OTDA to Begin Processing Additional ERAP Applications

On July 21, the State Office of Temporary and Disability Assistance (OTDA) announced that it is “actively reviewing and processing eligible Emergency Rental Assistance Program (ERAP) applications submitted through June 30, 2022.” This announcement came about because the 2022–23 state budget includes additional funds to support the ERAP program.

According to the latest data from OTDA, 344,957 applications have been filed as of July 21. And the state has paid 176,118 of them with total assistance obligated and/or paid at $2.8 billion. By November 2021, Governor Kathy Hochul had shut down the ERAP program since the $2.4 billion that was originally allocated for the program was exhausted. At the time, only 60 percent of applicants had been approved. However, weeks later a judge ordered New York to reopen the portal, reasoning that the state’s eviction moratorium was set to expire Jan. 15 and the federal government would soon replenish the program with unspent funds from other states.

Since the application portal reopened, the program has been allocated funding twice. In mid-March, the U.S. Treasury Department said it would send New York another $119 million. This is a small fraction of the estimated $2 billion that owners were still owed. At the time, Governor Hochul had asked for $1.6 billion. And the next month, New York set aside about $800 million in the state budget for ERAP. Shortly thereafter, OTDA announced that this cash would allow them to process additional rent relief applications.

However, New York could receive more federal funding due to reallocation of federal emergency rental assistance funds that hadn’t been paid out by states as of March 31, 2022. The Treasury Department has reported that states had earmarked or distributed over $30 billion of the $46 billion pot, leaving around $15 billion to redistribute to states in need. But it is still unknown how much or when New York will get the funds.

ERAP and Rent-Stabilized Units

It’s important to note that for rent-stabilized units receiving ERAP assistance, lawful rent increases are allowed to be preserved in the lease, but landlords must follow ERAP guidelines and agree to not increase the monthly rental amount above the monthly amount due at the time of application for ERAP assistance for months for which the rental assistance is received and for one year from receipt of the ERAP payment.

The DHCR is advising owners to send a letter to the tenant at the time ERAP payments begin and attach an explanatory rider at the time of the lease renewal. The rider should clarify that a lower rent is being charged pursuant to an ERAP directive and that the higher legal rent cannot be collected during the period of the ERAP rent freeze. The higher legal rent that was in the lease can be collected only when the ERAP rent freeze expires. It’s unlawful for an owner to demand arrears from the tenant, in a lump sum or in any other manner, for the difference between the higher legal rent and the lower rent for the period that the ERAP rent freeze was in effect.