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

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

Are people still waiting for unemployment payments?

Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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