The New York Housing Conference released a policy brief today studying the growing rental arrears crisis in New York State that began during the pandemic. The study looks at New York’s affordable housing stock, which includes all apartments operating under a regulatory agreement between the property owner and a government entity that restricts rent based on income.
In their data set of 49,121 affordable housing units, 15,237 of those units (about 31%) are in arrears owing more than 2 months of rent. On average, each household in arrears owes more than $9,500 in unpaid rent for a total of more than $145 million.
“It’s clear that New Yorkers need immediate relief to address the growing arrears crisis across our state – otherwise, we will leave thousands of renters at risk of eviction and affordable developments at risk of losing financial stability,” said Rachel Fee, executive director of the New York Housing Conference. “Although we applaud the Governor’s plan for long-term housing growth in our state, we also understand that relief is needed right now to ensure housing stability.”
These findings are reflective of a growing need for direct and immediate rental assistance for both tenants and landlords. Earlier this year, New York closed the Emergency Rental Assistance Program (ERAP), designed to grant financial relief to renters during the COVID-19 pandemic. About 140,000 applicants did not receive any assistance before the funding ran out.
The report finds that arrears coupled with rising operating costs are leaving affordable development building owners financially at risk. Affordable housing projects are underwritten assuming 2% increases in rent per year and 3% increases in costs. However, costs have increased faster than projected, at an average rate of 4.6% in the last five years. Rents have increased more slowly than projected, growing by only 0.85 percent on average per year. Building owners need additional assistance in order to make critical infrastructure upgrades and ensure the financial stability of their buildings.