(AmericanProsperity.com) – State-induced government shutdowns of the economy come with significant consequences. Across America, cancel the rent protests have erupted as some unemployed Americans struggle to pay their monthly rent. Over 30 million people have filed for unemployment and are forced to stay home. Many tenants say they can’t afford to pay the rent due to the pandemic. Some landlords are going above and beyond to work with them, reducing rent payments or forgiving them all together. However, other landlords say they can’t afford to help.
According to the Terner Center for Housing Innovation, 43% of renter households — approximately 7 million — were experiencing housing hardships before COVID-19. Approximately 16.5 million households have at least one worker negatively affected by the disease. That means 50 million people live in a renter household that has experienced an immediate job and income loss.
May was the second month rents were due during the lockdown aimed at slowing the spread of COVID-19. A WalletHub poll in late April revealed stunning numbers about the state of America’s finances. For example, 29% of respondents said they were less than 30 days from completely running out of money. The poll also estimated nearly 160 million Americans would be completely broke within 3 months.
Landlords are stuck between a rock and a hard place. Mortgage companies are required by law to provide forbearances to homeowners struggling financially due to COVID-19. Landlords, on the other hand, are not required to provide relief to struggling tenants, but can’t evict for non-payments until emergency declarations end.
Rent strikes were held recently in New York City, Chicago, Philadelphia, and across California. Organizers hope they’ll get the attention of lawmakers to help them with financial assistance during the pandemic. One idea protestors promoted was to cancel rents for four months and then offer tenants the right to renew their lease without rent increases.
However, landlords say it isn’t going to work for them. Their business requires money to operate every month, and the money comes from tenants paying their rent. On average, 70% of a landlord’s expenses are fixed every month. They have to pay property taxes, mortgage payments, liability insurance, water and sewer payments, electric bills, and cleaning costs. In some instances, cleaning costs have risen significantly during the pandemic as landlords deep clean buildings more frequently to protect residents from the disease.
Landlords understand people need help, but they need help, too, if there’s no money coming in during the pandemic. Encouraging people not to pay their rent at rental strikes only compounds the problem. If people don’t pay their rent, it’ll not only hurt landlords, but the renters as well.
~Here’s to Your Prosperity!
Copyright 2020, AmericanProsperity.com