When I worked on Wall Street, guys who I sat next to would bet on anything. Once, the whole trading floor filed out to West Street, to see whether a guy who had run track in college could run a mile in under 4:50 (he was my direct report; he made me $200). Another time, the big boss – my own great-great boss, a guy who looked like Toto Riina and had a big glass-walled office at the trading floor’s fifty-yard line – bet a young guy in operations $100 that he could not eat a whole box of Dunkin Donuts in a day.[1] Some other guys bet an uncoordinated young guy who had never learned to ride a bicycle that he could not drive a motorcycle.
The fun did not end once the outcome was determined. Toto Riina once demanded that his counterparty shave his head to settle his debt. My own great-boss was once paid $500 in pennies, delivered in two big whiskey-barrels and deposited on the floor of his office.
In fairness to the traders, there were limits to what they would bet on. Once, a window washer working on a platform high above the ground outside a skyscraper across the plaza from us got in trouble because one of the cables suspending the platform broke. The guys could have easily set an over-under on his life span (twenty-five minutes? Half an hour?) and started a market. Open outcry bets could have been placed near the window closest to him, and the instant messaging system could have supplemented that market electronically. But people were too busy placing bets on interest rates, agency bonds, aggressive tax strategies and implied volatility to bother with that.
The New York State eviction moratorium was first passed by executive action in March of 2020. Since then, it has been codified by legislation, extended several times, overturned in part by the U.S. Supreme Court, and reinstated with a constitutional figleaf. Most recently, then-brand-new Governor Kathy Hochul extended it in September of last year until January 15 2022. The betting is on now as to whether it will be extended again.
Evictions and eviction moratoria are to demagogue politicians what chum is to sharks. That is a shame, because they deserve a nuanced analysis. Evictions are horrific for tenants and expensive and time-consuming – and no fun – for owners, but they are a necessary evil, because under current law, they are the only remedy that owners have against recalcitrant tenants. Take away that remedy and the free riders will ruin it for good residents. In a perfect world, alternative remedies, like a well-designed public rental insurance scheme and fair, efficient and binding arbitration, would remove the need for most evictions. But this world is not perfect.
This is not news. I have ranted about it before.
To justify a moratorium on eviction, you need a very substantial policy counter-weight. In March of 2020, that counterweight existed. In the face of the brand-new Covid epidemic, we were facing an economic collapse as well as a public health emergency. Reasonable people could argue that it was not fair to evict tenants in an economic environment that could be as severe as the Great Depression, and nobody, reasonable or un- wanted people rubbing up against each other in shelters and in homeless encampments. So – in March 2020, the moratorium made sense.
Those days are over. The original policy justifications for the moratorium have gone the way of the five-cent buffalo. Instead of an economic collapse, we now have a worker shortage. Anyone who wants to work now can work. And although Covid is still very much with us, it is not the danger that it once was, particularly for vaccinated people.
Because of this, the government did not emphasize the original justifications for the moratorium when it was extended last year. Instead, the legislature and the Governor’s office said that the moratorium should stay in place to allow money to work its way through the ERAP system. A well-placed ERAP check could stave off eviction for many tenants. Once that was done, the thinking went, the moratorium could be lifted.
Well, ERAP is now broke. All available money has worked its way through the system. Nothing is being paid out on existing applications, and the system will not accept new applications. So much for that justification.
As I understand it, Governor Hochul has decided not to extend the moratorium. Here’s a quote which I pulled from a website that popped up on random Google search. I have not fact-checked it, but it looks legit and since it is on the Internet, it must be true:
“We talked about giving people a little more breathing room, giving them just a little more relief on a short-term basis, and that went all the way to January 15. That was something no other state has done to my knowledge, and what we want to do is let people know that that is concluding very shortly.”
Sounds like both good sense and good news to me.[2]
Of course the wild card here is the legislature. They might step in and bugger things. Query whether Hochul would veto legislation – and whether the progressives in the legislature have a veto-proof majority.
The basic conundrum of residential real estate is that to a resident, a dwelling unit is home, while for an owner it is an entry on a balance sheet. That is the circle that eviction can not square. Since yesterday, I have been typing up five day rent demands and thirty day notices, certified-mailing the rent demands and emailing the thirty-day notices to process servers. Mike, the manager at my park in New York, told me that Tin Hat Guy, in Lot 23D, exploded when he heard about this. Mike said, “He told me, ‘How can I get that much money?’” Tin Hat Guy is the one who told me in December that he did not have to pay lot rent because Biden and Kathy Hochul said he did not have to. I said to Mike,
-I dunno. Work for a living?
-Hah, hah.
-I’ll accept any reasonable payment plan. But it has to be reasonable, and he has to stick to it. He won’t do that if we don’t have the remedy of eviction.
-He says he won’t get that much money on his tax refund.
-The problem goes away if he pays.
-I know.
This morning, I wrote a dunning text to a young couple who live not far from Tin Hat Guy. They have been chronically late since they moved in, and Mike has had to keep after them to clean up after their dog. When the WOG said that they would pay at the end of the month, I said that we would serve the thirty-day notice now, but if they paid in full, the problem would go away. I added a text to the effect that I did not want to evict them, and that if they performed their contractual obligations, these problems would stop. She texted back,
–You legally cannot evict us because of covid, we have the isolation orders and positive result papers
I considered replying, Are you vaccinated? If not, serves you right, but decided to act like an adult. Instead, I texted back,
–Untrue, after 1/15.
-Again, if you fulfill your contractual obligations, the eviction case will go away.
Those two usually do come through, after legal remedies are made manifest. They generally mean well and are young enough to learn how to get their shit together – but I need a remedy to help them learn how to do that.
In case you are curious, the window washer turned out OK. A helicopter came, dropped him a cable, and helped him to safety. I could have made a mint, if I had gone long his survival. As far as I know, he is still alive today, living somewhere in the five boroughs with a loving intimate partner and several children. I wish him well. But if he leases a dwelling unit, I hope that he pays his damn rent, on time and in full, as he promised.
[1] I learned about this at 11:00 AM that day, from the guy in operations. When we spoke, there were about fifteen donuts left in the box. He had a big glass of milk on his desk, and he looked kind of green and sluggish.
[2] There has also been chatter that more funds will be requested for ERAP. I suspect that the probability that money will be found in either the federal or state budget to top-up the ERAP fund is low, but in any event it appears that this push is independent of the lapse of the eviction moratorium.
ANY WAY YOU SLICE IT, IT WILL STILL BE (BOLOGNA). HAPPY NEW YEAR IN N.Y.S.