A woman wearing a face mask walks by a closed cafe on Friday, March 2020 in Astoria, NY. The city ... [+]
Correction: The article originally did not state the bill applies only to individuals and small businesses effected by COVID-19. It has been updated.
The first of the month, when most New Yorkers will pay their rent and mortgage, is two days away. A bill has been drafted by a group of New York State Senators to suspend rent payments for individuals and small business owners that have lost income or been forced to close their business for three months. The bill would also suspend mortgage payments for people who will be deprived rent payments because of the decision.
“The people who get left behind are at the lowest rungs of the economic ladder. I’m trying to protect them first and foremost,” says State Senator Michael Gianaris, who introduced the bill last Monday.
38.9% of New York City residents said that they couldn’t pay an extra month of rent if their jobs or income were put on hold due to the COVID-19 pandemic, according to a PropertyNest survey released earlier this month.
Rent increases were already one of the biggest concerns for small business owners before Governor Cuomo ordered all non-essential businesses to close on March 20.
Across the country, 96% of small businesses have already been impacted by COVID-19 and 51% of small businesses could only operate for the next 0 - 3 months as of March 19, according to a recent survey by Goldman Sachs.
“Most small businesses were already operating on slim margins before the crisis. The urgency [of freezing rent] can’t be overstated,” says Karen Narefsky, Senior Organizer for Equitable Economic Development at the Association for Neighborhood & Housing Development.
For Senator Gianaris, and the twenty-one senators co-sponsoring the bill, there are three ways forward.
First, Governor Andrew Cuomo could issue an executive order to freeze rent payments for individuals and small business owners. This order wouldn’t need approval from the Senate.
Second, the bill authored by Senator Gianaris and others could be approved by the Judiciary Committee, fast-tracked through the Senate, and signed into law by Cuomo.
Third, the language of the bill can be added directly into the state budget. It would have to be approved by both houses and the Governor. The state budget is due by midnight on March 31.
“All three parties would have to agree to do it. Under normal circumstances it would be near impossible, but these aren’t normal circumstances,” says Senator Gianaris.
“Last week alone, 85,000 New Yorkers filed for unemployment. How are they supposed to pay rent in just two days when their income has evaporated?” says Senator Brad Hoylman, Chairman of the Judiciary Committee and co-sponsor of the bill.
The public cost of the bill would be zero. The financial burden would be shifted to the banks who own mortgages, who Senator Gianiaris believes are more likely to receive federal assistance.
“It is much more likely that Trump will bail out the banks than the individual tenants,” says Senator Gianiaris.
Renters make up over 3.3 million households or 46.1% of residents, according to the 2018 data collected by the American Community Survey.
In New York City alone renters make up over 2 million households, or 67.3% of residents.
Small landlords, with 5 buildings or less, own 28% of the residential rental units in NYC, according to public data analyzed by Sam Raby, data lead at JustFix.nyc.
The legislation should include a “hardship fund” for these small landlords who cannot absorb the lost rent, according to Cea Weaver, organizer of Housing Justice For All.
Housing Justice For All, a campaign of the Upstate Downstate Housing Alliance (UDHA), has been working with Senator Gianiaris on the legislation. UDHA is a coalition of over 70 organizations representing tenants, homeless New Yorkers, and public housing residents across the state.
In legal terms, small businesses in New York State are independently owned and operated businesses with 100 employees or less. New York State has over 2.2 million small businesses and employs 4.1 million people, 50% of all workers in the state, according to a 2019 report published by the Small Business Administration New York Office.
Karen Narefsky and the United for Small Business NYC coalition are advocating for a more expansive definition of small business tenants on the bill to include street vendors, worker cooperatives, non-profits, and cultural institutions.
“Cancelling the rent would allow for us to not worry about permanently closing the studio,” says Cat Murcek, one of nineteen worker-owners at Samamkaya Yoga Back Care and Scoliosis Collective, a yoga studio in New York City. They have already negotiated with their landlord to reduce their April rent, says Murcek.
Mahmoud Salamony rents a garage in Long Island City in which he rents space to pushcart vendors and food trucks. He is not charging the pushcarts and trucks for the months of March and April because people are out of work, he says.
But his rent is $22,500 a month and is due in two days, he says.
“I don’t know what I’m gonna do. How can I come back with this kind of money? Do I stay on or close forever?” Salamony says.
He also supplies ingredients to the pushcart vendors and food-trucks, as well as owns two food trucks of his own. All of his business is stalled, he says.
New York State is ahead of other states in considering a rent freeze. Chicago tenants have been circulating a petition to freeze rent that has amassed over 14,000 signatures as of Monday, March 30.
Grace periods on mortgage payments have been implemented in New Jersey, California, and Nevada as of Monday, March 30.
Deidre Woollard, editor of Millionacres.com, has been compiling a nation-wide resource of eviction suspensions and moratoriums by state and city that can be found here.
