenance. And tenants who have not availed themselves of eviction protections could lose their homes before new aid arrives.

The budget director said the decision to put the $2 billion toward ERAP needs to be discussed with the Legislature. He added, “ERAP is a federal program and there are federal resources that are available for this.”

But if federal funds are coming down the pike, they are probably just as far off as the budget vote.

ERAP ran through nearly all of its money by November, at which time Gov. Hochul shut the portal to most applicants. Last week, a judge ordered the state to reopen it to allow tenants access to the eviction protection a pending application provides.

Hochul has twice asked the federal government for more money. The Treasury Department recently approved only another $27 million, a sliver of the $1 billion Hochul had requested. Hochul tried again last week, noting in her letter to Treasury Secretary Janet Yellen that funds should be reallocated by March 31.

Landlords who are owed rent could roll the dice and wait for aid or take tenants to housing court. The eviction moratorium expired Saturday, giving landlords of tenants who did not apply for aid some leverage to recoup arrears.

However, the court system is backlogged, meaning court-mandated repayment could take a while. And renters still have protection from the Tenant Safe Harbor Act: Tenants who couldn’t pay rent because of a pandemic-related hardship can use that as a defense against eviction. Owners still have the opportunity to seek a non-possessory judgment for repayment.