The coronavirus pandemic has hit a lot of people hard, and while the jobless rate has fallen tremendously since reaching a record high in April 2020, millions of Americans are still out of work. But the jobless rate in New York City far exceeds the national average -- as of December 2020, it sat at 9.5%, whereas the U.S. unemployment rate that month was 6.7%.
It's not surprising, then, to learn that New York City tenants are horrifyingly behind on rent. In fact, the city's landlords are owed more than $1 billion in missed rent payments, according to landlord trade group the Community Housing Improvement Program (CHIP).
That said, that $1 billion figure may be a lowball estimate, as CHIP tallied data on buildings subject to New York City's rent regulation laws, which account for about 50% of the city's total rental units. When we factor in delinquent rent from all New York City units, the total amount owed by renters is probably more than $2 billion.
Government aid has fallen short
Those who have been impacted negatively by the pandemic have been entitled to aid in the form of stimulus checks and boosted unemployment benefits. But given the number of tenants who are behind on their rent, it's clear that aid hasn't done a good enough job. Both landlord and tenant advocacy groups have repeatedly lobbied for more assistance during the pandemic.
While some property owners may be in a position to write off missed rent payments and still keep up with their own mortgage payments, many of the city's landlords aren't large property management companies -- they're mom-and-pop landlords who need their tenants to keep paying so they can cover their own mortgages.
The $900 billion coronavirus relief bill signed into law in late December included $1.3 billion in pandemic-related rental assistance for New York State alone. But it's unclear as to how much of that total will be made available to New York City renters and how exactly that aid will be disbursed in general.
Of course, there's been protection for renters since the start of the pandemic in the form of eviction moratoriums. In December, Governor Cuomo extended New York's statewide eviction ban until May 2021. But that's left many landlords to scramble to pay their own bills.
New York City landlords should seek relief
New York City landlords who can't make their mortgage payments due to a lack of rent collection can see if they're entitled to forbearance, or extend their existing forbearance arrangements if eligible. Recently, the Biden administration announced mortgage borrowers who entered forbearance by June 30, 2020, could extend that protection for six months beyond its original 360-day window, thereby allowing for a total of 18 months of paused payments.
But not every mortgage qualifies for forbearance, and at this point, landlords who can't make their housing payments may be running out of options. If they can't collect rent from their tenants but also can't replace those tenants with ones who can pay, they could eventually risk losing their income properties.
As things improve on the pandemic front, vaccines get rolled out, and the jobless rate declines, more New York City tenants could find themselves in a stronger position to start catching up on rent. For the sake of mom-and-pop landlords, let's hope that happens in time to avoid unwanted consequences -- namely, foreclosures for those landlords whose hands have been tied since the pandemic began.