Rent strike: The pros and cons of protesting for financial relief

WASHINGTON » For the tens of millions of people who are newly unemployed — and others who still have jobs but whose income has been severely reduced — the novel coronavirus has made it harder to keep a roof over their heads.

Even before this worldwide health crisis, many families were living on the financial edge. And now, the fallout from the pandemic has pushed them over.

Some tenants have banded together in not paying their rent, going on a “rent strike” to protest for financial relief from the government. Here are some questions and answers on the pros and cons of such a move.

Q

: Should I participate in a renters’ strike?

A

: On Twitter, #CancelRent and #CantPayMay have been trending in response to a staggering unemployment rate caused by businesses closing in an effort to stop the spread of COVID-19.

Tenant groups and community advocates have organized one nationwide strike called “We Strike Together” to push the federal government to provide renters with more coronavirus-related financial aid.

This movement is not without merit.

COVID-19 has exacerbated the affordable housing crisis. And the start of each new month brings more financial anxiety.

“Rent strikes reflect public anger over the way that the housing system is designed to benefit real estate interests over the rest of society,” said Shamus Roller, executive director of the National Housing Law Project (NHLP). “The federal government needs to step in to help protect renters and struggling landlords by providing rent relief.”

The Census Bureau’s American

Community Survey found that there were 44 million renter households in 2018. The COVID-19 crisis has disproportionately affected renters, according to a recent report by Dan Magder, chief executive of Center Creek Homes, and Laurie Goodman, vice president at the Urban Institute and co-director of its Housing Finance Policy Center.

The lack of affordable housing forces renters to spend too much of their monthly income on their homes — more than half of their income in high-cost areas. This leaves little room to save for a financial crisis.

“Policymakers need to address the stress that renters have from the COVID-19 crisis and head off a worsening situation that could include mass evictions, deteriorating housing stock, and even a real estate or housing market crash,” Goodman and Magder write.

Q

: So that makes a compelling case that it’s in the public interest for renters to strike. What’s the argument for the other side?

A

: Not surprisingly, landlords, with their own bills and mortgages to pay, argue that rent strikes will end up hurting the economy even further. Pension funds invest in commercial real estate, including apartment complexes. Owners of both large and small apartment complexes could be forced into foreclosure,

reducing the inventory of rental units and ultimately pushing up rent prices. With reduced income, landlords will start to lay off workers, such as leasing agents and maintenance crews.

“What the owner will do when he or she gets no rent is look to all the payments that have to be made on a monthly basis: their mortgage, their payroll, their taxes, their insurance, and their utilities,” said Doug Bibby, president of the National Multifamily Housing Council (NMHC). “And the first thing to go is going to be the payroll.”

Q A

: What’s the potential downside to me?

: There is a risk in joining a renters’ strike. So, you need to ask yourself what kind of relationship you will have with your landlord once the strike ends.

At some point, you will have to negotiate with your landlord about how to catch up on past rent. You may

need a break on rental payments going forward if the spread of COVID-19 doesn’t slow down enough to get people back to work.

Then there is the matter of your credit history. Your landlord may report your late payments to the credit bureaus, a red flag that could hinder your ability to find another rental.

And consider whom you are striking against.

“Despite headlines in recent years about large institutional investors moving into the singlefamily rental space, the overwhelming majority of units, 88% of single-family rentals, are owned by mom-and-pops or small businesses who own no more than 10 units,” according to the Urban Institute report.

Your landlord may be in just as much financial distress as you are.

“There are many smaller landlords who are also struggling during this time,” NHLP’s Roller said. “It’s not in the best interest of renters if the end result of this crisis is

that the rental market becomes even more dominated by real estate investment trusts and large corporations.”

Change has often happened because individuals were willing to make a sacrifice even at a great financial cost to themselves. Just be sure you understand the risks and plan for the consequences of participating in a rental strike.

Readers can write to Michelle Singletary c/o The Washington Post, 1301 K St., N.W., Washington, D.C. 20071. Her email address is michelle.singletary@ washpost.com. Follow her on Twitter (@ SingletaryM) or Facebook (www.facebook.com/ MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.