Rent Collections Are Down In New York — And No One's Sure Why

NEW YORK — More tenants living in New York City’s least expensive housing units aren’t paying their rent — a trend that risks further destabilizing the city’s affordable housing market.

The uptick in rental delinquency isn’t new. It started six years ago, when the pandemic flung the city’s economy into chaos and plunged low-income New Yorkers into dire financial straits. But even as the city has rebounded, rent collection rates in affordable housing remain short of pre-pandemic levels. As costs balloon, landlords say insufficient rental income is threatening their ability to stay afloat.

The issue has confounded owners and operators of these buildings, many of them nonprofits, which are often celebrated as a model for addressing the extreme dearth of housing options for very low-income people.

But why rent collections remain depressed is a matter of debate, and has exposed thorny questions for a sector that prides itself on housing people on the margins. Are some tenants — in the wake of a years-long pause on evictions and demands to “Cancel Rent” — withholding payments even when they’re able to make them? Or is it simply harder than ever to be poor in one of the nation’s most expensive cities?

“There is a subset of people, maybe the smallest subset, who are literally making a choice not to pay rent, and we don’t do well with acknowledging that but there is a subset for whom that is the case,” said Davon Russell, president of WHEDco, a nonprofit housing provider in the South Bronx. Russell says he’s collecting rent from just 75 percent of tenants. “If we’re ultimately caring about keeping people housed, we should just as doggedly talk about the people who are sabotaging that.”

Others bristle at the notion that some tenants are not paying rent just because they may be able to get away with it. Indeed, plenty of economic indicators suggest worsening financial duress for people already struggling. Costs are going up faster than wages, and inflation that took hold after the pandemic has proven painfully persistent. Landing a spot in subsidized affordable housing, in other words, hardly means a person won’t still find themselves squeezed.

“In some people’s minds, just evoking the words ‘cancel rent’ somehow unlocked in their tenants the idea that they no longer ever had to pay rent again, and I just don’t think that’s true,” said Sam Stein, a housing policy analyst at the Community Service Society. “People are in legitimately dire straits and they don’t have a choice to make. I don’t think there’s been this mass cultural shift toward flouting the obligation to pay rent.”

Whatever the reason, the rent collection conundrum comes as costs like property insurance have skyrocketed for owners, pushing New York’s affordable housing sector to a breaking point as Mayor Zohran Mamdani seeks to expand construction and preservation to a record 400,000 lower-cost units over a decade.

“It's created a lot of real financial upheaval for affordable housing, sort of across the board,” said Patrick Boyle, a senior director for New York at Enterprise Community Partners, a nonprofit that invests in affordable housing projects.

Before Covid, many owners say they consistently pulled in at least 95 percent of their expected rent, which is regarded as the necessary threshold to cover a building’s costs. Last year, rent collections were at about 89 percent, according to Enterprise data on affordable properties it oversees as an asset manager. While that dip may not seem dramatic, these properties operate on tiny margins, leaving little cushion to account for the unexpected drop in revenue.

“Even though it seems like a small percentage drop, coupled with those other things, it's significant,” Boyle said.

A broader survey of 428 affordable housing projects conducted by Enterprise and the National Equity Fund, which both serve as intermediaries between developers and federal tax credit investors, found the share of projects with very troubled rent collection rates — defined as less than 80 percent — jumped from 3 percent in 2017 to 11 percent in 2024.

Some housing experts say incentives for tenants have shifted in the wake of Covid-era aid and an eviction moratorium that lasted from March 2020 to early 2022. Tenant activists at the time converged around a demand to “Cancel Rent” — essentially a push to forgive pandemic-era arrears. The state eventually established an emergency rental assistance program that doled out more than $4 billion in aid.

One condition for landlords who received these emergency funds on behalf of tenants was that they could not pursue an eviction case for at least a year thereafter, with some exceptions. This produced a considerable backlog, and even today a housing court case can stretch on for months if not years. Against that backdrop, tenants may believe there’s help coming, or at least grace, if they don’t pay.

“We have to consider what the unintended consequences are of public policies or practices where there are no immediate consequences for someone who falls behind on rent,” said Michelle de la Uz, executive director of Fifth Avenue Committee, a nonprofit affordable housing provider.

Producing more affordable housing for very low-income people is often held up as the path to stability for countless New Yorkers at risk of eviction and the roughly 80,000 people sleeping in municipal homeless shelters each night.

So taking people to court over nonpayment can make for uncomfortable optics for organizations who run this housing. Many say they don’t actually intend to evict anyone, but that filing these cases is the most expedient way to get emergency rental aid from the city. (The city’s Human Resources Administration, which doles out the emergency assistance known as “one-shot deals,” says going to housing court is not a requirement for getting this aid, but owners say an active case moves you up in the queue.)

“I don't think people choose to fall into debt if they can otherwise avoid it, or choose to subject themselves to an eviction proceeding,” Cea Weaver, Mamdani’s tenant protection czar and a longtime tenant activist, said in an interview. “People who are very low-income make extraordinarily smart decisions about how to survive in a really challenging and expensive city, and that comes with a huge amount of anxiety.”

Even if the rent is affordable, for someone making, say, $35,000 a year, other costs can easily push them over the edge. There’s not much left over to account for a health emergency, or a funeral, or kids’ school supplies.

In public housing, rents are pegged to a household’s current income and can be adjusted up or down if that income changes. For privately-run affordable housing, a person or family must meet certain income qualifications before they move in — and typically won’t pay more than 30 percent of their income in rent, at least at first. But the rent won’t be adjusted down if their income drops.

The Mamdani administration is aiming to provide more financial cushion to the lowest-income renters in city-subsidized affordable housing. In forthcoming housing deals, extremely-low income renters will pay no more than 25 percent of their income in rent, a change that also means these projects will require more city subsidies amid a budget crunch.

The democratic socialist mayor’s campaign pledge to freeze rents on 1 million rent-stabilized apartments — which includes subsidized affordable housing — could also give overburdened tenants some extra breathing room. Rents on these units went up a cumulative 12 percent over four years under former Mayor Eric Adams. But the move to keep rents flat, which will be decided by the Rent Guidelines Board next week, would freeze rental income for owners who are struggling to absorb costs and increasingly falling into financial distress.

In the face of low rent collections, Russell, of WHEDco, says the organization’s buildings are being kept afloat by one-shot deal payments from HRA. The affordable housing sector at large is pushing for a quicker path to obtaining this emergency assistance, and more “upstream” solutions that address tenant rent burdens before they balloon.

A recent visit to Bronx housing court illustrated the complexities of nonpayment cases.

One man, who’s lived for 15 years in a rent-stabilized apartment in the Pelham section of the Bronx, is on the verge of eviction after not paying his $588 monthly rent for about a year and racking up some $7,000 in arrears. While his rent is significantly below the average market rate, he’s not in income-restricted affordable housing and said his income is limited to social security disability payments that amount to about $1,000 per month — “just enough to get by.”

The man, who was granted anonymity to speak freely about his situation, said he fell behind because he’s been helping a cousin who struggles with addiction and other health issues, paying for medical expenses and money she owes to dealers threatening her harm.

“I love her so much and I care for her, and she’s not well,” he said after his court hearing. “It took too long for me to start thinking about myself.”

He’s applied for a one-shot deal from HRA, but it hasn’t come through yet.

The outstanding rent arrears in these cases are often daunting, especially relative to a person’s very limited income.

“If your income is $25,000 a year and you owe $7,000, it might as well be a million dollars,” said Lisa Bova-Hiatt, CEO of the New York City Housing Authority, which runs the city’s vast stock of public housing.

NYCHA is struggling with nearly $500 million in arrears, much of it from the pandemic. The agency’s monthly rent collections — currently at 87 percent for new rent charges — have recovered to more or less what they were before Covid, but still reflect a decline from 95 percent average rent collections a decade ago (a time period that also coincided with poor conditions mounting in many public housing buildings).

“I do think that the psychology around owing so much money then sometimes becomes overwhelming for people,” Bova-Hiatt said. “It's like, okay, well, I owe $7,000, what's another couple of hundred?”