Millions in state rental cash for NYC remains unspent since 2020, outraging advocates (Exclusive)

At least $68 million in state rental assistance intended for New York City languished unspent for months despite demands from Mayor Adams that the state and federal government cough up more cash to help with the city’s migrant crisis, the Daily News has learned.

The funds dispersed through New York State’s Rental Supplement Program were only approved for use Friday after The News began inquiring about it and after months of back and forth between the state and city.

“It’s the third year of this program, and they haven’t spent a dime of it,” said Judith Goldiner, attorney-in-charge of the Legal Aid Society’s Civil Law Reform Unit. “It’s completely disgraceful that the city and the state are sitting on money that could be used to move homeless families out of shelter immediately.”

According to Goldiner, the state set aside $100 million per year for the last three years to be spent under the Rental Supplement Program. State records obtained by the Daily News support that assertion.

The money is distributed to various localities throughout the state and much of it can be used to assist undocumented immigrants and the homeless, according to state records.

State records also show that at least one of the annual city earmarks comes in at nearly 68%.

According to officials with the state’s Office of Temporary and Disability Assistance, which administers the program, that first $68 million allocation has been the subject of delay for months because the city’s plan omitted annual cost projections and would have run afoul of state regulations.

Anthony Farmer, a spokesman for the state’s Office of Temporary and Disability Assistance, said Friday afternoon that the agency received an updated submission from the city tied to the $68 million rental supplement money “hours ago” — a day after The News inquired with the mayor’s office about the delay.

Hours later, Farmer said the state had approved the city’s plan, thus unlocking the $68 million in rental supplement cash.

Separately, cash allotments for subsequent years still haven’t been approved because a portion of the cash is required to go toward housing subsidies known as state FHEPS vouchers due to a change in state law in 2022. Unlike cash allocated through the Rental Supplement Program, those vouchers cannot be applied to undocumented immigrants due to federal restrictions.

The holdup there stems from the city not fully calculating the reimbursement expenses it’s owed for those vouchers, state officials said.

Jonah Allon, a spokesman for Mayor Adams, pointed to state “divestment” as the reason for the hold up and honed in on the fact that the city will now only receive one RSP allotment that isn’t tied to voucher reimbursements.

“The money was initially intended to support vouchers for undocumented New Yorkers, but was diverted to fund the higher costs of state FHEPS, meaning that no funding is available for RSP after the first year,” he said. “This severely impacts New York City’s ability to use this funding for New Yorkers who are not eligible for other subsidies, including undocumented New Yorkers.”

Right now, nearly 60,000 migrants remain in the city’s care and, as of Wednesday, nearly 83,000 people are being housed in city homeless shelters. So far, just over 101,000 migrants have come to the city since the spring of 2022.

For months, Mayor Adams has called on both the state and federal government to step up assistance to the city, demanding the feds expedite work permits for migrants and the state implement a decompression strategy that spreads the burden to other localities.

Last week Adams stepped up his calls on Gov. Hochul to do more to address the situation. Just days after Hochul announced the state would be putting an additional $20 million toward the case management of migrants’ asylum claims and social services needs, the city said in state court that it needs $37 million more from the Hochul administration to foot the entire bill.

Adams, who has projected that the city’s cost for the migrant crisis could reach $12 billion by 2025, also urged Hochul to use her power to get other local governments throughout the state to pitch in, saying she can tap her executive powers to override county-level orders used to block the movement of migrants and that the right-to-shelter law that applies to the city should be applied evenly to other local governments throughout the state.

But advocates like Goldiner and Christine Quinn, who heads the homeless service nonprofit Win, pointed out that the city should have been working more diligently to get additional state funding for rental assistance.

Quinn said she began asking about the unused funding months ago.

“They have to implement that plan, and they have to do it quickly,” she said. “Why do they have to do it quickly? Because we’re begging for money in Washington — as we should — but if we have millions of unspent dollars, Washington is not going to give us more money. The mayor is right when he calls on Washington to give us more money, but we have to have our house in fiscal order, and we don’t.”

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Goldiner told The News that Legal Aid has been pressuring the city “for a very long time because this money has just been sitting there and they’re not using it.”

“The whole thing is crazy,” she continued. “It’s another example of how both the city and the state don’t seem to feel the urgency we all feel about what’s going on, and they can’t make something happen in a remotely timely way.”

According to state records, money from the state rental supplement program had been allocated to localities other than New York City prior to Friday. Erie County, where Hochul hails from, has received $3.8 million in rent assistance funding through the program, Nassau County has received $2 million and Suffolk has gotten $2.6 million.

City Councilwoman Diana Ayala, who heads the Council’s General Welfare Committee, said it “makes absolutely no sense” that the city still hasn’t received its share.

“Right now, we’re just maintaining. We’re not moving,” she said. “This money, if it’s there, could help.”

Murad Awawdeh, executive director of the New York Immigration Coalition, described the delays as emblematic of the Adams administration’s failure to focus more energy on getting asylum seekers and homeless New Yorkers into permanent housing.

“The Adams administration has fought this idea at every turn, and is instead opening more and more expensive emergency shelters,” he said. “If there is funding that is being left on the table by the Adams administration, they need to immediately fix that.”