#Instead of a ban, NY should pay landlords not to evict tenants

Gov. Kathy Hochul has decided to cast the US Supreme Court as the enemy of the state’s tenants and to look for ways to continue the dubious evictions ban. In reality, she and the state Legislature should be looking in the mirror: It’s state government that’s to blame for the snail’s-pace distribution of $2.4 billion in federal assistance meant to pay rents and keep property owners afloat.  

A system that requires both tenants and landlords to complete complex forms is the enemy of both. Only $156 million has trickled out to date. Rather than face up to this, Hochul wants to call a special legislative session to find a way around the Supremes’ ruling.

There’s a better way: Trust the landlords. Get rid of the red tape and substitute a simple, legally binding declaration by property owners of the amount their rental income has declined — tied to a promise not to evict tenants for nonpayment.

The slow rate of assistance distribution is the result of a Rube Goldberg system in which tenants must declare that they are in need of financial help — and landlords must open their books to authorities to demonstrate their own need. The Emergency Rental Assistance Program Web site is a veritable labyrinth: The process is so complex that the ERAP home page includes a training video on how to apply. 

There’s a “landlord portal” as well — which reflects the fact that both landlord and tenant must apply together for assistance to flow.

It’s a system in desperate need of a reality check. Landlords aren’t itching to evict needy tenants for sadistic pleasure. No property owner wants a vacant apartment, especially when unemployment remains high and there’s no guarantee of finding a new tenant to replace the one who would be evicted.

Instead, we need a new, trust-but-verify system for property owners that would channel assistance funds directly to them. This would mirror what turned out to be the highly effective federal Paycheck Protection Program. The PPP directed funds to business owners to allow them to continue to pay workers idled by the lockdowns. The funds went to businesses, not to the employees — to allow owners to continue to pay their workers. 

Memo to Hochul, who has joined the progressive rush to declare landlords the enemies of the people: Property owners are business owners, too. Hundreds of thousands of mom-and-pop landlords are small-biz owners, themselves in need of paying mortgages and the property taxes municipalities rely on. The parallel to PPP should be clear: Get the money to the property owners as a way to protect the tenants.

Here’s how to make it work. Owners would fill out a short income-declaration form, comparing their pre- and post-COVID rental income. Send it to the state Department of Revenue, which is already equipped to issue “refund” checks directly to bank accounts. Access to those business bank accounts by tax officials would provide protection against fraud, based on the same threat that any taxpayer faces — random audits. 

Notice that this approach assumes good faith on the part of renters, taking for granted that those who didn’t pay their rent were prevented by COVID side effects from doing so.

This is far from unprecedented. Public-housing authorities nationwide, including the New York City Housing Authority, already send rent payments via direct deposit to property owners who participate in the Section 8 Housing Choice Voucher program. 

Getting funds directly to landlords shouldn’t bar them from any and all evictions. So-called lease violations — criminal activity, for instance — must still be grounds for eviction. Only back rent should be forgiven.

Might there be fraud? Of course there might. But the COVID-relief programs have all been plagued by fraud — as, of course, is Medicaid, the core of ObamaCare. That shouldn’t deter us from getting emergency income to those who are counting on it: property owners and, by extension, their tenants. 

But there’s no less reason to trust landlords than any of the millions of business owners whom government has helped through the pandemic. No, landlords, contra Bob Dylan, aren’t those who put a price on your soul. They are people providing an essential service. It’s time to trust the landlord.

Howard Husock is a senior fellow at the American Enterprise Institute.