The #CancelRent movement has garnered significant media attention and caused a groundswell of opposition and protest among renters across the U.S. With 30 million newly unemployed Americans and COVID-19 causing devastating blows to businesses everywhere, it’s understandable that tenants facing unprecedented financial hardship are worried about how to pay the rent, let alone put food on the table. April saw a doubling of tenants who didn’t pay their rent, from five percent in a typical month to 10 percent. Data for May isn’t yet available, but it is expected that the percentage of people who skipped their rent will be substantially more, and the situation may only worsen in the months to come.
These are hard times for sure, and the impact is most severe on lower income Americans. However, the #CancelRent movement takes an anti-landlord position based on an assumption that property owners in this country can shoulder the financial burdens of everyone else. This simply isn’t true.
Half of all landlords in the U.S. are individual property owners who typically have a mortgage payment of their own to make and rely on rental income for their monthly expenses. They may also be using rental income as retirement savings. Even the large, corporate property owners have a bottom line, and their employees can also find themselves out of a job with the loss of rental income.
Both sides in this equation – landlords and tenants – have real, legitimate fear and neither party can weather the storm unscathed. To get through this, the best approach is for both sides to communicate their challenges and listen to each other with an open mind. The government is already working on a second stimulus package which could include $100 billion in rental assistance, which would be good news for everyone. But until that happens (and it’s not guaranteed), renters and landlords both stand to benefit from an honest conversation and the ability to compromise and make adjustments.
Landlords who aren’t willing to accommodate tenants who can’t pay their rent may soon have vacancies to fill – which, as the economy worsens, is not ideal. Finding new renters costs more money in cleaning, preparing, and listing the property and screening potential tenants – and the pool of qualified tenants will likely shrink in the coming months. Landlords are also entitled to some financial assistance, both from the government and their lenders, so similarly to tenants, they should approach each creditor with transparency about their situation to see what flexibility exists.
There are many options for landlords to consider such as lowering the rent, accepting partial rent in the short-term and offering a longer grace period on missed payments. Once tenants can pay their rent again, perhaps landlords can reduce the amount they owe in back-payments, or spread it out over the length of the lease.
Additionally, landlords are in a good position to help their tenants who have a good track record of paying rent on time by offering to report the last 24 months of rental payment activity to the credit agencies. The credit reporting bureaus all accept rental payment histories from the past 24-48 months, and for renters who are currently in a cash-crunch situation but have been responsible tenants in the past, offering this service can go a long way towards fostering a good relationship and potentially incentivize residents to find a way to pay their rent.
RentReporters offers a credit reporting service that benefits tenants and landlords and can be a useful tool to both parties facing challenges stemming from #CancelRent and lost income. For more information, visit https://www.rentreporters.com/how-we-help/how-to-report-rent-to-credit-bureaus/