The Ithaca Common Council passed a measure to cancel rent and prohibit evictions. It needs approval by the state Department of Health to be implemented.
“Cancel rent” campaign notches first victory, in Ithaca
Measure to forgive three months’ rent needs approval by the state’s Department of Health
Ithaca’s Common Council isn’t waiting for the state legislature to cancel rent for the town’s 7,500 renters — it is demanding that right from the Cuomo administration.
The measure, which passed by a 6-4 vote, was supported by the mayor, Svante Myrick, and tenant groups including Housing Justice for All. It calls for the municipality to seek permission from the state to cancel three months’ rent — with no means-testing required — and stop residential and some commercial evictions.
“We, the City of Ithaca, write to formally request the State Department of Health’s review of our city’s attached resolution to forgive the rent obligations of our residents,” the letter reads. “In light of these acute pains and the absence of comprehensive state or federal action, we declare our intent to use our own legislation to protect renters.”
If approved by the Department of Health, Ithaca would take a series of actions that read like a laundry list of landlord nightmares. The mayor would forgive three months’ rent for any resident, prohibit eviction of residential or small-business tenants, and “obligate” landlords to offer lease extensions at the current rent level.
The resolution does, however, call upon renters who are “financially stable” to continue paying rent, and urges a national rent and mortgage forgiveness fund for landlords.
The state’s Department of Health did not return a request for comment.
Tenants’ success in Ithaca — a liberal college town — comes as the campaign to cancel rent faces an uphill battle in areas of New York that are less progressive.
Last week, state legislators threw their support behind a bill to provide subsidize landlords whose tenants meet certain requirements, but some tenant groups criticized it as financially insufficient and unhelpful to tenants who cannot document income loss. The bill advanced in the state legislature last week — as the Assembly speaker steered it around opposition from the Assembly’s housing committee — but has not been signed by Gov. Andrew Cuomo.
The Ithaca measure more closely resembles legislation envisioned by tenant groups around the country who have called for rent to be canceled during the Covid-19 pandemic, as unemployment rates near Depression-era levels.
Ithaca is the first municipality to pass a measure to cancel rent on the premise that not doing so would endanger the health of its residents — skirting the need for legislative approval, or specific approval from Cuomo, who has not supported canceling rent.
Cuomo could intercede, however, to prevent the municipality from canceling rent. Earlier this week, the governor — who has been granted emergency powers to battle the pandemic — reminded New Yorkers that he can supersede virtually any elected official in New York, even Mayor Bill de Blasio, when he announced a New York City curfew on an upstate radio show.
Collections have been surprisingly strong through the pandemic, but there are troubling signs — for landlords and tenants alike.
Tenants Largely Stay Current on Rent, for Now
Collections have been surprisingly strong through the pandemic, but there are troubling signs — for landlords and tenants alike.
Since April, landlords have looked to the first of the month fearing that tenants will stop paying their rent. For the most part, that has not happened. Despite a 14.7 percent unemployment rate and millions of new jobless claims each week, collections at many buildings are only slightly below where they were last year, when the economy was booming.
How can this be? The answer is a little negotiation and a lot of government money. The $2 trillion CARES Act, which backstopped household finances with stimulus checks and extended unemployment benefits, has kept a surprising number of tenants current on their monthly balances. At the same time, many landlords have reduced rents or are forgiving overdue payments in full or in part.
The trend cannot continue without a swift and robust recovery, which is becoming increasingly unlikely, or without another big injection of government money, which Senate Republicans say is not happening anytime soon. American households were struggling with rent long before the economy went into free fall, and there are signs — from an increase in partial payments to surveys that show many tenants are putting rent on their credit cards and struggling to pay for essentials like food — that this pressure is building.
There are cracks under the surface.
Signs demanding rent relief hung from an apartment building in Washington in late May.Credit...Andrew Harnik/Associated Press
When the coronavirus outbreak started shutting down the economy in March, there was widespread fear that millions of tenants would fall behind on their monthly bills. Renters were already struggling with housing costs, with a quarter of tenant households paying more than half their before-tax income on rent and utilities, and the loss of jobs and hours seemed almost certain to worsen those troubles.
Much of the available data has told a different story. In April, the National Multifamily Housing Council started releasing weekly payment tallies covering about a quarter of the nation’s rental units, and aside from a substantial dip in the first week, the collection rates have been only slightly below where they were last year. Through May 20, landlords in the council's survey had received 90.8 percent of rents, compared with 93 percent a year earlier. A similar story has played out in state surveys and earnings reports from real estate investment trusts like Mid-America Apartment Company and Equity Residential.
But many of these numbers skew toward higher-end buildings. Other surveys show that buildings with poorer tenants have lower collection rates. Meantime, deferrals and partial payments appear to be increasing: Apartment List, a rental listing service, said 31 percent of respondents failed to make the full May payment on time, up from a quarter the month before. Hoping for a swift recovery, many landlords are telling tenants they can pay later, knowing this often won’t happen.
“Landlords and renters will share in the pain,” said John Pawlowski, an analyst with Green Street Advisors, a real estate research firm in Newport Beach, Calif. “We just don’t know what the sharing balance will look like.”
New Story, a San Francisco-based nonprofit organization that builds and finances affordable housing, recently raised $2 million to help renters struggling to make their bills because of coronavirus-related job losses. Alexandria Lafci, a founder of the organization and its chief operating officer, has spent the last few weeks calling landlords to haggle on behalf of tenants.
“I called 21 properties and got eight yeses with an average of 20 percent off,” she said. Only three landlords rejected any accommodation, with the rest agreeing to arrangements like lower payments for the next three months or shaving down past-due balances to give tenants a break without lowering their advertised rents. Smaller landlords and affordable housing are in trouble.
“Landlords and renters will share in the pain,” an analyst said, but it’s not clear in what measure.Credit...Tom Brenner/Reuters
Rental housing is a fragmented business, with purveyors ranging from publicly traded corporations that own tens of thousands of units to operators of only one or two. And falling rent collections are more likely to affect smaller landlords, who tend to have a limited financial cushion and less capacity to borrow.
These landlords play an important role in the housing system — especially for lower-income tenants. Individual investors own about half the supply of low-cost units, and many are what housing advocates call “naturally occurring affordable housing,” or homes and apartments that carry below-market rents even without a subsidy, according to the Joint Center for Housing Studies at Harvard. These units, which overwhelmingly consist of small apartment buildings and single-family homes, are also more likely to have tenants affected by the coronavirus, with more than half of renters in the hardest-hit occupations living in single-family homes and duplexes, according to the center.
Naturally occurring affordable housing is often overlooked, but these units are crucial. Government housing programs like Section 8 rental vouchers and the Low-Income Housing Tax Credit do not come close to satisfying the demand for lower-cost housing. This is why cities have yearslong lists for vouchers and lotteries for the tiny number of newly built subsidized units.
Getting such housing is laborious and invasive, and it leaves out workers like undocumented immigrants and families whose incomes put them just beyond the threshold to qualify. Naturally occurring affordable housing is in a sense more valuable, because it represents units that anyone — someone switching jobs or fleeing an abusive spouse, for instance — can find on Craigslist.
This housing can also be easily lost, not because it disappears, but because it is purchased by a homeowner or investor who renovates in hopes of increasing rents. This is what has happened over the last two decades: Since 2014, according to Harvard’s Joint Center, the nation has lost about 2.7 million affordable units, defined as those carrying rents less than $600.
Carline Chery, 50, owns three Boston duplexes. Two-bedroom units go for $1,800, more than what the lowest-income renters can pay but roughly $900 less than the typical rent in the metropolitan area, according to Zillow. Compared with a public company, Ms. Chery runs a shoestring operation, with no reserves and little capacity to absorb a missed month.
So when tenants in one of her buildings recently stopped paying, she borrowed from family members to make the mortgage payment, then put the building up for sale. The strongest interest has come not from another landlord, but a first-time home buyer.
“I cannot afford it anymore,” Ms. Chery said. Landlords and tenants both want more money.
Fearing a surge in homelessness, state and local governments spent March and April instituting triage measures, like bans on evictions and utility shut-offs, along with limited subsidies for struggling renters. The CARES Act also offered aid to public-housing providers and grants to state governments that could be used for rental assistance.
Since then, tenant activists have unified around a cry of #CancelRent, staging car rallies and roadside protests to demand that the government halt rent and mortgage payments — without the accrual of back payments — as long as the economy is battered by the coronavirus. Representative Ilhan Omar, Democrat of Minnesota, introduced a bill that roughly mirrors that desire.
Although the bill has little chance of passing, housing advocates and landlords’ groups have pressed for more direct help to renters. The CARES Act allotted $12 billion in housing grants to cities, homeless shelters, affordable-housing providers and states, but the money was largely directed to renters and landlords in public or subsidized housing. That leaves out most moderate- and low-income tenants who live in market-rate developments, and small landlords like Ms. Chery, whose loans are held by private lenders and not backed by the federal government.
The House of Representatives recently passed the $3 trillion HEROES Act, which in addition to more financial stimulus to households included $100 billion in rental subsidies for tenants affected by coronavirus-related job loss. That bill has no prospect of Senate approval, but landlord and tenant groups continue to push for expanded aid for tenants.
“Small landlords and renters depend on each other, and both need emergency assistance to stay afloat during this time,” said Diane Yentel, chief executive of the National Low Income Housing Coalition. “Without it, we will end this crisis having saddled low-income renters with more debt, and having lost more of our country’s critical housing stock.”
Roughly 80% of U.S. tenants paid rent so far in June, according to a survey by the National Multifamily Housing Council.
Nearly 80% of renters have made payments in June: report
A different picture may emerge when the federal government’s enhanced unemployment benefits come to an end in July
Rent collections continue to appear stronger than initially expected despite financial stress brought on by the coronavirus. Roughly 80 percent of residential tenants paid at least some rent during the first week of June.
That’s a slight increase from rent collections during the same period last month, according to the National Multifamily Housing Council, which tracks 11.5 million market-rate rental apartments.
The survey excludes subsidized units, single-family rentals, privatized military housing and student housing. That may explain why some reports, such as a New York City industry group’s own tally, have painted a significantly less-rosy picture of rent collections.
The Community Housing Improvement Program found that 25 percent of New York City renters had not made payments in May — and that figure grew by 10 percent at buildings where renters had gone on strike. At least 55 buildings were on rent strike in May, according to organizers.
Another snapshot of rent collections comes from community banks, which are active lenders on lower-income multifamily apartments in New York City. One community bank said during its first-quarter earnings call that April’s collections in rent-stabilized apartments were at half the normal levels, while market-rate apartments collected closer to 80 percent. Another community bank reported that while a significant portion of its portfolio was in deferral, rent collections in multifamily apartments were around 80 percent.
For now, residential rent collections are in a holding pattern, bolstered by enhanced employment benefits and one-time relief payments from the U.S. Treasury as part of the federal CARES Act. (Immigrants without work authorization and essential workers who are unemployed because they fear returning to work are not eligible for additional monthly unemployment payments.)
The Furman Center at New York University found that rent burdens were likely to stay manageable for those receiving enhanced unemployment, until those benefits run out in July.
Nearly 1 in 4 New York City rent-stabilized tenants haven’t paid rent in June so far, according to a Community Housing Improvement Program survey.
Nearly 1 in 4 New Yorkers skipped rent in June: survey
May saw similar figures, as relief measures for landlords and tenants have not been signed into law
Nearly 25 percent of New York City renters have yet to make rent payments in June, according to one industry group’s survey.
The rent collections tallied by the Community Housing Improvement Program — which represents the owners of 400,000 rent-stabilized units, or a slice of the city’s 3 million units — varied widely. For some landlords, the drop-off was particularly acute: Nearly a fifth of those surveyed reported rent collections less than 60 percent of normal.
CHIP, which represents smaller landlords, called for a “massive federally-funded bailout” for renters to mitigate the “devastating impact” of the rent shortfalls. Landlords were excluded from the $350 billion Paycheck Protection Program (though some found legal loopholes). The most direct form of rental assistance came in the form of a one-time $1,200 check from the federal government to individuals and enhanced unemployment benefits. On the state level, a rent assistance bill is waiting to be signed into law.
In the survey, 66 percent of commercial tenants paid no rent so far in June. Forty percent of respondents said they will struggle to pay their property taxes, and nearly 6 percent said they will not be able to make any property tax payments on July 1.
The group’s May survey showed similarly dismal rent collection numbers — and it remains unclear what those figures will look like once enhanced unemployment expires in July.
“It is clear that the economic impacts of the COVID-19 pandemic are nowhere near an end. There are thousands of tenants and building owners who need help now,” said Jay Martin, executive director of CHIP. “Renters need a massive federally-funded bailout or we will see families across our city suffer in unimaginable ways. State and City officials must also work with small building owners to relieve their crushing tax burden so they can have more flexibility to work with tenants that can’t make rent payments.”
City and state legislators have proposed — and even passed — measures to provide some relief to renters and landlords, but none have been signed into law. One bill intended to provide relief for landlords in New York City in the form of a property tax deferral was fast-tracked in the City Council — but critics say the measure would only kick the can down the road. And with reduced late fees piling up on deferred taxes, landlords may end up paying more to the city’s coffers in the form of late fees in exchange for the extra time.
Assessing residential rent payments during the pandemic has been difficult. Another industry group, the National Multifamily Housing Council, found that 89 percent of renters paid at least some rent in June so far in its most recent survey of 11.4 market-rate, professionally managed apartments — significantly more than CHIP’s survey.
Another factor in New York City is rent strikes, which Martin said are an ongoing issue, although the impact on rent collections is unclear.
The current rent crisis may be headed to a breaking point as a new report finds that 25 percent of city tenants haven't paid any rent since the coronavirus shutdown began in March.
Report: 25 percent of New York City tenants are not paying rent
25 percent of tenants in NYC have not paid rent since March
The current rent crisis may be headed to a breaking point as a new report finds that 25 percent of city tenants haven't paid any rent since the coronavirus shutdown began in March. NEW YORK - The coronavirus pandemic has caused untold economic hardships for millions of Americans, with people struggling to afford basic necessities, including rent.
Lena Melendez and her husband have been living in a rent-stabilized apartment in Washington Heights, but have not been able to pay rent since May.
“We only had one unemployment check to live on for months and we had to eat,” Melendez told FOX 5 NY.
The coronavirus pandemic has shut housing courts and prompted most states and federal authorities to initiate policies protecting renters from eviction. But not everyone is covered and a number of landlords -- some desperate to pay their mortgages themselves -- are turning to threats and harassment to force tenants out.
And they are not alone. According to Michael Johnson, Communications Director for the Community Housing Improvement Program, a group that represents mostly landlords of rent-stabilized buildings, nearly a quarter of renters haven’t paid rent since April.
“We are seeing about 20 percent of our members reporting that fewer than 60 percent of their tenants are paying,” Johnson said.
Johnson said that landlords have bills piling up and with little or no savings left, their livelihoods are at risk.“
We have owners that have owned buildings for two, three decades and this is the first time that they’re struggling to pay property taxes,” Johnson said.
According to Johnson, if owners are unable to pay those property taxes, they will put their buildings up for sale, which could be a breaking point for the rental market and for the economy of the city.
“If property tax payments come in at 10 percent below what was expected, we’re talking about billions of dollars that the city relies on for their budget,” Johnson said.
Johnson told FOX 5 NY that the federal government needs to step in to help both tenants and landlords to avert a major crisis.
National Multifamily Housing Conference survey finds 87.6 percent of tenants paid some rent through July 13.
Armageddon on hold: 88% of tenants paying rent
Survey of market-rate rentals comes as unemployment bonus nears end
Survey finds 87.6 percent of tenants paid some rent this month
With enhanced unemployment benefits set to expire this month, 87.6 percent of tenants paid some rent through July 13, according to a national survey of market-rate units.
The number of renters paying at least some of the month’s rent was only slightly lower than the 90.1 percent during the same period a year ago. It was also a bit shy of the month-ago figure, 89 percent.
The numbers suggest that actions by Congress and the Federal Reserve to inject trillions of dollars into Americans’ pockets has largely offset the effects of the pandemic on residential rent collection nationwide. However, the federal unemployment benefit supplement of $600 per week will end July 31 unless lawmakers vote to extend it.
The rent tracker, prepared by the National Multifamily Housing Council, surveys rental payments in 11.5 million market-rate, professionally managed apartments. The survey excludes low-income housing, subsidized units, single-family rentals, privatized military housing and student housing, where rent collection appears to have suffered more during the pandemic, according to industry reports.
Doug Bibby, the housing council’s president, wrote that the enhanced unemployment benefits that will expire at the end of this month have been crucial to allowing renters to pay their bills.
“If action isn’t taken now we risk making the nation’s housing affordability challenges far worse, rolling back the initial economic recovery and putting tens of millions at risk of greater health and financial distress,” said Bibby.
Since the beginning of the pandemic, more than one in four workers have applied for unemployment assistance. State benefits would continue.
In a weekly survey conducted by the U.S. Census, 12 percent of renters polled said they had no confidence in their ability to pay next month’s rent. Another 18 percent answered that they only had slight confidence.
According to RealPage, 77.4% of renters living in professionally-managed apartments in the U.S. made their rent payment as of July 6.
Fewer U.S. tenants paid July’s rent
Only 59.3% of New Yorkers paid rent by July 6
Multifamily housing saw fewer tenants making their rent payments for July as the COVID-19 pandemic worsened.
According to RealPage and the National Multifamily Housing Council‘s research, 77.4% of renters living in professionally-managed apartments in the U.S. made their rent payment as of July 6. This has ticked down slightly from a year ago when it was 79.7%.
Monthly payments received by July 6 came from 83.5% of residents in Class A properties, the most luxurious apartments, while 81.5% from those living in Class B properties and 68.9% from those living in Class C properties paid July’s rent.
“It is clear that state and federal unemployment assistance benefits have served as a lifeline for renters, making it possible for them to pay their rent,” Doug Bibby, NMHC President said in a statement.
The most significant drop was seen in metro New York, RealPage said. July rent payments came from 59.3% of households as of July 6.
The decline came after New York Gov. Andrew Cuomo extended eviction moratoriums through August, New York protests called for him to extend that period, and Ithaca, New York, announced it was cancelling rent.
COVID-19 hotspots Texas, Florida and Arizona had collection rates of 86%, 85% and 85%, respectively. This is down about three percentage points year over year in these locations. LendingTree said that 31% of renters said they don’t think they will be able to make next month’s rent payment on time, either. The enhanced unemployment benefits that are part of the CARES Act expire at the end of the month.
“Unfortunately, there is a looming July 31 deadline when that aid ends,” Bibby said. “Without an extension or a direct renter assistance program that NMHC has been calling for since the start of the pandemic, the U.S. could be headed toward historic dislocations of renters and business failures among apartment firms, exacerbating both unemployment and homelessness.”
In June, the share of total rent collected on the first day was 10%. In April and May it was 12%, and in the January through March period it was 16%, according to LeaseLock. The total amount of rent collected by June 6 was 80.8%, NMHC said.
Signature Bank said multifamily rent collections in its portfolio topped 80% in Q2 2020, but $9.4 billion in loans are still in deferral.
Signature Bank “pleasantly surprised” by multifamily rent collections
Apartment rent collections topped 80%; portfolio-wide deferrals total $9.4B
Signature Bank, one of New York City’s most active multifamily lenders, was “pleasantly surprised” by rent collections during the last quarter.
Its $15 billion multifamily portfolio, which accounts for 30 percent of its total holdings, saw rent collections top 80 percent during the second quarter, the bank reported during an earnings call Tuesday.
Still, $9.4 billion of the loans in Signature Bank’s $50 billion portfolio remain in deferral. That’s down from $10.9 billion at the height of the coronavirus pandemic. By July 15, $2.2 billion of those loan deferral agreements were scheduled to expire, and $1.3 billion of those, or 60 percent, began paying again, Joseph DePaolo, president and CEO of Signature Bank, said the earnings call.
Most of the loan forbearance agreements provided to borrowers expire between August and September. The bank will consider giving borrowers additional time on a case-by-case basis.
Community banks, including Signature Bank, are the primary lenders for the roughly 1 million rent-stabilized apartments in New York City. Signature Bank’s rent-stabilized portfolio — which accounts for roughly half of its multifamily loans — took a beating during the first quarter of 2020, with rent collections falling 50 percent.
Despite the increased rent collections over the last three months, Signature Bank reported second quarter income of $117.2 million, a small increase from $99.6 million the first quarter but down from $147.3 million during the same period in 2019.
Office rent collections for the quarter ranged from 65 to 80 percent, and retail rent collections ranged between 35 and 65 percent of normal levels, DePaolo said.
The owners of 400,000 New York City rent-stabilized apartments reported rent collection improved in July.
Rent collection jumps in NYC, ebbs in US
Vacancy rate in Gotham apartments has doubled since February, survey shows
The owners of 400,000 New York City rent-stabilized apartments reported that rent collection improved markedly in early July, while a national survey found collection in market-rate apartments slipped.
Their trade group Community Housing Improvement Program reported that 17.7 percent of residential tenants paid no rent in the beginning of the month, down from roughly 25 percent during the same periods in April, May and June. That represents a 29% improvement in the non-payment rate.
The National Multifamily Housing Council, which collects data from 11.1 million market-rate apartments, reported that 91.3 percent of those households paid at least some rent by July 20, a modest drop from 92.2 percent by the same time last month.
During the pandemic, rent collection reported for those market-rate apartments has been consistently higher than for New York City’s nearly 1 million rent-stabilized apartments, which disproportionately serve low-income renters.
Despite the relative improvement in the city, rent collection in rent-stabilized apartments remains far worse than usual, which Jay Martin, CHIP’s executive director, underscored in a statement.
“This is no time to take a victory lap. Tens of thousands of New Yorkers are struggling to pay their rent and that means the owners of hundreds of apartment buildings are in financial distress,” said Martin. “Many of our members are in serious danger of losing their buildings if the federal government does not step up and provide renters with help.”
Most of the trillions of dollars disbursed by Congress during the pandemic has gone to individuals and small businesses, such as a weekly $600 unemployment benefit, some of which has filtered up to landlords. The unemployment bonus is due to end next week.
Between 5 percent and 10 percent of tenants who did not pay rent in CHIP’s previous surveys have started to pay some of their back rent, the survey showed. But 15 percent are at least one month behind — which the group extrapolated to estimate the number of units behind on rent citywide at 300,000.
The landlord group also reported a big increase in the vacancy rate: from 3 percent to 4 percent in February to 8 percent to 10 percent in July. The vacancies were more prevalent in higher-rent units, the survey found, which has strained balance sheets. Those apartments are typically not as easy to fill as the low-cost units, which are in greater demand.
Martin warned that the continued strain on multifamily property owners will force them to sell to “corporate landlords or vulture hedge funds” unless policies are implemented to make up for lost rent.
The properties facing the greatest rent shortfall are smaller residential buildings with a commercial tenant on the ground floor. Of those tenants, CHIP reported, 63 percent did not pay any rent for July. That rent can make up 30 percent of a building’s cash flow.
“These properties needed help months ago,” said Martin. “Elected officials need to be looking at ways to get property tax relief, emergency rental vouchers and other forms of help to the owners and occupants of these buildings immediately.”
Governor Andrew Cuomo's executive order that effectively paused evictions expires tonight.
Thousands Of New Yorkers At Risk Of Eviction As Cuomo's Moratorium Expires
Thousands of families are at risk of being kicked out of their homes in the coming weeks because an order from Governor Andrew Cuomo is set to expire on Wednesday night.
These families had received eviction notices in January, February, and March, prior to the COVID-19 pandemic, but saw them temporarily suspended by the governor's order and court guidance as the COVID-19 public health crisis deepened.
"The courts moratorium on evictions expires tonight at midnight. It's linked to the Governor's executive orders extending certain court deadlines, which also expire at midnight," said Judith Goldiner, the attorney-in-charge of the Civil Law Reform Unit at The Legal Aid Society. "If those two are things are not extended, then there are 14,000 New York City families who had warrants of evictions against them at the time of the PAUSE."
Marshals could start issuing eviction notices to those families as soon as Thursday if the orders aren't extended. Within two weeks after getting the notice, the tenants can be evicted.
But due to ongoing issues with the U.S. Postal Service, Goldiner said that some families might not receive any eviction notice until the marshal shows up at their door.
"What's going to happen to them? How do they know how to fight it? How do they know what their rights are?" Goldiner said. "These are families who likely could have paid their rent from savings or from work employment if the PAUSE hadn't happened and they hadn't lost their jobs, or they would have been able to go to public assistance to get a one shot deal to pay their rent. Or, with respect to the holdover folks, they might have been able to move out in a timely fashion if New York wasn't on PAUSE."
Tenants unable to pay rent due to financial hardship during the COVID-19 crisis have a sliver of protection from getting booted from their homes under the Tenant Safe Harbor Act. The measure, signed by Cuomo in late June, keeps landlords from evicting tenants. But it doesn't prevent landlords from taking them to potentially crowded and indoor courthouses for rental payments during the ongoing pandemic. And the law also does not apply to tenants facing holdover cases or who owed money before the pandemic.
"Anyone paying attention would know that Governor Cuomo signed into law a moratorium on residential evictions for anyone who has suffered a financial hardship, due to the pandemic, for the duration of the crisis," said Cuomo spokesperson Caitlin Girouard, referring to the Tenant Safe Harbor Act.
The Office of Court Administration says it is waiting to issue updated court guidance once Cuomo makes a move, likely Thursday.
"We want to see what the governor does before we make new orders," OCA spokesperson Lucian Chalfen said this week.
"I, again, call upon the State, whether it's through legislative action by the Assembly or executive order to affirm that anyone in that situation where they simply can't pay should be allowed to create a payment plan and pay back their landlord in the future when they have the resources over time," Mayor Bill de Blasio said during a press briefing on Wednesday.
De Blasio also recommended tenants who need legal assistance call 311 for the Office of Tenant Protection.
Goldiner added if these families end up getting kicked to the curb—whether into a new apartment, with family and friends, or into the shelter system—the dislocation could exacerbate the historic public health emergency with coronavirus that has already killed more than 23,000 people in New York City. Other tenant attorneys have said undocumented immigrants are at particular risk for losing their homes.
Of the 14,000 families, about 2,200 are holdover proceedings involving lease violations and other disputes, and 11,500 are nonpayment proceedings, according to the Department of Social Services's Office of Civil Justice. DSS conducted an analysis earlier this summer to prepare for "eviction potentially on the horizon," DSS spokesperson Isaac McGinn noted. The group includes those with no record of legal representation.
"As a result, we’ve been sending targeted mailers this summer to tenants we identified may be at risk and are continuing that outreach, making New Yorkers aware of the resources available to them," including free legal assistance through the city's right-to-counsel program, McGinn said.
The department says families facing holdover cases are at more immediate risk, as there are less options for intervention before an eviction is carried out.
Meanwhile, a group of Brooklyn tenant activists staged protests outside of landlord attorneys' offices Wednesday morning, calling to cancel rent and end evictions, chanting, "No lawyers, no cops, all of this has gotta stop!"
In addition to the potential for an eviction crisis, hundreds of thousands more could be at risk of housing instability after weekly $600 pandemic unemployment payments expired. NYU's Furman Center estimated 279,400 lower-income renters who were getting the payments will face increased rent burdens, as well as 111,500 who lost their job but did not claim unemployment.
Jay Martin, the executive director of the Community Housing Improvement Program, said property owners' hands are tied when they take tenants to court due to taxes owed and legal requirements with their lenders.
"The vast majority are in just a precarious financial situation as their tenants, and they're basically being forced to pursue evictions because the government has failed to provide any direct subsidies of any substance to the renter, they have not done anything to provide true relief from the property owners' side," Martin said.
CHIP, a group of rent-stabilized property owners, estimated 17.7 percent of residential tenants did not pay rent in July, an improvement from April to June, but before weekly $600 pandemic unemployment payments expired.
"When your business model is collecting rent, the inability to collect rent means you don't have a business model anymore," Martin added.
Renters across the country are largely still making their rent payments despite high unemployment numbers and waning government aid
August brings no sign of the rent apocalypse
Industry groups are concerned that renters will not make payments as government money dries up
Tenants across the country are largely still paying rent despite high unemployment and waning government aid, a new report found.
About 87 percent of apartment households made a full or partial rent payment by Aug. 13, according to the National Multifamily Housing Council’s Rent Payment Tracker. That was only a 2-point drop from the same period a year ago, when the economy was humming.
NMHC surveys 11.4 million units of professionally managed apartment units across the country.
Doug Bibby, the organization’s president, said the rent collections could decline, however, as relief through the CARES Act dries up. The federal unemployment benefit of $600 a week expired in the last week of July, and job growth is not likely to make up the difference.
“With that support now having expired more than two weeks ago, households across the country are grappling with even greater financial distress,” Bibby said in a statement. Unemployment is steadily declining across the U.S. In July, the U.S. unemployment rate was 10.2 percent, down from its peak of 14.7 percent in April. Still, the U.S. has lost about 13 million jobs since the coronavirus gained a foothold in February, according to the Department of Labor.
For the unemployed, the next few weeks, or months, could be tough. Democrats and Republicans have failed to compromise on a new stimulus package, which was expected to extend the unemployment bonus, albeit at a diminished level, and perhaps include another round of $1,200 stimulus checks.
In addition, eviction moratoriums are also set to expire in many states, and some landlords are eager to move out tenants who have not paid rent for months.
The Trump administration laid out sweeping eviction protections for most tenants in light of the ongoing health crisis.
Evictions banned through December for most US tenants
CDC invokes measure on Trump’s OK, but money for landlords is in question
The Trump administration today announced sweeping eviction protections in light of the health crisis.
The public health order, a draft of which the Centers for Disease Control posted Tuesday afternoon, will halt evictions from Sept. 4 through the end of the year for residential tenants who qualify. To be eligible, tenants must file a form to their landlord declaring they cannot pay rent, have availed themselves of available assistance and make less than $99,000 per year or have received a federal coronavirus aid check earlier this year.
Landlords can still evict tenants for reasons other than non-payment of rent, and the moratorium does not constitute a cancelation of rent, the order said. A White House spokesperson told reporters that federal funds have been made available for affected landlords. However, no details were given, and it is not clear what recourse landlords will have if tenants stop paying rent.
A CDC memo to explain the measure said that halting evictions lets local governments “more easily implement stay-at-home and social distancing directives to mitigate the community spread of Covid-19.”
The agency also noted that “housing stability helps protect public health,” because homelessness increases the likelihood of individuals moving into homeless shelters, where they are at higher risk for contracting the disease.
On Tuesday, before the announcement, Treasury Secretary Steve Mnuchin said the measure would affect close to 40 million of the roughly 43 million rental households in the United States.
The move comes nearly a month after President Donald Trump directed agencies to “consider” an eviction ban for properties backed by Fannie Mae and Freddie Mac, after an eviction moratorium covering properties with federally backed mortgages expired. Last week, those protections were extended through the end of the year.
Unemployed workers have been without enhanced federal benefits since they expired at the end of July, and Congress has yet to reach an agreement on a further aid package.
Groups representing landlords have criticized eviction moratoriums for not addressing the problem of tenants unable to pay rent, and said this latest measure is more of the same.
“Eviction moratoriums don’t actually solve anything, so it’s not terribly surprising this administration would pursue a moratorium as a cynical political ploy before the election,” said Jay Martin, executive director of the Community Housing Improvement Program, a landlord group in New York City.
Doug Bibby, president of the National Multifamily Housing Council, a trade association that represents rental landlords, said in a statement that he was “disappointed” with the measure, and hoped that Congress would reach an agreement to address financial pressures on owners.
“An eviction moratorium will ultimately harm the very people it aims to help by making it impossible for housing providers, particularly small owners, to meet their financial obligations and continue to provide shelter to their residents,” Bibby said.
Nationwide market-rate rent payments in September sank to their lowest levels since the start of the pandemic, according to National Multifamily Housing Council
Market-rate rent payments sink to lowest level since start of pandemic
About 76% of multifamily tenants nationwide have made a payment in September, latest survey shows
September rent payments for market-rate apartments nationwide fell, the largest drop since the pandemic began in March.
A survey of 11.4 million market-rate units found 76.4 percent of those households made a rent payment in the first week of September. It marked a 4.8 percent-point drop from the same time last year, representing 552,796 fewer households sending a rent payment. It was also a 2.9 percentage-point dip from August collections.
The survey was conducted by the National Multifamily Housing Council, which lobbies on behalf of large multifamily firms and has released the tally each month since the virus took hold.
The decline in rent payments comes over a month after federal unemployment benefits expired, benefits that had provided individuals with up to an extra $600 a week. In response to the ongoing health crisis, the CDC announced a ban on evictions for nonpayment for households making less than $99,000, or $198,000 for joint tax filers.
For landlords, the eviction ban heightened concerns that, without further federal assistance, tenants will stop paying rent.
“Falling rent payments mean that apartment owners and operators will increasingly have difficulty meeting their mortgages, paying their taxes and utilities and meeting payroll,” said Doug Bibby, president of the National Multifamily Housing Council. “The enactment of a nationwide eviction moratorium last week did nothing to help renters or alleviate the financial distress they are facing.”
The apartments included in the latest rent payment survey are not rent-regulated, subsidized affordable housing, student housing or single-family rentals. Tenants tend to be higher earners, so the decrease could be particularly troubling.
Residents of below-market rate apartments, which typically cater to lower-income renters, were hit especially hard by the economic downturn. Lower-income households were also much more likely to have an employment disruption, according to the Federal Reserve.
A group representing 85,000 property owners who control 10 million apartments joined a lawsuit that seeks to stop the federal eviction ban.
Group representing 85K landlords joins suit to stop CDC eviction ban
National Apartment Association CEO: Moratoriums force industry into “offering a service without compensation”
A group representing 85,000 property owners who control 10 million apartments joined a lawsuit that seeks to stop the federal eviction ban.
The National Apartment Association joined the suit, which is trying to invalidate the Centers for Disease Control and Prevention’s eviction ban. The action was filed Sept. 9 in the federal court in Georgia.
It names the Secretary of Health and Human Services and the acting chief of staff of the CDC as defendants. The plaintiffs filed a separate motion for a temporary restraining order of the ban.
“Eviction moratoria saddle the apartment industry solely with the responsibility of offering a service without compensation, all while operating at a potential deficit,” Bob Pinnegar, CEO of the National Apartment Association, said in a press release.
The plaintiffs argue the federal eviction ban — announced Sept. 1 — places an unfair burden on landlords, who leased their properties with the understanding they could evict tenants who didn’t pay rent and recover control of their properties.
The lawsuit contends the eviction order deprived Richard Lee Brown, a Virginia landlord, of the sole avenue to evict his nonpaying tenant, who owes $8,092 in rent for her $925-a-month apartment.
The suit also alleges the CDC does not have the authority to make laws or issue an eviction order — and that doing so amounts to a constitutional violation.
“CDC’s actions are not authorized by statute or regulation,” the complaint reads. “But even if they were, they are unprecedented in our history and are an affront to core constitutional limits on federal power.”
The lawsuit is the latest seeking to dismantle an eviction moratorium meant to protect tenants hit hard by the pandemic. In numerous states, landlord groups have made similar arguments to combat the eviction bans, but have met with little success.
In the wake of the CDC’s eviction moratorium — which President Donald Trump called for — evictions in 16 cities immediately plummeted, a Princeton University study found. The ban does not prevent evictions for reasons other than nonpayment, such as nonrenewal of lease, or for violating other terms of the lease. The ban, which lasts through the end of the year, also does not preclude states from passing stricter eviction rules of their own.
Evictions are still on hold in New York courts as housing advocates worry about the fate of an estimated 14,000 renters who faced eviction before the state’s COVID-19 emergency
Cuomo Extends Eviction Moratorium for New Yorkers Through Jan. 2021 New York City courts had 200,000 pending housing court cases and eviction warrants for 14,000 families when the state shut down in March
Evictions remain on hold for residents of New York through 2021, Gov. Andrew Cuomo announced on a conference call with reporters Monday.
Housing advocates have worried about the fate of residents at risk of eviction as unemployment in the state remains high and congressional aid hangs in limbo.
The governor's latest extension of the eviction moratorium lasts until Jan. 1, 2021.
New York originally halted evictions statewide against all tenants in mid-March.
That changed in May, when New York limited the moratorium to individuals who qualified for unemployment or who couldn’t pay rent because of COVID-19.
Last week, Cuomo extended the ban on COVID-related commercial evictions and foreclosures an additional month. That extension will be in place until Oct. 20, according to the state.
The moratorium extends protections that are already in place for commercial tenants and mortgagors related to the financial toll seen by business owners as a result of the ongoing pandemic.
The extension "allows commercial tenants and mortgagors additional time to get back on their feet and catch up on rent or their mortgage, or to renegotiate their lease terms to avoid foreclosure moving forward," according to the state.
"The pandemic remains far from over, and we need to continue protecting the business owners supporting their families amid restrictions necessary to protect the public health," Cuomo said in a statement. "That's why it's the right decision to extend the eviction ban for commercial tenants another 30 days."
In a previous call with reporters, Cuomo has said he plans to protect from evictions through the end of the pandemic.
“Until when? Until I say COVID is over. And you know, we’ll figure out when that is," the governor said.
With a new stimulus stalled, millions of renters said they are likely to leave their house in the next two months due to eviction.
3.7M renters may lose their homes due to eviction: Census Bureau
A quarter of renters surveyed uncertain of ability to make rent, but industry rent data shows market-rate payments strengthened
Millions of renters believe they will be evicted from their homes in the next two months due to eviction, according to the results of a new survey.
The U.S. Census Bureau found that of 58 million households it surveyed, 14.7 million — or a quarter of the total — had no or only slight confidence in their ability to pay rent next month, according to a Household Pulse Survey conducted for the week ending Oct. 7. The same survey found that in half a million households, rental payments are currently on hold, or will be soon.
Nearly half of 8.3 million renter households surveyed by the Census said they were “very” or “somewhat” likely to leave their home in the next two months due to eviction.
Efforts to prevent mass displacement during a health crisis at the state and federal level have mostly focused on preventing evictions for non-payment, or allowing landlords to defer mortgage payments for a period. As bills stack up while talks for a new stimulus sputter, it is unclear who will pay when eviction protections and forbearance agreements expire.
“No one is going to pay nine months’ back rent when this is all over,” said Robert Gilman, who co-chairs the real estate group at public accounting firm Anchin.
Gilman said he’s concerned about what will happen when forbearance agreements expire and property taxes come due in January in New York. “I’m not saying it’s wrong,” Gilman said, of the limits on evictions. “The majority of people really do need help — but you have to look at both sides of the ledger.”
In New York, limits on some evictions were extended through the end of the year, and they now apply to evictions that were filed before the pandemic. A CDC eviction ban for nonpayment of rent is also in place through the end of the year. But even with those stopgap measures, uncertainty among renters across the nation about their ability to continue to make rent payments remains high.
An industry survey of market-rate apartment payments paints a rosier picture than the Census surveys show.
According to the National Multifamily Housing Council, a trade group representing large rental landlords, rent collections improved slightly from September to October. In the nearly 12 million apartments it tracks, which does not include subsidized apartments, 79.4 percent of households made a full or partial rent payment by Oct. 6, compared to 76.4 percent that had paid by the same time in September.
“Despite ongoing efforts by apartment community owners and operators to help residents facing financial distress through creative and nuanced payment plans, rent relief and other approaches, renters and the broader multifamily industry are confronting growing challenges,” said Doug Bibby, president of NMHC.
The mixed results support the idea of a K-shaped recovery, where those who are more affluent make a rapid recovery, while lower-income earners lag behind. At a presentation by the St. Louis Federal Reserve in September, economist Bill Emmons noted that the current crisis has had more of a disproportionate impact on low-income households than past crises have.
Fitch predicts lower rent collections will lead to higher rates of delinquency and evictions in areas where unemployment stays high.
Affordable apartments could suffer 50% hit to bottom line: Fitch
Higher operating expenses, lower rent collections, and more evictions forecast
A ratings agency predicts as much as a 50 percent hit to landlords’ bottom line at unsubsidized affordable apartments, which may lead to evictions when federal moratoriums expire.
Fitch Ratings predicts “full, on-time rental payments” for affordable properties subsidized by the government, which includes federal rental voucher programs such as Section 8. But properties that don’t receive subsidies could see a total discount to their debt service coverage ratio of as much as 40 to 50 percent, due to a 30 percent drop in rent payments as well as a pandemic-driven jump in operating costs.
Both subsidized and unsubsidized affordable multifamily properties are likely to see a 10 to 20 percent increase in operating expenses, Fitch predicts.
For the time being, few borrowers with multifamily mortgages tracked by Fitch are behind on payments, despite high unemployment levels and widespread economic distress. Only 0.56 percent of borrowers whose loans are in CMBS transactions were delinquent in September, compared with 0.41 percent prior to the pandemic.
Overall, multifamily has not suffered as much as other sectors, such as hospitality and retail, which have scrambled to lure travelers and shoppers back while government orders limit their ability to do so.
But a true assessment of the current state of the multifamily market has been hindered by programs that allow property owners to defer payments on a short-term basis. Until the end of the year, multifamily properties with federally-backed mortgages can apply to defer their debt payments for three or six months. Banks which lend to multifamily property owners have offered deferral plans, too, but many of those agreements will start to expire at the end of this month. After those agreements expire, Fitch expects a slight uptick in delinquencies.
Still, some data points offer clues for how the damage to the multifamily sector will unfold in the coming months.
Job losses in the hospitality and retail sectors, whose employees largely can’t work from home, have led to a disproportionate impact on low-income renters. A survey conducted by the U.S. Census Bureau found that, by the end of September, a third of renters who were behind on their rent payments made less than $25,000 per year. Fitch predicts higher instances of missed rent payments — and evictions, after federal limits on evictions expire at the end of the year — in areas where unemployment has remained high.
Rent collections in market-rate apartments have also decreased, although less dramatically than at affordable properties. In September, rent payments at professionally managed units dwindled to 76 percent, the lowest level since the National Multifamily Housing Council started tracking those rents in March.
Rent-regulated apartments in New York City have consistently lagged about 10 percentage points behind the rent collection figures NMHC has released, Jay Martin, executive president of the Community Housing Improvement Project, told a virtual audience at the New York Multifamily Summit last Friday.
More than 6 million households missed their rent or mortgage payment in September, as Congress stalls on coronavirus stimulus aid.
More than 6M households missed their rent or mortgage payment in September
Persistent layoffs are slowing momentum in the labor market, which bodes poorly for the broader U.S. recovery as millions of out-of-work Americans delay their mortgage and rent payments.
More than 6 million households failed to make their rent or mortgage payments in September, according to the Mortgage Bankers Association's Research Institute for Housing America, a sign that the economic fallout from the coronavirus pandemic is weighing on jobless Americans as Congress stalls on relief measures.
In the third quarter, the percent of homeowners and renters behind on their payments fell slightly from the prior quarter. Still, the overall amount remains high, experts caution.
Over the summer, rent and mortgage payment collections improved as states resumed business reopenings and more Americans returned to work. High unemployment, however, continues to place hardships on millions of U.S. households.
The unemployment rate fell to 7.9% from 8.4% in August, the Labor Department said earlier this month. Overall, the economy is still recouping jobs in outsize fashion after shedding a record 22.1 million in early spring, but the recovery is slowing.
In September, 8.5% of renters, or 2.82 million households, missed, delayed, or made reduced payments while 7.1%, or 3.37 million homeowners, missed their mortgage payments.
Renters receiving unemployment benefits rose from 3% in early April to 7% by the end of September. Mortgagers getting jobless aid remained unchanged at 3% during that time span.
Congress stalls on COVID-19 relief
Congress hasn't approved additional coronavirus relief since March, when both chambers came to bipartisan compromises on a handful of bills that totaled more than $3 trillion, including one-time $1,200 checks to Americans and a $600 weekly unemployment boost. Economists worry that millions of U.S. households face the prospect of falling further behind in the coming months without another round of much needed federal aid.
"With the current eviction moratorium expiring in January, the situation could be even more challenging for renters,” Gary V. Engelhardt, professor of economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University, said in a note. “Many renter households across the country could find themselves with no place to live and no means to repay missed payments."
In September, the Trump administration implemented a national moratorium on residential evictions through the end of the year. The moratorium, which will run through Dec. 31, applies to individuals earning less than $99,000 a year and who are unable to make rent or housing payments.
Republicans and Democrats have been deadlocked for months over passing a new coronavirus stimulus package, sparring over issues such as the amount of money to give in a federal unemployment benefit.
The Republican-controlled Senate is set to act on a roughly $500 billion relief proposal next week, an amount rejected by congressional Democrats as insufficient to tackle the pandemic. On Wednesday, Treasury Secretary Steven Mnuchin said that passing another COVID-19 relief package before the election would be “difficult.” 26M student debt borrowers missed September payments
Millions of student debt borrowers, meanwhile, have fallen behind on their payments, which could have ramifications on their credit, experts caution.
In September, roughly 26 million people missed their student loan payment. The proportion of student debt borrowers who missed a monthly payment has remained steady at 40% since May.
Student debt borrowers receiving unemployment rose from 3% in early April to 8% by the end of September. In August, the Trump administration extended relief from March and suspended student loan payments, stopped collections and waived interest on federally held student loans until Dec. 31.
But it doesn't cover private student loans. Most student loans, or about 92%, are owned by the U.S. Department of Education, according to MeasureOne, an academic data firm. Private student loans make up 7.87% of the total outstanding U.S. student loans.
“Borrowers ending up in default would see an adverse effect on their credit, in turn making it potentially more challenging for them to rent or qualify for a mortgage," Engelhardt added.
Under the CARES Act passed in March, homeowners with loans who are struggling financially because of the pandemic can request a forbearance for up to 180 days, which may be extended for an additional period of up to another six months if borrowers are still under financial duress.
Forbearance allows borrowers to pause or reduce their mortgage payments, but they still have to repay those missed payments in the future. But the CARES Act relief applies only to federally-backed mortgages. For those who have non-government-backed or private loans, the forbearance or deferment options are left up to a loan servicer’s discretion.