Did you make your rent payment this month?
If you’re struggling to make that happen, you are not alone. According to Edison Research, over 62% of renters are concerned about being able to make the rent. Welcome to the newest symptom of the coronavirus: the 2020 Rental Housing Crisis.
With over 43 million renters nationwide, the rental market makes up nearly 40% of all housing in the USA, where at least 20 million jobs were lost in April. While out-of-work renters scramble to make their payments, landlords are wondering how to service an avalanche of debt and unpaid taxes.
Congress has included relief for homeowners with government-backed mortgages, as part of the $2.2 trillion rescue package that passed in March – but what about the rental marketplace? In Maryland, Governor Mark Hogan has declared a state of emergency due to the coronavirus, effectively stopping all rental evictions and repossessions in his state. But in Arkansas, Ohio, Georgia and 20 other states, there are few protections for renters, according to Bloomberg News.
According to an Urban Institute Survey from last month, almost half of renters report some kind of financial hardship. The cascading effect of unemployment is severe, especially in shut-down cities like New York, where nearly 70% of the population rents. Jan Lee is a third-generation landlord who owns properties on Manhattan’s Lower East Side. He’s not some wealthy urban squire, swimming in money. He’s a small business owner in a blue windbreaker who also works as a full-time contractor. He tells Bloomberg that he doesn’t have a mortgage, but the property taxes are the real hurdle for him. There’s no forbearance (payment relief) on property taxes, so the city can impose fees, fines and liens…and eventually seize his properties. “My entire family’s work over three generations will be gone,” he says.
In Houston, the fourth-largest city in the USA, 55% of the city’s residents are renters. At the Ashford Westchase apartments on the city’s west side, tenant notices begin with this somber sentence: “Despite what you may have heard in the media, rent is still due and evictions will be filed.” Unlike Maryland, Texas has no coronavirus clauses to prevent evictions during adverse economic conditions. Renters are scrambling to pass on car payments, or fudge on other debts, in order to make the rent. Texas has temporarily stopped evictions in court, but Houston has no such rent provisions. So Bayou City landlords have the law on their side if people don’t pay. But who really wins, once landlords evict someone during this crisis? Who’s going to come in and take over the rent? Someone else who is wondering when their industry or their job will return? A vicious cycle continues to spin.
In Philadelphia, Bloomberg reports that Shane Riggins, age 31, has joined a movement to boycott rent payments. He’s been able to make his payments for April and May, but since losing his job at a local law firm, he’s unsure about what to do next – will he have enough money to weather the storm of this financial crisis? He says, “Every time I pay rent, it’s taken immediately and given to a bank. Is that really, in this crisis, the best use of money?” Unemployment numbers are escalating as workers in the restaurant industry, travel, tourism, retail and other scorched markets are wondering where the rent check is going to come from.
Princeton University has put together a state-by-state scorecard, featuring the number of renters in each state as well as a rating for current housing policies. While many states are slowly reopening the economy, places like Los Angeles County have introduced additional stay-at-home orders. But opening the economy introduces its own set of risks, which go far beyond a few missed payments. Unfortunately, we remain in the dark regarding so many aspects of the coronavirus. Balancing economic concerns with medical guidance is an even bigger challenge than these housing issues. Meanwhile, renters and landlords are getting crushed, with little relief in sight.
Source: Forbes
