Fed Up With One-Shot Deals, Landlord Draws Line in Sand

While everyone agrees that rent collection has dropped, there’s much disagreement about why — but not among New York City landlords.

They almost universally blame government programs, policies, agencies and an excruciatingly slow eviction process. Some also mention tenants’ financial problems and inflation, which are much harder for policymakers to fix.

One longtime owner emailed me to share insights into two of his prime suspects: the Emergency Rental Assistance Program and one-shot deals.

ERAP, a response by the state to pandemic job losses, was so badly designed that it depressed rent collection long after the program ended, and continues to do so, he said.

“I told many legislators during ERAP [that] if they don’t require tenants to pay 30 percent of the rent, tenants would never pay again,” the landlord said. “But basically ERAP said, ‘We don’t care what you’re making or how long you were unemployed, we are paying 15 months of rent.’”

ERAP checks came with a year-long rent freeze. With housing courts backlogged anyway, desperate landlords took the money and braced for the worst.

By this owner’s estimate, 60 percent of his tenants who got ERAP money were $5,000 behind on rent only six months later.

“I told this to countless legislators: If people get used to not paying, they will never pay,” he said.

Tenants with a pending ERAP application couldn’t be evicted and some might have been angling for a second check, but ERAP ran out of money and was eventually shut down.

The landlord’s experience with one-shot deals, which are awarded by the city’s Human Resources Administration to delinquent tenants, has been similar. He eventually receives money to cover back rent, but loses in the long run.

As was the case with ERAP, to get a bailout, tenants have to stop paying. It’s theoretically possible to get a one-shot without an eviction filing but stiffed landlords usually bring a nonpayment case. Two or more court appearances later, the rent might be paid by HRA, but the legal fees are not.

Gothamist reported that about three-quarters of one-shot applications were denied during the first three months of the Mamdani administration, but that figure is deceiving because applicants often keep reapplying until they are approved.

The payout covers the full arrears, so tenants have an incentive to withhold rent during their quest for a one-shot. Technically they are supposed to repay the city but if they don’t, nothing happens.

“I have numerous tenants who receive two, three and four ‘one shot’ deals,” the owner wrote.

Role in rent freeze

One-shots also backfired on landlords in that the Rent Guidelines Board used them to justify the rent freeze approved in June.

One-shot payments exploded from $102 million in fiscal 2022 to more than $540 million in fiscal 2024, then increased to $556 million the next year, Rent Guidelines Board chair Chantella Mitchell said last spring.

Mitchell cited that as evidence that tenants were increasingly unable to pay rent and needed a rent freeze. Her statement did not contemplate that one-shots rose fivefold because word spread among tenants that they could get them by not paying rent.

The landlord who reached out to The Real Deal said one of his tenants has a monthly rent of just $658, but stopped paying. The landlord, after fighting in court for four or five years, got a check from the city for about $33,000 to cover 50 months of rent.

But nearly two dozen court appearances ran his legal bills for the case to $5,000 or $6,000, which the city won’t reimburse.

That means the collected rent, after legal fees, was about $550 a month for nearly five years. The landlord said that typically his legal fees amount to 15 or 20 percent of each one-shot.

“Enormous” losses

It could be worse. Some nonpaying tenants don’t get a one-shot at all. When that happens, “the losses are enormous,” the landlord emailed. “In the last 2 months, I lost 2 tenants who [each] owed $100,000.” Their rents were $2,300 and $3,900.

The ordeal with the $658-per-month tenant didn’t end with the one-shot, as the resident never resumed paying.

After three months, the landlord filed another case. Six months later, the city offered another one-shot — $6,000.

“I am not accepting,” the owner said. “I told them I want the legal fee.”

He knows he won’t get it but is drawing a line in the sand.

“I will go to trial,” he vowed. “I know the judge will never give me the legal fee but no one wants to go to trial. Let’s see.”