Residential tenants paying rent (or maybe not)

David Goldsmith

All Powerful Moderator
Staff member

Despite no mass-eviction event, filings are on the rise​

Moratorium’s end didn’t spark mass evictions, but growing concern: report​

The end of the national moratorium didn’t spark an eviction surge, but gaps in federal rental assistance and tenant protections have reportedly given way to a swelling trend. (iStock)
The mass-eviction event many feared would follow the federal moratorium’s expiration in August didn’t come to pass, but tenants across the U.S. are facing a steady rise in filings.
Evictions are beginning to accelerate across the country in a slow-moving crisis, The New York Times reports. Housing experts and advocates told the outlet they are largely concerned that amid gaps in tenant resources and eviction data, it’s unclear where the trend is headed.
The Eviction Lab at Princeton University noted a nearly 14 percent increase in filings in the first two weeks of October compared to the previous month. According to the Times, that increase came on the heels of a 10 percent month-over-month spike in the first two weeks of September.
view
view

However, the rate of filings does not encompass a complete picture. The Eviction Lab only tracks 31 cities and six states, making the true number of evictions almost impossible to nail down. One think tank says one-third of American counties don’t have any available eviction court data.
The filings the Eviction Lab did track were still at about half the pre-pandemic average during the first two weeks of October. The $46.5 billion rent relief program has likely had an impact in keeping evictions as low as they are so far.

However, trouble could be around the corner. The Urban Institute told the Times more than 37 percent of renters live in jurisdictions with local moratoriums or postponed eviction judgments still in place, meaning more tenants could be imperiled once those protections expire.
Additionally, the rental market’s explosion in recent months could price out more and more tenants. Through the end of July, asking rents for single-family homes soared nearly 13 percent year-to-date, the highest increase in five years, according to data from Yardi Matrix. In August, the national average rent hit $1,539, a 10.3 percent increase from the previous year.

The slow rollout of federal rental assistance in recent months has complicated resources for landlords as well, who could be forced to pursue court without aid as judges continue to work through a backlog of cases filed during the pandemic.
In New York, some landlords are seeking alternate ways to get timely judgments against nonpaying tenants, turning towards civil court to try for money judgments, rather than the repossession of a home.
 

David Goldsmith

All Powerful Moderator
Staff member

State pulls the plug on rent relief
Gov. Hochul has asked for almost $1 billion in additional funding
New York


New York’s portal for emergency rental assistance will stop accepting new applications Sunday night, shutting out potentially hundreds of thousands of landlords — and their tenants.

Gov. Kathy Hochul, in a press release Friday afternoon, said the state had earmarked virtually all of the $2.4 billion in available funding to applicants and had requested another $996 million from the Treasury Department.

Absent that federal infusion, the portal will close to new applicants at 10 p.m. on Nov. 14, according to the state Office of Temporary and Disability Assistance.

With 278,700 applications submitted and only 168,000 households approved, the decision means more than 100,000 will get nothing from this potentially last round of funding.

The Community Housing Improvement Program, a landlord group, estimates that at least 162,000 additional renters in the state have yet to apply.
 

David Goldsmith

All Powerful Moderator
Staff member
$2B in Hochul budget could fund rent relief

Relief needs approval by the state legislature and would take months​


Gov. Kathy Hochul dangled a bone in front of rent-starved landlords Tuesday, proposing a budget including $2 billion in pandemic relief — money that could fund the tapped-out emergency rental assistance program.
“I’ll work with the legislature to identify the most impactful use of these funds in the short term, whether that’s for struggling, small landlords and their tenants, or the hardest-hurt industries and workers,” Hochul said.

State Budget Director Robert Mujica confirmed that the money could go toward the rent-aid program, which relied on federal funds that ran out.

“Those monies are available for coronavirus relief efforts or spending. ERAP is one of those things,” Mujica said. “There is nothing that would preclude the use of those funds for the ERAP program.”
Rental owners could certainly use the money: $2 billion is what the Community Housing Improvement Program, a landlord group, estimated to be the statewide need.

“Gov. Kathy Hochul clearly gets it,” said Jay Martin, executive director of CHIP. “Now, the state legislature has to follow her lead.”
“If they don’t, renters in arrears will be put at risk of losing their homes. And those renters should blame the state legislature if that happens,” Martin said. All 213 Senate and Assembly seats are up for election this year.

The legislature has until April 1 to sign off on a budget. The timeline forces owners and renters to endure for three more months, plus however long it takes the state to distribute funds if they are included in the spending plan. Doling out approved funding has been a problem for the state in the past.

The wait would leave both groups vulnerable. Owners, some of whom have gone two years without seeing the rent, must continue to cover bills and maintenance. And tenants who have not availed themselves of eviction protections could lose their homes before new aid arrives.
The budget director said the decision to put the $2 billion toward ERAP needs to be discussed with the Legislature. He added, “ERAP is a federal program and there are federal resources that are available for this.”

But if federal funds are coming down the pike, they are probably just as far off as the budget vote.
ERAP ran through nearly all of its money by November, at which time Gov. Hochul shut the portal to most applicants. Last week, a judge ordered the state to reopen it to allow tenants access to the eviction protection a pending application provides.

Hochul has twice asked the federal government for more money. The Treasury Department recently approved only another $27 million, a sliver of the $1 billion Hochul had requested. Hochul tried again last week, noting in her letter to Treasury Secretary Janet Yellen that funds should be reallocated by March 31.
Landlords who are owed rent could roll the dice and wait for aid or take tenants to housing court. The eviction moratorium expired Saturday, giving landlords of tenants who did not apply for aid some leverage to recoup arrears.

However, the court system is backlogged, meaning court-mandated repayment could take a while. And renters still have protection from the Tenant Safe Harbor Act: Tenants who couldn’t pay rent because of a pandemic-related hardship can use that as a defense against eviction. Owners still have the opportunity to seek a non-possessory judgment for repayment.
 

David Goldsmith

All Powerful Moderator
Staff member

New York rent relief contractor boasted about profits as program struggled​

Guidehouse CEO congratulated employees on $115M earnings in Nov. presentation​

The head of the firm running New York’s Emergency Rental Assistance Program touted the company’s earnings as the program struggled to distribute aid to vulnerable renters and ran out of funds.
Video obtained by The Washington Post of a November presentation by Guidehouse CEO Scott McIntyre shows him celebrating the consulting firm earning $115 million in fees from its contract with the state. He congratulated employees, saying the company made “38 percent margins” on the contract.

The state’s rollout of rent relief was one of the slowest in the nation and the program struggled from its debut. Eventually, the state was able to disperse $2.4 billion in aid, but payments didn’t start going out until August. The program ran out of funds in November and the portal was closed to most advocates, triggering a lawsuit filed last month by local tenant and housing advocates.

The system was plagued by technical glitches interfering with applications and payment processing. A spokesman for the Office of Temporary and Disability Assistance, which oversees the program, told the Post the chief executive’s comments were “beyond troubling,” given the initiative’s widespread issues.

“It is beyond troubling that a company partially responsible for recurring technical issues in the processing of applications and payments for New York’s Emergency Rental Assistance Program would allegedly boast of its success in profiting off the misfortune of tens of thousands of New Yorkers adversely affected by the pandemic,” spokesperson Justin Mason said.

Jay Martin, the executive director of landlord group Community Housing Improvement Program, posted a link to the story in a tweet, writing: “I am f*****g livid.”
Guidehouse said in a statement to the Post the reference to “38 percent margins” didn’t mean the company made the figure in profits, but instead indicated “an internal management reporting metric.” A spokesperson for the company said profits were about 13-16 percent, in line with competitors. A former executive of the company who was at the meeting, however, told the Post he left with the impression the company made 38 percent on the contract.

In January 2021, the state received proposals from eight companies to manage the state’s federal fund pot, according to the Post. The state ultimately canceled the bidding process and awarded the contract to Guidehouse at the beginning of May, more than three months before the first payments were disbursed.
Guidehouse is seeking an extension of its contract with the state, which would pay the company another $30 million, according to the Post. That request is still pending.

Gov. Kathy Hochul closed New York’s rent relief portal late last month after exhausting most of its funding. A judge ruled earlier this month for the state to reopen the portal, giving renters a chance to secure eviction protections before the state’s eviction moratorium expired.
Hochul last week proposed $2 billion in pandemic relief as part of the state’s budget, which the legislature has until April 1 to sign off on.
 

David Goldsmith

All Powerful Moderator
Staff member

Another pittance: NY gets $119M for rent relief​

Federal allocation is 7% of what state requested​

New York’s rent relief fund is no longer a dry pot. But a fresh allotment of federal dollars won’t cover the growing need of renters and landlords.
The U.S. Treasury Department said Tuesday it would allocate $119 million for the state’s emergency rent relief program, Crain’s reported. That’s just 7 percent of the $1.6 billion Gov. Kathy Hochul requested from the federal government in January.

Landlord groups had estimated that the state needed at least $2 billion to cover the 126,000 pending applications in the portal as of January, plus the projected 175,000 tenants who owe rent but haven’t applied.

Separate estimates suggest the situation is even more dire. The Partnership for the Homeless said at a City Council hearing last last month that 400,000 households in the city alone need aid.
“Every dollar is meaningful; however, this falls woefully short of meeting the financial struggles of the nation’s largest population of income-insecure renters,” said Joseph Strasburg, president of the Rent Stabilization Association, of the federal allocation announced Tuesday.

The program has gained about 65,000 new applications since it reopened in January on the order of a state judge. The uptick comes as housing court judges have advised tenants during court appearances to apply for ERAP to gain the eviction protection a pending application affords.

The state budget, which is being negotiated and is due by April 1, will likely include more money for the program. But proposals that came out of weekend talks suggest state funding may fall short.
Hochul’s budget proposal included $2 billion that state budget director Robert Mujica said could go toward ERAP. The state Legislature countered that suggestion with smaller allotments. Assembly Democrats proposed $1.3 billion for the program and Senate Democrats suggested $1 billion, if adequate federal aid did not come through.

A spokesperson for the Treasury said there will be additional rounds of ERAP reallocations, meaning more federal funding could reach New York. As of January, the Treasury reported that $21 billion in funds has yet to be earmarked.

The Treasury’s money is split into two tranches. The first has gone through two rounds of reallocation and the spokesperson said the Treasury will soon release the process for requesting money in the third round.

Dispersing untapped funds from the second tranche can begin March 31, the spokesperson said.

A spokesperson for the governor’s office said Hochul, “will continue pushing to secure every available dollar from the U.S. Treasury to provide relief to the New Yorkers who need it most.”

The Legal Aid Society, in response to the most recent allotment, which “falls drastically short of the statewide demand,” called on Albany to include at least $1 billion in the state budget for ERAP.

In theory, anything shy of $1.9 billion would leave some renters and owners short.

Delivery and distribution of funding could also be problematic. The Treasury did not comment on when the newly-allocated money would reach New York, but said the agency’s efforts have “helped speed up the pace at which these funds are reaching renters in need.” The office of the governor did not comment respond on when the $119 million would hit the portal.

It’s unclear whether a separate federal allotment approved for New York in January has been made available to applicants. A March 1 report by the Office of Temporary and Disability Assistance, the state agency running ERAP, shows $2 billion had been set aside or paid out to applicants. That is less than the $2.4 billion the federal government sent New York last year.

OTDA has been slow to disperse funds in the past. Landlords say the portal, plagued by glitches early on, is still running inefficiently. They say the site does not alert them if an application is stalled because of missing documentation, for example. To keep abreast of their status, some landlords spend hours each day refreshing the website or calling the state agency.

“In 2022, we should expect a lot more from technology and government than that,” said Ann Korchak, spokesperson for the Small Property Owners of New York.
This article has been updated to include comments from The Legal Aid Society, the governor’s office and the U.S. Treasury Department.
 

David Goldsmith

All Powerful Moderator
Staff member
For years pro-development advocates have espoused that gentrification doesn't lead to displacement. This new study may indicate otherwise.

Multifamily flips spur more evictions: report​


Landlords who buy low, sell high oust tenants more than non-speculative owners​

One thing leads to another, as The Fixx sang in their 1982 classic.
In the case of rising multifamily property values in New York City, it will lead to more evictions, a new report predicts.

Here’s the logic.
Strong demand for city living is leading to rising rents, which in turn increases valuations of apartment buildings and attracts buyers looking for a quick profit.
Such speculative investments tend to be accompanied by more evictions, according to a report released this week.
Communities of color, which already face higher rates of eviction, are more likely to bear the brunt of that potential displacement, the authors write.
“The re-charging market combined with the end of the eviction moratorium represents a real risk to tenants,” said David Greenberg, vice president of research and evaluation for the Local Initiatives Support Corporation, a Manhattan-based nonprofit that co-authored the report.

“Because properties that appreciated steeply also evicted more frequently, there’s real reason to be concerned about the effects on tenants of the relatively hot multifamily market,” he added.
Tentative property tax assessments showed the market value of New York City rental buildings jumped 11.7 percent from last year. And those values still have room to run: They are still 7.7 percent shy of pre-pandemic levels.

The report, also authored by nonprofit University Neighborhood Housing Program and the New School, finds that in rental buildings flipped for a large profit or refinanced for a much larger loan, tenants were 1.5 times as likely to face eviction than in properties that had not experienced such a “speculative event.”

To identify buildings that may have been subject to speculation, the authors looked at trades of multifamily buildings with five or more units between 2003 and 2020, then cut that data down to the top quarter of most profitable sales. That portion of buildings saw at least a 30 percent annual increase.
They then analyzed buildings where debt rose by at least 50 percent annually in the same period. Landlords of appreciating buildings can refinance as often as every few years and use the proceeds to bankroll new investments.
Owners might use that cash for building improvements, the report notes. However, a separate analysis suggests they are not: Buildings with speculative debt had about 50 percent more housing violations than those without.

The report lists Ved Parkash, an owner who made the public advocate’s worst landlord list in 2015, as an example. Parkash bought 835 Walton Avenue in the Bronx for $3.2 million in 2004 and took out a $2.4 million mortgage. He refinanced for $3.4 million in 2008, for $3.2 million in 2012 and for $6.3 million in 2015. On a whole, Parkash’s portfolio had six times more housing violations than the city average, the report found.
A spokesperson for Parkash Management contested that the owner’s portfolio contained about 7.5 violations per unit, as described in the report.
“[The report] failed to say that the number of building violations is substantially less than when the buildings were purchased,” the spokesperson said. “Many of the violations were cured but not removed from the record.”

To link speculative investment to evictions, the authors examined properties with the highest sale price appreciation or debt increases between 2014 and 2016. Properties with a speculative event had nearly twice as many evictions per unit between 2017 and 2019 as those without one.
Evictions are more frequent in communities of color, impoverished neighborhoods and areas where rent has risen, so the authors ran the numbers controlling for those factors and found that properties subject to speculation still had 150 percent more evictions.
“There is a straightforward economic logic to this finding — owners hoping to realize greater value on their properties, or who are feeling the pressure of increased debt, are more likely to initiate eviction proceedings,” the authors write.

In market-rate buildings, owners may raise the rent on tenants, then file for an eviction when the renters don’t pay. Once the tenant is out, the owner can get a higher rent from a new tenant. Owners who favor refinancing may use the cash from them to buy more buildings and replicate the scheme.
The report adds that because those types of purchase and refinancing plans were more frequent in Black and Latino neighborhoods, those populations are more likely to be subject to displacement from speculative owners.
To counteract that, the report proposes policy changes including good cause eviction, which would give tenants more protection from displacement.
Advocates for the legislation argue that it would reduce transience and benefit families. Opponents say it would produce permanent tenancies and discourage investment in buildings.

The authors also recommend funding programs that allow tenants and community organizations to purchase buildings and better city enforcement of housing maintenance. Harsher penalties for violations could disincentivize owners from forgoing repairs.
Finally, the report suggests regulations that would compel owners to direct refinancing proceeds toward improvements and hold lenders accountable.
 

David Goldsmith

All Powerful Moderator
Staff member

States bicker over rental assistance amid Treasury reallocation​

Total $2.3B to be moved this year, spurring disparity across state lines​

Evidently, $46.5 billion of rental assistance is not enough to go around in the United States.
The Treasury Department has started reallocating funds from states with excess funds to states out of funds altogether. The Associated Press reported the reallocation has created winners and losers, along with political debates among lawmakers, tenant advocates and residents in some states.
According to the Treasury, $30 billion has either been spent or allocated through February. States have a mandate to cumulatively spend the first $25 billion by September and the remainder by 2025. To move things along, the Treasury is reallocating $1 billion from the first pot of assistance and $2.3 billion overall this year.
Big states like California and Texas are the ones generally receiving the reallocations, according to the AP. Smaller, Republican states with more rural residents and less renters are the ones largely losing money, like Montana and West Virginia.
Some of those states had an excess of funds and were able to return some with little issue.
Other states, however, have run into political battles. North Dakota and South Dakota have found themselves divided across parties; Democrats wanted to keep more money, while Republicans were ready to return the funds. South Dakota Gov. Kristi Noem even referred to the funds as “government hand-outs.”

Tenant advocates want to keep the funds coming, especially for those who live in rural areas or may not have access to affordable housing. They’re facing claims from opponents, including Nebraska Gov. Pete Ricketts, that access to funding is an incentive for people not to work.
“We are trying to reallocate the best we can,” Gene Sperling, who is overseeing the coronavirus rescue package, told the AP.
Even states benefiting from the reallocation are left feeling unsatisfied. Last month, the Treasury said it would allocate $119 million for New York’s rent relief program, only 7 percent of the $1.6 billion Gov. Kathy Hochul requested.
“Every dollar is meaningful; however, this falls woefully short of meeting the financial struggles of the nation’s largest population of income-insecure renters,” said Joseph Strasburg, president of the Rent Stabilization Association.
 

David Goldsmith

All Powerful Moderator
Staff member

Landlords who got aid are illegally raising rents: AG​

Letitia James says renewal notices violate program terms, amount to “double-dipping”​

Tenants have reported getting lease renewals with rent increases after their landlords received money from the state’s emergency rental assistance program, the attorney general said Monday.
Those hikes violate the program’s rules.

ERAP provides money to owners to cover arrears, but landlords must keep rents steady for a year after receiving the first relief payment.
“Landlords who accepted payments from the state yet are still raising rents are double-dipping and breaking the law,” James said, adding that some lease renewals may have been generated automatically by management systems.

The attorney general added that she is “ready to take action” if landlords break the rules, but she did not say what she might do.

The warning comes as demand surges for rentals in the city, triggering record-breaking increases. Rents are up nearly 40 percent from this time last year, according to data from Zumper.
Landlords looking to profit off those jumps have been quick to hike rents, pricing out existing tenants. In some cases, prospective tenants have engaged in bidding wars.

James’ warning also applies to the 180,000 owners who have applied for relief but have yet to be approved. Owners who plan to accept funding should not raise rents, she said.
In the past month, the U.S. Treasury and state have injected a combined $919 million into ERAP to satisfy some of those pending applications. But the money might cover less than half of what New York rental owners are owed.

James instructed tenants who received a notice seeking an illegal increase to return the document to their landlords with a note explaining that receipt of ERAP funding precludes a rent raise. Those tenants should ask for a new lease.
 

David Goldsmith

All Powerful Moderator
Staff member

Eviction filings pick up as housing courts get busy​


Filings since March up about 40% from mid-January​

Weeks after New York’s eviction moratorium expired, legal services were overwhelmed by an influx of cases. In the months since, the situation has only grown more burdensome.
Landlords have filed about 2,000 eviction cases on a weekly basis since the beginning of March, the New York Times reported. The volume of filings represents about a 40 percent jump from mid-January, when the moratorium expired.

People are beginning to be evicted. The process is slow, as cases wind their way through housing court, but ore than 500 cases have resulted in tenants losing their homes since February.
The increase in filings has left tenants in the lurch as they struggle to find representation they’re entitled to under the city’s Right to Counsel program. Last month, several legal services providers urged the courts to slow scheduling so low-income tenants could get representation, irking landlords seeking to be made whole financially.

As of early April, housing courts were contending with a backlog of 200,000 eviction cases that piled up during the two-year eviction ban. By comparison, about 262,000 eviction suits were filed in all of 2019, according to data from the state court system.
A spokesman for the court recently said legal groups have declined almost 1,400 cases since the start of March. Legal Services NYC has stopped accepting cases in Brooklyn, while Legal Aid Society has stopped taking new cases in Brooklyn, Queens and Manhattan.

Legal services providers are jockeying for upcoming law school graduates to help ease the caseloads of attorneys struggling to cope with the sheer volume of cases coming through housing court.

Lucian Chalfen, spokesperson for the courts, rejected the notion of a slowdown, saying it would “accomplish nothing” and the backlog would continue. Chalfen noted the number of scheduled cases was below pre-pandemic levels, down 41 percent compared to 2019’s first quarter.
 
Top