The coronavirus pandemic has upended—or at least temporarily paused—regular life for many people. Job loss is just one of the drastic changes millions of New Yorkers have to deal with now, and that means it's going to be hard for many of them to pay rent. In fact, about 40% of New Yorkers won't be able to afford their rent after being laid off.
So it's a good thing Gov. Cuomo announced a 90-day suspension on evictions from residential and commercial buildings. The only problem is that this puts extra pressure on landlords across the state, many of whom won't be able to afford their mortgage if they don't receive rent payments from tenants. That's why some are proposing a freeze on mortgages—as well as other possible solutions—until tenants can more consistently pay their rent.
Several Ideas Proposed to Help Landlords
Many landlords throughout the city are worried about how they're going to pay their mortgage when nearly half of their tenants likely can't pay for a few months. So lately, there's been a call for local politicians, including Gov. Cuomo, to enact a plan to help landlords, not just their tenants grappling with the effects of coronavirus across NYC.
More specifically, some have suggested direct financial help, such as tax-free rent vouchers that are tied to tenants' unemployment claims. They also recommend that the city offer their help to struggling tenants via cash assistance so they can pay their rent. This may be better for everyone than waiting until they're about to be evicted after months of not being able to pay.
And of course, there's the option of suspending the mortgage payments of New York landlords until their tenants can consistently pay their rent once again. In fact, Frank Ricci of the Rent Stabilization Association has suggested mortgage forbearance, plus a waiver on sewer and water fees and property taxes—which make up about 40% of their payments. Gov. Cuomo's spokesman Peter Ajemian mentioned the state is considering the possibility of waiving mortgage payments, as well.
It's also important to encourage tenants who haven't lost their income to keep paying rent on time. After all, since almost 40% of their rent payments go to the city in some way—from property taxes to sewer and water payments—on-time payments help the city as well as the landlords. Unfortunately, some people seem to have misunderstood Gov. Cuomo's moratorium on rent and have encouraged people to stop paying even if they can afford it because the landlords don't have to pay their mortgage right now either. At least that's what some local politicians have claimed. But their assumption isn't true, as New York landlords are still very much expected to keep paying their mortgage on time—for now anyway.
Legal Help for New York Landlords
Until there are plans in place to help New York landlords whose tenants can't pay for a few months, many will struggle to pay the mortgage. However, there may be legal protections in place that not everyone is aware of. So if you're an NYC landlord facing foreclosure at this difficult time, contact a New York City real estate attorney for legal guidance.