Landlords May be Stocking Up at the Same Food Pantries as their Tenants

A story in the Washington Post over the weekend highlights the challenges for landlords in the pandemic, and it is a story not often told. But, contrary to popular belief, it’s not just tenants that are struggling, it’s landlords, too

The Post zeroed in on a house in Schenectady, New York in its story, The battle for 1042 Cutler Street.  The house, a three-story square box built in 1901, is owned by Romeo Budhoo, who came to the U.S. from Guyana in the early-2000s.  “The house had been sold four times out of foreclosure, condemned by the city, and scheduled for demolition” until Budhoo stepped in.  Budhoo “worked at a nearby pick-and-pack warehouse for $8 an hour and saved up a small down payment toward a $79,000 purchase price. He’d rewired the electricity, gutted the plumbing, installed granite countertops, and begun renting it out for up to $950 per month. Gradually those profits had paid for more distressed properties, for his daughter’s college degree, and for a small home of his own where her diploma now hung above the entryway. He’d spent two decades growing his business on the first of each month until the pandemic hit Upstate New York.” 

When the Post reported on the story in May 2021, Budhoo was stuck.  He could neither collect his rent nor evict his tenant.  He has offered to work with his tenant to accept partial payments, even as he watched the property deteriorate on the outside and inside.  “And now it had been a full year without payment, and Budhoo had maxed his credit cards, applied for a secondary loan on his 2015 Mercedes-Benz, defaulted on $13,000 in property taxes, and started taking medication for panic attacks and stomach ulcers [and] he’d begun mowing people’s lawns and selling eggplants out of his garden to neighbors for a couple dollars each.”

The tenant, Alfonzo Hill, lost his job at a restaurant and had trouble paying his rent and other bills.  “when Hill finally received some small unemployment payments and a four-figure stimulus check from the government, he used the money to fix the engine in his broken-down minivan, buy a little extra food, purchase some basic furniture, pay down his credit card, and surprise his daughter with a decent laptop for her virtual classes, because why would he spend what little money he had on rent that he didn’t actually have to pay?”

The Post said that “more than 8 million rental properties across the country are behind on payments by an average of $5,600, according to census data. Nearly half of those rental properties are owned not by banks or big corporations but instead by what the government classifies as ‘small landlords’ — people [like Budhoo] who manage their own rentals and depend on them for basic income, and who are now trapped between tenants who can’t pay and their own mounting bills for insurance, mortgages and property tax. According to government estimates, a third of small landlords are at risk of bankruptcy or foreclosure as the pandemic continues into its second year.”

Budhoo’s American dream has turned into a nightmare.  Many small landlords in Schenectady are immigrants who had arrived in this city alongside the Mohawk River, northwest of Albany, in the early-2000s.  That was a low-point for the city after it had lost “half of its manufacturing jobs and a third of its population. The city at that time was blighted by thousands of vacant homes, and instead of spending $18,000 to demolish each one, the mayor had come up with a plan to go to New York City and recruit Guyanese immigrants who had built a reputation for fixing up derelict property. The mayor handed out his cellphone number and offered to sell houses for as little as $1, and more than 5,000 Guyanese began to move. They bought cheap homes, rehabbed them, rented them out, and then started paying property taxes that helped revive the city.”  That’s how Budhoo came to the city to grab a piece of the American dream.  “Now those same landlords were operating at a loss, and the city was trying to survive its own pandemic budget crisis by increasing their trash fees and raising property taxes for the first time in five years.”