Sunday, April 5, 2020

Do We Pay the Rent?

     Have you heard about the "Keep Your Rent Movement" that's cropped up along with the Coronavirus?

     Many tenants in the U. S. and Canada, especially in the larger more-expensive cities like New York, L.A., Montreal, Toronto and Vancouver, have decided that they shouldn't have to pay rent as long as the Coronavirus pandemic keeps people self-isolating and out of work, or on reduced hours working from home.

     They argue that landlords are getting a break because many of them are benefiting from deferrals on their mortgage. So if landlords don't have to pay their mortgage, why should tenants have to pay rent?

     Besides, greedy landlords have been taking advantage of housing shortages in recent years by raising rents well beyond the rate of inflation. Meanwhile, renters have not enjoyed similar increases in pay -- and now they're being squeezed even more because they've been let go, fired or furloughed. They're on reduced wages, or perhaps on no wages at all!

     As one protester wrote: "Why are rental property owners the only class whose income in guaranteed during this chaos? You landlord cannibals need to PAUSE THE RENT without future collection while the people of L. A. count the bodies . . ."

     If tenants are sick and self-isolating, the argument continues, the last thing they should have to worry about is how they're going to pay rent. Besides, no one wants people infected with Coronavirus out on the streets looking for a new apartment, moving in with elderly parents, or squeezing into tight quarters by bunking in with friends.

     In addition, governments have passed legislation banning evictions during this period. For example, the mayor of Los Angeles announced: "During this crisis I know many Angelenos are worried about paying rent. If you are able to  pay, you should continue to do so. But for those who aren't able to pay due to the COVID-19 pandemic, your City has your back. No one should be evicted for this emergency."

     So, the Keep Your Rent people figure, if the government is protecting them from being evicted, why should they pay their rent anyway? People joining or supporting the Keep Your Rent Movement are hanging white sheets out their windows or off their balconies to show their solidarity.

     Of course, the greedy landlords have something to say about this movement. Even if their mortgage payment is deferred, they argue, they'll still have to pay it in the end. And in the meantime they have real-estate taxes to pay, condo or association fees, insurance, maintenance and utilities like heat and air conditioning.

     Also, not all landlords are big, greedy corporations. Almost half of rentals in the U. S. are made by individuals who rent 1 - 4 units, not as a get-rich-quick scheme but as a sideline to supplement their income. And they know that their tenants, even if they lose their jobs, will be receiving unemployment plus extra money from the government -- and their expenses other than rent will be going down, since they can't go to restaurants and won't be doing any traveling.

     Besides, the renters signed a lease. They agreed to pay a certain amount of money in order to take over this property and live in it for a period of time. They made a promise. Is it right, is it ethical, to just welsh on their part of the deal? Why is it any more acceptable for people to steal lodgings from a landlord than to steal food from a grocery store?

     Me, personally? What do I think? I of course sympathize with tenants who  through no fault of their own are forced to choose whether to pay rent, or pay for groceries. But in the past I was one of those small-time landlords, and I know some people will take advantage. I can remember driving over to the condo I rented to a young couple and collecting the rent in cash, month after month, because their check had bounced several times . . . and how often the cash was $50 or $100 short because . . . well, they both had jobs but they also had a hundred excuses. Boy, was I glad when they moved out! And I was even happier when I finally sold the unit and retired as a landlord.

     So who's side are you on? Are landlords being cold-hearted by insisting on collecting the rent? Or are you hanging a sheet out your window in solidarity with the folks who are on strike to Keep Your Rent?

24 comments:

Barb said...

Mortgage relief is going to be a available to a huge number of people for ninety days. I would suggest that the smart move for homeowners and landlords who get such relief is that they pass it down the line by deferring and or making payment plans to said tenants. For a variety of reasons not the least of which is that it's better for their bottom line as they are not liable to re-rent in the currentsituation in much of the country, the increase in homeless ness leads directly to a higher danger of the virus and a myriad of other reasons.

Our landlord has given a two month waiver with the understanding that said rent will need to be added on in future months after these two. I have no need to take advantage, but others do.

I don't think totally waiving rent is possible, wise or manageable, especially for those non-conglomerate type landlords who may have one home they are renting out or living in a duplex and renting the other side or own a four aprtment type of location.

Arkansas Patti said...

You presented both sides well. I think in these times that the rent should be waived or reduced but that it should be collected through payments in the future when we are stable once again.

DJan said...

I live in a 26-unit property, and we rent, live here with an annual lease. We received an email from our landlord saying he cannot afford to delay rent, but our governor has said nobody can be thrown out for nonpayment during this time. Since we get social security, and hopefully that won't go away, I can afford to pay. It would bother me very much not to be able to pay rent. But I understand how hard it must be if you have lost your job and haven't received anything from unemployment yet. Dire straits. :-(

Anonymous said...

I am a landlord, owing a duplex with two apartments. In mid-March, I texted both tenants, letting them know that if they are laid off they should contact me so that we can discuss, but the they should not stress about making the rent payment. Both replied that they are still working and appreciated my reaching out. I have owned the property since 2011, and one tenant has been there since something like 2006. I have never raised his rent. The neighborhood around the property is exploding with non-resident landlords who are ravaging the neighborhood by charging exorbitant rents. Some charge three times for a studio apartment what I charge for a 1-bedroom. I believe in affordable housing, and the way I conduct myself shows that. The problem is not landlords. The problem is the multimillionaires, ever on the hunt for the next untapped market they can exploit in their endless pursuit of money.

Linda Myers said...

We have rented our Washington house to a son and his family. We told them two weeks ago that if they had a problem paying the rent (they're both out of work now), we could make it up later.

They paid the rent on the 1st, as usual. If they need the money later, we will send it back.

Janette said...

I own my home outright. We continue to get SS and pensions (so far). We pay our bills because we have the income.
My son owns/ rents out a condo outside of his old base. He can cover the mortgage, tightly, but has reached out to us if this goes on too long. We, simply, have no idea what to tell him. If he has to pay the mortgage for three months, without hope of collecting, he would have to sell the condo. His security clearance is in jeopardy if he goes to foreclosure.
I already hear about abuses...people who are working at home who are considering just taking the month off and saving, just in case the whole system collapses. Others are hoping that this will push rents down....
I think you should have to prove your hardship.
We rented for 16 years. Once we were short and contacted our landlord. No petition, personal contact. This is not a hashtag event.
For mortgages, rent, credit cards.
If we all take a few months off of paying bills - even when we are getting income- ...the system will collapse. To me this could be way worse then the “housing crisis”. Welcome to my 30-40 year old family members greatest fear....

Anonymous said...

Washington state you cannot throw out renters, thank god for that, but I have seen many who got to live in wonderful homes in our neighborhood and just beat the you know out of them, never throwing garbage out and practically destroying the property..Now if I see something weird and destructive I call the owners I have their names and phone numbers many have multiple cell phones, they never rent to people who don't sign leases etc..I can see the dillemmas both ways, but really if one has a home to actually rent in any neighborhood one has to be prepared for the worst case scenario and keep some savings for emergencies that is my opinion..a home is a real big thing in my opinion if one is renting than one has to be prepared like the girl scout/boy scout motto..just saying!!!!!!!!!

Anonymous said...

How long will it take for those without jobs to begin receiving UE payments? From what I've been reading, the number of people filing for UE benefits has increased so much that some state sites have crashed or frozen. So, saying well, people will have UE benefits and will be able to pay-maybe yes, maybe no. Could take several months before some people start getting benefits. If they've been good tenants, should they become homeless because state and federal infrastructure isn't up to the demands currently being placed on it?
At least some parts of my state of residence have banned evictions for non-payment of rent (evictions for other reasons or causes are not banned), which doesn't mean some LLs won't do their best to evict for non-payment even if it's banned, although at least in my county, the court isn't scheduling FEDs and small claims cases as the moment.
While I can understand non-large corporate LLs needing rent payments, they too can use the credit cards, etc., that one commenter has mentioned tenants can use to pay rent if they no longer have jobs. The LLs can use it to make their mortgage payments if their rental properties are mortgaged. They may also be able to get loans based on their rental properties--a resource their tenants don't have. They too could perhaps be expected to have managed to save up the same emergency funds that a commenter indicates tenants should've managed to accumulate. Reality is that, for many people, particularly those who lack health insurance, or who have very high deductibles or co-pays, an emergency fund can disappear almost overnight with one illness or accident. This isn't true in just about every other developed nation in the US--consider that. And no, universal health care coverage isn't "free" in other nations, it's paid for by everyone's taxes and generally the wealthy pay more tax then they do in the US.
Some people in the US are trying to avoid getting care for suspected COVID-19 symptoms because they don't have the estimated treatment cost of $35,000. How many do? Their wish not to incur medical debt is understandable, but it hurts all of us, it always did but the potential for societal injury is much clearer during a pandemic.
I applaud the compassion shown by the landlord who hasn't raised rents in an area where rents have exploded, and who contacted his tenants re: their ability to pay rent.

Olga said...

We are all hurting in one way or another but some way more than others. I have full sympathy for the good people on both sides and sadness to know that there are too many who would take advantage.

Kay said...

I agree with Olga. I do see both sides too. This is such a hard time.

Barbara said...

I have never been so thankful for my little bit of social security benefits as I have been lately. I'm lucky to be able to afford my rent just as always but if I was laid off I would definitely not pay rent and save the money for food because I worry that food will become so expensive in the future.

Carol Cassara said...

I am so glad I do not have to worry about this, with everything else going on.

Wisewebwoman said...

I was a landlord for many years and the good tenants, thank heavens outweighed the bad but when bad, it was horrific and it took sheriffs and bailiffs and court orders and then revenge damage along with default rent, often 4 months in arrears.

I sympathize with those out of work but surely they can pay 50% of the rent if in financial straits or just negotiate rather than cease payment?

XO
WWW

Kathy @ SMART Living 365.com said...

Hi Tom! To even ask this question is a sign of how much our world has changed in a very short time. As a landlord myself (a small one of course) I am well aware that if our tenants can't pay that will "trickle down to us." Fortunately we have taken the "safety first" approach with our personal rentals (meaning they don't have loans so we won't be squeezed by the banks) but I think it is an assumption by the "Keep Your Rent Movement" that banks will be waiving or delaying mortgage payments. If anyone has a mortgage payment on your property has your bank contacted you to tell you that? If you think landlords are greedy, take a look at the banking industry!!!! We are also invested in some large partnerships that own apartment buildings but all of them have loans on them so we aren't sure what will happen at this point. It is projected that 40% of the tenants will not pay their rent. Can we still cover the mortgage? Hopefully. No landlord that I know of wants to evict a good tenant (even if our state had not made that impossible right now.) The hope is that we can all find a way to work with each other. But this issue is bigger than landlords and tenants. If you can't pay your insurance--do you demand they cover you? If you can't pay for your credit cards, do you demand? If you can't pay for your tv cable, do you demand? When you think of the far reaching effect of this challenge, I don't know if anyone of us can really predict. ~Kathy

gigi-hawaii said...

I rented out a room to a tenant from Texas for 18 months, and then I quit the landlord business. I am glad I don't have to do that anymore. It's so unpleasant to go to court to evict a tenant.

Fred said...

Both sides have their points. A significant portion of Americans live paycheck to paycheck. If these people lose their jobs and do not get immediate unemployment they will have no choice but to default on their rent. Some that could pay will take advantage of the situation and join them. Temporarily evictions will not be allowed. A larger problem may be access to food for these same people.
When this much of the economy is upset there is no limit to the amount of collateral damage. We are living in interesting times.

David @iretiredyoung said...

I like to think that a responsible tenant will continue to pay the rent if they are able and a responsible landlord will take the tenants circumstances into account if tenants find themselves in difficulty as a result of Covid-19. I'm a landlord and trust in my tenants to act fairly/do the right thing just as I must to if the circumstances arise. This is a time for common human decency, and I hope that all parties will behave as such - judging by the other comments to your post, I have some faith that this will be the case.

Tom said...

Here's more on the issue if anyone is interested . . . https://www.cnbc.com/2020/04/02/coronavirus-small-landlords-struggle-as-renters-stop-payments.html?recirc=taboolainternal

Rebecca Olkowski said...

I just moved out of a huge apartment complex in LA into a small room in someone's house. The apartment corporation upped our rent by $200 last time and the rent was astronomical to begin with. It makes it hard for anyone, especially seniors to find affordable rents that don't eat up their entire pension and Social Security checks. It's sad.

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