A Queens politician wants to bail out both renters and landlords by sticking it to the banks.
State Sen. Michael Gianaris proposed a bill that for 90 days would suspend rents for small-business and residential tenants who are out of work because of the coronavirus. The bill would also forgive mortgage payments for landlords experiencing financial hardship as a result.
“There’s going to be a chain reaction in our economy that we can’t even imagine, but it starts at the housing market,” said Gianaris. “Ultimately the chain has to end somewhere — everyone’s expectation is that the federal government will have to solve the problem.”
Under his bill, rent and mortgage payments would be forgiven rather than postponed. An executive order issued by New York Gov. Andrew Cuomo last week urged banks to defer mortgage payments for 90 days for homeowners suffering because of the health crisis.
Gianaris said that banks who hold mortgages are the “best-positioned to seek federal relief.” A relief package for landlords with mortgages backed by Fannie Mae or Freddie Mac came Monday afternoon.
Along with waiving rents for 90 days, the Queens Democrat’s bill would allow landlords in financial distress to apply for forgiveness of their mortgage payments in an amount equal to that of unpaid rent stemming from coronavirus-caused hardship.
Late fees would not apply during the 90-day period, and any lease that expires during that time would be automatically renewed, with the monthly rent unchanged.
Thirteen other senators joined Gianaris to sponsor the bill including Julia Salazar, Jessica Ramos, Kevin Parker, David Carlucci, Brad Hoylman and Alessandra Biaggi.
The bill’s consideration for landlords doesn’t quite satisfy real estate trade association the Rent Stabilization Association. The organization would rather the city foot the bill for unpaid rent, and is pushing for a “dollar-for-dollar offset” in the form of a property tax abatement for the lost rents.
“Short of this, the rental housing industry — the biggest economic engine in New York City — will collapse faster than the stock market,” Joseph Strasburg, president of the RSA, said in a statement.
“I’ve talked extensively to homeowners, landlords and tenants,” said Gianaris, explaining the process for drafting the bill. “I imagine that now we’ll hear from the banks.”