New York’s rent stabilized landlords say a new emergency COVID bill extending eviction protections until the beginning of March is a stall tactic that is driving them further into debt.
The Senate Democratic Majority held a Special Session today (Monday) to pass the COVID-19 Emergency Eviction and Foreclosure Prevention Act.
Considered the strongest bill in the nation to block eviction proceedings from going forward, it allos renters and homeowners to stay in their homes if they are facing hardships due to the pandemic.
Any pending eviction proceedings, or any commenced within 30 days of the effective date of the legislation, will be stayed for at least 60 days to give tenants an opportunity to submit the hardship declaration, effectively implementing a two-month moratorium on evictions.
Senate Majority Leader Andrea Stewart-Cousins sad the law means “New York tenants, homeowners, and small landlords will not have to fear being kicked out of their homes if they’ve been impacted by this pandemic and economic crisis.”
However, Jay Martin, executive director of the Community Housing Improvement Program (CHIP), said, “Renters need help, not a stall tactic. This bill is a stall tactic. Closing the courts for a few months will not relieve the massive debt that tens of thousands of renters face, or provide any financial relief to the hundreds of housing providers who have provided safe, clean homes to millions of New Yorkers during the COVID-19 emergency.”
While Martin said his members aren’t in the eviction business, he added, “The cost of providing free housing cannot be fully borne by property owners. If renters interpret this bill as a justification to not pay rent, the damage to our economy and local budgets will be immense. We encourage the Legislature and Governor to take necessary steps to make sure this is not the case.”
The housing leader said state leaders need quickly distribute the $1.3 billion in expected funds from Congress as part of the $25 billion rental assistance fund. “Vulnerable renters and struggling property owners need this money immediately,” he added.
Senate Housing Committee Chair and Bill Sponsor, Senator Brian Kavanagh said, “By enacting this comprehensive residential eviction and foreclosure moratorium, we are delivering real protection for countless renters and homeowners who would otherwise be at risk of losing their homes, adding to the unprecedented hardship that so many are facing.”
Cea Weaver, co-ordinator for Housing Justice for All, a statewide coalition representing thousands of low-income tenants, also called the bill a “temporary solution,” adding, “In order to prevent massive economic disaster, our legislature must clear the back rent owed by New Yorkers and create a hardship fund for small landlords struggling to keep their buildings safe and afloat.”
Housing Justice for All wants the state to cancel rent altogether and raise taxes on the wealthy.
“Unless our state legislature is comfortable with a massive wave of evictions on May 1 of next year, they must include the clearing of accrued rental debt in the 2021 state budget,” said Weaver.
“Passage of this eviction bill is just one component of the broader housing and rent relief package that the state legislature must enact in early 2021. Our legislative leaders must address the looming rent debt crisis, as many unemployed tenants owe thousands in back rent and have no way to pay it. Eliminating rent debt is crucial to ensuring a real recovery from the COVID-19 crisis. With a Democratic supermajority in place in both houses, the State Legislature must forgive all back rent accrued during the pandemic, and pass permanent Good Cause Eviction protections,” said Weaver.
The legislation creates a Standardized Hardship Declaration Form, which tenants can submit in court or to their landlords to prevent or halt an eviction if they experience financial hardship due to the COVID-19 pandemic that prevents them from being able to pay their rent in full, or move; or if someone in the household is at increased risk of severe illness from COVID.
The form allows tenants to declare financial hardship if they have lost income; have increased health, child care, or other family care expenses; have been unable to obtain meaningful employment because of circumstances relating to COVID-19; or cannot afford moving expenses.
Once a tenant has signed this form, they may return it to their landlord or to a court to prevent a landlord from filing an eviction, or to suspend an eviction proceeding already underway until May 1, 2021, in addition to other protections.
The bill also provides protections against foreclosure and tax lien sales to any residential property owner that owns 10 or fewer dwelling units, including their own primary residence.
Property owners will be able to access foreclosure and tax lien sale protection by filing a Standardized Hardship Declaration Form with their mortgage lender, local assessor, or with a court, similar to that created by the eviction protection proposal. The owner will declare, under penalty of perjury, a financial hardship that prevents them from paying their mortgage or property taxes because of lost income, including reduction in rent collections; increased expenses; or the inability to obtain meaningful employment.
Landlords with more than ten total units are excluded from these protections.
The bill also protects a property owner from credit discrimination if the owner has fallen behind on mortgage payments on the property at which they reside or because they have received a stay of mortgage foreclosure, tax foreclosure, or tax lien sales on the property.
Homeowners will use the same Hardship Declaration to avoid credit discrimination based on their mortgage arrears on the property.
The legislation limits these new protections only to single home residences, co-ops, owner-occupied multifamily primary residences with one to nine rental units.
REBNY president James Whelan said the board is deeply concerned about the impact of the new legislation on the overall economy.
“From the outset of the pandemic, many of our members recognized the traumatic public health and economic carnage that COVID-19 would bring to our City,” said Whelan. “It is a generational economic crisis that has had devastating effects on tenants and property owners alike. In response, many REBNY members pledged a voluntary eviction moratorium at the onset of the pandemic in March and devoted resources to support the launch of Project Parachute. REBNY also supported New York’s eviction moratorium and recently called for it to be extended for residents and businesses unable to pay rent due to the impacts of COVID-19.
“It is understandable that the State Legislature is taking steps to extend the moratorium on evictions. Unfortunately, the legislation does not contain safeguards to ensure that the moratorium does not apply to tenants whose ability to pay rent has not been impacted due to COVID-19.
“If property owners do not receive rent from tenants who can afford it, it will become more difficult for them to use increasingly limited resources to help impacted tenants weather this crisis. Additionally, creating a broad incentive for any tenant to refuse rent would place even greater strain on New York’s ailing economy and further deplete the tax revenue that fuels basic government services for our entire population. The burden on owners is already showing, as nearly $500 million in New York City property taxes have yet to be paid this year due to impacts of COVID-19. Building owners citywide will owe $13.7 billion in property taxes by January 4.
“The State Legislature should show that it understands we are all in this together – owners and tenants alike – and take steps to ensure all owners can navigate this crisis, continue to meet their obligations and be prepared to fully engage in New York’s eventual economic recovery.”