The abolition of rents has put small homeowners on the brink of survival

Now, not only tenants, but also homeowners are going through difficult times. So that everyone can stay afloat, you need to join forces. Maintaining safe and affordable housing is critical to the future of New York. This became especially evident during the crisis caused by the pandemic of the coronavirus infection. This publication writes New york curbed.

Hard times

Brooklyn homeowner Ting hoped to replace the roof of his pre-war brick apartment building in Brownsville this year. Instead, he uses the money he saved from renovations to stay afloat after three of his four tenants failed to pay their rent in May. Rental income is his only income. But the landlord says he is more disillusioned with the government than with his tenants. “Everyone is going through difficult times right now,” laments Ting, who asked not to be named for confidentiality reasons.

All of his tenants who did not pay in May were waiting for unemployment checks after they lost their jobs. “I can’t continue the agreement without paying a mortgage, but I don’t want to drive out my tenants. We need help, and we need (government. - Ed.) sent it to the people who really need it most. "

For many, the term “landlord” conjures up the image of a tough man managing many houses who sees his tenants as numbers. However, small owners who own one or more real estate properties often earn not so much, unlike large homeowners, and do not have sufficient cash or access to loans. Therefore, it is not easy for them to survive the long economic pause caused by the pandemic.

Even before COVID-19 hit New York, Thing was hardly making a profit. His expenses include mortgage payments, electricity, water and sewer, heating. In total, they can reach $ 6 thousand per month, depending on the time of year.

In addition, he has to allocate funds for unexpected repairs. As a result, Ting's monthly profit is usually, he said, only $ 300.

Now, until the rent comes in, he works in conditions of "super deficit." And if he did not have the money saved on the repair of the roof, he would survive at the expense of personal savings. But this can happen anyway.

The crisis has affected everyone

Such tight profit margins underscore the economic gulf between the various New York landlords and the financial difficulties they are currently facing. Problems have fallen on both such as Thing and some of the largest urban landlords, such as the Vornado Realty Trust. The latter for the first quarter of the year received a net income of only $ 5 million. But between small owners and giant corporations, there are countless different homeowners.

Giants such as LeFraks, Dursts, and Rudins dominate urban real estate. But in fact, New Yorkers are just as likely to live in an apartment managed by a landlord who owns only one or more buildings. And many of these small, older properties tend to stabilize rents. This usually applies to houses with six or more apartments built before 1974.

According to The Community Housing Improvement Program (CHIP), 80% of the 4000 rent stabilized members of this program own less than 25 housing units, ranging from small family buildings to mixed apartment complexes. But in May, about 20% of CHIP tenants were unable to pay their rent, up from about 100% in April, according to a poll conducted among its members. Of the surveyed homeowners, who have about 64 thousand apartments, another XNUMX% of tenants of premises on the first floors did not pay for them in May. “Amazing,” says Jay Martin, CEO of CHIP, appalled by the loss of rental income for small landlords. "This is a huge part of their business that has just evaporated and probably won't be back for a while."

Joanna Wong is one of those who struggle with this loss of rental income from residential and commercial premises. Wong, who is a member of CHIP, has been managing a 30-unit house in Chinatown in Manhattan for about 40 years, and a six-unit house in Sunset Park in Brooklyn. Both buildings have retail space on the ground floor, but these enterprises were mostly inactive due to the state order for accommodation in the house. Most tenants paid in April, but in May the situation changed.

“In the same boat”

“I'm trying not to drown right now,” Wong said. - It's so difficult to plan something, because no one knows how long it will last. There is a lot of uncertainty on both sides. " She believes that tenants and small landlords are "in the same boat."

Mariko Osanai rents a one-room apartment in the Wong building in Sunset Park, where she lives with her 7-year-old son. After losing her barber income in mid-March, Osanai says she negotiated partial payments for April and May, but Wong waived some of the rent and also used some of Osanai's bond. “I have to say that I am very grateful and happy that my landlord has a good heart,” said Osanai, who believes that the state and the federal government should provide equal support to tenants and property owners. "But people who are not so lucky have no choice."

On the subject: 7 things New York City tenants need to know during the COVID-19 pandemic

Some tenants argue that both tenants and small landlords should not be left in the lurch. Patricia Keaton, who recently lost her job as an event organizer, lived for three years in a one-room apartment in Woodside. A few days before the lease expired in April, her landlords, who own a four-story apartment building, called to arrange for a partial payment plan. “It was a difficult conversation because we all have bills and no one is to blame for that,” says Keaton, who notes that her father owns a small apartment building in the upstate. - Tenants need support, no doubt about that. But my business too. How can anyone expect to be able to do business as usual when people are fighting and the city is under lock and key? This is especially true when a property without a professional manager can mean working without weekends and holidays. "

For Wong, managing her buildings involves multiple functions. This has been the case since her parents bought a pre-war apartment building, and her father worked a variety of jobs, from taxi driver to tofu maker, to make ends meet. He even took up construction to learn how to renovate buildings. Wong herself took plumbing courses at New York College of Technology to reduce maintenance costs. “Managing a small building is a completely different matter because you do a lot yourself,” she says. - We are cleaning the clogs in the toilet. We are clearing snow, not sitting in offices with our feet on the table. "

Wong plans to pay his bills as long as he can. If the moment comes when she cannot pay, “then it will be necessary to make a choice of which bills not to pay, to determine which ones are not absolutely necessary for working day in and day out, such as real estate taxes,” she commented.

In addition to the money that could be used to maintain the buildings, as is the case with Ting, some are struggling to pay mortgages or property taxes. And if the owners of the buildings cannot pay their next bill for real estate (the tax that is due in July), this is in great trouble for New York. The city has already cut its budget by $ 1,3 billion for emergencies due to billions of lost tax revenues and rising new costs to counter COVID-19.

Debt problem and ways to solve it

“It's a domino effect,” says Chris Athineos, CEO of Small Property Owners of New York (SPONY). This company represents property owners who own less than 100 buildings. “If the tenant does not pay the rent and the landlord cannot pay taxes on the property, then the city is unable to maintain schools or pay police and firefighters. It's all interconnected. "

That's why a solution to the debt problem should include support for tenants and landlords, Athinos and Martin argue. One measure could be an emergency rental assistance program similar to that proposed by State Senator Brian Kavanagh. She would use vouchers to bridge the gap between total rents and 30% of adjusted household income. Real estate tax benefits in the form of reduction or cancellation of late fees, which can be up to 18%, can also be useful, say, to groups of lessors.

State Governor Andrew Cuomo forbade landlords from leasing late fees and imposed a moratorium on eviction until August 20. However, he did not say anything about how to expect rental payments from poor tenants, which could ultimately amount to a monthly rent after the moratorium expires. He did urge state lenders to suspend mortgage payments, but this does not apply to apartment buildings. Many perceived this as an unfair provision of homeowners privileges compared with tenants.

On the subject: Cuomo extended moratorium on eviction of tenant debtors in New York

In any case, tenants and small landlords need government assistance, and they must band together to get it, Atinos says. “Small home owners and tenants need to really go hand in hand with their legislators to urge them to ease the burden,” he said. It doesn't have to be an adversarial relationship. We should work together. "

What help has already been provided

Shortly after the Pause plan went into effect, management at affordable housing developer PUSH Buffalo raised rental cancellation funds in April and May for 99 low-income tenants and five commercial tenants. “These are tenants working in the service sector. We knew they would be the first to fail to come to work, ”said Rahwa Ghirmatzion, CEO of PUSH Buffalo.

Brooklyn landlord Mario Salerno canceled April rents for a couple of hundred tenants in their 18 apartment buildings at Greenpoint. It is important for him, “so that everyone has food on their table” at this difficult time.

Of course, not all homeowners are so generous. And while some small landlords began to make concessions to tenants and look for ways to solve the problem, others sought to capitalize on the crisis. This includes renting renters who are short of cash and threats to those who cannot afford to pay during the crisis.

For some tenant activists, the idea that property owners are facing financial struggles similar to those of wage tenants is offensive. Tenant activist Cea Weaver with Housing Justice for All says she has a hard time sympathizing with small landlords who may still have portfolios of multimillion-dollar assets. However, she believes that “really small” landlords, who tend to live in their own buildings, need government assistance. “Tenant moms and daddies are closer to tenants than corporate real estate tycoons,” Weaver says. - I think we have common interests. Both tenants and small landlords should campaign around this. ”

“Obviously, we will never be able to agree on some things. But in my opinion, it is possible to agree that maintaining safe, affordable housing is critical to the future of New York. And right now, small private homeowners need support for that purpose, ”says Martin. "We are like two ships passing at night, but essentially moving in the same direction."