A growing number of New York City denials of emergency rental assistance have left tenants and landlords in a bind.

In the first nine months of 2022, the Department of Social Services rejected more than 51,000 applications for “one-off deal” program assistance, two-thirds of which were rejected, Gothamist said report. The program can provide loans for rent arrears, but recipients can also provide loans for storage fees, electricity and moving expenses; however, denial data is only for rent arrears requests, and most other requests are approved.

The rejection rate is roughly double what it was five years ago. It’s a tough pill to swallow for renters, who often resort to the program as a last resort. For fiscal year 2022, which ended at the end of last June, the average grant amount was $4,300.

For FY 2018 and FY 2019, approximately $260 million was approved each year. For FY 2022, that number has dropped all the way down to $100 million, though much of that likely has to do with tenants applying for the emergency rental assistance program. In most cases, one-time transactions are deferred to ERAP because ERAP is a state program.

The reasons for the surge in rejections are hard to pin down. One problem is that the program stipulates that borrowers have the ability to pay back rent in the future, even if installments are required. This could disqualify the unemployed because they cannot always demonstrate their ability to pay future expenses.

More pressing issues are staffing and application backlogs. Individual DSS staff are processing far more applications than before, forcing some to reject incomplete applications rather than attempt to follow up on applicants as time permits.

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Correlation is not causation, but evictions are on the rise as one-time transaction rent applications are rejected. Landlords have filed more than 178,000 evictions in the past 18 months. That number is higher than it has been since the start of the COVID-19 pandemic, when evictions were suspended, but still well below the level of eviction filings for all of 2019.

Just as a one-time deal is the last hope for renters, so it is for landlords, who are constantly fighting to be whole again. Late last year, Jay Martin, executive director of the landlord group Community Housing Improvement Program, recommended a one-time state funding for the city. According to one landlord, the best option is to sue.

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