New York to stop accepting applications for rental aid

New York state said Friday that it would stop taking most requests for its pandemic rent relief for struggling tenants because an overwhelming number of applicants had left the program nearly out of money. The huge demand for aid underscores the severe economic pain inflicted by the coronavirus outbreak.

Since the $2.4 billion program started this summer, the state has received nearly 280,000 applications for help paying overdue rent and utility bills.

As of this week, New York had paid out $1 billion — nearly 85% in cases involving New York City renters — with another $1.1 billion committed to be given out but where more paperwork was needed from landlords.

There were an estimated 100,000 additional applications pending. State officials said that without more money from the federal government, 70,000-80,000 of those applicants could remain in limbo.

Officials said the application window would close at 10 p.m. Sunday across the state except in a few smaller counties, like Dutchess and Oneida counties, which had not yet exhausted their pool of funds.

The development was a striking reversal from this summer, when the state was among the slowest nationwide at distributing its share of rental assistance and when the application process was rife with glitches.

New York did not issue a single payment until August, one of the last states in the country to do so, but is now among the fastest, as several other states have continued to lag.

The development also reflected the severity of the economic crisis in New York, which has more renters than any other state. Even before the pandemic, more than one-quarter of the state’s households spent more than half their income on rent and some utilities.

Congress approved $46.5 billion in federal pandemic aid for rental assistance, an enormous infusion of money to help struggling renters, but it has not been enough for the most populous states, especially California, New Jersey and New York.

Last week, Texas also said it would not accept new applications after the number of requests exceeded the rent relief available.

The developments in Texas and New York come as the federal government is poised to consider whether to redistribute rent relief from states that do not need it or did not use it to states with greater need. Some housing groups have urged the U.S. Treasury Department, which distributed the aid, to redirect unused assistance from smaller states.

On Friday, Gov. Kathy Hochul said she had asked the federal government for almost $1 billion in additional funding for rent relief.