State lawmakers have approved a moratorium on evictions for the remainder of the Covid-19 emergency.
The bill, which still needs to be signed by Gov. Andrew Cuomo, covers tenants who have been financially affected by the pandemic. Its passage Wednesday was signaled by legislators the day before.
The legislation prohibits residential evictions for non-payment of rent by tenants who have endured financial hardship between March 7 and an unknown future date. It does not cancel rent, but indefinitely removes the main leverage landlords have to collect rent. Tenants would have to document their hardship.
The moratorium would remain in effect as long as any state-imposed restrictions on businesses do. With venues such as theaters and arenas not likely to be allowed to be filled to capacity for months, the eviction ban could last into 2021, critics say.
“Owners cannot simultaneously operate their properties at the same level for the next year while continuously deferring payments and meeting their other obligations, such as property taxes,” wrote real estate attorney Stuart Saft in a memo Wednesday. “While the bill bars evictions and allows a monetary judgment, a judgment does not have much utility if a tenant does not or cannot pay the rent.”
The bill would codify an eviction moratorium recently extended by the governor through Aug. 20. One major landlord, Time Equities CEO Francis Greenburger, believes the moratorium contributed to lower rent collection in April and May.
“Ninety-day temporary eviction relief has led to a widespread misunderstanding that rent relief, or rent forgiveness, was also offered for 90 days,” he wrote in an op-ed Tuesday in Gotham Gazette. “In part because of this, rent collections have dropped, even among people who can afford to pay. In turn, owners’ ability to meet their own financial obligations has already reached a crisis point for many, but especially small-scale property owners.”
Landlords could presumably clear up any misunderstanding by informing their tenants that the rent is still due. But they note that tenants merely need to prove “loss of income” to qualify for eviction protection. The bill does not say how much income, or that the tenant must be unable to afford the rent.
“There is a big difference between someone who lost their job versus a person who took a temporary pay cut,” Saft wrote. He added that the bill does not forgive or compensate owners for any expenses, such as utilities or property taxes.
Some tenant advocates objected to the measure as well because it falls short of their goals, including canceling rent. Because it is means-tested and not universal, tenants who work off the books — including many undocumented residents — could have difficulty proving a Covid-related loss of income.
Greenburger, in his op-ed, proposed the state allow tenants to pay off missed rent over a one-year period and that landlords be able to defer payment of property taxes to match the deferred rent.
“Such a plan could keep tenants sheltered while keeping property owners and the city ultimately whole,” he wrote.