Real Estate Weekly
Image default
Featured

Rent stabilized landlords crushed by no-pay tenants

According to a survey of our membership, for a third straight month nearly one-quarter of all residential tenants paid no rent, and about two-thirds of all commercial tenants in rent-stabilized buildings paid no rent. 

The persistent drop-off in rent collections is having a devastating impact on operating income for many members of the Community Housing Improvement Program (CHIP), who represent the owners and operators of more than 400,000 units of rent-stabilized housing in New York City.  

CHIP members reported that 66% of their commercial tenants have paid no rent so far in June. Commercial rent collection for May was only 39%, according to members surveyed.  

The survey also found that 24% of residential tenants have paid no rent in June. Residential rent collection for May was reported at 82% by CHIP members. 

Analysis of the individual responses reveal that rent collection levels vary widely among CHIP membership. Residential rent collection is below 60% for roughly one-fifth of CHIP members. Many of these members have operating expenses and pending property tax payments that vastly exceed rent collection, putting their properties in distress. 

JAY MARTIN

“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.” 

On July 1, property taxes, which are the largest operating cost for rent-stabilized buildings often making up more than 40% of a rent check, are due in New York City. Alarmingly, 39.7% of respondents said they will struggle to pay their full property tax bill, while 5.8% of members report that they will not be able to make any property tax payments on July 1. 

The survey was conducted from June 11 to June 15 and reached the owners and operators of roughly 100,000 units of rent-stabilized housing. 

(Visited 1 times, 1 visits today)

Related posts

HAP sells interest in $506M Maverick development

REW

WHO’S NEWS: Appointments, promotions in construction & design

REW

ON THE SCENE: Latest middle market sales

REW