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Unpaid Rent Is Still Piling Up, Threatening The Future Of NYC’s Affordable Housing

Despite nearly $3.5B in rental assistance being doled out in the last four years and an economy that has more than recovered all of the lost jobs from the pandemic, tenants in New York City's affordable housing units are still not paying their rent at nearly the same levels as they once did.

Landlords of subsidized housing are owed more than $100M in unpaid rent, according to a recent study. When adding in the rising cost of insurance, maintenance costs and labor, owners and operators of the most-needed residential properties say the rent shortfall is likely to cause the housing crisis to worsen if not addressed quickly.

“It's at quite a crisis situation,” said Susan Camerata, chief financial officer of Wavecrest Management, which manages roughly 30,000 units of affordable New York apartments.

More than a third of tenants in New York affordable apartments were two months behind on rent or more, according to a New York Housing Conference study.

For the last few years, policymakers and industry players have been focused on the scars of the pandemic and its impact on New Yorkers. But the number of tenants who are months behind on their rent hasn't lessened, puzzling government officials and industry players alike.

“This was a sort of a Covid thing that people understood at the time ... It kind of, maybe made some sense with job loss,” New York State Housing and Community Renewal Commissioner RuthAnne Visnauskas said onstage at last week’s New York State Association for Affordable Housing conference. “Now it doesn't really make sense, right? We are so far past that. And yet I hear it everywhere I go.”

At the end of 2023, 34% of renters in New York state affordable housing units had at least two months of unpaid rent bills, according to a study by the New York Housing ConferenceThe study, which sampled more than 52,000 units, found that households owed almost $130M in total, averaging $7,260 per unit.

The number of units where tenants were behind on rent increased from March 2023, when the NYHC's first edition of the study found that around 31% of households were behind by two or more months.

Nonpayment of rent in affordable housing is increasingly becoming a threat to affordable housing providers’ ability to house vulnerable New Yorkers, owners and operators told Bisnow.

“It's a really difficult time for low-income renters in New York City, but we also know that that rental income is required to make the buildings work,” , NYHC Executive Director Rachel Fee said in an interview. “You're collecting less rents, and your expenses to run the building are going up.”

Owners and operators are split on why affordable housing units in New York are struggling to get tenants to pay. Many operators told Bisnow they believe that plenty of tenants are still experiencing severe enough financial difficulties from inflation and job losses that they simply can't make rent.

But speaking at the affordable housing conference, BRP Cos. Managing Director Andrew Cohen said there is “a culture of nonpayment” among tenants who don’t want to pay.

Adolfo Carrión, commissioner of the New York City Department of Housing Preservation and Development, said that the government agency is switching up its messaging with a new advertising campaign to remind renters that paying rent isn’t optional.

“You have a space to live,” he said. “The government is not going to continue to bail you out, because we've come out of the emergency.”

215 W. 140th St. in Harlem, which is home to some of the 30,000 affordable units managed by Wavecrest in the five boroughs.

Federal and state programs helped tenants who were unable to make their rent payments during the pandemic, providing stopgap funding for their landlords. 

New York's Emergency Rental Assistance Program, funded by both federal and state dollars, had almost 500K requests from renters before it stopped accepting applications in January last year, according to Office of Temporary and Disability Assistance data from July.

As of April 29, almost 304K applications had been approved and payouts totaled nearly $3.5B. 

Even before the pandemic, low-income New Yorkers who found themselves unable to pay rent could apply for a one-off sum from the government.

In 2019, some 61,900 cases were approved and payouts totaled $269M, according to a data analysis by the Independent Budget Office. As ERAP payments started going out, one-shot payouts dropped, from $212M in 2021 to $102M in 2022. 

Eric Enderlin, president of the New York City Housing Development Corp., said unpaid rents in the city's public and subsidized housing units tapered off a little once federal aid came along. But after those delays in ERAP payments and the end of federal pandemic aid, rental arrears in affordable housing have started to climb again. 

“It's gone into what we call a little bit high, but extremely stubborn at this point,” Enderlin said at the conference. “It's really a challenging problem.”

Wavecrest is accustomed to collecting between 96% and 98% of the rent it is owed every month, Camerata said, which dropped to the low 90s during the past couple of years. Although its rent collections have been improving this year, operating expenses have continued to increase, and payments are still below where the company hopes. In April, Wavecrest collected between 93% and 94% of the rents owed.

“Many of these buildings, their financing and their operating budgets are really very, very tight,” Camerata said. “Without getting that cash flow, it really makes a very big difference.”


Owners and operators cited costs of labor and insurance as particular pain points for covering building costs. Some of those costs have been particularly hard to swallow amid rent shortfalls.

At Home Leasing, which manages 3,000 affordable units across the state, insurance costs have jumped by between 14% to 15% every year for the past six years, said CEO Bret Garwood, who also chairs the New York State Association for Affordable Housing group's board.

“The entire affordable housing industry is built on financing assumptions that 95% of tenants will pay their rent, and operating expenses will go up only 3% a year,” he said. “That has not been happening.”

Those consequences inevitably trickle down to the quality of life for tenants living in affordable properties, said Matthew Washington, vice president and chief of staff at nonprofit owner-operator Phipps Houses.

If a building has an operational shortfall, it may no longer be able to staff a 24/7 lobby intended for resident convenience and safety or pay a $1M bill to repair an elevator, he said. 

“Rent is what generates the revenue for the operations,” Washington said. “If we don't have all the rent, we can’t continue to maintain staff levels.”

That dynamic may become consequential for the affordable housing industry at large in New York, he said. Rental shortfalls, high building operations costs and a lack of government assistance for struggling tenants may push developers to choose to concentrate more on market-rate housing.

Similarly, Washington said, that same dynamic may soon begin to affect how much nonprofit developers are able to do when it comes to filling the supply gap. 

“Does it mean that some of the smaller nonprofit organizations that are building affordable housing determine that it's too risky to try to build more affordable housing?” he said. “You could see organizations making decisions not to pursue more. And as you know, we need affordable housing in a bad way in New York City.”

La Casa de Felicidad, an affordable property developed at 3097 3rd Ave. in the Bronx by nonprofit affordable housing provider Phipps Houses.

Landlords and operators of affordable housing have been trying to figure out why tenants aren’t paying. From their own outreach efforts, it seems like there's a mix of renters who can pay but don’t want to, and those who simply can’t pay. Many operators said they have poured time and resources trying to distinguish between the two groups to work toward solutions on a case-by-case basis.

BFC Partners, which owns between 4,000 and 5,000 affordable units in the city, hired social workers in the pandemic to try and help renters who were struggling to pay, said executive Winthrop Wharton. Wavecrest started adding a note to every rental bill it sent out asking tenants to reach out and ask for help if they found that they couldn’t pay, Camerata said.

Phipps Houses, which runs 9,000 affordable units in the five boroughs, including some Section 8 housing, tapped the expertise of its sister social organization, Phipps Neighborhoods, to work with residents struggling with rental costs.

“I would gather that the vast majority of our residents are struggling and having a hard time, rather than making an active decision to not pay,” Washington said. 

Evictions were a last resort for every owner and operator who spoke to Bisnow for this piece, but they were still something that all of them had been compelled to pursue for some of their affordable units at some point since the pandemic.

“Evictions were very rare before,” Home Leasing's Garwood said. “They're much more common [now], especially in properties suffering from large rental arrears.”

The NYHC’s study found that 19% of the more than 50,000 units it surveyed last year were involved in some sort of housing court action.

“The last thing we want is eviction,” Camerata said. “But we do need the money so that we could pay the bills and operate the buildings financially.”