As millions of people found themselves out of work due to the coronavirus-related closures that began last month, a new survey found almost one-third of renters did not make payments on their homes for the first week of April.
The data comes from the National Multifamily Housing Council, a trade group that tracks rent payments across more than 12 million rental units nationwide. Through the first five days of April, 31 percent of tenants did not pay their rent, reports The New York Times. For perspective, the rate of people who didn’t pay their rent during this same period last year was 18 percent.
Doug Bippy, president of the National Multifamily Housing Council, told NPR the lack of rent payment could ripple out across the housing market.
“If the rent payments drop off significantly, [landlords] won’t be able to pay their staffs, they won’t be able to pay their mortgages, they won’t be able to pay their utilities,” Bibby said. “They won’t be able to pay the managers who manage their properties for them.”
“I just see this cascading out throughout the whole system and just exacerbating the unemployment problem and the dislocation problem.”
As the Times reports, many people are leaving their rental properties altogether. With college campuses closed, students have broken leases to move back in with family, as have laid-off workers.
Those who stay in their rental units won’t be evicted, thanks to the recently-passed federal stimulus bill, also known as the CARES act, which placed a moratorium on evictions for the next four months. But the $2.2 trillion relief bill doesn’t provide much direct support to tenants and landlords who aren’t already in an affordable-housing government program.
For those living in market-rate developments, the rent bills will continue to accrue, even if they can’t be evicted for not paying them.
“Eventually the moratoriums will be lifted, and we don’t want to create an environment where low-income renters fall off a financial cliff and we have a rash of evictions,” Diane Yentel, chief executive of the National Low Income Housing Coalition, told the Times. Given that an estimated 40 percent of Americans couldn’t pay off a $400 emergency expense without taking on credit card debt or borrowing the money, it stands to reason that even households with moderate incomes could fall off the same cliff.
This has led to a slew of crowdfunding efforts to help people in need to pay their bills. Among them is Frederick Joseph, author and creator of the #BlackPantherChallenge, which fundraised over $950,000 and allowed tens of thousands of children to see the 2018 movie Black Panther for free.
Joseph has solicited followers to donate money to a GoFundMe to help provide rent relief. Created on March 26, the campaign had raised nearly $270,000 as of Monday morning.
But with unemployment spiking, a growing number of Americans will need a lot more than a GoFundMe to help them weather this financial storm. Some policy proposals include a dramatically expanded federal rental voucher program that can be used directly to pay landlords, as the National Multifamily Housing Council suggests. Rent amnesty would also ensure rents are forgiven for those who are directly impacted by the COVID-19.
“The only way it would be sustainable is if we have immediate rent relief, funds set aside for those folks that are going to need it,” Maureen MacNabb, a property manager in Portland, Ore., told KATU TV. “Renters are going to need relief.”