By Dan Wiessner
ALBANY, New York (Reuters) - Thousands of formerly homeless New Yorkers will be cut off from rent subsidies of up to $1,000 a month under a ruling issued on Tuesday by the state's top court.
The rent subsidy program, launched in 2007, allowed tenants who were once homeless to receive housing assistance for up to two years if they met certain criteria, including working for at least 20 hours per week or receiving a fixed income benefit.
New York City killed the program last year, after losing funding from state and federal authorities, which each paid for a third of the cost.
The Legal Aid Society sued on behalf of tenants, arguing the city was obligated to pay their rent because they had been precluded from other housing options, including homeless shelters, by joining the program.
The Court of Appeals on Tuesday sided with New York City in a 4-3 ruling, allowing it to end the subsidies.
Legal Aid, which said termination of the program impacted about 15,000 people, said the city had entered into legal contracts with tenants. It cited letters the city sent to tenants stating the "program guarantees that the subsidy portion of the rent will be paid directly to the landlord for one year."
The city countered it never intended to enter into a contract with landlords or tenants, since it knew the program was susceptible to budget woes.
In its ruling, the Court of Appeals said obligating the city to pay the subsidies "can only discourage governmental bodies from enacting voluntary programs to help the needy."
The Legal Aid Society did not immediately return a request for comment.
Michael Cardozo, the chief lawyer for the City of New York, said in a statement, "We believe the Court reached the right decision under the law."
(Editing by Paul Thomasch and Gunna Dickson)