Landlords brace for rent day massacre

Braced for a deluge of rent defaults some 25,000 New York City landlords are asking Mayor Bill de Blasio for payment forgiveness on property tax assessments, water and sewer bills as COVID-19 closes the city.

The plea came as the mayor made his own call to the state for a rent freeze for the city’s 1.1 million stabilized apartments for the year.

“Albany lawmakers are pushing for 90-day rent forgiveness for residential and commercial tenants – and on top of all this, the mayor and many state legislators are now calling for an automatic one-year rent freeze on all rent-stabilized apartments in lieu of this year’s RGB deliberations,” said Rent Stabilization Association president Joseph Strasburg and chairman Aaron Sirulnick in a joint statement.

“Freezing and suspending rents cuts off the only source of income that landlords have for paying their property taxes and water bills, and operating their buildings. They are being asked to operate like it’s business as usual – oh yeah, but there’s this health crisis and we’re cutting off your income because tenants need financial relief.”

Sirulnick said the plight of real estate owners is being overlooked by elected officials looking to provide desperate businesses with some guidance and relief.

“You would never see this in food and drug retail because supermarkets and pharmacies would go belly-up,” he said. “Rent freezes and rent forgiveness means buildings will go belly up – and with them the city’s rental housing. That’s an abyss from which there will be no recovery.

“Landlords are small businesses that provide an essential service,” Sirulnick added. “They need a lifeline like everyone else during this crisis. All rent-assistance programs must provide immediate relief to both tenants and landlords.”

Each year, the city’s Rent Guidelines Board would vote in June on what rent increases regulated tenants will get for one and two-year leases. But on Friday, Mayor Bill de Blasio said he would work with the state to suspend that process.

“We are in the midst of a crisis only comparable to the Great Depression,” the mayor said. “The people of our city are struggling and a rent freeze is the lifeline so many will need this year to stay above water.”

With rents due tomorrow (Wednesday) a bill sponsored by Brooklyn and Manhattan Borough Presidents Eric Adams and Gale Brewer may be gaining traction.

The so-called People’s Choice bill would allow NYC landlords to offer every renter the option of applying their cash security deposit directly towards next April’s rent.

That would ensure landlords do not fall behind on any of their liabilities.
Renters who opt-in would be able replace their cash deposit with low-cost insurance.

To date, Governor Andrew Cuomo has refused to budge on the issue of rent, saying his previously announced eviction ban is “the fundamental answer that solves,” the problem.

“It’s not that you won’t owe rent at one time, because you signed a contract, and even the people to whom you pay the rent have to pay the
rent and they have expenses,” Cuomo said.

Posted by Real Estate Weekly

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