There is another pandemic-influenced disaster looming in New York. Proving that no good deed ever goes unpunished, Governor Andrew Cuomo’s protection of tenants from evictions is bankrupting landlords.
As renters struggle, thousands in New York City have not paid full rent for months. Others have simply pulled up stakes and fled the pandemic as well as New York’s rising crime and plunging quality of life.
At the vanguard of the renters’ exodus are young families leaving the Big Apple for the suburbs. The pandemic has motivated many parents with young children to seek cheaper rents and more spacious living quarters.
The pandemic has led many New York City residents to uproot their lives in search of more spacious living quarters or cheaper rent. City living with its crowded streets and packed crowds have given way to cabin fever and quarantine lockdowns.
So, landlords, with no income, are facing the country’s highest property bills. Their next nightmare could be tax-lien sales, where the city sells unpaid tax bills to collection agencies. Those predatory third parties can charge as much as 18 percent interest. Waves of foreclosures could follow as the New York state moratorium on tax-lien sales has expired. That puts both small landlords as well as homeowners in jeopardy.
The housing-market disaster of the 1980s could be repeated. Two years into Mayor Ed Koch’s term, New York landlords were unable to do the basic maintenance to keep their property in decent shape for new tenants. Abandoned and decaying buildings spread urban blight and the city had to take possession of vacant buildings, removing them from tax rolls and compounding the problem.
New York’s Rent Stabilization President made this dire prediction: “If the City Council doesn’t end tax liens…(the) housing crisis of the 1980s will pale in comparison.” No one will be spared. New York’s “property-tax base, the city’s top revenue producer, will come crumbling down.”
Landlords have tried to work with and make deals with stressed tenants. Many have offered concessions by reducing, forgoing and offering rent concessions. One SPONY.org survey showed that more relief for landlords is needed.
The most telling information from the survey was about “the struggles (landlords) are facing as small business leaders.” Again, in a system weighted against landlords, the liberal New York City Council passed city legislation limiting “without remedy, the ability for owners to request rental payments or pursue debts.”
Another telling comment was “I can’t get tenants to commit to lease renewals because they claim I can’t kick them out.”
Then there was this poignant complaint: “There is no support for small landlords who have to pay their mortgage and all the bills. I am concerned that if tenants stop paying, then I will lose my home which has all my retirement savings invested in it.”
One spokesperson for the New York State Homes & Community Renewal blamed the federal government.
“New York State, facing a $62 billion, four-year revenue loss due entirely to the pandemic, has been calling on the federal government to deliver funding to offset these losses and despite promises, they’ve done nothing. New Yorkers need the federal government to act responsibly and deliver the resources we need to support them.”
As the blame game continues and Nancy Pelosi’s political posturing over a new relief package persists, neither renters, landlords, nor strapped tax-and-spend New York politicians should expect another bailout anytime soon.