25 Aug SharkStreet Radio on 970AM TheAnswer: Real Estate and COVID-19
Keeping you on the bleeding edge of the real estate industry and coming to you live from the global capital of real estate, New York City. Welcome to SharkStreet, we have your host, former CEO of Property Shark and current CEO of Rentigo Bill Stanford.
Bill Standford 4:15
Good afternoon, New York City Good afternoon, New Jersey Good afternoon, Long Island in Connecticut, I am incredibly happy to be back on the air.
It has been, it’s been a while, and it’s been over a year since I’ve been on the air and I have to say I’m absolutely ecstatic to be back on there is just a ton of things that are going on in this space and there’s just so much news so much happening so fast, we’ve got so many issues so many problems going on so many opportunities have to figure out a way to make sense of it all in at night you know I’m just I’m pleased to be with you on this day. And it’s a beautiful day it’s hot today I’m back in the city for the first time, I think in three months, maybe even more so I guess I got out of here on March 15, and today was the first day it was back and it was weird. It was absolutely weird. I must say I was just walking around there’s nobody out there. It just doesn’t feel right. Right now, people are walking around in masks and the whole place looks incredibly strange, but you know we have to figure out a way through this we have to figure out a way through this together, the real estate industry needs to come together, we have to act as one we have to be leaders in this space. I really wanted to come into the studio for the show today. And just to be a part of it. And listen, we got a lot to get to, we got a great show today. Again I’m super excited to be back. I want to I want to give a couple of thanks a couple of shouts out to the team at Rentigo for making this possible. I’d like to thank the people here, 970 AM, everyone’s been awesome. It’s been absolutely great seamless getting back on the air I’d like to thank my buddy Sean Wooters (?) from the deaf poets poets for lending his musical talents for my opening so that’s been awesome. And last but not least, and especially I’d like to give out a shout out to Dottie Herman, who was instrumental in making this all possible Dottie is an absolute leader in the industry. It is, it is wonderful for me to be able to follow her. And, you know, I’m just blessed and all right…so like I said, Where to begin, we have, we have some absolutely crazy times in this country, we’ve got we’ve got real problems, and New York City is not immune to it. I have just been just inundated with notes and messages and people talking to me about asking me questions about what’s happening with real estate data. Most people that know who I am know I come from the real estate data space I’ve been working in this space for 20 years, we have the COVID crisis and, and that’s going to be with us for a significant period of time. And we’re going to have to figure out a way through it. And, again, real estate impacts every aspect of our life it just, it is it’s where we live, it’s where we go to work, it is where we enjoy ourselves it’s where we go out to dinner. It is, it is where we, you know, see movies, the whole nine, it’s, it’s, uh, and we have to, we can’t we can’t continue to be hermits. We have to get back out there. You know I’m wearing a mask right now so you know mask love whatever it takes you suit up, and it’s time for people to to start getting back to work and start getting back to some, some type of normalcy.
You know, again, we have the real estate industry has been been absolutely devastated by the by the COVID and I can’t even I can’t talk to this enough, and almost all of the guests that we’re going to be bringing on are going to be talking about this in some way shape or form, how it’s really hurt this industry, and, you know, I just I don’t think people understand the importance of our industry, what it means to the city to everything to everyone, we’re taught when I say everything I literally mean everything you’re talking about schools you’re talking about police you’re talking about the hospitals, you’re talking about the firemen you’re talking about the garbage collectors, everything, it’s it’s approximately 30% of the entire budget, if not more is from the real estate industry, and you know that there’s a real problem when, when you know the the tenants the residents, they can’t pay their rent, and that is that. Then, and then these these property owners, they’re held responsible for this they have to pay their rents, and they have to pay their taxes, right, they have to pay the taxes. And if they don’t pay the taxes, with the money that they don’t have, then they get an 18% charge on that, and it’s, it’s just unconscionable.
Alright, so let me take, let me take a step back and I’d like to reintroduce myself to everybody. Again, my name is Bill Staniford, and I’m a born and raised New Yorker, I was born in, in 1970, and I’ve been with this city, through the good times and the bad times and boy, I have seen the bad times when, when I was 20 years old in 1990 this was the murder capital of the country, there was people I don’t think he, I don’t think people really remember ththis so there was there was more than 2400 murders in the year of, of 1992…2400. Okay Can someone do the math on that what is that seven plus everyday murderers. And, you know, I’m fearful, I’m fearful for a city I’m fearful we could be slipping back into this, this stage, and, you know, we have to ask New Yorkers we have to come together We have to do something about it. And again, the real estate industry should be leading the way again born and raised in New Yorker, former United States Marine Corps cryptologist codebreaker I worked in the drug war intercepting and decoding radio transmissions from Peru and Colombia.
I was down in Panama interdicting intercepting radio transmissions from Nicaragua. Two years prior to the time that Bill de Blasio, actually it was two years after the time that Bill de Blasio was down working with the Sandinistas and this was this was literally our enemies and I was, I was intercepting transmissions from the Nicaraguans on the Sandinistas were the enemy and literally Bill deblasio was working with the Sandinistas. So, after the Marine Corps went on to get my undergraduate degree graduate degree became a serial entrepreneur, one of the first companies out of the gate for me was a company called Property Shark pretty well known in the real estate space. It was one of the original real estate data aggregators based out here in New York City, actually, you know I was, I was over in Williamsburg, Virginia, sorry Williamsburg, Brooklyn and, you know, it was, it was amazing company grew incredibly well I ran that company for five years grew it scaled it out nationwide sold it to Yardi systems out in California.
After that I became CEO of another company called Urban stands for urban intelligence, we did a pretty sophisticated machine learning artificial intelligence project with Con Edison. Obviously the local utility provider here we were able to help them identify specific properties in New York City that were susceptible to gas explosions, absolutely fascinating became the chief strategy officer of another company called Envelope which digitized New York City’s zoning resolution into a 3D massing engine and for English right so that is taking 4000 pages of legal documents I mean people, people don’t understand the complexity of the zoning rules and regulations associated with New York City’s real estate, but it’s complicated it’s unbelievable so we took that and we turned that into a visualization machine where you could just press one button and you could automatically visualize the highest and best use of a property. Fascinating I became a mentor for New York City’s largest prop tech VC meta prop. And I am currently working now, as, as, not only the the CEO of company called Rentigo I also work as the co-chair of entrepreneurship and innovation at the Queen’s Chamber of Commerce.
And so, you know, obviously, saying, very much informed in the real estate space and working with my new company right now which I’ve been blessed. I joined this company Rentigo. That was the beginning of the year. And so that was huge change I mean this entire year has just been absolutely amazing.
And we are we are a company which I’m going to talk about a lot throughout this time but really the entire mission of Rentigo is to help property managers, make property management, more affordable. And this is something that’s near and dear to my heart. This is something that’s really important to me this is a mission that I can get behind and be a part of. And, and really be an advocate for the industry. And you know, I believe, and I make no bones about it I believe that the industry the real estate industry the multifamily industry has been under siege from Albany from our local politicians. And I think we’re just getting, you know, beaten down and, and now get this opportunity to work with this wonderful company where the entire mission is to make property management, more profitable. I don’t consider property managers to be clients of mine, I consider them to be my partners. We provide them with a payment platform, a communication platform so that they can manage their properties more effectively. And it’s all about them. It’s all about the branding for our property managers and property owners so that they can, they can build their brand so I you know we don’t care at Rentigo whether you’re talking about branding a community branding. The company, but it’s all about it’s all about you, and then what we do is we look for ways to make property management more profitable. And so, you know, I was given the opportunity to to get back on the radio and, and I took it right so I want to talk about SharkStreet. And what we’re going to be doing here for the foreseeable future, what the mission of this radio show is and, and I you know I am, I’m, I’m dead set on trying to become a resource for property owners and property managers and people that are interested in real estate that want to get into commercial real estate and property ownership and property management, and I want to be seen as someone that they can come to and turn to To that end, you know, I want you to be able to reach out to me at any point in time. I am, I’m accessible, right. So, this is you can reach me through LinkedIn, you can reach out to me through Twitter. And, and I will respond back to you.
We are going to be talking about a plethora of different things, a plethora of different angles and titles like so we’re going to be talking about most of this is going to be talking about practical advice to property managers right so this is going to be what challenges you face. And then, all of those things so we want to get into actual property management the guests that I got that I’m going to bring on here are going to be the best of the best. We’ll talk about technology and finance, insurance, we’re going to be talking about new developments that are coming online. affordable housing inclusion, and there’s just going to be a number of great things that we can tackle one of the things that we’re not going to shy away from is the policy, the political side and all the rules and regulations that are surrounding that we’re going to be bold we’re going to be brave and we’re gonna bring the best information we can’t you and we will be right back after this break with J’nelle Simmons, the CEO of landlords New York. Hold on.
Bill Staniford 18:54
Excellent. Thank you very much and welcome back…welcome back to shark street, and we are going to be joined here momentarily with J’nelle Simmons .J’nelle is the CEO of landlords New York.
So she she is or is not online, so she is she’s not on the line.
All right, so listen we’re gonna be trying to get into. J’nelle here on the line, and, you know, so one of the things that we want to talk about right now is how Manhattan rents have dropped for the first time in in a decade.
So this is this is unbelievable news that we’ve had. And this was just recently posted on the, on the New York Post. That, that the Manhattan rents have dropped for the first time, and this is this is really since the first time since the, the crisis, right so since the Great Recession. And, you know, again, it’s one of the most amazing things. So, you know, it’s obviously going to directly impact the value of our properties, it’s directly going to affect the tax base and, you know, it’s something that we’re going to be challenged with on a regular basis for the foreseeable future. And so at this time I would like to welcome J’nelle…J’nelle Are you with us.
J’nelle Simmons 20:13
I am Hi, thank you for having me.
Bill Staniford 20:14
Absolutely. So, um, J’nelle Simmons, you know. First I’d like you to just take a little bit of time and talk about your background, and then how you got involved with Landlords New York.
J’nelle Simmons 20:32
Sure. And I personally am originally from the Midwest, I worked as an entrepreneur and spent over a decade working in marketing and business development, before moving to New York. Gosh over 10 years ago, I guess, been a while. I, when I moved here I had my experience as a business owner and I like to call myself an accidental landlord through an inheritance of property as well as through personal business ventures there. When I moved to New York was interested in looking into. Just some different opportunities here locally and friends with several who were landlords and property managers and
Bill Staniford 21:20
so when did. When did you join us in 2010?
J’nelle Simmons 21:21
I, yeah I moved here, 10 years ago. So I guess they say after 10 years you’re officially a New Yorker.
Bill Staniford 21:30
I actually say it’s five right if you can if you can make it five years then you know you’re one of us.
So, unfortunately, I think we just lost J’nelle Simmons, but we’ll get her back in a second. And so, again you know Landlords New York is one of the, one of the organizations that I really look at here in New York City, as one of the leaders in the space, and a place that individuals can go. That can, so they can get some information, and some support.
You know, for being a landlord which is obviously one of the most complicated things and it’s getting more and more complicated on a regular basis. And so, Landlords New York is a is an organization that is. It’s actually a for-profit organization in…. J’nelle Are you back? If you don’t, no worries I’m talking about your I’m talking out loud, no.
J’nelle Simmons 22:27
Landlord about landlord. So yeah, I’ve seen that I’ve moved to New York and through, through friends of friends was introduced to a group of private owners who are very successful each in their own right and you know really out of pocket and a frustration from the lack of access to resources and information for landlords was kind of sparked the idea that became what is now Landlords New York so I am currently the CEO of this online trade organization and we’ve been in operation since started began in 2011 with kind of building the site and a soft launch but really since, since 2012 we’ve been actively growing.
Bill Staniford 23:12
Awesome. So one of the things that I’d like you to do right so I would like to to, you know, pitch to me as if I’m a property owner which by the way I’m not right so this is, this is actually one of the things that I say to people. I’ve been in real estate I’ve been working in the real estate sector for a very long time 20 years, and I’ve been working mostly in real estate data and technology but I’ve never owned in New York City and that’s by design, but let’s just say for example, I was and I do I you know because. Listen, if I’m not a property owner, I believe that I can speak more forcefully as an advocate for the industry, it’s not it’s not self serving I it doesn’t benefit me personally in any way. If property values go up, or there’s no angle here if you will. Sure, but let’s just say that I was a property owner and let’s say I owned a, you know, a multifamily property in the New York City area. What’s your pitch, what why did why should I join landlords.
J’nelle Simmons 24:10
I a number of reasons. How long do you have?`
Landlords New York is we’re an online trade organization. Currently comprised of over 6000 landlords and property managers in New York and we’re growing daily our membership actually has grown on average about 50% year over year since we launched, which speaks to the need in the community for for this type of resource our membership is free. So there’s your sales pitch, it’s free to join for anyone who owns or manages residential or commercial property as a business in New York. Now we do carefully vet each of our members. After we receive their registration in order to maintain the integrity and the confidentiality of discussions that take place on our site in our private forum and our live, of course we’re not having live events, currently so online events and seminars that we host.
We’re not a political or lobbying group but rather we’ve really focused on education, and more boots on the ground type of operational issues and the questions that you know many of us in the industry owners and managers encounter daily not high level you know what’s the next hot market Brooklyn’s booming this and that we’re really more hey I had this situation in my building with a tenant, or it’s a Saturday afternoon on the hottest day of the year and my HVC sees what do I do, you know it’s more of those types of situations that we are able to help with our members,
Bill Staniford 25:53
it’s the nuts and bolts of operate. Okay, yeah.
J’nelle Simmons 25:54
Oh and very much we’re not we’re, we’re not a political group per se however we do send daily emails and have a calendar and we keep our members, up to date with all of the need to know information it can be a full time job in itself just staying on top of the ever changing laws and regulations in this market so we help them with, you know, here’s upcoming deadlines, have you registered your bill the, you know, the, the, this law has changed and now you need to benchmark gain went from 50,000, square feet to 25,000, square feet, you know, a lot of those operational issues are members and…
Bill Staniford 26:29
one of the things that I was interested in, when we were talking before was about your purchasing power program is it…Am I saying it right is that is that what it is, the purchase?
J’nelle Simmons 26:39
Yes, we, we have recently launched, one of the resources that we offer is the purchase power program. It’s essentially a buyers group, collectively, our, we have over 6000 members who collectively own or control over a million residential units and over 100,000 square feet of property so collectively that’s a lot of purchasing power so what this program does is offer exclusive member only discounts from local and national vendors and service providers, and they have access through this purchase power program, you know, whether you own one, if I own one building and my the neighbor next to me owns 100. They’re likely going to get better rates on deals from vendors so this program is able, we’re able to offer our members, these deep discounts from our partners that they may not have received otherwise so it’s really been just a win-win all around for the vendors for the landlords, particularly posts in this post COVID world that we’re living in where everything is so price conscious because everyone’s struggling tenants are struggling landlords are struggling the vendors are struggling builders that program specifically has really been our way of being able to give back and help to kind of spark them to business with an economy all around.
Bill Staniford 28:00
Exactly And listen, that is I want to be very clear that is one of the reasons why you’re on right now it’s one of the reasons why we’re going to be bringing you back on a regular basis. Again this entire mission that I’m on right now is trying to figure out ways to make property management more affordable for the property managers make it more profitable. Again, you know, people do not understand they believe that the property owners and property managers are just millionaires and billionaires and that’s just not the case. These are everyday people that running on tight margins sure there’s people out there, but that is not the norm and J’nell. Hold on, we’re gonna bring you back at the end of this break and everyone stay tuned for some more StarkStreet.
Bill Staniford 30:09
Welcome back to SharkStreet.
J’nelle…You’re still with us? And what I, what I’d like to do right now is I’m gonna want to pivot a little and I want to start giving some actual concrete advice to the people that are out there. And this could also be for tenants and anybody that’s interfacing with real estate which is basically everybody out there. Let’s talk COVID, and obviously it’s the biggest issue, and I’m super interested in hearing what you have heard from your property owners from your property managers. What are the biggest challenges that they are currently facing regarding COVID.
J’nelle Simmons 30:51
Yeah. So first I should preface I have a bird’s eye view into these discussions and questions and issues that landlords are dealing with through part of one of the areas of our part of the membership we have a peer to peer forum where members Connect, and are able to connect and socially learn from each other, knowing that that information is coming from a fellow landlord, so that were many of our members, especially since COVID will go to post a question what do I do, what, how can I collect rents I’m not collecting rents where you know I’m, I’m struggling we’ve only been able to connect 20 -30 to get like 20 -30% of income. Since the pandemic hit so you know in terms of issues
Bill Staniford 31:42
Do you have a high level… I mean do you do you just anecdotal and I am, we’re not going to get into really great detail here but you do know what percentage of people are still are still out of your group that are still paying the rent?
J’nelle Simmons 31:53
It’s I mean it varies we have again….Some members have just one or two building some have hundreds so I don’t necessarily have an exact number across the board but I’ve seen. I’ve seen some as low as 20% and others as high as, in the 90s. So, you know, it’s really it. I don’t know that we, I’m able to give an exact
Bill Staniford 32:14
It’s superr interesting I mean I’ve heard I’ve heard numbers all over the board but you know right around 50,60, 70% are still paying, you know, Rentigo we were collecting at 90%, and obviously our platform is built so that you know people can can pay their brand digitally and never have to interface with humans. Anyway, right. So, so, so, like, again, what are the what are the nuts and bolts problems that they’re facing like it… someone gets COVID what happens?
J’nelle Simmons 32:44
Exactly. I was gonna say money is an issue but more than that there’s the, there’s the human side of this, which is what has affected all of us, and that you, you have some of our members that I’ve spoken with who have unfortunately they’ve had tenants in their building who have gotten sick so you have others who have actually passed away from the disease so from a management perspective, you’re dealing with, you’ve almost become a psychiatrist. Because tenants are scared they find out that someone in the building is sick what’s being done they’ve had up additional just disinfected majors, and here’s what we’re doing so you’re, you know when you’re faced with an issue where you’re financially struggling because you’re your rent roll has gone down yet all of your bills and taxes and everything is due, but you’re having to still pay and bring on, in some cases, additional staff and resources, just to make sure that you’re maintaining the health and safety of your building and other tenants in a situation where you do have a tenant who is has been affected. Of course we can’t Marshal law and lock them in their apartment, but we you know they are I do that, if you have to. We’re not there but you know yeah, you have to make special arrangements for everything from at this call out when you have trash that needs to be picked up called this number or text or been through an app that you’re used to the super you know the trash outside the door that comes in picks it up.
Bill Staniford 34:16
Let me just stop you right there so so yeah somebody gets sick. Okay, somebody gets sick, and now they’re not supposed to leave their apartment. Correct?
J’nelle Simmons 34:28
Bill Staniford 34:29
Okay, so they’re not supposed to leave their apartment, which means they can’t take the trash out, right?
J’nelle Simmons 34:37
Bill Staniford 34:38
Okay, and is that now the landlord’s responsibility to pick that garbage up?
J’nelle Simmons 34:40
That’s what I I don’t know any specific law but yes that’s what we that’s what is advised and that’s what is being communicated among our membership into their tenants, so they’re actually they’re communicating with the tenants who have who are sick to stay in their apartment and they make arrangements either with a set time or like I said they’ll call, and they’ll set it just barely opened the door set it aside. At that time that super comes by picks it up, takes care of it has to make sure it’s super tight wrapped up put in an extra bag I mean, we’re really talking about a lot of measures to protect everyone
Bill Staniford 35:13
These are people that actually know that they have COVID. Right.?
J’nelle Simmons 35:20
Correct. They got diagnosed.
Bill Staniford 35:24
Right, right, because obviously they’re okay but though, I guess we can only talk in the realm of that because, I mean, but the reality is is that most people don’t even know that they have COVID which is which is a bit scary but let’s say let’s stick to the realm where we have a tenant who has said that they have COVID, they have told the landlord that they have COVID and then they’re going to begin self isolation. What happens if they don’t self isolate and is the landlord somehow responsible for that?
J’nelle Simmons 35:52
That’s a great question, and that is a question that we, I don’t know that we’ve I anticipate there will be a legal precedent that will be set, I’m not aware of any specific case law as of yet mainly because courts haven’t been open. But I mean that I think there’s potential that that’s something that we will see and it’s certainly a concern among landlords when I know they’re absolutely doing their best and hiring companies that come in and fog and clean the elevators and stairways and laundry and disinfecting multiple times a day and doing everything to take care of, of keeping tenants in isolation. They’re like I said other tenants in the building when you hear of that it’s just human nature you know there’s fear and so it’s just really raised so many it’s such an unprecedented time that we’re living through and everyone that I see is just doing their best that’s all that, that we can do, and listen to the experts listen to the advice from you know listen listen to those who are in the know.
Bill Staniford 37:03
Listen, it just seems unbelievable to me where we have a situation where these owners these managers are actually bringing in less revenue on one side, the government is still requiring them to pay, exactly the same amount of taxes that they were before so there’s there’s right to them. Yeah, yeah, their costs are going up their revenues are going to town, the taxes are staying the same, and now they have all this additional legal liability.
J’nelle Simmons 37:31
Yeah, right. I mean
Bill Staniford 37:33
it’s it’s like it’s like a hailstorm, and I just, it’s amazing to me because we live in. We live in a city right we live in a city where most people rent and, and I’m one of them, right. So, as I said, I don’t own I’m a renter and, and I still, you know, I have to I renters have to understand the situation that they’re dealing with. Right. These are people, these are businesses that are trying to maintain and it’s, it’s just unbelievable. And I just, I feel like the tenants need to step up more right I mean that’s that’s my perspective, like, you know, it’s hard. It’s actually, I mean I shouldn’t even be saying that because as soon as COVID rolled around, I got out of town. Right, that’s the first thing I do, I just said I you know it the the whole proposition, I got lucky right I got very lucky that my lease was coming up. And I said, Listen, that’s it. I, you know, why not renew my lease because I don’t even know when you’re not alone
J’nelle Simmons 38:36
You’re not alone…many people did that, especially when regardless where they were in their lease, many people especially a lot of millennial tendent still were able to go back and, you know, move back with their parents or wherever and other other state, or in more rural areas, potentially, yeah, we are, we I saw a lot of that from, from our members who had a lot of tenants who just vacated.
Bill Staniford 38:59
Oh yeah, I mean I can’t, I that that’s gotta be actually the norm right there’s gonna be a large percentage of people that say this no longer makes sense to me and and again I’ve been thinking about the calculate in my head and I actually, I call on all the people all the listeners that are out there to go through this process yourself and start thinking through like gaming this thing out what does this actually seem like because COVID breaks in March, if your lease terminated at the end of, at the end of March, are you renewing it? Probably not. And then you go maybe you move back to your mom or, and let’s just say you know you’re It’s June and you were planning on coming to the city because you just graduated from college. Are you, are you coming here?
J’nelle Simmons 39:42
Right there so there’s so many questions in there, you know, there isn’t much recourse right now, and not knowing it and I’m not sure that there will be once the courts open up you know the backlog is going to be immense and judges aren’t seeking to have 10s of thousands of people, evicted. You know, it was hard enough before for the tenant non payment evictions and I you know I imagine it will be doubly so once, once that is back open so you know what I’ve seen in terms of from. And it’s been interesting to watch among the conversations that have taken place in the forum The, the evolution of the discussions from early on, like back in March when the when the city first sat down and when the first hit the questions were I mean it was, we’re talking about hundreds and hundreds of comments on you know what what’s everyone’s doing with this 90 day eviction or are we are these rent waves I mean it was just like this. Panic of how am I going to survive, how my bills are still too. There are all these confessions and some of the frustration was that it seemed to be a lot of the bills that were proposed were these kind of blankets, you know, regardless of whether or not you have the impact of COVID or the, the impact of landlords large or small, no matter what portfolios, everyone’s been impacted. So you know what a lot of people and, and what was recommended was to just speak with each resident individually, understand their reality and explain your that you know you’re obligated to maintain services just as they are to pay rent, and, you know, just try to try to do the best we can to work together that’s really all the, that can that can be done so
Bill Staniford 41:31
So when the eviction process right now. I mean, it’s just it’s just dead. right it’s just dead that it says that nobody can evict?
J’nelle Simmons 41:40
Bill Staniford 41:41
that’s just amazing.
J’nelle Simmons 41:42
August, 20, I believe, and then there’s even a new bill that was introduced by Senator Miring in Brooklyn that would extend for another year. I think I’d have to look into those specifics but, yeah,
Bill Staniford 41:57
it’s just shocking to me because I’ve got some statistics here right so I’ve got some statistics that say right now, as of right now and the taxes were supposed to be collected just a couple of weeks ago. Right. And so, yeah, I had 6% no taxes at all, 6% of the property owners and leaces no taxes whatsoever and 39% of them only partially so 45% of people were not going to be paying their full amount in taxes, because they cannot because they can’t because they don’t have any money.
J’nelle Simmons 42:32
Right, the right, and that that tax budget for the city makes up a huge amount of the budget I want to say something 44, you know, in the 40% of the budget so so that’s a tremendous amount of money.
Bill Staniford 42:49
It is absolutely devastating
J’nelle Simmons 42:51
Did not allow you to collect any income but are yet we’re gonna raise your taxes. Pay up but it doesn’t make it doesn’t make sense
Bill Staniford 43:01
right right yeah and that that is, that is, you know, ladies and gentlemen, I mean this is this is the exact point that I’m trying to get across here is that this entire system that doesn’t make any sense and and again, J’nelle I’d like to I’d like to hold you over for the next next segment if you if you will hang around because this is it’s fascinating we still have so much more to cover, but I mean this is this is a very bad situation for the property owners for the, for the tenants for the city, and we got to get our heads around this we have to understand the magnitude of the problem that we’re dealing with. So we’re going to be right back with some more SharkStreet. After these words.
Bill Staniford 45:28
We are here with J’nelle Simmons the CEO of Landlords New York, and J’nelle thank you for remaining with us. I have. I’ve been going through this process in my head and it’s something that, again, I would like to like to engage the audience and I’d like to like them to go through this process with us. And what I call it is, it’s just gaming out what this actually what happens, what happens to the industry, when certain decisions are made and I listen I’ll tell everyone. I promised, J’nelle that I wasn’t going to get into politics with her, and we’re not going to talk directly about politics, listen, and I listen I’m not going to shy away from politics and I’m going to bring the RSA on next week and we’re going to go deep into politics. But, but this is this is really, it is political but it’s also just the nuts and bolts of, like, what actually happens right and so, you know, we’ve been talking about COVID and all these added additional pressures and and all these different rules and regulations that the property owners and managers have to abide by in order to continue operations. And there are vacancies rising in vacancies are actually better than having to go through the eviction process right where you have a dead asset and people are just not paying rent and living right so vacant, I mean that that’s a better situation, it’s still it’s still a bad situation and and so right you know and like I actually I want to pose a question to you and maybe you don’t know and I’ll certainly pose it later on to other people in the space but why isn’t commercial property taxes variable Why, why isn’t it just, if you’re paying, let’s just say, 20% of your, your rent goes to taxes or 40% goes to taxes so why is it Why isn’t it just variable when you, when you get the thousand dollar paid rent check that 400 goes off to pay taxes and that when they when they don’t pay the rent and there are no taxes. Why wouldn’t you do that?
J’nelle Simmons 47:43
That’s a great question…Thinking… you asking why, in terms of leases for each commercial?
Bill Staniford 47:54
I’m just I’m just curious I’m curious because it doesn’t seem like our leadership is filled with problem solvers it just seems like it’s filled with people that are just looking to maximize their income, and when I say their income I’m talking about governmental income. Certainly increasing taxes on this but not really understanding how it happens. Yeah, and but, but again, like I want the audience to think through what actually happens so if people stop paying their if people stop paying their rent, which is happening so that’s that’s that is reality. And then, and then the landlords cannot pay the next step is the landlords cannot pay their taxes because they don’t have any money. Right. Okay. And then, and then the next step. So then, there’s a lien pro well first of all we have to deal with the 18%. Right. APR on any of the late, any of the late fees on the taxes. At some point there’s a tax lien put on the property. Right. Yeah. Okay. And then, and so then what happens after that. Is it no longer makes sense for that property owner to own that property, I think. Right, right. At some point, it just doesn’t make any sense.
J’nelle Simmons 49:13
And, and that’s the fear is that. I mean a worried about a lot of landlords. Think current administration I mean it has it. And what I’m hearing from a lot of our members I want to be clear it’s just my, my perspective as consistently sided with tenants and made it increasingly difficult for landlords to cover these expenses on low and moderate cost housing. And now that many tenants are no longer able to pay the rent the current conditions may force, many landlords to just walk away from those properties which is going to on the residential side further limit access to affordable housing.
Bill Staniford 49:53
J’nelle Simmons 49:57
Tenant side yeah nowadays, they’ve gotten rid of the the personal, the personal guarantee so there’s literally no a commercial tenant can can walk and are able to have an out and landlords have no recourse
Bill Staniford 50:10
right anything, most of most of these properties are surrounded LLCs, right. So, I mean, most of them. So, right, and those are companies if you walk away so if there’s if there’s an individual or if there’s a group that owns multiple different properties and they have multiple different LLCs and the liability is limited to that one asset. So some people understand that sort of aspect, but if that asset is no longer performing, let’s say there’s a tax lien on them, they have they have back two mortgages, and it just doesn’t make any sense to continue operating that property and they just walk away the LLC declares bankruptcy. And then what right this, again, I want the audience to think through this, then what happens. So So now the manager has walked away, and there’s a there’s a tax lein so there it’s a non performing asset and again, these are the funds that are being used to pay for our police, which are under attack pay for our streets pay for our schools pay for absolutely everything that we hold near and dear. And so then what happens. So it goes to auction, or something.
I’m guessing. Right.
And, and, and then you have what is called just urban blight. Right, so you have, who’s going to pick up that asset, what, why, why go through this hassle. And I like I honestly, it just blows my mind that people don’t think through this. And to see what happens on the other side, and I’m assuming all these banks that have these mortgages on these properties, they must be getting nervous. Do you talk to any, any of the people on the banking side,
J’nelle Simmons 51:55
I have a couple not again really mostly high level but yes it i mean if you really, really really get in the way that you just laid it out I think is very, very clear step by step because that could potentially, I mean the the ramifications of this are, it could, it could go So, so far, you know, I don’t want to be too doom and gloom and then spreading fear but yes, it could very much harm the banks and the mortgage holders and, you know, we talking about commercial tenants, the, the canceled out the personal liability provision of retail tenants leases we mentioned. An example we’re seeing, particularly difficult on the commercial side from what I’ve seen some members there. I spoke with someone just a couple days ago that were they’d only think trying to find my, I had made a note here because they thought that it was interesting. something like they’d only collected 10% of their…
Bill Staniford 53:02
You’re talking….you’re talking about, you’re talking about retail right?
J’nelle Simmons 53:03
Bill Staniford 53:04
So the the retail side of the industry is just devastated right? i mean this is because, obviously, I mean I can you know I’ll speak, speak about myself, I haven’t been in data at all. Yeah. Well listen, I mean today was literally the first day that I walked into any store at all in four months and I went into a Starbucks and I got myself an iced tea. And it literally the first time I’ve been in any store in four months so I can’t imagine how are these people paying the rent, they’re not there yet.
And we have, we’ve got this situation where it’s really, you know, and the answers are not clear but one of the answers is, is that you either have to make some type of variability on the taxes for these people were, you know, it just like if you’re, it’s just like a sales tax you’re taking 8.75 or whatever it is, but whatever percentage you’re taking you’re paying on collection. Right. I mean, could that certainly seems logical is how it almost has to be that way right because Because really, when you think about it, the, the role that the entire real estate industry is serving is as tax collector, for, for everything that we know, right, the entire industry is working as the tax collector for free. And it’s, it’s just shocking to me that, you know, we’re in this situation and again, like what I’m calling on is for people in this city to understand that if you’re a renter, you need to be part of the solution. Right. And so, you know, it’s, and I get it, it’s hard right and and i’m, i’m super grateful that you know I still have a job, and I get it when you don’t have a job, right, and we have we have unemployment we have all these other benefits for the individual but there’s absolutely nothing for the property owner and the and the property owner is really the one that I mean, out of all of the industries in New York City. This is the engine that is driving our entire economy, and our society. I can’t, I can’t even state that enough
J’nelle Simmons 55:22
Absolutely…the government bailing out banks and protecting tenants from eviction but there’s you know there It seems like there has to be something to do regarding deferring monthly mortgage payments or I think what you’re suggesting about taxes being alone on what they’ve what has been able to be collected. Absolutely.
Bill Staniford 55:45
It’s just, it makes a lot of sense. But listen, you know, we’re gonna have to wrap it up here in a couple minutes I want to make sure that people are able to get in touch with you and be able to contact you and and so go through go through your information again, just to let our audience know where they can go to get the information about Landlords New York.
J’nelle Simmons 56:02
Absolutely. They can just go directly to our website which is landlordsny.com, and you can sign up there again registration is free, feed and perspective are a major benefits it helps with decisions and points of view when you’re dealing with a difficult situation, such as COVID, sometimes you can lose sight of the big picture or want feedback from someone else, just to vent and dealt with a similar problem. And we allow for a lot of that quick feedback and it was really a sense of collegiality among professionals, too. Sometimes and partners sometimes competitors, but all of whom let’s continue with the challenges that we’re all facing right now.
Bill Staniford 56:46
The industry has to come together, it has to stand together.
And very quickly what about events you do any events, or is it…
J’nelle Simmons 56:56
Oh yeah well I mean, we were, twice a year we had a large all day property management symposium which is essentially our website right life with panel discussions among landlords are different experts that yet. Now we’re currently having Are you so much landlordsny.com
Bill Staniford 57:17
Awesome so anyone can get in touch with me Bill Staniford, Twitter, LinkedIn Bill Stanford Rentigo.com. I will see you next week. And, signing off from SharkStreet.