Report: NYC Rent Collections Improve but Vacancies Double

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As reported by Crain’s NY, the Community Housing Improvement Program report showed that even though rent payments are somewhat back on track, they are still lower than the norm for landlords. Photo Credit: Wikipedia.com
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By: Hellen Zaboulani

There was a slither of good news, but then some more bad news for New York City landlords.  As per a study by a NYC landlord group, delinquencies in rent payments fell last month from 25 percent down to 18 percent, however residential buildings saw vacancies double, rising to 8 percent since February.

As reported by Crain’s NY, the Community Housing Improvement Program report showed that even though rent payments are somewhat back on track, they are still lower than the norm for landlords.  Land owners have been struggling to keep up expenses on their property while tenants fell behind on payments.  The report said, more than 15 percent of renters are one month or more behind in their payments—this would mean that renters of roughly 300,000 units in NYC are late in their payments.  “This is no time to take a victory lap,” said program Executive Director Jay Martin. “Tens of thousands of New Yorkers are struggling to pay their rent, and that means the owners of hundreds of apartment buildings are in financial distress.”

As a result of the financial pressure many tenants have left the city.   Their exit has further aggravated the situation, handing the landlords scores of vacancies.  The jump in empty apartments–roughly 200,000 units—has more likely occurred in expensive units, as per the report.  This is bad news for rent-stabilized units too, because it’s the expensive units that help subsidize the affordable units. The number of available Manhattan apartments for rent on StreetEasy reached 20,833 on Friday, up from 9,350 just last year.

“Many of our members are in serious danger of losing their buildings if the federal government does not step up and provide renters with help,” Martin said.  He said that the landlords still have to pay their mortgages and tax payments even though their rent collection has slowed. Martin said he expects some landlords may need to sell their properties if this situation keeps up or much longer.

“The real estate industry is the main financial driver of revenue that keeps the city and its essential services operating,” said Joseph Strasburg, president of the Rent Stabilization Association, which reps 25,000 owners of a million rent-stabilized apartments in NYC’s five boroughs.   The problem will have a wide impact of the city’s economy.  As per Crain’s, property taxes bring in 40 percent of the city’s annual tax revenues. The Independent Budget Office has downgraded its projected intake for the next four years.

At the same time, Commercial vacancies are also up, pulling down prices, as per a report from real estate firm CBRE.

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