Chicagoans who have seen their jobs and paychecks disappear during the pandemic have been crying out for rent relief and talking about a rent strike to push their demand.
What they got from Mayor Lori Lightfoot Wednesday is a “Chicago Housing Solidarity Pledge” signed by what a leading banker called “strange bedfellows”: residential housing groups, landlord associations and lenders.
It’s an unprecedented but non-binding commitment to show “flexibility and restraint” in dealing with one another during this unprecedented time of hardship to prevent the pandemic from triggering another wave of foreclosures.
Participating landlords have agreed to offer tenants grace periods with terms that “avoid repayment at the end of the deferral period.” They also promised to waive late fees for missed payments and allow renters who miss payments to amortize those payments over time.
Lenders who signed the pledge — including Bank of America, BMO Harris, Northern Trust, US Bank, PNC, Wintrust and Fifth Third — have agreed to suspend foreclosure filings until May 31 and stop reporting late payments to credit reporting agencies.
They have also offered to waive late fees for missed payments and defer payments with terms that “avoid immediate repayment at the end of the deferral period.”
Lightfoot acknowledged the pledge does not carry the weight of law, but hailed it nonetheless. She called it a historic breakthrough, noting that it’s the first of its kind in the nation, and was reached by parties normally at each other’s throats.
“We knew this was gonna be a crisis. … If we were gonna save people and we were gonna keep them in their homes — whether they’re renters or landlords or owners of single family homes like mine — that we had to step up to avert an even worse crisis on the other side of this,” the mayor said.
“We can’t mandate that it happen. But the moral imperative that’s been expressed by every single speaker who has come to this podium hopefully will prick the conscience of everybody, including landlords, to step up and say, `I can do better,’ “ the mayor said.
Lightfoot stressed tenants have an obligation to pay something if they have the means.
“Just because we’re in this pandemic doesn’t mean you don’t have to pay rent or mortgage. You do. We all have obligations to each other and we must endeavor — even in this time — as best we can to meet those obligations,” the mayor said.
“Those who are still able to make payments, need to, in order for landlords and lenders to be able to work with those who can’t.”
Even before the mayor’s news conference ended, the Autonomous Tenants Union was tweeting that “non-binding pledges by landlords and the mayor’s pleas to ‘give grace’ are wholly insufficient.” The union wants rent payments and mortgage collections suspended.
Northwest Side Ald. Matt Martin (47th) said it’s “good for folks to say, `This is what I’m willing to commit’ to in a more public way.” But Martin will keep pushing for his own pending ordinance, which would give struggling Chicagoans a year to pay rent that accumulates during the stay-at-home order.
Though the pledge lacks the weight of law, David Casper, the U.S. CEO of BMO Financial Group, said Lightfoot deserves extraordinary credit. She “has a knack for bringing people together, sometimes maybe even strange bedfellows,” he said.
“Her leadership here is significant, in that it wasn’t with a stick. It was really with a plea for pulling together for Chicago. Which actually gets to the heart of the matter and, I think, got to the heart of many cold-hearted bankers,” Casper said.
“Most of the banks ... have already been doing this. But this pledge will allow us to do more and be crystal clear in what we can do.”
Housing Commissioner Marisa Novara said the pledge is “about everyone doing his or her part to weather this storm and minimize evictions and foreclosures in the aftermath” of the pandemic.
“It’s also a declaration that Chicago is united — and we have to be. COVID-19 has wracked Chicago’s housing market. ... The numbers are pretty stark. We...polled some of our affordable housing providers and they reported decreases in rent collection as high as 61 percent in the month of April,” she said.
“Our modeling shows that renters are being hit up to ten times harder than homeowners — in part, because about half of the jobs that have been at the highest risk of being lost during this time are low-paying jobs to begin with.”