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Wednesday, Apr 14, 2021

New York is about to kill a whole lot of landlords

New York is about to kill a whole lot of landlords

Thousands of tenants haven’t paid full rent.
Gov. Andrew Cuomo and President Trump made sure to protect tenants by banning evictions during the pandemic, but public officials have done almost nothing for property owners. That’s inviting disaster.

Many of these landlords, particularly mom-and-pop small-building owners, have been struggling for months to make ends meet as the COVID crisis drags on.

Thousands of tenants haven’t paid full rent. Others, looking to escape the virus, violent crime and plunging quality of life, have fled, pushing up the vacancy rate and forcing owners to grant concessions.

Meanwhile, landlord bills — including property taxes and water and sewage fees — have mounted, without letup. Cleaning and other costs have actually soared, thanks to the pandemic.

The latest nightmare: an upcoming tax-lien sale, where the city sells owners’ unpaid tax bills to a third party, which then moves to collect on them, along with 18 percent interest charges. Waves of foreclosures may soon follow.

Cuomo had placed a moratorium on lien sales, but it expires Tuesday. That could spell doomsday for owners on the hook. And not just small landlords, but also owners of private homes as well.

Anyone who recalls the housing-market horrors of the 1980s knows where this is headed: landlords unable to do basic maintenance, some ditching properties altogether. Decaying and abandoned buildings spreading urban blight. The city taking possession of vacant buildings — which takes them off the tax rolls, depriving it of vital revenue.

The prospect has pushed some owners and real-estate advocates to call for a halt to landlord-debt sales altogether.

“If the City Council doesn’t end tax liens,” warns Rent Stabilization Association President Joe Strasburg, the “housing crisis of the 1980s will pale in comparison.” No one “will be spared.” And New York’s “property-tax base, the city’s top revenue producer, will come crumbling down.”

Yes, the city needs a way to collect taxes it’s owed. But those levies can eat up as much as 50 percent of a landlord’s income. That’s not sustainable even in good times.

Landlords need relief. If they don’t get it soon, they won’t be the only ones to suffer.

Quote of the Day

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.

Warren Buffett
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