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As layoffs and unemployment claims due to coronavirus skyrocket, some say paying rent is untenable for many and must be put on hold.
As millions of Americans struggle to manage their expenses on a reduced—or nonexistent— income due to layoffs and furloughs, the chief concern for many is a looming bill on May 1: rent. Even before the pandemic, almost 50% of the roughly 43 million renters in the country were rent burdened, meaning they spent more than a third of their income on rent, while about a quarter of renters spent over half their income each month on housing. Most of these households don’t have a month’s worth of rent in reserve.
Though many states and local governments have instituted eviction moratoriums to prevent renters from ending up on the streets during the pandemic, housing advocates insist this won’t be enough. Instead, they want to see a national rent moratorium, essentially relieving people of the responsibility to pay rent for some period of time instead of just allowing tenants to put off payments. This will free up cash for households that are already rent-burdened, allowing them to spend money on groceries, medicine, and other essential needs, they argue.
“People are afraid,” said Jesse Connor, an organizer with the Autonomous Tenants Union, an advocacy group based in Chicago. “A huge number of people are already living paycheck to paycheck. When you lose two weeks, or three weeks, or a month of pay, most people could make something work for April but have no idea what they're going to do for May.”
Of the 13.4 million rental households tracked by the National Multifamily Housing Council, only 69% paid their rent for this month by April 5, a decrease of 12 percentage points from the month before. This figure, paired with two consecutive weeks of record-setting unemployment claims, makes the push for a rent freeze starting in May more urgent, advocates say.
The ATU has collected over 16,000 signatures on its petition that asks Illinois Gov. J.B. Pritzker to use his emergency executive powers to enact a rent freeze. While the ATU normally works locally, they had to take their fight to state level because Chicago Mayor Lori Lightfoot is preempted from issuing a freeze by a 1997 state ban on rent control in Illinois, a policy that the ATU has been working to repeal for years. At a press conference last week, Pritzker said that the rent control ban is “not something that under an executive order I can overturn,” but lawyers working with the ATU and other housing advocates disagree.
A coalition of city council members, county officials, and state legislators issued a joint plea to Pritzker asking him to freeze rent, mortgage, and utility payments during the pandemic, and at least one lawmaker, state Sen. Robert Peters, plans to sponsor a bill to achieve the same thing once the Illinois legislature determines a process for meeting virtually. Renters in his district, which includes Chicago’s Hyde Park, say they are out of options and are currently organizing what could be the largest rent strike in the state against a management company that owns 32 properties in the area.
Though some property associations across the country have shown support for a rent freeze, most landlords have not been receptive to the idea, even as advocates also push for mortgage freezes that would ease the burden on property owners. Paul Arena with the Illinois Rental Property Owners Association,said that a rent freeze would be “completely unnecessary.” He noted that the majority of tenants in his 50 units are still employed, while those who aren’t can file for unemployment or find opportunities in grocery stores and other industries that are hiring.
“Industries that are still able to function shouldn't be interfered with. It makes no sense to impose a rent freeze,” he said. “It would be devastating if you shut off the entire revenue stream for our business but obligations like maintenance, property taxes, and utility bills continue to accrue.”
But the calls for rent cancellations are picking up steam across the country, with city officials attempting to put pressure on state lawmakers and governors to act. Supervisors in San Francisco argued last week that an immediate rent and mortgage moratorium is necessary to stop “a level of debt, homelessness, evictions, and foreclosures” akin to “the Great Depression.” City councilmembers in Portland, Oregon warned that without a rent moratorium, “those who defer rent payments may accumulate significant personal debt” and “may ultimately face eviction” once the pandemic is over. The Boston City Council approved a symbolic resolution calling for the governor to enact a rent and mortgage moratorium.
Many officials have expressed frustration with governors, like those in Washington, New York, and Connecticut, who have created mortgage moratoriums or adjusted payment schedules for homeowners, but have not issued the same protections for tenants. H. Jacob Carlson, a professor at the School of Labor and Urban Studies at the City University of New York, said lawmakers can’t assume benefits will trickle down to renters. “I’m worried that the direction we’re taking with all the focus on mortgage forbearance and things for homeowners distracts us from the renters most in need,” Carlson said.
Instead, Carlson is among a growing number of housing scholars who argue there should be a national 90-day rent moratorium—an idea already supported by some members of Congress, like U.S. Sen. Rick Scott, a Republican from Florida who last month called for a moratorium on rent, mortgages, fees, utilities. Carlson said that the moratorium should be universal, not just for those who have lost their jobs or otherwise suffered financially during the pandemic, because “means-testing policies tend to be administratively burdensome and can exclude some of the most vulnerable people.” He believes that the federal government will need to step in on the issue because they have financial powers that state and local governments lack—powers that would allow them to enact graduated policies where profitable institutional landlords would bear some of the burden of a rent moratorium, while small-scale landlords could receive rent reimbursements from the government.
Some are afraid that a recession similar to the one in 2008 could have ripple effects where renters are unable to pay bills, and mom-and-pop landlords who rent one or two units lose their homes. When that happened in the Great Recession, investors bought foreclosed properties and raised rents significantly while adding new fees. “Investors with capital reserves could snatch up those properties the day after this pandemic is over,” Carlson said. “We’re worried that a crisis like this potentially puts small-scale landlords out of business.”
Those who support a rent moratorium argue that housing investors and landlords are businesses like any other, and should expect to have lower revenue in the coming months. “They can take a haircut on profits to ensure that their tenants aren’t all going to get evicted in three or four months,” said Connor from the ATU.
Carlson agreed that everyone will “bear a bit of a burden” during the fight against the coronavirus, but that renters need to be prioritized because they are disproportionately represented on unemployment rolls. “People losing their jobs and unable to make rent are getting hit twice,” he said. “Stabilizing this group of people keeps the whole ship as steady as possible. If we take fear of rental payments off the table, it allows them to spend money elsewhere in the economy.”
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