Each year when the New York public advocate’s office releases a list of the city’s “100 Worst Landlords,” it sparks a brief albeit fervent debate about how that list makes tenants’ lives any better.
But city public Advocate Letitia James, the author of the annual watch list, thinks she’s found a way: Stop lending money to bad landlords.
In fact, James has released a new list to complement the usual names of undesirable landlords who’ve racked up sometimes more than 2,000 violations with the city’s housing preservation agency: A list of banks who lend to them.
The list, which includes some well-known lenders like Capital One and JPMorgan Chase & Co., was collected by examining the loans on each individual building that appears on the “100 Worst Landlords Watchlist.”
“Banks should put their money where their values are,” James said in a statement last week. “Stop funding the city’s worst landlords until they fix unsafe housing conditions.”
Of course, the banks tell a different story. Signature Bank — which tops James’ new list with 58 loans, doling out some $130 million to bad landlords — released a statement in response to James saying if it stopped giving out loans to landlords on the watchlist, those landlords would never generate enough capital needed to actually fix some of the issues in their buildings.
Some of the more disruptive problems facing tenants living in buildings on the watchlist include rats, no running water, and damage to ceilings and floors. While fixing all of those issues takes a good amount of cash, James questioned whether commercial banks like Signature were doing enough to ensure landlords were using that money for the right reasons.
She called on state lawmakers to force banks to either deny loans to landlords for buildings that qualify for the worst landlords list, or to take a more active role in fixing problems for buildings already on the watchlist.
James isn’t alone. A few state elected officials are backing her proposals including Assemblyman Jeffrey Dinowitz, who said banks should not be “aiding and abetting bad landlords.”
Yet Signature Bank says as the largest commercial bank working with low-income housing in New York City it’s already working with landlords to make the lives of tenants easier.
“Signature Bank has placed conditions on the loans it extends and contingencies with the borrowers that such improvements must be made,” a Signature spokeswoman said. “The bank tracks the progress regularly, closely and carefully.”
But that alone does not seem to be enough for lawmakers like Dinowitz, who said the rising costs of housing in New York City are pushing many out of their homes.
With options becoming more and more limited, landlords offering lower-income housing should be held to a higher standard.
Many of the landlords and buildings that are on the watchlist are regular fixtures there. Take Ved Parkash, the Queens-based landlord who topped the list in 2015. He told both elected officials and media outlets he would work to fix many of the problems in his four buildings that qualified for the watchlist — all of which were in the Bronx. By 2016, he dropped down to third on the list.
Yet, according to data provided by James’ office, Parkash was still able to take out at least one loan for another building.
That sort of lending leads elected officials like James to accuse banks of not doing enough to keep landlords honest.
Signature Bank added while an aggregate total of loans to so-called “bad landlords” of $130 million may sound high, that figure only represents a little more than 2 percent of its total portfolio.
But it’s exactly that kind of hefty economic power, James said, that requires big banks like Signature to act on behalf of tenants, not landlords.
“Banks must use their economic leverage to get bad landlords to take responsibility for maintaining basic living conditions in their buildings,” she said.
“We won’t rest until every single tenant has access to safe housing all across New York City.”