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New Yorkers rent. To get an idea of the level and degree, look at Brooklyn. More than 2.5 million people live in this borough, and almost 1.8 million are renters. Combine that staggering number with the variety of laws and court directives passed since the start of the pandemic, including the Tenant Safe Harbor Act (TSHA). Not only was there a moratorium on evictions that lasted nearly two years, but the effects of these laws and directives have been and continue to be far-reaching even after the moratorium has ended.
The moratorium’s purpose was to protect tenants who were losing money from a struggling economy—and could eventually face eviction because of it. However, as with many programs, the abuse has been rampant and widespread. Additionally, due to several correlated events, the moratorium has added to a shortage in the amount of available low-income housing. In the midst of all of this turmoil, the mom-and-pop landlord, which make up the majority of the rental market in the outer boroughs, is getting forced out of the market.
The Mom & Pop Landlord
When you look at the statistics put out by the U.S. Department of Housing & Urban Development, you learn that a significant amount of properties are owned by individuals rather than for-profit organizations. A person who owns one to four units is likely renting out properties and using the rent money to pay for the mortgages and upkeep. Although they probably have relatively small profit margins, they anticipate a large windfall when they eventually sell.
Because of the eviction moratorium, these same individuals were forced to pay the mortgage, taxes, water, heating and other carrying costs, often without receiving any rental income from tenants that they could not remove from their property. The mom-and-pop landlords were faced with the possibility of carrying several mortgages on their own, losing their properties, or selling to a larger for-profit business that had the capital to wait out the moratorium.
And that is why many claim that these individual landlords, who were once providing housing for low-income individuals, are being chased out of New York. The average cost of a private individual’s rental property fell below the average price of an apartment building owned by for-profit businesses.
The End of the Moratorium
The immediate effect of legislation and court directives passed as a result of COVID was on the tenants who supposedly could not afford rent due to the pandemic. After two years, the secondary and tertiary impacts on the housing market are being realized. Even though the moratorium is over and the courts are scheduling hearing dates, the delays are lengthy, the procedure more cumbersome, and the arrears owed are often staggering. The moratorium prevented people from being evicted for a time, but just now realizing the cost with which it came. While we were able to help our clients navigate this difficult time during the pandemic, we are all still dealing with the aftermath and will be for the foreseeable future.
Drucker & Mattia PLLC
The attorneys of Drucker & Mattia, PLLC, have vast amounts of experience assisting property owners. The moratorium and the pandemic affected both landlords and tenants. Contact us today to schedule a free initial consultation for legal counseling in conjunction with either.
Drucker & Mattia PLLC
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