When the COVID-19 Stay at Home orders started around the US, concern about those losing their jobs rose. There are many statistics about the number of Americans without savings, who live paycheck to paycheck or even fail to stay within their means with rising credit card bills. We saw information pop up about those who joined in on the Airbnb craze, taking on mortgages with the intention of renting out month to month, knowing they could not support those payments without the income of temporary renters. The stimulus check sent out for a total of $1,200, and those who had lost their jobs could file for unemployment plus the additional $600 a week COVID-19 relief. However, people are still struggling to pay the bills.
A few months later, we are seeing new statistics pop up, and on July 8th CNBC posted an article referencing a survey by Apartment List on the payments for July. There are also easily accessible statistics on April, May, and June if you’d like to see if month by month!
32% of US households have not made July’s housing payment
19% of US households made no payments during the first week of the month of July
13% of US households paid a portion or rent or their mortgage during the first week of the month of July
36% of renters missed their July rent, compared to 30% of homeowners missing their July mortgage
During the start we saw calls for eviction protection and rent relief, but what does that mean for landlords who cannot support their properties without rental income? What can we do to alleviate the pain in the housing and rental industry for both tenants and homeowners who are struggling to pay their bills? Do you think the Stimulus check and the COVID-19 unemployment relief are enough?
Yes! It is important to note that while protecting tenants from eviction during difficult times is crucial, we must also realize that if the owners/landlords can’t make their mortgage payments, then the tenants can end up on the streets all the same.
There is a negative view of landlords in certain circles that seem to paint them as rich greedy fat cats that don’t take care of their properties while collecting rent money. While this could be the case for some landlords, most landlords are regular working people as well that are trying to make an investment. They have day jobs to make ends meet. Between mortgage payments, maintenance and repairs on properties, there is usually not much left after collecting rents.
If we had a pause on mortgages (similar to how student loans are being handled) for both residential and investment properties that ran in parallel with state shutdowns, then more tenants would be protected, because landlords are not under pressure to pay their mortgages on time.
However, this does raise another question, majority of mortgage lenders are private companies as well, many of which are small local banks. Without mortgage payments coming in, they run the risk of collapse. What would we do to ensure there wouldn’t be a financial crash with all the forgiveness?
Agreed with all of this! I am an independent landlord, and I have set myself up for success in an emergency. However, that doesn’t mean it wouldn’t be difficult to me after a certain number of months. I have seen the call for rental relief, but my mind does go straight to the landlord. What does that mean for me? If my tenant doesn’t have to pay, do I still have to? Mortgage pause makes the most sense to me, as you detailed, but the banks would need some level of protection in that as well. What would that look like?
The statistics each month on the increasing number of people unable to pay their mortgage and rent are concerning, and I do wonder if at some point a relief program might need to be put into place.
While I can’t relate to being a landlord and understand there’s way more to that side than I can understand, I do know that I have multiple friends who have had their rent INCREASE in the past few months. Living in a city where rent is already pretty high, this seems insane to me. I can’t imagine large apartment complexes are suffering as much as independent landlords. To me, that seems like you are trying to push people out of their apartment.
I’m really hoping a second Stimulus check will happen. Just last week another 1.5 million Americans filed for unemployment.
Rent increase seems like the opposite of what these apartment companies should be doing. It sounds to me like they may be trying to make back vacancy losses, but at the risk of losing more tenants. You would think the goal would be to maintain existing tenants and their rental income. I am surprised to hear that!
The statistics about unemployment is shocking, and I do wonder if a second Stimulus check will happen and what that will look like.