NJ continues to pay lease reductions after the moratorium expires

Photo credit: Anthony Crider via FlickrProtest against rent increase, January 2021

The New Jersey Department of Community Affairs says it has so far distributed around $ 1.2 billion to help people unable to pay rent due to COVID-19 and to help landlords reduce their rental income since the beginning of the pandemic in March 2020.

The first $ 91.75 million funding tranche was paid out in full last year after Congress passed the CARES bill, said Lisa Ryan, a spokeswoman for the DCA. Since then, it has disbursed 65% of a second tranche of federal funds totaling $ 353 million under the Treasury Department’s Emergency Rental Assistance Program (ERAP). The funds distributed from this program on Tuesday totaled around $ 232 million and went to 26,000 households, Ryan said.

Another $ 272 million from the same treasury program will be distributed when the first phase is spent, she said.

In addition, the DCA is responsible for distributing an additional $ 500 million in federal funds approved by a new state law (S-3691). The measure suspends the state moratorium on evictions for non-payment of rent during the pandemic, helps landlords and prevents tenants from being evicted for unpaid rent arrears.

The $ 500 million will be used for an eviction prevention program launched on Tuesday. The money will prioritize future rent for low, middle, and middle income renters for up to two years. Since it is aimed at meeting future needs, the money will not be spent immediately, Ryan said.

Landlords suffer just like tenants

DCA’s breakdown of rent reduction spending follows attacks by the New Jersey Apartment Association, which accused the agency of helping landlords get back months of unpaid rent that would normally have allowed them to evict tenants. The association estimates that landlords have owed around $ 2.3 billion in rents since the pandemic began.

The trading group’s executive director, David Brogan, said it was misleading for the DCA to claim that it paid out 65% of the $ 353 million tranche of federal funds because it actually spent a much smaller proportion of the total rental facilities that it provided it is responsible for the distribution.

He said landlords were treated unfairly during the pandemic because they were expected to house non-payers for free and couldn’t evict those renters since Governor Phil Murphy issued an order in March 2020 banning evictions during the pandemic. The moratorium applies to low-income tenants until the end of 2021.

“A government-ordered eviction moratorium has placed an unreasonable burden on private-sector landlords, and the government has done little to help,” Brogan said. “At the same time, the government has required these landlords to pay property tax in full and on time, otherwise they could lose their property. How is that fair? “

The rent subsidy approved so far is about half of what is owed to landlords, and what was distributed “didn’t come quickly enough,” he said.

However, DCA’s Ryan noted that New Jersey already met Treasury Department requirements on Tuesday to spend at least 65% of its initial ERAP funding allocation by Sept. 30, and ranks third in the country in the state’s monthly funding allocation .

DCA in position for additional funds

Meeting these Treasury Department requirements will enable the DCA to receive additional rent relief funds that would be reallocated from other states that do not meet the standard, she said.

However, she said the agency recognizes that many tenants are still in need and is therefore working on ways to expedite payment of the rent reduction by running daily applicant lotteries, twice-weekly checkups, and adopting Treasury Department guidelines for rapid distribution.

The DCA is also working with the court system to track tenants facing eviction lawsuits and reaching out to affected individuals via mail, email and phone, Ryan said.

“We know many New Jersey tenants need immediate help and are working continuously to expedite distribution,” she said.