(iStock.com/peterspiro)
The state will continue to accept applications beyond Jan. 15 "if new state or federal funding becomes available that is sufficient to fund the projected costs after January 15, 2023," according to the proposed stipulation and order.
The injunction that has kept the portal open this year will lift on Jan. 15, according to the agreement. The state will give five-day written notice of any closure to the plaintiffs.
Counsel for the tenants initially said that they did not believe closing the portal was justified. But Edward Josephson of the Legal Aid Society made a different assessment in comments this week.
"At this point, having gone over the figures in the state's papers, it really does not look like there's a realistic chance that federal money will cover applications past January, so we thought at this point it would make sense to settle the case," Josephson said.
If more funding materializes "by some happy chance," the state will likely reopen the portal, he added. And if not, "we'll take legal action at that point."
In a statement, the Office of Temporary and Disability Assistance said it plans to close the application portal "on or after January 15" barring any "substantial infusion of new federal funding," with the possibility to reopen at a later date.
"OTDA is pleased that the Emergency Rental Assistance Program has provided welcome relief to tens of thousands of tenants in need throughout New York State," the agency said.
When it launched in June 2021, ERAP had more than $2 billion at its disposal to pay landlords whose tenants fell behind on rent during the coronavirus pandemic.
To date, the state says that it has issued 213,079 payments to landlords valued collectively at $2.68 billion. Since the portal reopened in January, the program has received an additional $334 million from the U.S. Treasury Department, as well as $800 million from the state.
New York recently requested an additional $1.02 billion from the Treasury, on Nov. 4, court records show. Based on prior reallocations, OTDA predicted it could receive between $52 million and $77 million in response.
Even if New York does receive $77 million, the state claimed, it would still face a deficit of $217 million and growing.
Wednesday's settlement eliminates a major lingering pandemic-era eviction defense. Currently, tenants who apply for rental assistance generally see a pause in any pending eviction case.
According to the Legal Aid Society, 136,607 people have been able to apply for ERAP since the portal reopened this year. The figure includes applications that have been fulfilled and remain pending, Josephson said.
"I would say that on the whole the lawsuit certainly served its purpose," he added. "As a result of the portal staying open ... tenants were able to go through the ERAP process without facing eviction."
Tenants whose applications remain pending when the portal closes can still benefit from a stay in their eviction case, according to the state.
Law360 has reported on instances where judges moved to lift such stays in the past year, including in cases where the tenant was being sued for a lease violation rather than missed rent.
Among those ERAP applicants who have yet to be served are residents of public and subsidized housing, who are allocated to the back of the line under state law. The state had more than 58,000 such applications as of last month, according to court filings.
The closing of the portal may benefit some New York City Housing Authority residents, if not all, Josephson predicted, since "as long as it's open more unsubsidized tenants will get in line in front of them."
"The state and city need to put their heads together to figure out how to prevent the eviction of people who aren't covered by ERAP," Josephson added. For example, he said, New York City's Human Resources Administration may need to step up with its alternative rental assistance options.
Cynthia Tibbs, tenant association president at the West Side Urban Renewal Brownstones, a cluster of NYCHA buildings on Manhattan's Upper West Side, told Law360 on Wednesday that closing the portal may make sense, but that she and her neighbors need more information before they can feel at ease.
"Is NYCHA going to eat it and wipe the slate clean, or are the rents going to be paid by the government? You have to give ... a definitive answer, and no one has a definitive answer," Tibbs said. "I hear it all the time — 'I have no idea what's happening with ERAP.' It's the big question of the day."
Mobilization for Justice senior staff attorney Amanda O'Keefe, who represents tenants facing eviction in the Bronx, said the news that the portal could soon close is concerning, but not entirely surprising.
"I don't think we had a whole lot of faith that the funding would be able to support all the pending applications right now, and a lot of us have been looking into alternatives because of that," she said. "But at the same time it also concerns me that there are people … who are still waiting for assistance, and what happens if they don't get it?"
The plaintiffs are represented by Edward Josephson, Ellen Davidson and Alex MacDougall of the Legal Aid Society.
The Office of Temporary and Disability Assistance is represented by Noam Lerer and Celina Rogers of the Office of the New York State Attorney General.
The case is Maria Hidalgo et al. v. New York State Office of Temporary and Disability Assistance, case number 453931/2021, in the Supreme Court of the State of New York, County of New York.
--Editing by Alyssa Miller.
Update: This story has been updated with comment from the Office of Temporary and Disability Assistance.