Landlord and Renter Response to COVID-19 | Think Realty | A Real Estate of Mind
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Landlord and Renter Response to COVID-19

In little time, COVID-19 has already had big impact on landlords and renters. The scale of renter unemployment, the lack of communication between landlords and renters, and a lack of awareness for solutions are far more serious than have been reported.

Avail, the Chicago-based company offering an online platform of education and property management tools for DIY landlords, recently published its March 2020 survey results on how the COVID-19 crisis is affecting independent housing providers and tenants.

In little time, COVID-19 has already had big impact on landlords and renters. The scale of renter unemployment, the lack of communication between landlords and renters, and a lack of awareness for solutions are far more serious than have been reported. More than 10,000 landlords and renters responded to the survey, revealing:

  • Communications gaps between renters and landlords;
  • What renters will do if nothing changes;
  • Options landlords have for covering losses; and
  • Why small-business housing providers will likely struggle.

 

According to the Bureau of Labor Statistics, unemployment at the beginning of March was 3.5%. However, based on job losses, Avail claims the unemployment rate could rise higher than the already-predicted 20%. Of the renters surveyed, 54% have lost their jobs due to the pandemic, with 16% of those being self-employed.

Communication Is Key

Seventy-five percent of renters reported that they had not yet been contacted by their landlord regarding the coronavirus, and the percentage is similar among landlords. Of the housing providers surveyed, 70% have not yet communicated with their tenants about COVID-19. Of these landlords, 47% report that they planned to reach out to their renters while the other 53% do not plan to reach out to their renters.

The results indicate most renters are uncomfortable about reaching out to their landlords to explain job loss due to fear of eviction. Similarly, landlords might feel uncomfortable asking renters about their employment status during this pandemic.

States that have been hit the hardest by COVID-19 including New York, New Jersey, California, Washington, and Michigan tend to be where renters are the most informed about eviction information during the pandemic. The data revealed that most renters are unaware of protections and rights in place during this pandemic that would alter the normal course of an eviction.

Renter Response

If renters don’t realize they have additional protections in place during this emergent time, they might resort to taking actions they otherwise would not, like not paying rent or taking on debt versus establishing a payment plan with their landlord or negotiating temporary reduced rent. According to Avail’s report, renters were asked if they could not afford to pay rent, what they would do. Here are the responses:

A Landlord’s State of Emergency?

Most property owners who responded to Avail’s survey said they are under prepared to deal with a financial hit in the coming months. Over half of landlord respondents (58%) said they do not have access to credit options to float expenses in case of an emergency.

Independent DIY landlords likely won’t have the ability to recoup the cost of missed rent in the same way larger real estate owners will.

Although the recent stimulus package under the CARES Act allows mortgage forbearance for homeowners and landlords, it still doesn’t cover the maintenance, utility, and other expenses that are required to keep a rental property habitable. This is especially difficult for landlords with fewer than ten units as they are less likely to have the available cash or investor base to fall back on.

Where to Learn More

Avail’s research team also released a resource directory for landlords and renters, providing answers to questions regarding COVID-19, rights and protections, government announcements, and business and financing tools to help navigate uncertainty during the pandemic.


Category: News