The first of May is just days away, but thousands of Chicago area residents who have lost jobs and income to COVID-19 won’t be able to pay their rent.
Thousands of others already are behind in their rent because of the coronavirus lockdown. The percentage of Chicagoans who failed to pay their rent for April this year shot up 60% over last year, according to a Chicago Department of Housing survey.
Adding to the problem, as you would expect, is that those who are most likely to fall behind in their rent now are those who were barely getting by all along. Half of Chicago renters were “rent burdened” even before the coronavirus hit, meaning they already were spending more than 30 percent of their income on rent.
What should they do? Where can they turn?
Rent strikes backfire
Housing activists in big cities across the country — Chicago, New York, Los Angeles, San Francisco, Seattle, Austin — are pushing one solution: A rent strike. You know, just don’t pay.
Not only should people who have lost jobs and income refuse to pay their rent, the activists say, but so should all other renters in an act of “solidarity.” Only then, the activists argue, will landlords agree to cancel or suspend rents and late fees until the pandemic subsides and people return to work.
We wish we could sign on to such an attractively simple solution to a complex problem. Nobody should be hounded for the rent during a nationwide economic collapse.
But a rent strike just pushes the problem along to another group of victims of the pandemic — landlords who may be up against it themselves — and fails to account for other damaging ripple effects.
Some landlords won’t be able to make mortgage payments. They won’t be able to pay property taxes or service fees, such as for water. They won’t be able to hire plumbers, electricians and roofers. Buildings would fall into disrepair.
Nor do we favor a proposed change in Illinois law, or an executive order by the governor, to allow municipalities to impose a moratorium or cap on rents during — and even after — the pandemic.
Rent control, economists on the left and right generally agree, has always been a superficial and ultimately counterproductive fix to the problem of high rents. It leads to greater shortages of affordable housing as landlords pump up rents elsewhere to make up the difference, defer building maintenance and convert apartments to condominiums.
Pay if you can — and no evictions
It’s important to stress that the typical Chicago landlord is not some huge corporate entity that enjoys a hefty financial cushion. It is the married couple or small group of investors who own a six-flat, or maybe a few six-flats. The typical Chicago landlord, surveys show, owns 32 rental units and does not have enough money in the bank to weather a long-term loss of rent.
A more realistic solution begins with people who still can afford to pay their rent doing just that. That’s real “solidarity.” It gives landlords more financial room to work out deals with tenants who are hurting. It keeps tax revenue flowing for services such as the schools and police. It keeps the handyman employed.
The average Chicago landlord — call us naive — is not looking to throw tenants into the street. “From day one, most people in the industry have had a lot of empathy for those who, through no fault of their own, are put in this position,” Michael Glasser, of the Neighborhood Building Owners Alliance, told us. “These are uncharted times, but work with us.”
And as a partial protection against the more ruthless landlords — those who demand full rent payments no matter who or what or how — Gov. J.B. Pritzker on March 20 put a halt on evictions in Illinois until the state’s stay-at-home order is lifted. Fourteen other states and 24 cities have done the same.
Tenants in government-subsidized housing are protected from eviction for up to six months by provisions in the CARES Act, the federal economic stimulus package.
Better solutions
More promising approaches to rescuing hard-hit renters generally involve leveraging federal government assistance or tax breaks to encourage landlords and tenants to work together. One provision of a proposed bill by U.S. Rep. Bobby Rush, D-Ill., for example, would offer forgivable federal loans to landlords who waive rent and extend leases during the pandemic.
As with so many aspects of our nation’s response to the coronavirus, local government can do only so much. In pretty much every way, this is a national crisis.
Chicago is now providing grants to city residents who lost their jobs or were otherwise economically impacted by the coronavirus and need help making rent and mortgage payments. It’s a worthy program, but the grants so far — $1,000 apiece to some 2,000 recipients — represent only a fraction of the assistance needed.
Congress has the most power to pressure banks to offer mortgage forbearance to landlords hit hardest by the crisis, putting the landlords in a better position to let the rent slide for tenants. And only Congress can provide emergency rental assistance at a level that would substantially shore up municipal housing budgets, as Chicago’s Department of Housing has suggested.
A rent strike would pit us against each other, though we’re fighting a deadly virus that would freely take us all down. We can do better than that.
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