Storm Recovery Agency Improperly Revoked Rehab Funds Issued to Landlord

In January 2014, landlord applied to the New York Rising Housing Recovery Program for funds to rehabilitate and elevate a rental property in Long Beach, NY, and to repair damage caused by Superstorm Sandy. The program was administered by the Housing Trust Fund Corp. (HTFC) through the Governor's Office of Storm Recovery (GOSR). The program awarded landlord $183,032, much of which was paid out between March 2015 and December 2018. HTFC then advised landlord that he was ineligible to receive grant funds because he "failed to notify the Program that relocation was required" for his tenants for a year in 2015 due to program-funded activity and that landlord didn't permit his tenants to return to the rental property after completion of a program-funded project. Landlord's appeal was denied and he was directed to return all funds received from the program. 

Landlord then filed an Article 78 court appeal of the GOSR's ruling. The court ruled for landlord and annulled the determination, finding that the tenants weren't displaced from the rental property as a result of any program-related activity, and that the tenants left of their own volition and had no intent to return post-construction.

The HTFC and GOSR appealed and lost. The Appellate Court found that the agencies' decision was arbitrary, capricious, and lacked a rational basis. The tenants voluntarily ended their tenancy for personal reasons unrelated to any rehabilitation or repair work. 

Matter of Ridler v. Housing Trust Fund Corp.: Case No. 2023-00503, Index No. 620938/21, 2025 NY Slip Op 02785 (App. Div. 2; 5/7/25; Dillon, JP, Miller, Voutsinas, Ventura, JJ)