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Monday, 4 May 2020

Landlords brace for huge wave of rental defaults after more than 30 million Americans applied for unemployment relief

  • Lockdown has now been in places across the country and shattered incomes
  • Landlords are fearful that the colossal number will prevent them collecting rent as the unemployment benefits take longer to reach their tenants
  • One Minneapolis landlord said a fifth of his tenants had delayed payments, he said: 'You're deferring and working out plans, and it's only going to get worse'
Landlords throughout the US are bracing for a huge wave of rental defaults after more than 30 million applied for unemployment relief.
In the last week of April rental payments were not far off normal, according to the National Multifamily Housing Council. Ninety-two percent of the rental properties in its data paid or made partial payments, compared with 93 percent in March. 
However, the lockdown is now in force throughout the country and people's incomes have been battered. Although eviction moratoriums are in place, many of those will have expired by the end of July, around the same time that supplements to employment benefits will be drying up.
Bruce Brunner, who lives in Minneapolis, said two dozen of his 120 tenants have called to say they won't be able to pay their rent on time. 
Crown Heights building tenants Jose Sanchez, Sean Reilly and Stephen Henderson participated in a May Day rent strike urging housing payment freezes for the duration of the coronavirus pandemic
Crown Heights building tenants Jose Sanchez, Sean Reilly and Stephen Henderson participated in a May Day rent strike urging housing payment freezes for the duration of the coronavirus pandemic
'Six weeks ago, you could name your price and you'd have multiple people applying,' Brunner told the New York Times. 'Now you're deferring and working out payment plans, and it's only going to get worse.'
Sean Reilly, 25, joined thousands of other tenants across New York on Friday for May Day protests demanding rent cancellation.  
As Reilly and fellow tenants unfurled banners at their walk-up in the Crown Heights neighborhood, cars surrounded Governor Andrew Cuomo's mansion in New York's state capital Albany for a socially distanced protest.
Similar movements took place across the country, which has the highest number of coronavirus cases and deaths - more than one million people have been infected and more than 64,000 have died.
The protests, which coincide with May Day, are believed to be the largest such coordinated tenant activity in New York since the 1930s, when mass strikes took aim at rent gouging.
An estimated 12,000 unique tenants across 100 buildings in America's coronavirus epicenter participated in Friday's strike, according to preliminary figures from the advocacy group Housing Justice for All, a lead organizer of the movement.
'I'm not gonna lie, it is scary saying to our landlord, 'we're not paying rent,'' said Reilly, a Democratic Socialists of America member who along with four roommates owes $3,100 per month.
As Sean Reilly and fellow tenants unfurled banners at their walk-up in the Crown Heights neighborhood, cars surrounded the governor's mansion in New York's state capital Albany for a socially distanced protest
As Sean Reilly and fellow tenants unfurled banners at their walk-up in the Crown Heights neighborhood, cars surrounded the governor's mansion in New York's state capital Albany for a socially distanced protest
'I had a pit in my stomach when we sent that email, but that's what we have to be doing right now,' he told AFP.
Reilly still has work - he declined to go into the specifics of his job for fear of repercussions - but says numerous colleagues lost employment, and he's afraid he will be next.
His neighbor Stephen Henderson - whose household of four roommates splits paying $3,400 in rent each month - moved to the city from Colorado last summer and has lost all his freelance work in the television and film industry.
The 24-year-old received his first unemployment check last week - US jobless numbers have shot past a crippling 30 million claims since confinement measures began - but is still waiting for the $1,200 stimulus promised by the federal government.
More than half the tenants in Henderson and Reilly's five-unit building are striking.
'A lot of us are kind of trying to figure out where we're gonna get the money to eat in another month, let alone pay rent,' said Henderson, wearing a black bandana to guard against coronavirus infection and a hoodie to shield from persistent rain. 
Nearly two-thirds of New York's 8.6 million residents rent in a housing market where, according to tracker RentCafe, the average two-bedroom can run from $2,500 per month in Queens to more than $4,000 in Manhattan.
In mid-March Cuomo issued a statewide evictions moratorium until June 20 - but Reilly says that's just 'kicking the can down the road.'
'People aren't getting the wages back that they've lost from losing their jobs,' he said, adding that his household is hoping to devise a payment plan but that without government help the situation is dire.
Their building's manager did not respond to AFP's requests for comment.
Kalman Zimmerman, a landlord and broker who operates throughout Brooklyn, told AFP 'forgiving is very tough' for managers, who he says are also struggling to keep up with property taxes and mortgages.
'I'm totally for a rent freeze, if the government freezes tax payments and mortgages for landlords,' he said.
Minnesota representative Ilhan Omar introduced a recent bill to cancel rent and mortgage payments nationwide until the coronavirus pandemic ends, including relief for landlords.
She's found support among progressive lawmakers including New York's Alexandria Ocasio-Cortez, but neither Republican President Donald Trump nor leading congressional Democrats have indicated such legislation is in the cards.
Though concrete prospects of a rent freeze might seem distant, Reilly says the longer the crisis lasts, the longer people will 'build consciousness.'
'Our movement is only going to get stronger,' he said. 'We're gonna damn well keep trying until we win.' 

3 comments:

  1. somebody has to suck it and it won't be the banks

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  3. If they ger unemployment they can pay rent?

    ReplyDelete