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COVID-19

Are we paying rent?

Sabri Ben-Achour Apr 16, 2020
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An apartment building in Brooklyn, New York on March 25. Bryan R. Smith/AFP via Getty Images
COVID-19

Are we paying rent?

Sabri Ben-Achour Apr 16, 2020
An apartment building in Brooklyn, New York on March 25. Bryan R. Smith/AFP via Getty Images
HTML EMBED:
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Like 22 million other Americans, dance instructor and choreographer Anthony Davidson has suddenly found himself without a job. He didn’t pay April rent and he isn’t going to pay May’s.

“I need to save every penny I can, now, because I don’t know how long it will last or how long it will be until I have a paycheck again,” Davidson said.

He’s getting unemployment, but he can either use it to pay rent or pay for … everything else.

“My highest priority is medical insurance, because you never know what is going to happen,” he said.

At the beginning of April, it looked like 31% of apartment tenants had not paid rent on time. New data from the National Multifamily Housing Council show that some have since paid late or partially, but 16% haven’t paid any rent — still higher than usual. The numbers may be higher for commercial tenants and in some cities.

“Commercial tenants — a lot of them are not paying rent,” said Frank Ricci, director of government affairs for a landlord advocacy group the Rent Stabilization Association. Some landlords are working with tenants, Ricci added, and evictions have been paused in places like New York. But, he noted, landlords face expenses, too.

“I don’t think anyone wants to get to that decision point of making a choice between paying your property tax, versus paying a mortgage, versus paying a necessary repair. It’s an impossible choice,” Ricci said.

“Someone has got to foot the bill here and now the game is who’s best able to dance and avoid the problem and everyone’s trying to get themselves off the hook here,” Elliot Eisenberg, a real estate economist with economic consultancy Graphs and Laughs, told “Marketplace.”

Some economists warn that unpaid rents — and, in turn, unpaid mortgages — could further strain the financial system.

“In a normal recession, the problem is bad enough,” Eisenberg said. “But here, the speed at which the job losses have come has been so profound [that] these nonpayments become an immense issue because you’re losing large chunks of revenue.”

COVID-19 Economy FAQs

What do I need to know about tax season this year?

Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.

How long will it be until the economy is back to normal?

It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.

How are those COVID relief payments affecting consumers?

Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.

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