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
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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

When does the expanded COVID-19 unemployment insurance run out?

The CARES Act, passed by Congress and signed by President Donald Trump in March, authorized extra unemployment payments, increasing the amount of money, and broadening who qualifies. The increased unemployment benefits have an expiration date — an extra $600 per week the act authorized ends on July 31.

Which states are reopening?

Many states have started to relax the restrictions put in place in order to slow the spread of COVID-19. Although social-distancing measures still hold virtually everywhere in the country, more than half of states have started to phase out stay-at-home orders and phase in business reopenings. Others, like New York, are on slower timelines.

Is it worth applying for a job right now?

It never hurts to look, but as unemployment reaches levels last seen during the Great Depression and most available jobs are in places that carry risks like the supermarket or warehouses, it isn’t a bad idea to sit tight either, if you can.

You can find answers to more questions here.

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