April was a difficult month for North Americans. The Coronavirus arrived in the US not only as a health problem but with heavy luggage of uncertainty and unemployment. Companies were forced to stop operations without a clear restoration date and with no production, the fastest and easiest solution was the downsizing. There are 42 states in the US that are following the social distancing instruction by working remotely and following the stay-at-home measurements. This has caused employers to finish or temporarily stop some of their employees' contracts. Lots of people out of jobs, in causing a critical economic situation, that is ending up in tenants not being able to pay their rents.
This month nationwide, out of the 13.4 million rental apartments, only 69% of tenants paid rent in time on the first 5 days of the month, compared to 81% from the same period in March (14.8% monthly drop). Compared to the exact same period last year, there is a 13 point difference.
I personally received some requests from tenants of units I manage asking if there would be some kind of rent relief due to the COVID-19 situation. People are out of their jobs, as companies are not able to pay salaries without producing any money. It seems normal that people are looking to reduce their monthly budgets and ask for some kind of rent break to their landlords. The problem is that the bills for the owners keep coming. For condo owners, property taxes and the monthly maintenance fees don't stop, and reducing the rent or giving a rent relief will affect them drastically.
There was a record of 6.6 million Americans that filed for unemployment benefits in the last week of March. But, what is the government doing about it? New York Governor said there are no plans of forgiving rent payments, but the subject will be brought back to the table after the 90-day ban on evictions. NYC Mayor was looking for a rent moratorium to be approved, but nothing has been official to date. The national government pledged to defer the mortgage payments supported by the federal government, with the only condition that tenant is evicted from the properties. They also gave a six-month grace period without penalties for non-mortgage-payments.
While social distancing, unemployment rise and potential economic shut down continue, we will be required to create new rules and solutions. What is important to keeping mind is that we will get through this together and will even emerge stronger!
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