As #CancelRent Movement Gains Steam, Landlords Warn About ‘Chaotic’ Impact
New York’s residential and commercial landlords are bracing for a nail-biting April, and a slew of new policies floated across all levels of government are only adding to their anxieties.
Senate Deputy Majority Leader Michael Gianaris introduced a bill last week that would suspend rent for commercial and residential tenants for three months if the pandemic has affected their incomes. The bill, S8125, would mean residential or small-business commercial tenants would never be required to pay the rent that was waived. Anyone who “faces a financial hardship” as a result of that unpaid rent will receive forgiveness on mortgage payments for 90 days, according to the draft legislation.
Over the weekend, the plan garnered national attention, with presidential hopeful Sen. Bernie Sanders tweeting his support of the plan, calling for a “moratorium on rent payments." The bill, which has more than 20 co-sponsors, would go hand in hand with a statewide ban on evictions for unpaid rent amid the pandemic.
Along with pausing mortgage payments, evictions, and utility shutoffs, we must place a moratorium on rent payments, especially in states hardest-hit by the coronavirus like New York. We must build on the important work @sengianaris and others are doing to make this happen. https://t.co/FKDbZYk4Pp
— Bernie Sanders (@BernieSanders) March 28, 2020
Meanwhile, Mayor Bill de Blasio has called on the Rent Guidelines Board to freeze any raises on rent-stabilized units in the city. Manhattan Borough President Gale Brewer, Brooklyn Borough President Eric Adams and city council members have suggested a plan that would allow some renters to use security deposits to tide them over for April.
Landlords, uncertain of how April will play out, are worrying the proposed legislation in New York will embolden those who haven't been affected by the crisis to skip rent. Though the legislation refers to rent forgiveness, some real estate players say any shortage of cash will put them in a precarious position in paying staff, taxes and utilities.
"There are all these other costs that have to be paid,” said Taconic co-founder Charles Bendit, who owns thousands of rental units in the city. “If no one pays rent ... I don’t know where we come up with the money.”
Bendit said he wants to keep working with state officials to create a plan, but noted landlords are already prevented from enacting evictions for unpaid rent right now.
“We are compassionate,” he said. "We understand this is a time of extreme stress and anxiety. We want to do whatever we can to minimize the anxiety. But by the same token, we need to provide a safe place for renters to live."
New York is facing the worst of the pandemic that has swept across the United States. More than 1,200 people have died from COVID-19 in the state and in excess of 9,000 people have been hospitalized. Across the nation, more than 3 million people applied for unemployment last week.
“Under the leadership of Governor Cuomo, New York is doing an excellent job of managing this crisis, but the devastation caused by coronavirus will be far-reaching and long-lasting,” Gianaris said in a release announcing the bill March 19. “We must stay on top of the fast-changing consequences of our efforts to contain the virus, and the millions of tenants in our state cannot be left behind. Suspending rents is a critically important step to help New Yorkers survive this unprecedentedly difficult time.”
Gianaris' office didn't respond to Bisnow's requests for comment Monday.
Landlord group Community Housing Improvement Program, known as CHIP, wants the government to provide emergency vouchers to renters who need relief, rather than opting for a rent suspension.
“We believe the devil is in the details of this bill. As it is crafted, we don’t believe it would provide relief to residential landlords — which is something the senator has claimed,” CHIP Communications Director Michael Johnson said.
He said the eligibility for the suspension is based on income loss, and therefore sets a “low bar." The group wants to see some sort of means test to establish eligibility.
“We want to give renters help ... [but] we’re concerned that everyone will think ‘We’re in an emergency and no one has to pay rent,’” he said. “If they do that, it will create a chaotic situation.”
Johnson said the group remains concerned that while the bill promises to provide mortgage relief, there are questions as to whether the state could actually force banks to comply.
“If you look at the details of this bill it doesn't make sense,” he said. “We think there are big enough loopholes [for banks] to drive a truck through.”
