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NYC Housing Court 'destructive element.' (The Owner's Voice)

By denying or delaying rentals fairly due, the New York City's Housing Court is contributing to the destruction of the affordable housing stock here.

This is the inevitable result when the Housing Court adheres to a policy of not issuing timely warrants to evict rental apartment tenants who consistently do not pay their rent.

Rental income is an apartment building's lifeblood and to prevent an owner from collecting rentals from even a few apartments leads to a pattern of declining maintenance, bankruptcy and abandonment.

This pattern becomes a "given" when owners canot get warrants to evict tenants who do not pay their rent, and it is common knowledge today that Housing Court judges are not granting timely warrants of eviction. We believe this is not accidental, or rare, but an unwritten policy.

It is next to impossible if not impossible today to get warrants of eviction. The delays go on for months on end, because the Housing Court seemingly signs an unlimited number of show orders that enable a tenant to continue to avoid paying rent.

This is an unconscionable policy that is endangering the rights of the vast majority of middle- and low-income tenants who do pay their rent. The few tenants who consistently do not pay rent--and who the Housing Court will not allow to be evicted--reduce the total income that owners receive from a building, income they need to properly operate and maintain their buildings. In most instances, owners of affordable housing must have income from all apartments to pay for heating fuel, electricity, water, repairs, mortgage interest and amortization, building service employees wages and taxes.

It is entirely unfair to endanger the maintenance and continued operation of an apartment building because of a few bad apples. No matter what the reason for a tenant's consistent failure to pay rent, this problem should not be saddled on the owner. It is a burden of society at large, but the Housing Court policy imposes it on owners alone. This endangers the shelter of millions of tenants who pay their rent promptly, because it endangers the continued operation of their buildings.

The Housing Court's policy on eviction warrants is creating one of the most critical situations ever faced by the city's affordable rental housing industry. By refusing to grant the warrants, the Housing Court is delaying justice, and justice delayed interminably is justice denied. It is sufficiently egregious that owners are being denied due process, but, as we indicated above, a no-eviction policy allows a small group of tenants to endanger the economic viability of an entire building. This is happening throughout the Bronx, throughout the city.

This is a no-win policy for the city, and it must be stopped. Even the city is being harmed by this policy, because the Housing Court, we are told, is refusing to allow evictions in renovated apartment buildings. Of course, when the city operates the buildings, it can turn to tax revenues to make up any operating-cost shortfall. But owners who can not collect rent are simply out-ofpocket and too often have no choice but to cut back on maintenance or abandon the property.

The important point, though, is that the Housing Court's policy harms every one involved.

The court has the power to play a key role in the rental housing industry. Its actions, in the aggregate, can determine if affordable rental housing will survive or perish. Yet, despite all the industry's efforts to make the Housing Court a forum for justice--including the fact that a federal court last year ordered reforms in Housing Court policy--very little has been done to create a level playing field, and the Court has not even implemented the the reforms ordered by the federal jurisdiction. The one improvement that the Housing Court did allow to be implemented--the manning of owners' tables in Housing Court--is now under attack.

When owners can not obtain sufficient income from an apartment building, because the non-rent-payers can't be evicted, a downward economic spiral begins that has to lead to declining maintenance and abandonment, and, in fact, in the past year there has been an increase of in rem properties, Article 78 receivers and foreclosures.

This is a dangerous situation--for the industry and the city. The affordable housing industry loses properties, the city loses apartments and the ranks of the homeless swell. Moreover, the affordable housing industry is a major contributor of tax revenues, and as the in rems increase, the collection of real estate taxes decline. But the city must have a healthy tax base if it is going to be able to maintain its infrastructure. And this is yet another way that the Housing Court's eviction policy endangers affordable housing and the city itself.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Klein, Ruben
Publication:Real Estate Weekly
Date:Apr 29, 1992
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