As New York confronts an unprecedented health and economic crisis, AAFE calls on our city, state and federal government leaders to implement a comprehensive housing stabilization plan. This is the only way to protect the most vulnerable members of our low-income and immigrant communities, who have been disproportionately impacted by COVID-19. Our perspective on these issues is informed not only by our decades-long commitment to tenant rights but also AAFE’s long experience as a mission-driven affordable housing developer.
The State Legislature approved several bills this week that fall far short of what is required to address the dire situation faced by tenants across New York City. At all levels of government, our elected officials must act swiftly to bring our devastated communities the support they so desperately need. We believe that an equitable housing plan must include:
RENT RELIEF: While Governor Cuomo was right to extend the state’s eviction moratorium through August, the protections offered to tenants will be substantially weakened after June 20. According to the governor’s executive order, the legal burden is on tenants to prove they cannot pay rent or to show that they’re collecting unemployment benefits. If allowed to stand, undocumented immigrants and others who do not qualify for government benefits will be endangered and it will be open season on low-income tenants in housing court. The moratorium also does nothing to address a looming problem: how tenants are supposed to come up with thousands of dollars in back rent that will eventually come due. We support rent cancellation for tenants financially impacted by COVID-19, with the understanding that nonprofit and small landlords must receive government support to meet their financial obligations.
RENT FREEZE: In a preliminary decision, the Rent Guidelines Board voted to approve a rent freeze on one-year leases, while allowing a 1% increase in the second year of two-year leases. Given the current dire situation faced by rent stabilized tenants, the board should enact an across-the-board rent freeze when the final vote takes place June 17. Furthermore, the board must provide equal opportunities for all communities of color to participate in the process, since in-person public hearings have been cancelled and meetings are being conducted remotely. Simultaneous translation, including Chinese language translation, must be provided.
RENTAL ASSISTANCE: While it is essential to protect our low- and middle-income tenants from eviction during and after the pandemic, we must also ensure the stability of New York City’s stock of affordable housing. Property owners are still responsible for mortgage payments and property taxes, even though many residents are unable to pay rent. Many mission-driven nonprofit housing organizations and small landlords, particularly legacy second and third generation small building owners in New York’s immigrant enclaves, do not have cash reserves to meet their financial commitments in this difficult environment. Predatory private equity firms are already circling, waiting to snap up distressed properties. If they are successful, our neighborhoods and low-income residential and commercial tenants will lose out and face wholesale gentrification pressures unlike anything we have experienced before.
This is why it is so important for our government to establish an adequate emergency housing fund to help tenants pay their rent and to provide housing vouchers for homeless New Yorkers, while allowing small landlords to stabilize their properties. The $100 million voucher program approved in Albany this week is clearly inadequate. State lawmakers have admitted this reality, acknowledging that at least $10 billion is needed from the federal government for rental assistance in New York.
The stakes could not be higher. Small landlords already fear they will not be able to pay their next property tax bill. Since one-third of the municipal budget is dependent on property tax revenue, this could have far-reaching and disastrous financial impacts, hampering the entire city’s recovery efforts. If tenants do not obtain rental subsidies, landlords will likely default on tax payments, which in turn would result in cuts to vital city services, trapping the regional economy in a downward spiral.
In the absence of federal aid directly to tenants, as the next best option our city and state governments should provide nonprofits and small landlords with property tax relief and subsidies for utilities, insurance and maintenance. This will enable them to absorb rent shortfalls and provide forgiveness and forbearance to tenants who have lost income and from commercial tenants who were required to close during the pandemic.
While robust federal funding is essential, our state must also act boldly by identifying other revenue sources. New York’s wealthiest households can and should pay their fair share in taxes. We call on our State Legislature to enact equitable tax policies to bolster critical services and stabilize our affordable housing infrastructure.
AFFORDABLE HOUSING DEVELOPMENT: New York faced an affordable housing crisis long before the pandemic. The economic hardship brought on by COVID-19 will create an even greater need for safe and secure homes for our most vulnerable community members, including a growing homeless population. There has never been a more critical time to invest in affordable housing for both new construction and preservation. Undertaken safely, essential affordable housing construction provides jobs and income for thousands of workers and ancillary trades, while ensuring the creation of more affordable housing to provide a safety net for many New Yorkers facing unemployment and homelessness.
As we have witnessed in previous disasters such as 9/11 and Hurricane Sandy, existing rent stabilized housing becomes even more vulnerable during the ebb cycle of economic recessions as buildings are sold by distressed small landlords to private, deep-pocketed real estate investment funds. The pause in the market and even decline in sales prices allow entire neighborhoods to be acquired by predatory developers which, time and again, leads to rampant tenant harassment and mass eviction once the economy recovers.
It is both a prudent and economical affordable housing strategy for the city to invest in nonprofit and mission-driven housing organizations to ramp up housing preservation initiatives like previous Lower Manhattan acquisition programs and Neighborhood Pillars, which facilitates the rehabilitation of distressed properties to create permanently affordable housing. It is a proven means of stabilizing communities and preserving our immigrant neighborhoods.
The vast majority of small landlords are invested in their communities, respectful of longtime rent stabilized tenants and supportive of the mom-and-pop businesses in their commercial spaces. Nonprofit building owners are not only dedicated to preserving affordable housing, but as trusted community development organizations, they are integral to our immigrant neighborhoods. They provide critical social services and are first responders during times of crisis, ensuring the delivery of emergency assistance, food, workforce training and access to government benefits. Any housing plan emerging from post-pandemic New York must address the survival of the nonprofit institutions and small property owners who anchor our communities.
As we navigate the COVID-19 crisis, AAFE firmly believes in a comprehensive affordable housing strategy, including strong tenant protections, rent relief, support for nonprofit and small landlords and investment in affordable housing development. Only a wide-ranging plan encompassing all of these needs can address the greatest economic and housing crisis New York has faced in generations.