The Yiddish word dreck comes from Old High German -threc, Old Norse threkkr, and Old English threax, a likely proto Indo-European *(s)terk/(s)treg and a likely proto Germanic * thrakjaz. It is a cognate of the Latin stercus. It comes into Modern English as “dregs”, “turd” and “bedraggled”, Italian as sterco. In German and in the English cognates, it generally means “dirt”, or, something soiled or cast away; in the Yiddish, and in English, after the e/r metathesis, it became earthier.
Although the term is flexible enough to contain multitudes, it can be also be used to describe two bills that have passed both the New York State legislature and are awaiting Governor Cuomo’s signature. These bills are A10290-B and S-8419. They were drafted with noble policy goals in mind but they are, in execution, dreck.
Bill 10290-A prevents courts from issuing a warrant of eviction or a judgment of possession against a residential tenant or other lawful occupant of residential rental housing who has suffered a financial hardship during the COVID-19 epidemic for the non-payment of rent during same. Here are a few things to note about this:
· “COVID-19 covered period” is a defined term. The Covid-19 covered period is March 7, 2020 until the date on which none of the provisions that closed or otherwise restricted public or private businesses or places of public accommodation as outlined in certain executive orders are in effect. In order for the bill’s prohibition to apply, (i) the applicable tenant must have suffered a financial hardship during the COVID-19 covered period, and (ii) the cause of action for the applicable eviction must be non-payment of rent that has accrued during the COVID-19 covered period;
· The prohibition does not apply automatically. It must be raised as a defense by the tenant;
· In determining whether the tenant has suffered a financial hardship during the COVID-19 covered period, the court can take into account any public assistance that the tenant has received; and,
· The bill explicitly allows landlords to go after tenants for money judgments, even in cases in which financial hardship during the COVID-19 covered period would be a successful defense against a writ of eviction.
Bill S8419 attempts to give back to housing providers what Bill 10290-A takes away, but what it provides to owners of manufactured housing communities is best described by the above-referenced Yiddish word descended from the PIE *(s)terk/(s)treg. The basic rule of the bill is that it allows for rental vouchers to be provided by the state to providers of housing to certain tenants who have lost income during the COVID-19 pandemic equal to the increase in the applicable tenant’s rent burden. As I have written before, vouchers are the best solution to the current housing crisis. However the devil, in this bill, is in the details — and in the math.
Under the bill, $100,000,000 of CARES Act funding is allocated to vouchers to be provided by the state government directly to the owner of dwelling units for applicants determined to be eligible households during the coverage period in an amount equal to the difference between the applicant’s rent burden on March 1, 2020 and their rent burden during the month or months for which assistance is requested.
Here are the defined terms:
· Eligible Household An eligible household is a household (i) with an income below 80% of the area median income, as adjusted for family size, both prior to March 7, 2020 and at the time of application; (ii) with a rent burden prior to March 7 2020 and at the time of application, that has (iii) lost income during the coverage period.
· Income For these purposes, “income” means all income from all sources, including wages, tips, charity, alimony, welfare benefits, social security benefits and unemployment insurance.
· Coverage Period The coverage period is April 1, 2020 through July 31, 2020.
· Rent Burden Where the rubber meets the road. An applicant’s rent burden is the amount of an applicant’s “contract monthly rent” (undefined, but presumably the amount of rent that an applicant is contractually obligated to pay each month) which is more than 30% of the applicable gross household income.
The biggest problem is that the program only applies to applicants who had a rent burden prior to March 7, 2020. That is crazy. Assume a family of four pays $2,500 a month for an apartment in Brooklyn. The mother works as a home care assistant and the father works as a tattoo artist and moonlights as a capoeira instructor. Between the two of them, they earn gross income of $120,000 a year, or $10,000 per month. Well, their contract monthly rent is 25% of their gross income. That means that, on March 6, they do not have a rent burden, because they are not spending more than 30% of their gross income on monthly rent. Then, both get laid off on March 7. Their rent burden has increased from $0 to $2,500 overnight and they have no way of paying the rent, but because they did not have a rent burden on March 6, under the bill they get….bupkis? C’mon, guys — you can do better.
The problem gets worse when applied to manufactured housing facilities. That is because most mobile home park tenants do not have a rent burden. That is because mobile home parks are effective, unsubsidized affordable housing. And that is because lot rents are underpriced, compared with apartment rents. Outside of New York City, Long Island and Westchester, the minimum wage in New York State is currently $11.80 an hour (scheduled to increase to $12.50 an hour at the end of 2020). Let’s say a mobile home park tenant lives alone and works 30 hours a week at Burger King (these assumptions are conservative — in many cases, there will be two earners in the household, one or more will work at least 40 hours a week, and one or more might earn more than the minimum wage — but let’s err on the side of caution). She will make $11.80 * 30 per week, or $354.00. In months in which there are four weeks, she will make four times that much, or $1,416.00. Thirty percent of $1,416 is $424.80. But lot rent in her park is $400 (again, being conservative here — lot rents in New York can go into the $400s, but they are generally in the mid-to-high $300s). 400 is 28% of 1,416, so the tenant does not have a rent burden on March 6. This means that she gets nothing under the bill even if she is struggling to pay lot rent while she is working, and even if she loses all of her income because she is laid off on March 8 due to COVID-19 issues.
Effectively, the bill discriminates against tenants who live in affordable housing. It discriminates worse against tenants who live in unsubsidized affordable housing.
How to solve this? Pretty simple. Keep the vouchers, but eliminate the hocus-pocus. Make it a dollar-for-dollar subsidy. You lose $800 in gross income during the covered period, you get a check for up to $800, capped at the amount of your monthly contract monthly rent. It is simple, transparent, and fair to the poorest people in the state. Most importantly, it is not dreck.