Should jobless renters be evicted or forgiven during pandemic?

About 43 million households in the United States are renters and as jobless rates continue to spike many are either forgoing or unable to pay rent. But a rent strike will only exacerbate the housing affordability crisis, say economists.

Mark Lennihan/Reuters
Pedestrians wearing masks pass an empty storefront with a "For Rent" sign in the Red Hook neighborhood of Brooklyn, New York, May 12, 2020. While some small businesses close permanently, renters are refusing to pay rent during the coronavirus pandemic.

As U.S. states start to ease coronavirus lockdowns, one group warns that its troubles are worsening without enough financial support: renters.

"All of these companies are getting bailouts – we need a bailout, too!" said Sami Bourma, a chef and Uber driver in the Washington area who has been unable to work since late March.

The father of two has not paid his monthly rent of about $1,800 on his one-bedroom apartment in the past two months, along with what he said are hundreds of others in his apartment complex in Alexandria, Virginia.

The tenants are urging both policymakers and the property owner to make rent contingent on income through the pandemic and in the months of recovery that are to follow.

The property owner, Bell Partners, did not respond to a request for comment.

"I don't have much money in my account. And no one knows how long the pandemic will take, so what options do I have?" Mr. Bourma told the Thomson Reuters Foundation.

About 43 million households in the United States are renters, according to the National Multifamily Housing Council, an industry group.

Like Mr. Bourma, almost half of renters by mid-April were already experiencing difficulty paying for housing, food, or medical care, according to the Urban Institute think tank.

That is more than twice the figures for homeowners.

Covering the housing for vulnerable tenants would cost about $100 billion, according to some estimates, and housing advocates are now rallying around a federal proposal to make that amount available in upcoming emergency funding.

In the meantime, nearly 200,000 people across the country have, like Mr. Bourma, refused to pay their rent, according to a tracker called We Strike Together – bolstered by some campaigns across entire cities or states.

"If May 1 is hard [when rent payments are typically due], June 1 will be harder without any action," said said Maurice Weeks, co-executive director of the Action Center on Race and the Economy, a nonprofit that helped set up the tracker.

Rent strikes amid the pandemic have not been confined to the United States, with related organizing taking place in recent weeks in Australia, Canada, Britain, France, and beyond.

The current housing crisis for U.S. renters is unprecedented in recent decades, housing experts say, as is the level of cohesion it has inspired across the country.

"For people who have been in housing for the past 50 years, the impact that most of us can remember is the foreclosure crisis [after the 2008-09 crisis], but the magnitude of this is greater," said Dianne Enriquez of the nonprofit Center for Popular Democracy.

But nonpayment of rent can have a serious ripple effect, industry groups have warned – including negatively affecting tenant credit histories, potentially making it harder for people to rent in the future.

"Rent strikes are counterproductive and ultimately harmful to all residents," said Bob Pinnegar, head of the National Apartment Association, an industry group.

"Bankrupting property owners is going to create many more problems than it would solve," he said in emailed comments, noting that federal assistance is "urgently" needed for both renters and owners.

On average only 9% of rent goes to building owners or investors, he added, with most covering mortgages, taxes, maintenance, and more.

"By causing financial hardship for the owners, people participating in a rent strike will further exacerbate the housing affordability crisis the country was grappling with prior to this pandemic," he said.

A spokesman for the U.S. department of housing and urban development said it would work with Congress on "ways to provide economic relief for Americans who are struggling to make ends meet during these unprecedented times."

As yet, mass rent strikes have remained more of a threat than a reality: About a fifth of renters did not pay by May 6, according to the National Multifamily Housing Council, roughly the same as the previous month.

But the fact remains, said Ms. Enriquez, that "even if they're not calling it a rent strike, most tenants in this country are simply unable to pay rent."

On Friday, the United States announced that more than 20 million people lost their jobs in April, resulting in an unemployment rate of 14.7% – the highest since the Great Depression of 1929-32.

There are parallels with the response by renters, too, researchers say.

Nine decades ago, as millions lost their homes amid spiking unemployment, the U.S. Communist Party undertook a national effort that included mass rent strikes – ending only when direct federal assistance allowed people to pay their rents, he said.

"Today, tens of millions of people cannot pay rent or mortgages," said Fordham University historian Mark Naison, who has studied rent strikes.

"Activists all over the country are urging rent strikes and contemplating eviction resistance until the crisis facing the incomeless is resolved," he added.

Local and federal authorities scrambling to protect renters have temporarily halted evictions in several states including New York and California.

But such actions only push a major problem down the road, critics warn – potentially leading to mass evictions.

"There are lots of municipal leaders who recognize that when these eviction moratoriums are lifted, we'll have massive homeless problems," said Jeremiah Ellison, a member of the Minneapolis City Council.

That concern has led Mr. Ellison and others to push for the outright cancellation of rent amid the pandemic, with landlords to be reimbursed by the government.

"We've used emergency powers at the state level to prevent evictions, and so I've asked the [Minnesota] attorney general to look into using emergency powers to work out a similar deal when it comes to rent," he said by phone.

A letter he sent last month to Minnesota state leaders received a flood of support that Mr. Ellison said surprised him, including majority backing from the city councils of Minneapolis and neighboring St. Paul, as well as municipal leaders from around the state.

"There's been lots of discussion of the costs of rent cancellation, but if we have hundreds of thousands of people becoming homeless at the end of this crisis, I don't know how we'll pay for a solution to that, either," said Mr. Ellison.

A federal legislative proposal would cancel rent and suspend mortgage payments through the pandemic, starting in April.

Some say rent cancellation needs to extend beyond the pandemic.

"There is also going to be a time of recovery. A lot of businesses won't be able to reopen immediately, or they might start out a bit slower," said Tiana Caldwell, a business trainer and housing activist in Kansas City, Missouri.

But until such a policy is in place, Ms. Caldwell feels she has no choice: She is not paying her rent.

Ms. Caldwell has not been able to do her job since mid-March. Nor has her husband, who stopped going to work to ensure he does not bring the virus home and infect Ms. Caldwell, who has underlying health issues.

The couple's situation underscores how widespread the current vulnerability is, she said: "It's more than just the poor. ... There are many, many people who are just one emergency away from being homeless."

This story was reported by the Thomson Reuters Foundation.

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