More than 26 million Americans and 1.2 million New Yorkers have filed for unemployment since the Coronavirus lockdowns took effect last month. The effect on rentals was almost immediate: One estimate concluded 1/3 of tenants didn’t pay their April rent when it was due. Evictions are on hold in New York State until June 19, sparing renters the immediate fear of homelessness. Beyond that, things are uncertain for tenants, who face anxiety over their shelter, and landlords, who could take a financial bath without more government help.
Everything is a negotiation
Aside from the state moratorium on evictions, and a similar federal moratorium that applies to the estimated 28 percent of units that are federally financed, there’s been no specific response taken to address the issue of tenants unable to make rent. According to Kingston real estate broker Nan Potter, who manages around 15 commercial and residential properties, some tenants are paying their full rents, some are paying what they can, and some aren’t paying at all.
“All my landlords are working with the tenants to figure out what’s best on an individual basis,” said Potter. “What I’m finding is that everybody is impacted. There’s nobody that isn’t impacted.”
New Paltz Village Trustee Alexandria Wojcik, liaison to the Village of New Paltz Landlord-Tenant Relations Council, said she’s heard about tenants and landlords who’ve been able to come to an understanding and others who have not.
“There’s a big mix to be honest,” she said.
Wojcik said many renters who haven’t been able to pay 100 percent of their rent are concerned about what will happen when the eviction moratorium is lifted— either outright eviction or non-renewal of their lease. “A lot of people are freaked out about those down-the-road scenarios, while trying to make it work,” she said.
Virus-related issues for renters aren’t restricted to financial matters alone. Wojcik mentioned her own landlord, who was responsive to her concerns about disinfecting the shared spaces at the building where she lives. Another issue is turnover: Many leases in New Paltz end in June, which could mean searching for roommates or apartments, or allowing landlords to show one’s current apartment, all while residents are supposed to be staying at home and interacting as little as possible. “How do any of us find our next apartment without putting ourselves and other people at real risk?” asked Wojcik.
Solutions, targeted and otherwise
Some measures have already been taken to address the problem. On the landlord side, federal legislation allows borrowers who have suffered hardship to push their mortgage payments to the end of their terms, allowing them to go up to 90 days without paying. That program, administered through lenders, is going well, according to Potter. “Almost all the local banks were very agreeable to extend it,” she said. However, she pointed out that idea wouldn’t work well with renters because pushing several months’ worth of rent to the end of a year-long lease would still result in an expense most tenants couldn’t afford.
Expanded unemployment benefits are also helping. Federal legislation added $600 a week to the state benefits, which range from $104 to $504 depending on income. A huge increase in unemployment claims in mid- to late-March overwhelmed New York State’s system, but the state has hired hundreds of new workers and revamped its system to help process those claims, which are paid retroactively to when they were filed.
State Sen. Jennifer Metzger (D-42) said around 80 percent of the calls to her office have come from constituents having difficulty applying for unemployment. Though she’s heard less from tenants and landlords, “with so many people unemployed, you worry about housing insecurity.”
She mentioned two bills introduced by State Sen. Michael Gianaris (D-12); the first would have suspended rent payments for tenants whose incomes were affected by COVID-19 for 90 days, and a revised version introduced after the stimulus that would still require most affected tenants to pay rent, but cap it at 30 percent of their current income (which for many would be whatever their unemployment benefits are).
A similar bill by State Sen. Brian Kavanagh (D-26) would provide housing vouchers to make up the difference between 30 percent of a household’s income and actual rent. The Kingston Common Council passed a memorializing resolution in support of this last week.
Assembly Bill A10224A would suspend rents for affected tenants for 90 days. That bill, along with the earlier Gianaris bill, has the support of the New Paltz Village Board.
Metzger said the Senate, which was supposed to return to session on Monday, will be operating remotely in the near future. “I know that members of the State Senate are very concerned about housing insecurity and that this will be one of the top issues that we take up.”
But state action would depend on help from the federal government. New York’s revenues are falling and, as a state, it can’t run a deficit or print money.
“It comes down to funding,” said Metzger. “We need another more significant relief package.”
That relief would come in the form of unrestricted aid to state and local governments, said Metzger. This week, Congress is expected to pass legislation with $500 billion to help small businesses and hospitals, but significant aid to state and local governments will have to wait for the next round.
At the moment, there isn’t a lot of optimism.
Wojcik said she expected fewer tenants will be able to make rent in May than in April.
Potter, looking beyond the 90-day extent of most proposed legislation, sees lost income and difficulties for all involved.
“I just think everybody is going to be in a real crummy situation at the end,” she said.