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The Other Side of Rent Debt: Five Small-Time Landlords Who Are Stuck

The reality that tens of thousands of New Yorkers haven’t been able to make rent during the pandemic has been one of the biggest stories of the past year. Less attention has been paid to the flip side of the housing equation: the thousands of small landlords who have had their finances fractured by a year of eviction moratoria, many of whom are now either cutting their losses and selling or on the verge of foreclosure.

As rent debts have mounted for tenants, so too have the credit-card balances, defaulted repair costs, property-tax bills, and new loans for smaller landlords who own a single building or at most a handful of properties. Apartment buildings and houses that once provided a path to the middle class for immigrant New Yorkers have now become a burden that they can barely afford to operate. And, for many, it seems increasingly unlikely that they will be able to pass them on to the next generation. Some of the mom-and-pop landlords struggling to keep their buildings are essential workers, people who’ve lost their day jobs or have lost family to COVID-19.

Help could come from Albany in what’s often referred to as the “cancel rent bill,” which would create a state hardship fund for small landlords and homeowners. A separate proposal known as the Housing Stability Relief Fund aims to create a $2.2 billion purse in the state budget that would clear the rent arrears of an estimated 1.3 million households statewide. Landlords will also eventually be eligible for a slice of the $1.3 billion in federal funds allocated to New York for rent relief, though how exactly that aid will be doled out is not yet clear.

But without meaningful support, small landlords are scrambling to bridge the gap. We asked five of them how they’re making ends meet.

MTA conductor Cynthia Brooks owns a four-family building in Brownsville and is owed $19,000 in back rent. In January, she reluctantly put her property up for sale.

I own a small (four-family) brick building that I purchased about six years ago. I have one tenant who has not paid the rent since April 2020 — no explanation, no communication, nothing. Two of my other units are vacant, and it’s difficult to get people in there right now. The previous occupants were also people who decided they didn’t have to pay during the pandemic. Basically, I have one paying tenant. I went from having a $7,000 rent roll to having $2,200. That difference has to be paid by someone, and that person is me. Luckily, I did have some money saved, but after 11 months, it’s basically depleted. My reserves were about $40,000, which sounds like a lot, but each month I have to provide heat, hot water, electricity, and gas. I have to do maintenance. I have a super, and he has to be paid. My monthly expenses are about $5,500. I’m down to about two months, two and a half tops, worth of expenses saved. The mortgage is the big granddaddy of them all — it includes the insurance, the property taxes, etc. That’s the bill I dread the most. I’m a working person. I’m an essential worker. As a small landlord, I feel let down.

I mean, look, I understand that there are tenants out there who really need help. This is nobody’s fault. We’re all hurting here. We just need help. I’ve gotten a forbearance. I’ve budgeted. I have no more tricks left.

I’ve put up a “for sale” sign on the property, because when the reserves are gone, I’ll have to dig into my 401(k) and my savings, and I just can’t afford to take that risk. I’m a single person. I look after an elderly parent. I would like to retire and have a roof over my head. I just can’t pour everything I have into this building. It took years to save for my property. I sacrificed. I did doubles. I did triples. I went without vacations, without new clothes and shoes just to get that down payment to follow my dream. I renovated the building from top to bottom. I wanted to give back to my community, give people a decent place to live. I tried to be smart about it by putting money aside, but no one ever counted on this happening. When I put the building up for sale, I thought, Maybe something will happen, and I won’t have to sell it. Part of me says, Nope, just move on. Then there’s another little voice in my head that goes, But you worked so hard. You put everything into it. You’re letting your dream die.

Danielle Hernandez and her brother operate an eight-unit building in the Norwood neighborhood in the Bronx. It was left to them by their late father.

We have eight units in our building, and come April 2020, a quarter of them stopped paying. That shaved off roughly $4,500 from our rent roll, which is around $13,000 in total. We had to eat into money we were saving to replace the roof. Then a pipe in the basement burst in July, and in November, my whole family got sick with COVID-19 — cough, fever, and a bone-deep fatigue. It took my dad. One day he was okay, and two weeks later, he was gone. I still have no words for it. I struggle with it every day. We couldn’t be there for him in his last moments, for his last words. Now when I walk into the building, all I can see is him. I see him sitting on the stoop. I hear his laugh in the halls. It’s painful to be there. That building was my dad’s pride. Now it falls to me and my brother. I feel this weight to keep his legacy alive.

I was sitting at my kitchen table the other day going over everything, and I just burst into tears. Things are so tight. The mortgage, the taxes, the utilities. We’re in forbearance right now, but it’s not like the mortgage has been forgiven. The building itself is 110 years old, and if any major unforeseen expenses come up, they could push us over the edge. We have a couple tenants on payment plans who have lost work and can’t make the full rent, and I get that, I really do. I worked for a catering company for ten years, and now suddenly there’s no work. It feels like we’re treading water. My priority is keeping the building going, paying the taxes, the water bill. If we hit the point where we lose the property, it’d be like losing my dad all over again, in a way.

Lincoln Eccles, the son of Jamaican immigrants, owns a 14-unit apartment building in Crown Heights.

I have three tenants who are struggling to pay, and because the margins are so tight, that basically just blows up my finances. The rent arrears for those currently in the building is floating around $30,000. Between them and the four vacancies, I barely have enough to keep the lights on. And I’m taking whatever resources I can to rehab three apartments simultaneously, getting them ready to be rentable. I’m in a situation where I barely have enough money to pay the primary bills, and I don’t have enough money to cover the property taxes at all. That’s delinquent. I’m in jeopardy. I’m spending money I don’t have. I’m at the point where I have to tap into my personal finance and credit cards to pay for things, and if things don’t pan out, it’s game over. The building will still be standing, but I won’t be.

Right now, I’m able to pay the loans, maintain the building, and credit card obligations, but I’m not able to service the tax bill. My tax bill is in excess of $60,000. That right there sucks a lot of the oxygen out of the room. I’m weighing the option of using personal credit to pay down the property tax if I absolutely have to, but that could be a catastrophic scenario for me personally. It might slow things down, but I’m not sure I would be able to recover from that. I’m no longer a young man, and I might take that debt to the grave — if I’m even able to service it. This is a legacy property. I have a baby on the way. The goal is to pass it forward to the next generation, to leave the asset in a better place, but that is looking less and less realistic.

Mike Mesheriakov rented out his two-family home in Prince’s Bay, Staten Island. Last spring, he was locked in a legal fight with his tenant; the pandemic prolonged that battle for nearly a year.

We rented our home because my wife was finishing up school. She was studying to be a doctor, and to save up the money, we moved in with my parents and put our home up for rent. It started out fine. I have one tenant who occupies a small one-bedroom apartment on the lower level. She has been paying the $1,500 rent on time. Our other tenant paid for nine months, but then suddenly stopped. Their rent was $4,500, and since they stopped paying, 18 months of back rent have accumulated. That’s over $80,000. So we went to court. There was no other way. And it was a very cumbersome and emotionally charged process for everyone involved. If they had lost income because of the pandemic, I would have been willing to work toward some sort of solution. But this was a person who should have been evicted before the moratorium even started.

The tenant literally moved out yesterday, and I’m painting and making arrangements to move back in. But tremendous financial and emotional damage has been done. I had to dig deep into my savings to pay the mortgage, which is around $3,800. The sewer and water bills weren’t paid by the tenants; the total bill is about $7,000 right now. I have to cover it. Then there are the legal fees. I had to pay $5,000 a month in expenses to maintain a property I couldn’t live in. It is a nightmare situation. It’s so frustrating because nobody cared. They just talk about canceling rent. What about the small landlords? I have three kids. The money I spent took away from my family. We’re not talking about me acquiring luxuries; we’re talking about not being able to provide educational opportunities for my kids, like getting them tutors and sending them to camp. I almost drained my 401(k) during all of this. I’ll have to work harder and longer to make everything up. But my anger and frustration is not directed at my tenant — it’s directed at the system that allows things like this to happen.

Tenzin Lama immigrated from Taplejung, Nepal, to New York in 1996. It took him 20 years of saving to buy his two-family house in East Elmhurst, Queens.

The pandemic has been very tough. I own a two-family home, but I am in constant worry that I won’t receive the rent because my tenant lost work. I understand his situation, but I depend on that income — that $1,400 — to pay the utilities, to buy food, to take care of my family. If that money doesn’t come, I don’t know what I’m going to do. I have no savings or nothing to turn to. If I cannot pay my bills on time, both my family and my tenant will be displaced.

The interest rates are really low for mortgages now, but because I bought my home a couple of years ago, I have a high interest rate. I tried to refinance, but I was told that — since I don’t have a job — I can’t refinance my mortgage and get a lower payment. I don’t understand how the system can work like this. Even as someone on unemployment, I have been paying my mortgage — it’s around $3,500 — on time because that is my first priority. I don’t want to miss a payment. But as a homeowner and small landlord, I also have taxes, insurance, utilities, maintenance. It’s a lot. The utilities are especially high at this time, and because I have a tenant, I have to follow the law to make sure they have adequate heat. I pay up to $400 for heat on a monthly basis, about $200 for water, and the electricity would be another $150. That’s just the utilities, then I have to feed and take care of my family.

I’ve worked in restaurants, as a mover, in laundry. I’ve done all the odd jobs possible, but now I’m not working because I’m afraid I’ll get sick. I don’t want to be out and about and bring the virus back to my home, because I live with my elderly parents. I’m not eligible to get a vaccine, so I’m waiting before I find a job. I did get the stimulus check and am receiving unemployment; if it wasn’t for that, we would be on the streets, but it’s much less than what I made before.

As an immigrant, I came to this country with the hope that I would be able to provide a better life for myself and for my family. For more than a decade, I lived in a small apartment with numerous people, saving every penny that I got from my job in the hope that I could one day own land. That’s the dream I came with from Nepal. After doing all of this, I’m in a position where it feels like I’m about to see all my hardwork go down the drain. It feels like I’m drowning.


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