Millions of Americans have lost their jobs or seen their incomes decline during the pandemic, and it's caused them to fall behind on their rent. In New York City, almost 500,000 households are delinquent on their housing payments, according to an analysis of census data by the National Equity Atlas.
All told, landlords in the city are owed over $2.2 billion. And with the new Centers for Disease Control and Prevention (CDC) eviction ban that was recently put into place, they may need to wait even longer to get it.
Landlords are struggling
It's easy to sympathize with tenants who lost their jobs through no fault of their own when the pandemic roared into town. But there's been less sympathy for real estate investors who make a living by managing properties and collecting rent.
Last year, to prevent a massive homelessness crisis, the CDC put an eviction ban into place, during which time landlords were left in the lurch on the rent collection front. That ban was then extended several times over before finally expiring at the end of July.
For a very brief moment, it looked like landlords would finally have some options once New York State's own eviction ban expired at the end of August. But then, the CDC put a new eviction ban into place that's set to last through October 3. And while the new ban isn't quite as all-encompassing as the last one, it still applies to the majority of U.S. counties. (Renters in any county with substantial or high COVID-19 transmission rates are protected.)
Rent relief funds could be a lifeline for landlords
Between the last two stimulus bills, there's $45 billion in rent relief funds available to help tenants get caught up on their housing payments. Of that, New York State is privy to $2.7 billion.
In June, the state launched a portal that would allow renters to apply for aid. Approved applicants are eligible for up to a year's worth of unpaid rent plus a year of unpaid utilities. And low-income renters can qualify for an extra three months of rent on top of that.
The good thing about these rent relief payments is that they generally go directly to landlords unless those landlords specifically opt out. Landlords can also apply on their tenants' behalfs. The bad thing is that New York has been horrendously slow in getting that money out.
So far, over 160,000 applications have been filed in New York State, 75% of which stemmed from renters and landlords in New York City. But as of the end of June, New York was one of only two states that had yet to send out rent relief funds. And as of late July, less than $1 million had been disbursed.
Now, New York is working on rolling out a new application to help speed up the process of requesting rent relief. And the city's also planning to ramp up the distribution of payments so that money gets into the right hands faster. As of now, the state is saying it will take until the end of August to disburse funds for approved applications.
From a landlord perspective, this is a mixed bag. The positive news is that landlords should get the money they're entitled to from the state's rent relief program at some point in the not-so-distant future. The problem is that many landlords may not recover from the fact that they couldn't collect rent for well over a year.
It's estimated that the CDC's eviction ban has already forced 12% of landlords out of business. And if New York hits any more snags on the rent-relief front, that statistic could easily climb locally.