Whether you are a renter, small homeowner, or rental property owner, nobody is ever prepared for the economic crisis that has developed before our eyes during this unprecedented pandemic.
National and local jobless claims are reaching historic levels that even the Great Depression didn’t see. Residential and commercial tenants are struggling and that subsequently has a ripple effect on building owners. It’s simple math: if rents cannot be paid, then property taxes, water bills and mortgages cannot be paid. When these expenses aren’t paid, the city’s economy suffers and the health of the city’s already-aging housing stock takes a hit.
In New York City, where political rhetoric is often prioritized over sound policies, many of our elected officials have immediately called for the complete elimination of rental payments without thinking of the profound consequences it would have. So, what do we do if tenants cannot pay their rent and landlords cannot pay their bills? Well, the answer is much simpler than our elected officials think.
Long before everyday life was turned upside down as a result of this global pandemic, RSA called on state and city government to enact an across-the-board rental subsidy similar to existing programs that would aid all income-burdened tenants. As always though, our voices were silenced because it’s a common sense policy with no political weight.
Now, for the sake of advancing political agendas, “no rent” sounds much better than rental relief or rental subsidies. However, at some point, simple logic must prevail. A rent moratorium without corresponding aid to the owners of the buildings in which tenants are not paying rent is a prescription for urban disaster. Especially now when our members and their employees are working harder than ever to keep buildings clean and safe for tenants. Yet, the politics of assistance to building owners, no matter how desperately needed, is impossible. Never do you hear of an elected official running on a platform that calls for sympathy or assistance to landlords.
Now is not the time to play politics. Everyday life is changing for the worse as this pandemic continues to grow and we must act now. Treating housing, especially buildings with regulated apartments, differently than any other industry in need of assistance is clumsy politics ruining deliberate policy discussions. Just like any other form of business, when there is not money coming in, bills cannot be paid.
The State budget passed without immediate assistance for tenants or building owners. The focus should now be on the federal government for assistance. A $2 trillion stimulus package has already been enacted that will provide one-time payments to taxpayers, enhanced unemployment assistance and relief for small businesses. But as this pandemic continues to worsen, it will not be enough.
Tenants are losing their jobs which means there is no money coming in at all. Not only is the rent due, but other living expenses must be met. One-time cash payments and unemployment assistance will help, but can only do so much. As Congress begins to consider the next phase of a relief package, it is crucial that the federal government strongly considers temporary rental relief. With federal rent vouchers, it will provide low-income tenants and tenants who have lost their jobs with the help they need: the ability to pay rent. When rent is paid, operating expenses are paid by building owners and buildings can continue to operate.
One of the many positive aspects about rent vouchers is that it eliminates the politics. Rents are paid and building expenses are met. It’s that simple. When building expenses are met, adequate housing is provided to tenants. Direct payments and unemployment assistance can then allow struggling tenants to pay their bills and put food on the table for their families.
As this pandemic began to worsen, RSA eagerly opened dialogue with state and city elected officials. Although our concerns were considered, the political rhetoric continued and every opportunity to make headlines prevailed. Despite the constant calls to eliminate rent payments, aside from existing loan and grant opportunities for small businesses in the city, there has been no assistance provided to residential tenants and building owners on the state level.
The first of the month has passed and tenants have struggled to meet their rent. Building owners are now scrambling to meet their operating expenses. With federal and local restrictions keeping workplaces and businesses closed until at least the end of April, we expect rent collections to be far worse come the first of May.
Now is the time to act. Relief that will keep tenants in their homes and allow owners to continue everyday business can and must be a priority. Rent vouchers will allow building owners to meet their property tax obligations, which makes up 30-40 percent of their rent roll, and is vital to both the city and state at a time when their budgets are taking a massive hit.
This is a unique opportunity for the federal government to step in and provide much-needed assistance to keep building owners and residential and commercial tenants afloat.
Aaron Sirulnick is the Chairman and Joseph Strasburg is the President of the Rent Stabilization Association, which represents 25,000 building owners of approximately one million rent-regulated apartments.