NYC denying emergency rent loans with a flurry, even as evictions rise

New York City’s social services agency is rejecting tens of thousands of tenants who apply for emergency assistance loans to cover their back rent, even as evictions rise and the homeless shelter system is stretched to the brink, city records show.

During the first nine months of 2022, the city's Department of Social Services rejected two-thirds of the 50,585 applications it received for so-called “One-Shot Deal” payments to cover rent arrears, records show. That’s roughly double the rate at which the department rejected applications five years earlier, according to press reports.

For many in arrears, the emergency assistance program is a lender of last resort and a final opportunity for them to hang onto their homes after falling behind on payments, according to tenants, attorneys and DSS workers who spoke with Gothamist. The drop in approvals comes as landlords filed more than 178,000 eviction notices in New York City over the past 18 months and the city’s homeless shelter population surpassed 100,000 people.

Clients losing their apartments and going to stay at a shelter is something that the city doesn't want because it costs more to house people in shelters than it is to keep people in their current apartments and stabilized.

Denise Acron, Manhattan Legal Services

“Clients losing their apartments and going to stay at a shelter is something that the city doesn't want because it costs more to house people in shelters than it is to keep people in their current apartments and stabilized,” said Denise Acron, the head of government benefits at the organization Manhattan Legal Services.

The grants averaged around $4,300 in the 2022 fiscal year, according to DSS data. New Yorkers can apply for One-Shot Deals to cover a range of expenses, like storage fees, electric bills and moving costs along with back rent. Under state rules, most One-Shot Deal recipients must prove they can pay back at least some of the amount, usually in installments.

From January to September 2022, the Department of Social Services rejected 66% of applications specifically related to rent arrears, according to the city data, which was obtained through a Freedom of Information Law request by the organization Mobilization for Justice and shared with Gothamist.

New Yorkers applying for loans to cover other expenses, like storage fees, had better luck, with close to 9 in 10 applications approved. Overall, the agency rejected 56% of the 84,826 One-Shot Deal applications it received in the span.

During the 2018 and 2019 fiscal years, the city issued One-Shot Deals totaling about $260 million each year, DSS said. In the 2022 fiscal year, from July 2021 to June of last year, that total had dropped to around $100 million. At the time, tenants were able to apply for aid through the state’s Emergency Rental Assistance Program, or ERAP, which paid landlords on behalf of renters behind on payments.

New York state suspended evictions from mid-March 2020 to the beginning of 2022 and created the ERAP fund to pay out more than $3 billion to landlords whose tenants owed rent. After the state enacted ERAP in June 2021, the city stopped issuing One-Shot Deals to people who owed back rent unless they had applied for state aid and were found ineligible.

‘A way to keep moving forward’

Harlem renter Reyna Feliz is one of thousands of New Yorkers trying to receive a One-Shot Deal after she and her family fell behind on their rent and received an eviction notice from their landlord.

Feliz said she received a $7,000 One-Shot Deal several years ago that helped her cover her back rent and stay in the apartment she shares with her husband and four children. She said they were able to get back on track before missing payments again earlier this year.

She said the grants are a crucial tool for many families facing homelessness.

“I know a lot of people who have gotten the help and it has kept them from getting evicted and going to the streets or to go into shelters,” Feliz said. “It does help if you use it right and you're responsible and you use it as a way to keep moving forward.”

Trying to cut red tape

DSS spokesperson Neha Sharma said the agency is still committed to issuing the payments on behalf of households facing eviction. Sharma said DSS is unable to easily compare the current rejection rates to previous years, but acknowledged that officials denied more applications in the early months of 2022 because many applicants could still qualify for ERAP aid.

She pointed out that the rejection rate is based on the number of applications, not households, with many people applying multiple times and others failing to complete follow-up requirements.

“DSS-HRA continues to take significant steps to cut the red tape, relax eligibility criteria, and expand and strengthen access to city-funded rental assistance while also working to ensure that New Yorkers are aware of all social safety net resources available to them, including our comprehensive eviction-prevention supports,” Sharma said.

State rules that force applicants to prove their future ability to pay rent also contribute to the high denial rate. Unemployed New Yorkers may face rejection, for example.

The state’s Office of Temporary and Disability Assistance said the rule is intended to ensure people remain stably housed after their landlord receives the check, rather than falling right back into arrears and repeating the cycle. The agency said it has not received requests from New York City’s social services agency to change the policy.

A mounting caseload

One veteran DSS employee who processes applications said the “future ability to pay” rule does fuel rejections, but said a mounting caseload and a dwindling workforce are making things worse.

The worker, who asked to remain anonymous because she was not authorized to speak to the media and did not want to lose her job, said she is handling nearly twice as many applications as prior to the pandemic and has to close the cases out quickly without properly following up with applicants.

“When I was working before, I had a minimum of seven cases. Now I have 10, 11, 12, and sometimes I can't even get through them all in one day,” she said. “I do denials all day.”

Acron, the attorney from Manhattan Legal Services, has seen the denials first hand while working with tenants at a weekly clinic inside Manhattan Housing Court. On a Wednesday morning last month, a steady stream of tenants worked with staff there to complete their applications — often after being denied when they first tried to submit the materials on their own.

Acron said tenants who get help from an attorney or advocate are far more likely to receive the assistance.

“It's a real problem because if they were approved the very first time around they probably avoid the onerous process of coming to housing court and missing a full day at work or having to bring their kids down with them and go through this whole very excruciating and painful and a whole-day process,” she said.

Ava Ferenci, a senior staff attorney with Housing Conservation Coordinators, agreed with the assessment, adding that advocates can flag applications for their contacts at the social services agency: “One of the biggest changes I’ve been seeing is before the pandemic, it used to be that people could get One-Shot Deals by themselves,” Ferenci said. “Now they’re going nowhere and applications are on pause until an attorney steps in.”

A ‘confusing’ process

But applicants can fall through the cracks, she said. Thousands of renters are showing up to housing court without an attorney, despite a city law meant to guarantee every low-income tenant the right to a lawyer in eviction cases.

Most applicants must submit materials through an online portal with few opportunities to speak to a caseworker in person.

Tenants with mental illness, including residents of supportive housing, are at particular risk because they may struggle to navigate a daunting process, said Dinah Luck, a senior staff attorney with Mobilization for Justice. Supportive housing organizations say they file to evict tenants as a last resort option to bolster the case for a One-Shot Deal. But a rejection could leave the tenant out of options, Luck said.

“The process has always been confusing, but now it’s harder to navigate,” she said. “At some point, if you’re not going to get a One-Shot, you’re going to get evicted.”