90 Day Rent Suspension (S.8125/A.10224)
March 25th, 2020
March 25, 2020
RE: An act to suspend rent payments and certain mortgage payments for certain residential tenants and small business commercial tenants for ninety days in response to the outbreak of coronavirus
S.8125 (Gianaris) / A.10224 (Niou)
MEMORANDUM IN OPPOSITION
Unshackle Upstate, a non-partisan, pro-taxpayer, pro-economic growth, education and advocacy coalition made up of business and trade organizations from all parts of Upstate New York has concerns with this legislation and opposes the bill as it is currently written.
This legislation states that any residential tenant that has lost income as a result of government ordered restrictions related to COVID-19 shall have their rent payments suspended for 90 days. The tenant shall never be required to pay any rent waived during this period.
Similarly, any qualified small business commercial tenant that has been forced to close their place of business has a result of the COVID-19 outbreak shall have their rent payments suspended for 90 days and shall never be required to pay any rent waived during this process.
The legislation does include limited support for impacted property owners. The bill waives a portion of mortgage payments for property owners who experience financial hardships as a result of the loss of rent payments. The hardship provision for property owners is insufficient.
While we understand the importance of supporting individuals and businesses that have been n negatively affected by this crisis, this legislation merely shifts any financial burdens resulting from the state’s restrictions on to property owners. Additionally, the financial hardship provision for property owners only apply when there is an active mortgage on a property. If a property is owned outright the owner will receive no compensation for the loss of rent during the 90-day period.
Many property owners are themselves small businesses who are also experiencing financial hardship during this crisis. This is especially true Upstate, where most residential and commercial properties are owned by small independent businesses or individual property owners.
While this legislation provides some mortgage payment relief to certain property owners, those payments reflect only a portion of recurring expenses. Property taxes, utilities, maintenance and other expenses will still need to be paid despite the loss of revenue from waived rent payments.
It is also critical that the state recognize the significant economic differences between upstate and downstate. Imposing these financial burdens on small businesses and mom and pop investors in Upstate New York will add additional challenges to the region’s already fragile economy. The bill sponsors should consider exempting Upstate New York from this proposal.
The state and federal governments have recently enacted legislation to aid individuals and businesses during this difficult time. If the state feels there is still additional need, they should consider additional direct financial assistance, instead of shifting the burden from one group to another.
Though we understand the intent of this legislation, this bill will ultimately create new economic challenges for Upstate New York. For these reasons Unshackle Upstate opposes the enactment of this legislation.
Contact:
Michael Kracker, Executive Director
716.541.1755
Michael.Kracker@unshackleupstate.com