‘We need to have an end of the moratorium’ in NY: Rent Stabilization Association President

Joseph Strasburg, President of the Rent Stabilization Association, joins Yahoo Finance Live to discuss NYC landlords fighting to block the eviction moratorium and rental assistance distribution in NY.

Video Transcript

ALEXIS CHRISTOFOROUS: New York boasts some of the strongest tenant protections in the nation. And Governor Kathy Hochul recently signed a law extending the eviction moratorium. Now landlords in New York are taking action to block that newly passed eviction moratorium. The Rent Stabilization Association represents 25,000 landlords in New York. And the country filed a motion in a state appeals court to prevent enforcement to the new law.

Joining us now with more on this is RSA's president, Joseph Strasburg, and Yahoo Finance's Dani Romero. Joseph, thanks so much for being with us. I know that your group has attempted to file lawsuits with the previous version of this legislation. What's the difference now, and what are the key elements to your complaint here?

JOSEPH STRASBURG: As you indicated, we were successful the first time to block the eviction moratorium that had expired in October. And we sued under the grounds of due process. The law, as it existed, all a tenant had to do is file the certification that they've been impacted financially by COVID. And there was no ability on the part of the owner to challenge that certification when, in fact, they knew that the tenant, in fact, was employed working, and they were withholding their rent.

So, in light of the Supreme Court decision, the state went back and reenacted the moratorium this time to January 15 of 2022, which is almost two years since the last opportunity for owners to be able to collect rent. And they attempted to so-call fix the due process issue. And we basically have said that the so-called fix-up that they had done, in fact, does absolutely nothing because it imposes an obligation on the part of the owner to certify under oath in an affidavit under criminal penalties that, in fact, the tenant is lying.

Most of the information, when you go into court in the sense of discovery, is that if the tenant is going to be provided the benefits of this moratorium, he or she then must prove that they, in fact, have been impacted. And it puts the burden solely on the shoulders of the owners. And it's really a red herring. So we made a determination to go back into court and basically have indicated to the Supreme Court that the state of New York does not believe that they should be following their ruling. And so we are waiting and we believe that sometime in the month of October, we will get a hearing and a result from the Supreme Court.

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DANI ROMERO: --loophole for the system. And, you know, do you know how far backlog the court system is right now?

JOSEPH STRASBURG: You know, on an average, housing court in normal times-- and it's really not normal, but pre-COVID-- it would take approximately from the filing of the petition to maybe getting a warrant of eviction anywhere from six to eight months. Based on this backlog, we will not see any cases of trials, even if it opened up today, you will not have a trial date in over a year. During this period of time, tenants are still protected, not having to pay their rent.

The unfortunate situation is that many of my members who are small property owners, many of them actually live in the building, have not received any rents during this entire period of time. And of course, government still requires you as a homeowner to pay your real estate taxes and your water and sewer. And you have to pay your mortgage.

And what ultimately is going to happen-- and we are seeing it right now-- is many of these small property owners will not be around this time next year. They will have defaulted on their mortgage. Some of them have basically thrown up their hands and said we'll sell it to whoever is stupid enough to buy our buildings.

And at the end of the day, the harm, the real harm is ultimately not just to the real estate industry in terms of the owners, but the quality of housing with the tenants in there is going to suffer. Because if you don't have the money to put back in your building and make the necessary repairs-- and understand in New York City, the average age for a building is approximately 60 to 80 years old. And it requires a tremendous amount of maintenance to keep it up.

And those are the units that we're going to end up losing. And ultimately, it's always going to be the owner's fault for not providing the necessary proper warranty of habit building. And that's the sad part. We're always the scapegoat in New York.

DANI ROMERO: And like you said, the rent debt is pretty much at a crisis level. I saw that roughly over 700,000 households are behind on rent in New York. I guess, what really needs to be fixed to speed up the rollout process in rental aid?

JOSEPH STRASBURG: Well, you know, people-- just a little bit of history, for those who are watching, back in December of 2020, we knew, the state of New York knew that we were going to receive at least a billion dollars under the previous administration for rent relief. In February of 2021 under a different administration, we also knew that we were going to get an additional $1.2, $1.3 billion in addition in terms of rent relief.

During this period of time, we had begged the state legislature to appropriate the money in February, rather than wait until the end of April, as part of their budgetary process. We had also asked the appropriate agencies that would be charged with rolling out the money to go through a trial period to make sure that when they finally were online, there would not be any glitches. We are now basically at the end of September. And only now for the first time, many of the barriers that we had pointed out have been removed and accelerated.

The sad part about it is that the state of New York was last in rolling out the money. States like Texas, even California, were much more efficient than the state of New York. And we were basically advocating instead of extending the moratorium, make sure you put all your efforts into making sure the money goes out, reduce the obstacles in terms of making sure that owners actually will be able to assist tenants in filling out necessary forms. And what eventually happened is government recognizing that they had basically screwed out a program that they should have been much more efficient, blame that as an excuse for extending the moratorium into 2022.

DANI ROMERO: I guess, my last question is, what is the solution then? I just feel like this big debate--

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JOSEPH STRASBURG: Sorry, you were frozen. I couldn't hear you.

DANI ROMERO: Oh, I was just saying, what is the solution to this drawn-out debate?

JOSEPH STRASBURG: Well, clearly, we need to have an end to the moratorium. What we have discovered is that many tenants do not want to cooperate in accessing this money because under the state legislation in New York, they will receive an additional 12 months of protection and not have to worry about getting evicted if they do not pay the rent. So it's in their interest to delay, to delay until that day comes where they have to and be forced to do it. You will find, just like Texas, which does not have a moratorium, there was a greater level of participation by tenants and the owners to get the money.

And we're basically saying is to the state, continue doing what you're doing, reduce the obligations in terms of the paperwork, end the moratorium. And at the end of the day, what will happen is that if tenants, in fact, have issues, those issues will be resolved in housing court. Because no owner in their right mind wants to go to housing court for eviction purposes. They don't want to keep an apartment empty. All they're asking for is the rent money in order to pay their bills. Otherwise, they're going to end up losing their apartment building.

ALEXIS CHRISTOFOROUS: All right, we're going to have to leave it there. Joseph Strasburg, president of the Rent Stabilization Association, and our own Dani Romero, thanks so much.

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