Low-Income Renters Who Fell Behind Face Staggering Debts

An analysis of New York renters in affordable housing found that the share of households owing more than $10,000 in arrears more than doubled, a year after the pandemic.

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The pandemic has drastically deepened debt for New York’s low-income renters, people who were teetering even before the outbreak and who have been hanging on thanks to an eviction moratorium that is set to expire this summer, according to a report released Wednesday by the New York University Furman Center.

In an analysis of 13,163 units that focused on a subset of the city’s affordable housing, the average rent owed by households with arrears through the year ending February 2021 jumped 66 percent, to $3,435 from $2,073. That represents more than two months of rent for 60 percent of the households analyzed, which normally paid $1,500 a month or less.

While the share of renters who owed some amount of back rent in that period increased moderately, from about 50 percent to 55 percent, many of those who fell behind faced staggering debts.

The share of households that owed more than $3,000 increased 65.5 percent, to 2,059 from 1,244; and the share of households owing $10,000 or more jumped 140 percent, to 672 from 280, said Matthew Murphy, the executive director of the Furman Center.

“I can’t help but think of a parallel to Sandy,” he said, referring to the hurricane that devastated flood-prone residents in 2012. “It’s similar to disaster recovery.”

The report, which collected rent ledgers from the owners of 128 properties primarily in the South Bronx and northern Brooklyn, is one of the most detailed looks at a segment of renters rarely recorded by industry surveys. Most of the buildings were financed using Low-Income Housing Tax Credits, which typically require that rents be affordable to households making up to 60 percent of the area median income, or $64,440 for a family of three in 2021. The units do not often appear on listing websites, because they are offered through affordable housing lotteries with long wait lists.

This group of renters as a whole may actually be doing better than other tenants, in part because their rents are below market rate, said Katherine O’Regan, a faculty director at N.Y.U. Furman Center. The median market-rate rent in New York City was about $2,500 a month in April, according to the listing site StreetEasy.

But the sharp rise in debt for those who have fallen behind is alarming for both tenants, who could face imminent eviction, and landlords, who are unlikely to recoup a sizable share of rent, because it is owed by the city’s most overburdened renters, Ms. O’Regan said. More than half of the total debt in the portfolio was held by households that owed more than $10,000.

A state moratorium prohibiting evictions from proceeding is scheduled to end Aug. 31, and thousands of New Yorkers could soon be forced from their homes. A recent study of state court data found that predominantly Black and Latino neighborhoods, where a disproportionately high number of Covid cases have been reported, had nearly four times the rate of eviction filings.

Landlords, too, are facing significant debts. A January survey representing about 40,000 rent-regulated units in New York City estimated that tenants in rent-regulated apartments owed $1.1 billion in arrears, according to Community Housing Improvement Program, a group that represents landlords. That debt has fallen to roughly $700 million, said Michael Johnson, a spokesman for the group, in part because of tenants paying back rent, but it could also reflect at least some of that debt simply being absorbed by property owners.

While $2.4 billion has been reserved for an emergency rental assistance program in New York State that was first announced in December, applications have not yet opened, said Barika Williams, the executive director of the Association for Neighborhood and Housing Development, a coalition of housing nonprofits. (A state website promoting the program now says the applications will open June 1.)

“We cannot as a city allow entire neighborhoods, especially communities of color, to be submerged by the coming eviction tsunami and think that’s an OK public policy,” she said.

For Ana Galvez, 38, a longtime resident of a six-story walk-up in the Melrose section of the Bronx, last year was the first time in a decade that she has been unable to catch up on rent payments.

Ms. Galvez lost her job in the kitchen of a Brooklyn restaurant in February 2020, at the start of the pandemic. She supports two daughters, a 9-year-old in New York and a 19-year-old in Mexico, who she hasn’t seen since leaving the country 15 years ago.

There were times over the years when she fell behind on rent, but she always caught up, Ms. Galvez said through a translator with CASA, a tenant advocacy group. But after losing her job, she hasn’t paid the $1,775 rent on her two-bedroom apartment since March 2020, a debt that could exceed $25,000, after other fees.

She does not qualify for unemployment assistance, because she was paid in cash, so she has relied on food banks and has started selling tamales and fruit in the neighborhood, from a shopping cart that she hauls up and down the stairs of her building.

She said she’s constantly preoccupied by the debt, and can’t bring herself to open the delinquency letters piling up in her mailbox. The threat of eviction became real, she said, when her younger daughter asked why they couldn’t stay in their home anymore.

For now she is waiting for a chance to apply for rental assistance, though she worries she may not be eligible, based on past programs that have rejected her.

She hopes this time is different, she said.

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