Editorial from the Baltimore Sun editorial board
Tenant and housing groups around the country have in recent days called for rent strikes and cancellations until the coronavirus-stricken economy recovers. People are wrapping their cars in “rent cancellation” signs and using the mantra in social media hashtags. Last week a rent strike was started where even those who can afford to pay were encouraged to withhold checks in support of those who can’t.
We understand and sympathize with the efforts of frustrated tenants scared that they could end up with no place to live. COVID-19 has halted much of the economy, shuttering businesses and leaving millions of people out of work and wondering how they will pay their bills, including what is usually the biggest expense of all — housing. With no end in sight, the pandemic threatens to create a massive homelessness problem down the road if the average Joe is not bailed out like small business and major industries, such as airlines. These tenants need help to prevent future devastation.
But simple rent cancellations don’t address the complexity of the issue and would be hard to do anyway because of constitutional issues regarding private banking contracts.
Any solution needs to involve both tenants and landlords. You can’t help one without the other.
Landlords are often painted with broad brush strokes as greedy business people looking to collect a check with no care for the well-being of their tenants. But managing rental properties is a business, and landlords can only cover the costs of maintaining a property with no rental revenue coming in for so long. (Some can’t afford it now). When tenants don’t pay rent, expenses don’t suddenly disappear. Not to mention, all landlords don’t fit the typical portrayal of large conglomerates with multiple properties that bring in a lot of money. In fact, there are many small landlords with one or two properties.
The housing bust of the mid 2000s left many homeowners underwater on their mortgages, and when they couldn’t sell their homes, they turned to the rental business. These landlords need monthly rental payments to pay their mortgages or face foreclosure, which would also lead to tenant evictions, in this case by banks who likely won’t care that a tenant lost a job. There are other expenses as well, such as property taxes, utility bills and basic maintenance.
Landlords, like homeowners, can work out payment deferrals with their banks, and the federal government has provided some other protections for certain mortgage holders. But more could be done.
Any further reprieve that is granted by the state or local government should make sure both landlords and tenants are made financially sound. Federally, a bill by Rep. Maxine Waters, D-Calif., would provide $100 billion in assistance to renters, landlords and those pushed to homelessness.
We know there are unscrupulous landlords who take advantage of tenants, and we don’t want to see any government aid used as another easy money stream for these businesses. We would urge the governor to continue requiring proof of income loss and hardship as he has with eviction relief. Although some may say that is burdensome, the process needs some accountability, and it is not hard to get proof of a layoff, pay cut or receipt of unemployment benefits. With tens of millions of Americans out of work because of the COVID-19 pandemic, many families are understandably finding it hard to pay rent.
