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Why New York Likely Won't Face Mass Evictions When Its Moratorium Expires This Month

Since the start of the pandemic, the shifting end date of New York state’s five-month-long eviction moratorium for residential tenants has left a dark shadow of uncertainty hanging over New York City. Many braced themselves for a tidal wave of new proceedings to flood in after the freeze was lifted.

But now, as the Aug. 20 moratorium end date approaches with no extension in sight, real estate lawyers and policy experts no longer expect an impending torrent of evictions on Aug. 21.

“I won’t say nothing will change, but certainly the court system is going to be very, very, very deferential and very mindful of evicting anybody through this situation,” said Luise Barrack, a Rosenberg & Estis member attorney who heads the firm's litigation practice. “Moving forward, that sensitivity will continue and there will continue to be a reluctance to take action against a residential tenant based upon nonpayment of rent.” 

The courts’ sympathy isn’t the only thing that could hold the waters relatively steady: Legislation enacted earlier this summer will make it more difficult to evict anyone during the pandemic, and landlords don’t see eviction as a particularly profitable strategy given the rapidly declining demand for rental apartments throughout the city, sources say. 

Still, there is fear among renters. Tenant advocates say the measures taken have not gone far enough to protect those at risk of homelessness because of the coronavirus pandemic.

In the months since Gov. Andrew Cuomo declared a state of emergency and shut down portions of the state's economy, voices of activists with fervent calls to cancel rent for the duration of the emergency echoed out apartment windows, onto the streets of New York City and through the halls of the Capitol building. 

Landlord groups gave ardent responses opposing rent forgiveness measures, instead urging public officials to bail out those left unemployed by the crisis through state and federal assistance, warning that erasing payments could lead to mass defaults among small landlords and a crisis in the New York rental market. 

Ultimately, the state passed a measure that fell somewhere in the middle. The Tenant Safe Harbor Act, passed by the New York state legislature and signed into law by Cuomo in late June, states individuals who prove they were impacted financially by the pandemic cannot be removed from their homes, but can be required to pay the rent in the future. While the measure doesn't grant rent forgiveness, it delays any action to an undefined later date.

A #CancelRent protester in Albany on May 1.

“There is no defined end period right now for tenants that have financial hardship and are able to prove that," Real Estate Board of New York Vice President of Policy and Planning Basha Gerhards said. “On Aug. 21, there’s not going to be this huge turnover in apartments or thousands of people in the streets, because you have legislation in place to really protect folks that may be at risk of nonpayment and [eviction] proceedings."

If an eviction case makes it before a court, a judge may be more sympathetic than usual to any tenants case during this time, legal sources said.

“The fact that landlords are able to take some action doesn’t mean that there is going to be any consequences,” Barrack said. ”Whatever the governor ultimately decides to do … it doesn’t mean the court system is inevitably going to follow.”

Barrack said she has heard tenant lawyers tell their clients that they wouldn’t even need a lawyer in an eviction case, certain the court would be on the tenant’s side. 

“I had one of my adversaries tell me, 'Hey — I just told my client you don’t need counsel, you don’t need anything, because no one is going to take any action. If you default, who is going to care? The courts aren’t going to issue judgments or anything else against a defaulting tenant,’” Barrack said. 

Though several hundred eviction cases have been filed since June 20, the reasons given for those cases were largely for reasons other than missed rent, she said. 

Of the more than 700 evictions filed since June 20, 600 have been holdover cases, meaning that the landlord brought the eviction for a reason other than a tenant failing to pay their rent, Barrack said.

The cost of eviction could deter landlords from going that route. Landlords must pay costs for filing and for retaining a lawyer, so it is in their interest to negotiate with the tenant rather than take them to court.

"With or without the moratorium being lifted, landlords and tenants have been engaged in negotiations, which are set up to salvage their relationships," said Scott Mollen, a partner at law firm Herrick, Feinstein. "The last thing that landlords want is to have empty spaces that have to be marketed during a pandemic and therefore they have strong incentives to resolve the issues around the table ... They are willing to consider rent abatements or other forms of rent relief." 

Joy Construction principal Eli Weiss, who owns multifamily properties in Manhattan, Brooklyn and the Bronx, said that he is not hearing many landlords discuss evictions.

“The reality is unless the tenant is a bad actor, I don’t know how wise it would be to evict anyone right now,” he said. 

Demand for apartments has dropped between 30% and 40%, Weiss told Bisnow last month. Rents in Manhattan dropped 6.4% from March to July as young and wealthy New Yorkers fled the city.

Whereas last year, landlords evicting tenants in New York was a major driver for sweeping rent reforms, today, landlords are attempting to negotiate with tenants to keep them in their homes, rather than try to find new residents, he said.

Rent collections have been higher than anticipated, Weiss said, which is motivating both sides to keep the status quo. Eighty-two percent of renters in the city paid July rent as of July 20, according to a survey conducted by the Community Housing Improvement program.

“Our tenants paid rent during an especially difficult period, it seems incongruous that the landlord community will turn around and enact massive evictions,” Weiss said. “This is a unique time where we’re all in this together.” 

As a sign of the unprecedented times, lenders have been willing to work with landlords if they are experiencing a loss of income due to nonpayment of rent at their properties, Weiss said.

“I can’t think of another time when this happened,” he said. 

Despite all sides of the multifamily equation rowing in the same direction, for the tenants who lost jobs and can't pay rent, the prospect of an eventual eviction once the emergency orders are lifted still looms.

"People have had to decide between paying their rent and feeding their families," Barrack said. "That is obviously not a situation that you would want anyone to be in, and I don’t know if there is going to be any additional bailouts, I don’t know that anybody does. That’s the tension here."

Cea Weaver, campaign coordinator for Housing Justice For All and a leader in the #CancelRent movement, said she expects thousands will still face eviction, despite the assurances from the real estate industry that they don't want to force residents out.

“Eviction is a quiet crisis, people are going to be just quietly filing evictions in housing courts,” Weaver said. “It’s hard to predict what is going to happen, but I know that [there are many that] haven’t paid rent in the last four months and will have to go to housing court and defend their rights to stay in their homes.”

Contact Kelsey Neubauer at kelsey.neubauer@bisnow.com.