Lost and found, eventually: Hempstead's $4.7M in federal rent relief

The U.S. Department of the Treasury announced in May 2021 that the Town of Hempstead would receive a final batch of $22.72 million in pandemic rent relief funds.

A year later, Hempstead spokesman Greg Blower said the town had exhausted all of this aid — which he put at $18 million. 

For two weeks, the town didn't acknowledge the other $4.72 million, despite Newsday asking about the additional money and forwarding Blower an email from a U.S. Treasury official confirming the town's $22.72 million allocation. Hempstead is now seeking the $4.72 million and guidance on how to use it, Blower said.

The confusion about Hempstead's rent relief allotment caps off a program impaired by inadequate public outreach, poor communication and puzzling design, community advocates said. 

The town and the Long Island Housing Partnership — a private nonprofit that was contracted by the town to administer the aid — have fallen short of federal spending targets, which might prompt the Treasury to take back funds. LIHP has approved and earmarked a significant share of Hempstead's relief funds, but less than half  of the money has been sent out to landlords, according to Treasury data. 

"The town is not effectively managing this," said Luis Mendez, founding member of Empowering Young Professionals, a networking and mentoring group for minority youth based in Hempstead. "They’re not living up to their responsibility."

Even after acknowledging the additional $4.72 million, Hempstead hasn't clarified whether the money will go toward pending relief requests or if applications will be reopened. When asked, Blower said Hempstead lacked information about the "high need" portion of its allocation — funds the federal government issued to communities with many low-income renters in addition to the assistance doled out by population size.  Blower said the town wasn't notified about the $4.72 million despite it being included in a 2021 allocation announcement from Treasury and appearing in the last four monthly data reports published by Treasury.

"The Town requests aid from US Treasury Department for the [Emergency Rental Assistance] program and, thereafter, is officially notified of monies allocated to the Town …  The Town does not make any funding presumptions prior to being officially notified of the allocations," Blower wrote in an email last month. "The Treasury Department has not provided guidance concerning the Treasury definition of 'high-need allocation'  and the specific tenant eligibility requirements … When the Town receives the official federal guidance, determinations will be made." 

Sarah Gallagher has been tracking rent relief distribution across the United States for the National Low Income Housing Coalition, a nonprofit promoting equitable affordable housing policies, and said she hasn't heard of other governments that were confused by their "high-need" funding. Hempstead Town doesn't need additional guidance from Treasury on this money because it has the same rules as the rest of the rent relief, Gallagher said.

"I've not heard folks bring this up as a point of confusion," said Gallagher, senior project director for the coalition's End Rental Arrears to Stop Evictions Project. "This is a new one."

The town didn't comment further when asked about the accounting issue. 

The Treasury press office didn't respond to a request for comment.

Washington offers assistance 

In late 2020, Congress approved the first of two Emergency Rental Assistance funds — money that state and local governments can put toward rent and utility bills for low-income tenants who suffered financially during the pandemic. Hempstead received $22.75 million in the first round of assistance and $22.72 million in the second for a total of $45.47 million, Treasury records show. All but three Long Island localities — the towns of Hempstead, Oyster Bay and Islip — had New York State distribute their aid, which is typically sent directly to landlords and utility companies. 

Under Treasury spending targets, localities should have paid out at least 60% of their first batch of funds by the end of March 2022. (Federal spending goals exclude the 10% to 15% of money localities can spend —  on administrative expenses, such as running public information campaigns and contracting nonprofits to assist with applications.) Hempstead has obligated or committed all $20.47 million of its allocation not reserved for administrative expenses, but had sent out just 34.95% of it, according to Blower and Treasury data current through the end of March.

Most governments are performing better. Just 33 of 405 governments included in Treasury's latest data report had used a smaller share of their aid than Hempstead. The states and localities around the United States spent a median of 77.74% of their direct assistance funds, according to the March Treasury report, the most recent one available.

Localities have until Sept. 30, 2025, to spend their second round of aid. To guide their progress, Treasury created an expenditure formula, which notes that 20% of direct assistance funds should have been spent by the end of March. At that point, Hempstead had obligated all of the $18 million it was aware of in that round, according to Blower. But the town had distributed just 4.77% of the assistance, Treasury data shows.

If governments don't hit the targets, they risk having a portion of the unspent money clawed back. The department previously clawed back about $730,000 from Oyster Bay. 

Hempstead is unlikely to lose funding, but the disparity between how much the town is obligating versus issuing in payments is concerning, Gallagher said. 

Funds held up in Hempstead 

Delays put renters in a tough position, community advocates say. Quickly getting the money out could help tenants fighting evictions, said William Bailey, who organizes tenants in the Village of Hempstead for the nonprofit New York Communities for Change.

"They could avoid [getting kicked out] — or even just going to court," Bailey said. "They think Hempstead doesn't care."

He and Mendez said too many people were unaware of the assistance. When they learned about it, some became discouraged or confused when they logged onto LIHP's website and read  that the program was closed, Bailey said. LIHP routinely opened and closed its application portal because doing so helped staff organize and prioritize applicants by need, the nonprofit has said. But LIHP's website didn't explain that the program was expected to resume taking applications, Bailey said.

"We have not seen, heard, witnessed or even thought that the town was running a program that could help folks," Mendez, former deputy director of the Nassau County Office of Minority Affairs, said of publicity efforts in Latino communities. "I would question the town's capacity in minority communities."

LIHP signed two contracts with the town to administer rent relief "from initial outreach, to applicant qualification, to final award," according to documents received through a Freedom of Information Law request. The organization is slated to receive $3.69 million, and the town plans to pay itself a total of $1.28 million for overseeing the rent relief program in Hempstead, contract documents show.

LIHP defended its administration of the aid, which it said has provided housing stability for hundreds. The Emergency Rental Assistance program is a complex, first-of-its-kind program, which required LIHP to establish and troubleshoot a system for distributing the aid, LIHP senior vice president and general counsel Jill Rosen-Nikoloff said in an email.

"This program is working very well and has already had a tremendous beneficial impact on the lives of hundreds of residents, notwithstanding the magnitude of the need, the lack of clear regulatory guidance, ever-changing federal regulatory interpretation, and a lack of a safe-harbor for nonprofits and government agencies responsible for the program," Rosen-Nikoloff said.  

By Sarina Trangle

sarina.trangle@newsday.com@SarinaTrangle

Sarina Trangle covers affordability and cost of living issues and other business topics. She previously worked as an editor and reporter at amNewYork.