Gov. Phil Murphy speaks at a recent press briefing on the COVID-19 crisis in New Jersey — Photo by Edwin Torres/Courtesy: Governor’s Office
By Joshua Burd
State officials have unveiled a $25 million grant program for small landlords who have lost rent revenue during the coronavirus crisis.
Set to be administered by the New Jersey Housing and Mortgage Finance Agency, the program will make payments to owners of apartment properties with at least three and no more than 10 units. The state will do so using funding under the CARES Act, the federal COVID-19 relief bill passed in late March, seeking to cover missed rent payments from April and through July.
Grant amounts will be generated based on the total amount of missed rental payments and the number of COVID-impacted rental units that serve low- and moderate-income tenants, according to a news release. Landlords who receive assistance will be required to pass along benefits to their tenants by forgiving back rent and late fees accumulated by pandemic-impacted units.
“To emerge stronger from this crisis, we need to make direct investments in our hardest hit neighborhoods and communities,” Gov. Phil Murphy said Friday. “Ensuring that responsible landlords can continue to maintain their properties and provide quality housing to our tenants is essential to our recovery. Through this program, we can also provide direct support to COVID-impacted renters by forgiving back-rent.”
The New Jersey Apartment Association said it was encouraged by the program and hoped to see additional relief for the industry, as landlords face revenue shortfalls under an eviction moratorium during the state’s emergency period.
“We are encouraged by the administration’s action today to provide direct assistance to small landlords,” said David Brogan, the NJAA’s executive director. “While much attention has been focused primarily on tenants, we cannot forget that landlords must operate and maintain those buildings, and also, they must meet their financial obligations.
“You cannot look at this problem in a vacuum. While the eviction moratorium helps tenants stay in their homes, there has been little attention paid to the plight of landlords of all sizes. At the end of the day, it helps no one if a bank takes over a rental property due to foreclosure.”
State officials say the Small Landlord Emergency Grant Program will earmark one-third of its funds for applicants who are registered in the Department of Community Affairs’ database as individual or family owners. Along with the size requirements, qualified applicants must meet the following specifications:
- Owners with properties that are not seasonal or vacation rentals
- Properties must have current fire inspection certificates as of March 9, 2020
- Owners of properties with at least one non-vacant rental unit impacted by COVID-19 between April and July 2020
- Owners with properties that have low- to moderate-income rent levels or rent based on up to 80 percent of the median area income.
Applications must be submitted between 9 a.m. Aug. 19 and 1 p.m. Aug. 26 in order be considered. The HMFA said it will allocate grant funding on a case-by-case basis, examining the number of COVID-impacted units and the amount of missed rent.
Applicants must be the Primary Property Owner of a residential rental property in New Jersey and be registered with the DCA’s Bureau of Housing Inspection as of July 17, 2020.
“We know that many of New Jersey’s landlords are not companies or corporations,” said Lt. Gov. Sheila Oliver, who serves as DCA commissioner and the HMFA’s chair. “Rather, they are families and individuals. And like the families they rent to, they are struggling because they are often locked out of access to capital and federal resources.
“The number one priority of this program is to offer much-needed relief to small landlords, who will in turn pass along the benefits to their tenants who are also fighting to stay afloat in the midst of this ongoing public health and economic crisis.”
Charles A. Richman, HMFA’s executive director, said roughly 30 percent of all New Jersey renters and 27 percent of low- and moderate-income renters live in three- to 10-unit buildings.
“We have designed this grant program to ensure that our most vulnerable renters and landlords get the help that they need,” Richman said. “At NJHMFA, our mission to ensure safe and equitable housing for every resident of New Jersey has never been more critical than during this crisis. These dollars will have the increased impact of securing financial sustainability for New Jersey’s families. HMFA is enormously proud to provide this assistance to landlords and tenants and thankful for Gov. Murphy and Lt. Gov. Oliver’s championing of this program.”
For his part, Brogan said the benefits of financial assistance goes “well beyond simply helping landlords and tenants,” helping to mitigate the potential property tax shift onto homeowners if multifamily properties fail. He noted that the apartment industry pays more than $1 billion annually in property taxes and that, without assistance to landlords, “property values will drop dramatically, and the property taxes paid by landlords will also drop dramatically.”
“This will leave municipalities scrambling to make up those lost property tax dollars, the cost of which will ultimately fall on the backs of homeowners,” Brogan said. “While this program is a step in the right direction, there are thousands of landlords out there right now struggling to make ends meet. Our hope is that this will be one of a number of steps that the administration will take to assist landlords struggling to survive.”