Zheng v. City of New York

973 N.E.2d 711, 19 N.Y.3d 556
New York Court of Appeals·Decided June 26, 2012·Published·Cited by 15 cases

Opinions

OPINION OF THE COURT

Read, J.

Plaintiffs claim that the City of New York is contractually obligated to pay rent subsidies to their landlords under the Advantage New York program until expiration of their leases. State and federal reimbursement for two thirds of the Advantage program’s costs ended on April 1, 2011, causing the City to discontinue it as of that date. Both lower courts found that the City did not intend to enter into enforceable contracts with plaintiffs or their landlords under the Advantage program, and the record supports this affirmed finding of fact (see Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397, 400 [1977]). Accordingly, we affirm dismissal of the lawsuit.

The City created the Advantage rental assistance program in 2007 to help homeless single adults and families achieve independent living. The Advantage program replaced and was designed to fix unanticipated problems thought to compromise the effectiveness of a predecessor program called Housing Stability Plus (HSP). HSP provided a five-year rent subsidy that was reduced automatically each year by 20%. Participants in HSP were required to remain eligible for public assistance (PA) and to comply with all PA requirements. Two problems became apparent over time as a result. First, some tenants limited the hours they worked because a higher income would render them ineligible for PA and, consequently, the HSP rent supplement. Second, landlords grew reluctant to participate in this program because subsidies were cut off whenever a tenant’s PA case was sanctioned or closed, thus interrupting the flow of rental revenue.1 Under the Advantage program, by contrast, landlords were assured that changes in a tenant’s PA status would not disrupt payment of the rent subsidy over the course of the lease.

[560] There were various versions of the Advantage program, with differing eligibility requirements. For example, the program made rent subsidies payable to landlords for households where at least one adult worked 20 hours or more weekly at minimum wage or above (Work Advantage), received a fixed income benefit such as Supplemental Security Income or Social Security Disability Insurance (Fixed Income Advantage) or had an active case with the City’s Administration for Children’s Services while in shelter (Children Advantage). In general, the family or single adult had to have resided in shelter for a certain number of days, and have an active PA case and a gross household income not exceeding a specified percentage of the federal poverty level.

The Advantage program was carried out through a lease between landlord and tenant to which the City was not a party, and four documents drafted by the City: a certification letter, participant statement of understanding, landlord statement of understanding and lease rider. These four documents differed depending on the program type and participant (family or single adult), vintage or agency, but contained the same basic provisions. The Advantage program was approved by the State’s Office of Temporary and Disability Assistance (OTDA), as required by state regulation (see 18 NYCRR 352.3 [a] [3] [ii] [a social services district may, with OTDA’s prior approval, provide an additional shelter supplement for PA recipients to reside in private housing, provided OTDA “determines that there are sufficient funds available to provide such reimbursement ”]).

The City’s Department of Homeless Services (DHS) and Human Resources Administration (HRA) jointly administered the Advantage program. To begin with, the City provided eligible individuals or families with a certification letter on DHS or HRA letterhead, which was routinely signed by city workers from these agencies, sometimes by facsimile rather than original signature. Several versions of this letter included the following subject line in boldface type: “Re: Advantage Program (Guaranteed Rent Not Tied to [PA]).”

The certification letter generally informed recipients that they were “now eligible for the Advantage rental assistance program”; and set out the certification and expiration dates, the length of time that the certification would be valid, the total maximum rent allowed, the monthly tenant contribution (based on total gross household income as of the certification date) and the maximum subsidy amount. The letter also stated that “[t]he Advantage program guarantees that the subsidy portion of the [561] rent will be paid directly to your landlord for one year,” and that a “second year of rental assistance under Advantage” was available if the tenant met the eligibility criteria. Recipients were encouraged to show the letter to prospective landlords and brokers when searching for apartments.

At lease signing, the tenant subscribed a participant statement of understanding, which indicated that “[u]nder the Advantage Program, [the City] will pay a portion of my monthly rent (over and above [the tenant’s] monthly rent contribution) directly to my Landlord.” As a “condition” of “participation” in the program, the tenant made 22 “commitments,” which included understandings and agreements to file for work supports and tax credits, notify HRA of a change in address, seek appropriate services to maintain the tenancy, repay the security deposit and certain other payments if failing to move into the apartment after signing the lease, cooperate with the City in its administration of the program and take part in program surveys and publicity. The participant statement was signed by adult household members, who represented that they had “read and understood their] obligations under [the participant statement]”; and by a city case manager and/or housing specialist, who “confirm[ed] that all present adult household members have verbalized their understanding [of] the agreements outlined in this document, and that all adult household members have signed and received a copy of this agreement.”

Also at lease signing, the landlord (or an authorized representative) subscribed a landlord statement of understanding, which specified that the City “will issue” or “will pay” rent subsidies directly to the landlord on behalf of the tenant, who remained “responsible for paying directly to . . . the Landlord, a monthly rent contribution” in a specified amount “to cover the remaining portion of the rent under the Lease and Rider.” Further, as a “condition” to “participation” in the program, the landlord made 12 “commitments,” which included understandings and agreements not to charge an Advantage tenant “any amount” beyond the agreed-upon rent; and to offer the apartment at the same level of rent for a second year, pay for heat and water and, in the event an Advantage tenant vacated the premises “due to an eviction or move,” return any prepaid rent to the City or, at the City’s option, allow another program participant to reside in the apartment for the remainder of the lease’s term.

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Zheng v. City of New York, 973 N.E.2d 711, 19 N.Y.3d 556 (N.Y. 2012).

973 N.E.2d 711 (Zheng v. City of New York) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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