While protecting tenant rights is important, people often leave small homeowners out of the conversation—not mega landlords that rule over the city’s “worst” list, but multi-generational, multi-family, often Black and brown homeowners who make up sections of many New York City’s residential and renter neighborhoods. 

These home and property owners were left at the mercy of the financial crisis in the early 2000s, and the COVID-19 pandemic only furthered housing insecurity.

“We’ll never own property at the rate we owned. Never again,” said Community Activist Paul Toomer Muhammad. “This is the foolishness.” Muhammad has been a property owner in East New York in Brooklyn for almost 20 years. He had two properties. His neighborhood is 55.4% Black and 34.9% Hispanic.

Muhammad blames “aggressive” emergency pandemic policies like the city’s eviction moratorium and the state’s Emergency Rental Assistance Program (ERAP)/Landlord Rental Assistance Program (LRAP) for setting back small landlords in one- to four-unit homes because they were not distinguished enough from large commercial buildings or buildings with more than six rent-controlled units, and therefore not protected. 

During the height of the pandemic, a tenant eviction and foreclosure moratorium, in conjunction with housing courts being suspended, only delayed the inevitable in the city. The Tenant Safe Harbor Act ended in Jan. 2022 and the COVID-19 Emergency Eviction and Foreclosure Prevention Act expired in Aug. 2021. He complained that these acts were a bandage that created a community of “adjunct unpaid shelters” out of struggling landlords. He considered joining the lawsuit five small landlords filed against State Attorney General Letitia James, claiming that the COVID Foreclosure Prevention Act hurt their interests.

“I’m in the same court system where you can stall a tenant in my house for a year and a half, but I still have to pay mortgage, water bill, tax, heat, electricity,” said Muhammad. “A foreclosure is an eviction to the landlord and the tenant.”

New York State Senate Majority Leader Andrea Stewart-Cousins, who grew up in public housing herself, agreed that affordability and housing is a major issue. She explained that was the idea behind giving the money for ERAP/LRAP programs to landlords directly. “Our conference has been really laser-focused on trying to keep the affordability of housing. Not only trying to keep tenants in their homes but trying to be supportive of small landlords. That’s why when we did the budget, we also had a separate pot,” said Stewart-Cousins. 

Assemblymember Stefani Zinerman, in an interview on BRIC TV, said that “government efficiency” in doling out assistance and collaboration could have been better for ERAP/LRAP.

Charles McNally, director of External Affairs at the New York University (NYU) Furman Center, said there wasn’t really a standard distinction for assistance programs based on the size of the landlord’s home. 

“We do know with regard to small landlords that they are just less able to weather income volatility,” said McNally. “A larger, more institutional landlord has a bigger portfolio, so they can maybe make up for lost revenue in one property. They have more access to credit, more collateral to be able to borrow against, more administrative capacity to help tenants access ERAP and resources, so there’s no question that small landlords as a group were more vulnerable to some of the disruptions the pandemic caused.” 

According to a Property Shark Foreclosure Report, foreclosures were high pre-pandemic and dropped significantly in 2020. Now, because of “rising interest rates and fears of a recession,” foreclosures are slowly increasing toward pre-COVID levels. Queens and Staten Island ranked the highest for foreclosures. The Bronx and Manhattan were the lowest in foreclosures. Brooklyn ranked third highest of the five boroughs in pre-foreclosures, which is when the lender files a notice of default on a property. The report noted a “foreclosure cluster” in the ZIP code of 11203 in East Flatbush, an 85.8% Black/Caribbean neighborhood.

“Brooklyn’s small homeowners are facing a crisis, and we need to do more to keep them in their homes,” said Office of Brooklyn Borough President (BP) Antonio Reynoso in a statement. “Black homeowners in particular are more likely to face foreclosure, to be targeted by scammers, to be unable to access funds for home repair and to end up in the tax lien sale if they have debt. This takes away opportunities for generational wealth building from too many people.”

In a NYU Furman Center 2021 report on the state of homeowners, the most recent data available showed the largest decline in homeownership among Black borrowers in 2020, while a “low-interest rate environment” resulted in a boom in mortgage refinancing among white borrowers. Homeownership rates were lowest for Black (26.6%) and Hispanic (15.9%) households, said the NYU report.

“There are fair housing protections that prohibit discrimination, but there’s a significant body of research that shows that home values themselves are different based on the demographics of where homes are located,” said McNally.  

Mobilization for Justice Senior Staff Attorney Belinda Luu was a foreclosure prevention attorney for seven years. Many of her clients were Black and brown homeowners in Brooklyn. Luu remembered a retired elderly couple she represented in Bedstuy, with a four-family home, who took out a mortgage and refinanced pre-pandemic. If the value of a home has increased, the owner can use a refinance to take out equity and use that equity to cover short-term deficits. The proceedings dragged on, and both ended up dying without a will before the foreclosure could be resolved.

“I think landlords, for the most part, are rightfully villainized, but there are people like that couple who own their home, and because of bad mortgages and gentrification, do rely on rental income,” said Luu. “I think it gives a different face to who people may think of as landlords.”

For whatever reason, she said, the messaging as it pertains to the landlords gets lost. 

Reynoso’s office said it’s imperative to make sure more small homeowners know about the resources the government provides, such as one-shot-deal mortgage assistance, free counseling and legal services, and low- or no-interest home repair loans. 

“Our office is committed to connect homeowners with these programs, whether it’s through Constituent Services or ongoing awareness workshops,” said the office. “The Reynoso administration is also working on policy solutions to end the tax lien sale for good and create new options for small homeowners with municipal debt that don’t involve foreclosure.”

In her statewide address, Gov. Kathy Hochul announced a strategy to build 800,000 new homes over the next decade to meet the historic housing shortage. The strategy proposes reversing antiquated state laws, repurposing underused offices and strip malls, financing home repairs in communities of color statewide, and offering new incentives toward multifamily buildings. It also taps a $250 million infrastructure fund and $20 million planning fund. 

“New York faces a housing crisis that requires bold actions and an all-hands-on-deck approach,” said Hochul in a statement. “Every community in New York must do their part to encourage housing growth to move our State forward and keep our economy strong. The New York Housing Compact is a comprehensive plan to spur the changes needed to create more housing, meet rising demand, and make our state a more equitable, stable and affordable place to live.”   

Ariama C. Long is a Report for America corps member and writes about politics for the Amsterdam News. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by visiting https://bit.ly/amnews1.

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