Landlord Says NYC Tenants Are Crazy to Pay Rent

In 2017, Leon Goldenberg filed an eviction case against a tenant who had stopped paying rent.

I can’t tell you how the case turned out. More than eight years later, it’s still going.

The increasing difficulty of collecting rent is one of the things Goldenberg wishes he had foreseen a decade ago. As the owner and manager of more than 2,500 units, many of them rent-stabilized, he would have gotten out before things got this bad.

Goldenberg has been buying multifamily buildings in New York City since 1983. He jokes that he now owns properties in every borough, plus Staten Island.

A sense of humor helps Goldenberg keep his sanity in a city where everything has gone against rent-stabilized landlords for the past seven years.

But there’s nothing funny about the plunge in rent collection that began with the pandemic. Even affordable housing nonprofits have seen collections rates drop by 5 crucial percentage points.

“That’s because there’s no reason to pay in New York,” Goldenberg said at a recent panel discussion in Brooklyn. “Anybody who is a tenant and pays in New York should have his head examined.”

Housing court is so slow and frequently unjust that the LeFrak Organization, the city’s largest landlord, sued to get the courts to meet its statutory deadlines. But the lawsuit went nowhere, proving that those deadlines are not real.

“You go to court and the judge says, ‘Seven months out is your next hearing,’” Goldenberg said.

The rough stretch for owners of rent-stabilized buildings began with the radical rent law of 2019. Then came the pandemic, “cancel rent,” eviction moratoriums, inflation, soaring mortgage rates and insurance premiums, deregulation rollbacks and, last week, the Community Opportunity to Purchase Act.

Zohran Mamdani, other progressives and even President Donald Trump keep talking about affordability, but the apartment that Goldenberg has been trying to take back from a tenant since 2017 is hardly unaffordable. “On a $1,000 rent, he still owes me $65,000,” the landlord said.

Advocates talk about the need for a strong safety net, but the safety net worked for that tenant: When the pandemic hit, the state’s Emergency Rental Assistance Program paid thousands of dollars of his arrears.

However, as with some other rent-aid programs, tenants could only get free money from ERAP if they stopped paying rent. It was a perverse incentive, fueled by socialists’ “cancel rent” movement. ERAP ended, but the notion that rent is optional didn’t.

Underlying Goldenberg’s comment that tenants would be foolish to pay rent is a simple fact: People have all kinds of ways to live rent-free for years. One is to repeatedly damage your apartment, then tell housing court you’re withholding rent because the unit needs repairs. Yes, this happens.

You can also buy time by calling Adult Protective Services and asking for help. The housing court judge will keep adjourning your eviction case until APS decides what to do. This can buy you a few months.

Didn’t get free legal counsel from the city? Got a cognitive issue that might justify a guardian ad litem to represent you? Need to care for a sick relative? Tell the court! Judges hand out adjournments like Halloween candy, and city officials will help, because the last thing they want is for tenants to end up in a homeless shelter.

Perhaps tenants’ most common tactic is to apply for a one-shot deal from the Human Resources Administration. The judge won’t kick you out if there’s a chance HRA will come up with money to pay your arrears. If it does, the eviction case will be dismissed.

Then, after a month or two, you can stop paying rent again and apply anew. Rinse and repeat!

Some tenants get a one-shot every year. It’s become an annual ritual — like Christmas, except the gifts come from taxpayers.

In theory, you have to pay back your one-shot. Reality check: Tenants living paycheck to paycheck often can’t save thousands of dollars for arrears while also paying rent.

Goldenberg had 36 good years in the landlord business before the tide turned against him in 2019, so he’s hardly headed for the poor house. But he says 14 percent of all rent-stabilized buildings are in pre-foreclosure or foreclosure, and he expects that to double.

His average rent is $1,386 per month. After property tax, water and sewer, heat, mortgage and insurance payments, little or nothing is left. Sometimes less than nothing.

The Housing Stability and Tenant Protection Act of 2019, he said, “has totally destroyed multifamily, rent-stabilized housing.” But despite the law’s stranglehold on rent, too many tenants still don’t pay. As Goldenberg put it, “What for?”