Housing Policy

With 30 Percent of Tenants Unable To Pay Their Bills This Month Due to COVID-19, Many Want Rent Canceled

Alexandria, Virginia, is the latest city to entertain demands to cancel rent payments during the current pandemic.

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There's no doubt that renters and homeowners alike have been hit hard by the COVID-19 pandemic and related economic shutdown. The Wall Street Journal reports that nearly one-third of renters were late on their rent this month, while a survey from rental listing website ApartmentList found that a full quarter of households couldn't pay all of their housing costs.

Localities, state governments, and federal agencies have so far responded with suspensions on evictions and foreclosures, and mortgage forbearance. With the end to the current economic shutdowns nowhere in sight, however, politicians and activists are starting to clamor for more radical solutions.

On Tuesday, City Councilman Canek Aguirre of Alexandria, Virginia, introduced a resolution demanding Gov. Ralph Northam, a Democrat, and the area's congressional delegation use all powers at their disposal to cancel rent and mortgage obligations for the duration of the current crisis.

"No resident who has lost income should be required to pay rent during this public health emergency, nor should they accumulate debt for unpaid rent," reads Aguirre's resolution. It's not the first of its kind.

The Seattle City Council voted unanimously at the end of March in favor of a similar nonbinding resolution demanding that Washington Gov. Jay Inslee, a Democrat, and/or President Donald Trump use emergency powers to cancel rent and mortgage payments. The San Francisco Board of Supervisors did the same, although Mayor London Breed returned the resolution unsigned last Friday.

There's active legislation in the New York legislature to waive residential and commercial rents for 90 days, as well as mortgage payments for landlords who lose out on rental income as a result of the legislation.

Even Sen. Rick Scott (R–Fla.) has proposed a federal postponement of rents for 60 days for those making less than $75,000 a year.

Some renters have started to take things into their own hands too, with media outlets reporting a steady stream of stories about tenants organizing rent strikes.

So far, however, tenants' obligations to pay rent remain intact. Efforts to waive them could run into some serious constitutional problems says Ethan Blevins, an attorney with the Pacific Legal Foundation.

"There's a doctrine of necessity in Fifth Amendment takings cases. The question is, was this necessary to prevent an imminent disaster?" Blevins tells Reason. Closing businesses or commandeering a building to use as a medical facility would fit that bill, he says. Suspending evictions is a more questionable move, while forgiving rent altogether likely crosses a constitutional line.

"Totally suspending rent that never has to be repaid really isn't related to preventing an imminent disaster," says Blevin. "It's not really proportional."

At a minimum, he argues, governments that do suspend rent payments will owe landlords compensation for depriving them of the ability to make any economic return off their property. Not being able to charge rent obviously means property owners won't receive any rental income, while eviction moratoriums mean they can't convert their property to some other economic use either.

Constitutional questions aside, rent forgiveness is hardly ideal policy, says Michael Hendrix, state and local policy director for the Manhattan Institute.

"What we're talking about in terms of government measures to alleviate rent burdens, they exist on a pretty wide spectrum," Hendrix told Reason last month. "Wiping away rent obligations, that exists in a different category than pausing rent payments and pushing them off toward some future point. That's very different from extending some sort of loan or cash to individuals to help them make rent."

There are two sides to every transaction, says Hendrix. Alleviating tenants' requirement to pay rent effectively shifts this cost onto landlords, who often have their own costs in the form of loans, utility payments, and property taxes.

Some politicians pair their rent forgiveness measures with proposals to forgive mortgage payments. That might help landlords, but then merely shifts rent burdens onto banks and financial institutions who could then face liquidity problems.

While the government can shift housing costs from renters to less popular groups like landlords or banks, it can't make those costs disappear.

The best solution then is probably to let private parties work all this out among themselves through negotiation, not central planning dictates. The New York Times reported last week that amid of calls for rent forgiveness and eviction moratoriums, some landlords are taking it upon themselves to temporarily reduce rents or are using security deposits to cover tenants' bills.

Not every landlord is going to be able or willing to do that, leaving a lot of tenants in the lurch. To the degree that such a problem might necessitate government intervention, cash assistance is probably a better course of action than deciding who gets to short whom on their contractual obligations.

The more we lean on the government to adopt emergency rent forgiveness measures, the more damage it will likely do to housing markets. As we've seen from past crises, there's always the possibility that emergency measures persist long after a crisis ends.

"[It's] like pulling at the collar of a t-shirt," says Blevins. "It will stay loose. It will be hard to go back to the status quo. Governments will have a precedent to point to."

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61 responses to “With 30 Percent of Tenants Unable To Pay Their Bills This Month Due to COVID-19, Many Want Rent Canceled

  1. So we’re also suspending property taxes, etc?

    1. And *sales tax*, biotches!

      1. What’s income tax, sliced liver?

        1. Thinking a bit more about that ….

          When I was in the Navy, Congress twice decided we had been in a combat zone previously and we got to refile income tax — that month’s pay was tax free, we got $10 extra pay, and could write “FREE” in lieu of a stamp. Whee! (All figures subject to ancient memory) One such tax-free period was something like Oct 29 to Nov 2 so we got two tax-free months.

          I wonder how people would have reacted if Congress did the same thing here — declared all income tax-free until the pandemic was “over”. Of course people would shift as much income as possible to that period. Would it also boost employment figures, as the laid off tried to find any work at all just to take advantage?

          I’ll bet it would have been better overall than these checks they are mailing out.

          1. Out of curiosity, did they know your were a coprophile?

            1. Shit, haven’t you heard of don’t ask, don’t tell?

              1. You’d have to add “don’t smell”

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    2. In California, not only did they not suspend property taxes, they didn’t even push back the payment date (which was April 10).

  2. The best solution then is probably to let private parties work all this out among themselves through negotiation, not central planning dictates.

    WHAT?! Then we wouldn’t have the same solution for everybody! It wouldn’t be FAIR!

  3. One third were late. What is the average # who are late? I don’t think 1/3 were out of work and bereft of savings, so do we have some folks taking advantage of the situation and gaming the system?

    1. 100% were ordered to shelter in place. Most non-essential people haven’t gotten a paycheck for most a month. Many people life paycheck to paycheck with little savings. So yeah, I can see a whole bunch of people being completely unable to pay their rents. Because government went and cancelled their jobs.

      Free rent isn’t the answer, of course. But neither am I going to blame the (un)working poor for being poor.

      1. Agree, but the answer shouldn’t be to screw the landlord.
        The governors declared the lockdown. They should be on the hook for the collateral damages they inflicted. It’s a bonus that most states have to balance their books rather than borrowing endlessly.

        1. In a fantasy libertarian world, the renters could sue the county and state under the takings clause. Their jobs were taken by the government, after all.

          Of course, in a fantasy libertarian world there would be no pandemic because everyone would be holed up in enclaves protected by barbed wire. It’s turtles all the way down!

          1. If it’s a libertarian fantasy then there is no government.

            1. No there’s not. But the classic vision of libertarian fantasy is everyone being extremly isolated and hyper-individualistic, holed up in compounds and being survivalists. Which is why both the turtle and the porcupine have emerged as libertarian mascots, rather than the coyote.

              1. What kind of hell world is that that you’ve imagined? Not for this libertarian.

            2. I think you’re thinking of anarchists, not libertarians, but you’re free to disagree with that.

          2. In a fantasy libertarian world landlords could hire thugs to remove delinquent tenants w/o going through all that eviction red tape.

        2. “The answer shouldn’t be to screw the landlord.”

          It was for Mr. Robinson in Mr. Robinson’s Neighborhood, every episode.

          1. c.i.l. my landlord.

      2. Over $4000 a month in unemployment plus $1200-3600 in “stimulus” and they can’t pay the rent? They need to move.

        1. Not like anybody has actually seen any of the unemployment cash yet. SOME people got the anti-revolution check in the middle of April.

        2. “Over $4000 a month in unemployment”

          Where can you get $4k a month in unemployment? In my state it caps out at under $500/week.

    2. To compensate the landlords, we need to confiscate the assets of the DNC, democrat politicians, and their major finding sources. As this is their doing. If it bankrupts people like Pelosi and Jay Inslee, all the better.

    3. I have no doubt that 1/3 of people live paycheck to paycheck. Especially young people who haven’t had time to build up savings, and then add into that the working poor who simply don’t earn enough to build up savings.

      When you flip the economy switch to “off”, you’re going to have to have some kind of relief effort for people who can’t make the rent or the mortgage.

      1. My friend has a fairly decent job. But illness in the family and a bad investment years ago have drained his savings.

        He had to sell his house and he moved into his parents old place which he was renting. But then COVID-19 hit, and he can’t get anyone to buy the old place. So he’s still paying mortgage on that. Plus medical expenses. Plus trying to raise a new kid. He literally has no savings left. A big asset, but he can’t sell it.

        At least he is considered “essential” and is allowed to go to work and earn a paycheck. I can’t imagine what he would do if he were not “essential”. Probably go bankrupt and mooch off of friends. I would let him mooch off of me, but it would break his heart.

        Most people aren’t as lucky as he is. And fuck all the libertarians who say it’s their fault for not having savings. It’s the government that robbed them of the opportunity to save.


        1. And fuck all the libertarians who say it’s their fault for not having savings. It’s the government that robbed them of the opportunity to save.

          So, not a philosophy of personal responsibly after all? Nothing wrong with charity, of course, but usually it has to be voluntary to be considered charity.

          If the government robbed people of their ability to save, what do you say to all those people saving money and making their student loan payments? They must be unpossible.

          1. I don’t understand your argument here. Are you denying the existence of poor people, or young people just starting out in the economy? It’s not their fault the government shut down their ability to earn a living by fiat. There’s nothing unlibertarian in recognizing that if the government fucked you, it needs to unfuck you.

  4. I have a friend (yet, a legit friend despite his boneheaded ultra-proggie worldview) who just got notice that rent would be waved fro March and April. This was voluntary on the complex’s part. No law mandating it, purely out of the goodness of the landlord’s heart.

    But my friend wants to sue them because they’re not refunding rent already paid. My brain can’t even.

    1. And he’s also getting is government handout. Goddamn, progtards are entitled pieces of shit.

  5. Isn’t this what the free $1200 handout is for?

    1. With rent being canceled, we can spend that $1200 on weed and firearms. The libertarian moment has finally arrived!

      1. But you can’t spend it on a cruise.
        But you can’t spend it on a driving tour of the USA.
        But you can’t spend it on a Movie.
        But you can’t spend it on a dinner out.
        But you can’t spend it on a trip to Disney World/land.
        But you can’t spend it on a family reunion.
        But you can’t spend it on a ball game.
        But you can’t spend it on a trip to DC (unless you are one of the super elite)
        etc
        etc

        So tell me more about this alleged libertarianism.

        1. It was a joke, there’s nothing libertarian about pulling $2.2 trillion out of thin air and mailing everyone a check.

          That said, I do plan on spending mine on a new exhaust for my car and a firearm should the ones I want find their way into the country sometime soon. I’m lucky, I work for a defense contractor and we’re doing great right now because the one thing we don’t have to worry about right now is the government cutting spending. Since I have no worries about being able to pay my bills, I’ll be spending my stimulus check on fun stuff.

          1. He didn’t pull it out of thin air, he pulled it out of his ass. Which is why those checks stink despite having his name on them.

            1. Eh? Trump hardly did this on his own. Him insisting his name is on it is pretty much on character for him.

              No one person pulled this out of their ass, collectively all of our representatives got together and decided we had $2.2 trillion that we didn’t have before, I presume they then went back to insider trading and molesting unsuspecting women.


              1. No one person pulled this out of their ass, collectively all of our representatives got together and decided we had $2.2 trillion that we didn’t have before…

                ^ This.

                Trump wants his name on it, sort of like how Obama was more than happy to let the name Obamacare stick even while he had virtually nothing to do with it outside of selling legislation he clearly never read.

                I’d bet Trump didn’t read the stimulus package either. He was just glad to sign something that signaled he was ‘doing something’. He wants to make sure people know he’s ‘doing something’ as well, and this is absolutely expected.

                If the checks were large enough, you can bet every legislator would love to have their name on the check too. Hell, can’t we at least include the local critter that pushed this through the House? We’ll have a better idea of who to vote against next time around.

        2. You should put that to rhyme Uncle Sam-I-Am.

      2. Oh-Zeez now $1200.00 lol

    2. That might cover a month (depending on where you live and your circumstances). Maybe a month and a half if you live in flyover country where living is cheap*.

      If this lockdown doesn’t stop sort of… nowish, and presuming those people even get their jobs back, $1200 ain’t gonna do much.

      *Yes, I haven’t lived in cheap flyover country for 35 years so I may be out of touch. Maybe there are places where rent is $300 a month.

      1. If there are places where rent is $300/mo, Alexandria VA is not one of them.

      2. I paid $350 in rent in Texas, but it was a shit garage apartment that was falling over.

        In contrast, we’re paying $1400 a month in Colorado in a small town.

        In San Francisco, that bastion of equality, the average is $3700.

        So, a lot of variance in how far that money will go for you.

        That said, if you rent in San Francisco you already live with at least one other person, but probably more like five, so I figure it’ll go just as far for the bottom earners.

    3. And don’t forget the $9600 in unemployment bonuses.

    4. Mine was under $900.

  6. So 30% just claiming they can’t pay is now the threshold for “free”?
    That clearly includes rent, so Bernie was right.
    I guess that includes college tuition, so Bernie was right.
    I guess that includes health care, so Bernie was right.
    I guess that includes cars, but don’t hold you breath, they burn carbon.
    I know that includes taxes, but don’t hold your breath, that different.
    So the democrats will not nominate a guy who got it all right.
    But at least their nominee will base the most important decision of his (brief) term primarily on gender, regardless of the qualifications for the office.

  7. BREAKING NEWS: Politicians seek to shield themselves from the consequences of their actions.

    1. yeah love to hear how any of this has financially affected Schumer and McConnell …

  8. Gov. Ralph Northam, a Democrat

    …and performer of minstrel shows.

  9. So Trump Trash wants free rent too?

    fuck them with a saw

  10. What about the Article 1 Contracts clause? “No State shall … pass any … Law impairing the Obligation of Contracts….”

    1. New Deal SCOTUS already set precedent that they can do things like that if they have “enough” reason…so I’m betting relief from the state-imposed panic-recession will surely count.

  11. I am not opposed to the idea of suspending rent payments, as long as we also suspend mortgage payments. If we’re going to let renters skip a few payments, we should their landlords skip a few mortgage payments.

    1. So the landlords who own their property outright are just SOL?

    2. I agree. This has to go all the way up the chain. Including but not limited to property taxes and/or IRS payments.

      1. The economy is circular. There is no “up the chain”. There is no endpoint that is rational.

        1. Tell that to the guy saying, “Fuck you, pay me”

    3. If anything, this should apply even more to mortgage payments. Landlords aren’t being compensated and most will presumably have to get loans to cover their lack of income that they will have to pay interest on just to keep their buildings. The banks were just given ungodly sums of imaginary monopoly dollars that will hugely devalue everyone else’s investments and savings. If the only thing we asked of them was to suspend mortgage payments for a couple months, the banks are still making out like bandits.

    4. That only benefits those who had a mortgage. Some people own rental properties free and clear and live off that income.

  12. Why not just have Uncle Sam print off an extra check for everyone that covers all their rent and mortgage payments? Hell. Do one better. Why not just print everyone a check for a trillion dollars and that should cover it right? We’ve officially reached the point of just printing money in whatever quantities are necessary to feel good, why stop now?

  13. Of course many want rent cancelled. The “American way” is to steal as much as you think you can get away with.

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