“Disgusting”: Industry accuses rent-strike leaders of exploiting crisis

Action would damage city, landlords and tenants, say real estate leaders

TRD New York /
Apr.April 17, 2020 08:00 AM
The Durt Organization’s Jordan Barowitz, Slate Property Group's David Schwartz and Rent Stabilization Association President Joseph Strasburg (Illustration by The Real Deal)

The Durst Organization’s Jordan Barowitz, Slate Property Group’s David Schwartz and Rent Stabilization Association President Joseph Strasburg (Illustration by The Real Deal)

Real estate industry leaders slammed tenants’ call for a May rent strike, deeming it political opportunism that could backfire.

While multifamily landlords are depending on tenants to pay rent if they are able — as 84 percent did in early April, one survey found — advocacy group Housing Justice for All seeks to drive that number toward zero. That could put vulnerable tenants at risk for damaged credit and eviction down the road, said David Schwartz, principal of affordable housing developer Slate Property Group.

“If they really cared about the less fortunate, they would come up with a plan to forgive rent for those who lost their jobs, and if that were the message, landlords would get behind it,” said Schwartz. “But this is a group focused much more on their own ideological interests. They don’t believe in rent … or even the police.”

The rent strike is a gamble, intended to pressure the government to provide relief for tenants who need it. But Sherwin Belkin, a partner at real estate law firm Belkin Burden Goldman, said he has been encouraged by Gov. Andrew Cuomo’s statements urging tenants to pay rent if they can.

Belkin also warned that if lawmakers impose a rent-canceling measure, it would have “serious constitutional infirmities.”

The lawyer said that by and large, multifamily property owners are working with tenants hurt by the shut-down that Cuomo ordered last month and extended Thursday through May 15.

“In light of the receptiveness of owners to work with tenants actually suffering hardship, encouraging the withholding of rent by those who can pay is mean-spirited at best,” Belkin said. “I also wonder if the next strike will be against paying for groceries or medication. I assume not, because vilifying property owners is the easy and cheap political tactic.”

Jacques Ohayon, who owns 50 apartments on the Upper West Side, suspects the strike threat is intended to pressure Cuomo into continuing a current eviction moratorium beyond 90 days. He said he supports rent relief on a case-by-case basis for tenants who are unemployed.

“Blanket forgiveness is a dangerous precedent,” he said. “Yes they deserve a break, but please consider the flip side.”

The flip side, said Jay Martin, executive director of the Community Housing Improvement Project, is that rent pays for building services — such as emergency cleanings during pandemics — and property taxes that sustain the city.

Martin criticized rent-strike organizers for “bragging on social media” that they have enough money to pay rent but are withholding payments out of solidarity with tenants who cannot.

“It’s kind of disgusting,” the landlord group’s director said. “It seems as if they are trying to use this crisis to further their political agenda.”

The Durst Organization’s Jordan Barowitz forecast the ramifications of the plan, which is also backed by advocacy group New York Communities for Change.

“A rent strike would disproportionately impact smaller landlords and pummel the city’s property tax collections by sending buildings into foreclosure,” he said in a statement. “It would cause thousands of 32BJ and municipal workers to lose their jobs including teachers, cops and firefighters.” The union SEIU 32BJ represents building service workers.

Property tax makes up the largest share — about $30 billion, or a third — of New York City’s annual revenue. It is a foundational revenue source because it does not fluctuate much with the economy. An Independent Budget Office study released Wednesday predicted little immediate decrease in the city’s property taxes.

Many in the real estate industry — and organizations such as the Rent Stabilization Association and the Real Estate Board of New York — along with state legislators including Senate Housing Committee chairman Brian Kavanagh and Sen. Julia Salazar — advocate for expanding a rental assistance program to help renters and landlords.

More than 200 elected officials, housing groups, landlord associations and other signatories have urged New York Congress members in a letter to secure $10 billion in federal rental assistance for the state.

But Housing Justice for All, which represents over 70 tenant organizations, retracted its support before the letter was issued. The New York City Democratic Socialists of America was erroneously included in the list of signatories because of a “miscommunication,” according to its co-chair, Sumathy Kumar.

“NYC-DSA is currently fighting for universal cancellation of rent for all New Yorkers during this crisis and a permanent rehousing of the 92,000 homeless people in the state,” said Kumar. “In our opinion, a three-month rent voucher is not a sufficient response to this crisis.”

Rent Stabilization Association President Joseph Strasburg said the real estate industry has been pushing the federal government to provide vouchers to tenants in need. He called the push for a rent strike “irresponsible.”

“They should be focusing their energies, along with the industry, to get renters relief from Washington, D.C,” Strasburg said.

Strasburg said tenants who don’t pay rent during the eviction moratorium — and haven’t worked out a repayment plan with their landlords — could get caught in a wave of housing court cases come June.

“Housing court is going to be relegated to basically a collection agency,” he said.


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