Coronavirus

New York Legislators Introduce Bill To Cancel Rent for 90 Days for Workers Affected By Coronavirus Closures

Sen. Mike Gianaris (D–Queens) argues eviction moratoriums don't go far enough to protect renters who've been put out of a job because of the virus.

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It's a sign of the times that when #cancelrent started trending on Twitter, the main accounts spreading it did not belong to members of the Democratic Socialists of America (for the most part), but rather to New York state legislators who're proposing yet another once-unthinkable policy intervention to assist people affected by coronavirus-induced business closures and layoffs.

"Tenants can't pay rent if they can't earn a living," said State Sen. Mike Gianaris (D/WF–Queens) last Friday. "Let's #CancelRent for 90 days to keep people in their homes during the #coronavirus crisis."

That same day, New York Gov. Andrew Cuomo (D) issued a 90-day eviction moratorium for both residential and commercial tenants statewide. Similar moratoriums have been issued by local and state governments across the country as one way of keeping people in their homes in the midst of the COVID-19 pandemic.

Federal agencies have also acted. The U.S. Department of Housing and Urban Development announced last week that it will suspend foreclosures for 60 days for all single-family homeowners with a Federal Housing Administration-backed (FHA) loan. FHA loans make up 12 percent of the mortgage market by dollar volume.

The Federal Housing Finance Agency said that it will offer mortgage forbearance through Freddie Mac and Fannie Mae for owners of multifamily housing who agree to suspend evictions.

Gianaris, tenant activists, and other like-minded legislators say these moves don't go far enough.

While an eviction moratorium will keep people in their homes temporarily, they say, it will do nothing to relieve tenants of their obligation to pay rent. They argue this sets us up a housing crisis a few months from now when the moratorium expires and tenants without the ability to pay months of back-rent are evicted en masse.

To prevent that, Gianaris introduced legislation Monday that would waive tenants' obligation to pay rent for 90 days if they've lost income as a result of the state's forced shutdown of non-essential businesses. Landlords would be able to deduct the rental income they lose as a result of this rent freeze from their mortgage payments.

The latter provision is a lifeline to building owners who argue that they too have bills that don't go away just because a tenant is out of work.

Suspending both rent and mortgage payments, however, just shifts these costs further down the line to banks and financial institutions who lent to landlords. If the return on their real estate investments goes to zero, lenders could also be in trouble.

Shifting costs from one interest group to another doesn't eliminate costs, it just changes who ends up bearing them. The rent freeze being proposed is a risky game of hot potato.

There's obviously a public health rationale for keeping people in their homes right now, particularly in New York City, which is experiencing the most severe COVID-19 outbreak in the country. There's also a sound case that the government should compensate people it puts out of work.

The best way to do that, however, would be through federal income assistance that allows everyone to continue to pay their bills. Cash assistance has the added benefit of transparency, as the costs of these closures will be on budget for everyone to see. Eviction moratoriums and rent cancelations, however, are more opaque, overly complex, and could create problems down the road.

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37 responses to “New York Legislators Introduce Bill To Cancel Rent for 90 Days for Workers Affected By Coronavirus Closures

  1. Does New York have any other function other than showing How Not To Do Everything?

    1. Why anyone has not sold all their property in that Commie state, I will never understand.

      So property owners gets fucked on rent because….

      1. Because democrats. A party which should long ago have been declared an enemy of the republic, and wiped out.

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  2. Did they cancel property tax obligations for landlords? Utility payments? Bribes for Housing inspectors?

    1. My question too — how about legislators’ pay, let’s cancel that for 90 days also. Lead the way, fuckers!

    2. Yeah, I was wondering the same thing. What do landlords do to pay for everything that isn’t a mortgage payment? What about landlords that own their properties outright, they are pretty much getting hosed

      1. “What about landlords that own their properties outright, they are pretty much getting hosed.”

        Yeah, this could be me, if I lived in NY. On the other hand, I am waiting for CA to do the same thing (so far, it’s just some counties).

    3. There is no way these fucking politicians are okay with cutting taxes during this “crisis”.

      It’s all about special interest groups that they can buy votes from.

    4. What about property taxes for the landlords was my first thought also.

      Nice that the banks can afford to not get the mortgage payments too, huh? Screw the banks apparently. What about those who own stock in the banks through their retirement accounts?

  3. Does this mean landlords don’t have to pay the mortgage(s) on their rental property?

    1. Or the electric bill or the water bill. Heaven help you if you cut the cable by not paying when no one is allowed to leave.

      People are complaining about businesses asking for money, closing down, and furloughing people. However, these businesses are run by people too

      1. I’ve never had a landlord pay electric. Though I do have heat and hot water included in my current pad. No complaints about that.

        1. I rented a place that included electricity and water in the rent. No one payed attention to how much they used, but they sure complained about the rent increases.

        2. It’s not just the apartments. What about the hallways and parking lots? The gate and door system? The pool and office need power too.

    2. This does not go far enough.
      #cancelmoney

      1. We already have a guy on this board that does this so well.
        Though I do like, #cancel money

  4. The Democrats aren’t even pretending not to be socialists anymore. Sigh.

    1. Why should they? It’s what the majority seems to want.

    2. “Those who rob Peter to pay Paul will always have the support of Paul.”

      1. Yeah but then Paul is the one with all the money and Peter needs assistance, so guess what happens next?

      2. Paul is in quarantine right now.

    3. The Democrats have not hid their Socialism for over 100 years.

    4. Disband the party by force and throw the DNC leaders and their elected operatives. Them criminalize the practice of Marxism.

  5. Not to worry, New York City has been working for 75 years to fix their chronic affordable housing shortage, I’m quite confident they are experts at correctly allocating the distribution of resources in the housing market by now.

  6. Remember that rent control was just a temporary war time accomodation now in it’s 80th year.

  7. Eviction moratoriums and rent cancelations, however, are more opaque, overly complex, and could create problems down the road.

    Well, if you’re going to go down the “opaque, overly complex, and could create problems down the road” road, how about looking at the tax code, say, or the “relief package”?

  8. “Tenants can’t pay rent if they can’t earn a living”

    Landlords can’t finance their debt if their tenants aren’t paying rent.

  9. These motherfuckers in the New York State legislature better not come to the federal government in an election year looking for bailouts. If the Republicans manage to take the House this year and manage to increase their margin in the Senate so that Susan Collins doesn’t matter anymore, I hope one of things they do is take the state income tax deduction all the way down to zero. Why should they get to spend profusely on the citizens in their state and stick the rest of us with the bill?

    No taxation without representation!

    1. The residents of NYC might get a clue and stop voting for scumbags, but I doubt it.

      NY’ers are the worst people ever.

  10. It actually kind of makes sense. The banks get to borrow at 0%, which in effect, suspends their obligation indefinitely. Suspend rent, mortgages, property taxes and interest, and just pretend these 3 months never happened.

    Much cheaper than printing government money to make the payments for EACH of the parties, which is what is happening now.

  11. Fleshing this out a bit:

    Each month: A owes $300 to B who owes $300 to C who owes $300 to A

    The government tells A and C that they must stop working and earning money. This is a problem:

    Solution 1: The government makes them whole by printing $300 and giving it to A and C each month

    Solution 2: Suspend all payments while the government prevents them from working

    Since we aren’t allowed Solution 3 (government isn’t allowed to tell you to stop working), which one of 1 or 2 is preferred?

    1. Solution 3 in which you take up arms against your government.

    2. Your oversimplification ignores the actual question.
      Are all of these utilities and services supposed to continue to provide their labor free of charge?

      THERE IS NO FREE LUNCH. SOMEONE HAS TO PAY.

      That is the ultimate law of economics. You would do well to remember it.

  12. I am blown away by all this stupidity, and I live in California, which is beautiful and has great weather to all you haters out there, so I already have a high tolerance for socialistic stupidity. Once NY does this, everyone else will want to follow suit. I don’t think this is constitutional. I don’t get why NY Legislature thinks this Even legal. Just cause they write the laws doesn’t mean they can do whatever they want. I rent out rooms in my house, and live in California anyhow, so don’t think it would apply to me even if I lived there, but would surely dump any trolls that take advantage. Three months would be annoying, but I could float it, and payback is a bitch. Luckily, I have good housemates and I believe we have an equitable arrangement, so I don’t think they will try. But my mother who rents her condo to rent out out a different would get screwed if California goes this way. Her tenants are “affected”, they work in the restaurant business, and she is 80 and retired so would be “unaffected”. I amazed at the stupidity. But she won’t be able to afford her rent.

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