Rental Sanity
No, NY isn’t facing a tsunami of evictions
MILLIONS of New York tenants are at risk of losing their homes — or so warn activist groups regarding the impending demise of the Empire State’s eviction moratorium. This, despite the $2 billion in aid Washington sent our way to make sure that exact thing doesn’t happen. The money, housing advocates insist, won’t prevent a mass-eviction crisis unless lawmakers extend the moratorium.
This is unfounded hysteria. There is no doubt that there will be hardship cases in the aftermath of the COVID-19 lockdowns. But predictions from the likes of Housing for All of “total chaos” and a wave of evictions aren’t likely to come true.
That’s because tenant advocates fundamentally misunderstand how the landlord business really works. Property owners are likely to evict only as a last resort. The reason is basic: An owner can’t be sure of finding a replacement. For owners who rely on rental income to maintain their buildings and pay their own bills — think here of the hundreds of thousands of momand-pop landlords — a vacant unit is their biggest fear.
And the housing market’s prospects look uncertain, from landlords’ perspective. It’s true that Gotham is slowly coming back to life, but there is simply no way to know how many residents have left permanently. And there is no reason to assume that small property owners have the whip hand and can dictate prices — the implicit assumption of the misguided rent-stabilization law that has distorted the city’s housing market for so long.
Assumptions that rents will always rise are no truer than the assumption that home prices would always go up — before they came tumbling down in 2008.
Owners owed back rent by tenants who qualify for COVIDrelated relief would be foolish not to wait for the wheels of bureaucracy to finally start to grind — and for tenants to get what the state has promised.
Eviction will let tenants who owe back rents off the hook. For their part, tenants who have the means should want to pay, if only to protect their credit ratings. The state needs to make the assistance process far easier; the tenant application requires a range of documents to be uploaded, including financial information from the landlord. Of course, that all requires good broadband access, just as remote schooling did. (Gov. Andrew Cuomo on Monday claimed he’d gotten this fixed.)
As we try to make sense of the many COVID-related emergency measures, it’s well worth asking why the eviction ban has gone on for so long — and why it was promulgated by the Centers for Disease Control and Prevention in the first place.
The CDC apparently assumed that it would limit the spread of the virus. But it’s more likely that we are seeing a progressive agenda in action — one that would like to prohibit eviction altogether and/or provide housing vouchers as yet another unaffordable entitlement. (Both have been on the table since the publication of Matthew Desmond’s book “Evicted” in 2016, to great liberal acclaim.) Those with such views are apparently unaware of horror stories, even in The New York Times, of tenants who have used the eviction ban to stay in homes that owners needed for themselves or who refused to pay even though they have good jobs.
If a mass eviction tsunami doesn’t materialize — and it almost certainly won’t — it should be the occasion for New York to revisit its larger housing policy, in particular the rentstabilization regime that covers some 1 million apartments.
An abrupt end to the program would be housing heresy of the highest order. But with the city’s population down and owners in fear of vacancies, this would be the best time to finally rid ourselves of a policy that provides rent relief for the wealthy and distorts housing prices citywide, by removing a vast swath of existing housing stock from the rational pressures of supply and demand and allowing some New Yorkers to permanently hold rent-stabilized apartments. Indeed, the required, upcoming Census review of the city’s housing market could well find a vacancy rate higher than the 5 percent trip wire imposed by state rent law.
If somehow that led to rent control’s rollback, we would see another round of mass-eviction mass hysteria — followed by calm after the storm, as the city’s housing market, like those of all other big US cities, finds prices that make sense and balance supply and demand. Let us hope.