As the first rent payments during the coronavirus pandemic come due, landlords hope for the best
N.J. and Pa. temporarily have halted evictions, foreclosures, and the shutoff of utilities. The Philadelphia Tenants Union is advocating for the suspension of rent payments during the pandemic.
The first rent payments since the Philadelphia region went on lockdown to try to stop the spread of the coronavirus are due in a week, and property owners and managers are anxiously waiting to see what happens.
“My mind is like, ‘Wait, the first is in a week. What? Where did March go?’ ” said Melissa Simmons, owner of Philadelphia-based Property Management International Greater Philadelphia. “Like everyone else, we’re hoping for the best with all this.”
Simmons has been trying to spread the news about resources as they become available, including relief funds and unemployment assistance for tenants, and some mortgage relief and small business emergency assistance for property owners.
If owners are aware of resources that can help them, “they can be more lenient with their tenants,” and ”hopefully come to an agreement that keeps everyone’s credit OK,” said Simmons, property manager for about 40 mostly single-family homes and owner of nine units in the Philadelphia region.
A record number of Pennsylvanians — more than a half-million — have filed for unemployment benefits since Gov. Tom Wolf announced the closure of nonessential businesses March 16. Governments in New Jersey and Pennsylvania temporarily have halted evictions, foreclosures, and the shutoff of utilities. The Philadelphia Tenants Union is advocating for the suspension of rent payments for the duration of the coronavirus pandemic.
At the same time, owners and managers of apartments, condos, townhouses, and rental homes need to pay their staff, property taxes, mortgages, and vendors. Having tenants staying at home all at once is a strain on utilities and plumbing for multifamily building owners. If the owner of a house loses the property, so does the renter. If some tenants can’t make rent payments, managers aren’t collecting as much revenue, even as the pandemic may lead to fewer new leases.
"There is some anticipation of some short-term financial downturn for sure,” said Marlynn Orlando, chief executive officer of the Pennsylvania Apartment Association, based in Bala Cynwyd.
Simmons said she is “hoping the government will provide enough resources to everybody. The small owners and the tenants for sure. That it’s not just big companies that they’re going to be taking care of.”
Hope for federal help
Most of the owners Simmons works with don’t have large multifamily buildings; the vast majority own a single-family house. Others may have inherited a rowhouse from a relative and kept it as a rental property, or they and their siblings went in together on a place when they were in their 20s and now the rental income helps them afford their own homes.
The $2 trillion federal stimulus bill that Congress is considering includes $3 billion for rental assistance, mostly for public housing agencies.
Federal lenders Fannie Mae and Freddie Mac are offering mortgage relief for certain multifamily property owners who agree not to evict tenants who can’t pay rent because of the coronavirus. New Jersey Gov. Phil Murphy has encouraged banks with residential or commercial mortgages, equity loans, or business loans to work with mortgage and loan holders experiencing financial hardship because of the pandemic.
Philadelphia Foundation and the United Way of Greater Philadelphia and Southern New Jersey started the PHL COVID-19 Fund, which will provide nonprofits with money for programs such as rental assistance and homelessness prevention.
Since before the pandemic, the Philadelphia Housing Development Corp. has been working to launch a program that would give monthly rent vouchers to tenants in subsidized housing who need help paying rent. The city also plans to establish PHLRentAssist, the rental assistance program Mayor Jim Kenney announced in his budget address March 5.
Emergency funds for tenants
The Pennsylvania Apartment Association has started collecting donations for an emergency assistance fund and aims to give small grants to tenants who are having trouble paying rent. The New Jersey chapter has asked the governor and Legislature to establish an emergency rental assistance program, which executive director David Brogan pointed out would benefit tenants, property owners, and operators of ancillary businesses. He acknowledged federal funds would be “absolutely necessary” to fund the program.
“At the end of the day, we really need to stay in operation in order to provide the homes that people are staying in,” Brogan said. “The last thing we want right now is for people to become homeless.”
Philadelphia courts are closed through at least next Friday, so landlords can’t get court orders that would be needed to evict tenants. Tenants are worried about what happens after courts reopen, said Judith Jones, vice president of the Philadelphia Tenants Union.
The group has been asking the mayor and City Council to extend the moratorium on evictions, as well as to stop foreclosures and residential tax liens during the pandemic. The group also is asking for a moratorium on rent payments, for landlords to forgive payments already missed during the pandemic, and for tenants not to owe back payments once it ends.
“We don’t want anybody to run into a problem later on owing back rent when they’re not able to work now,” Jones said. “It’s going to take a toll, and they’re going to have a hard time catching up.”
There’s been some talk among renters of rent strikes, but the Philadelphia Tenants Union is not advocating that, Jones said.
In a statement, Paul Chrystie, a spokesperson for the city’s Department of Planning and Development, said, “It is the city’s hope that between federal stimulus funds, the PHL COVID-19 Fund, locally funded programs to be launched soon, and landlords and tenants recognizing our unique circumstances and working to accommodate each other’s needs, the city’s renters will avoid evictions for the duration of this crisis.”
Maintenance demands rise
Orlando said the Pennsylvania Apartment Association’s members are trying to be flexible, including allowing some residents to stay past their leases. Property managers have to continue to provide safe residences for tenants, "especially because people are stuck at home,” she said. That means maintaining buildings and responding to emergencies. And they’re trying to keep the workers they need to operate employed.
“They are navigating the various mandates that keep coming out and changing,” Orlando said.
Timothy Henkel, principal and senior vice president of Pennrose, a Philadelphia-based developer and manager, said some tenants’ inability to pay rent because of changes in job status is “the next shoe to drop.” Pennrose has 23 properties in Philadelphia and primarily manages housing in Pennsylvania, New Jersey, and elsewhere on the East Coast for low-income residents.
“That’s a very vulnerable population,” Henkel said. “Even outside a virus, in any economic downtown, they’re the first to lose their jobs.”
Pennrose has expanded its support services for residents, including reaching out to food banks and donation funds on their behalf. Henkel said rent revenue is necessary as buildings undergo wear and tear and need continuous maintenance — not to mention cleaning, especially now.
“The ability to keep rent flowing is really critical to keep those essential services going,” he said. “If [residents] have the ability to pay, we need them to continue to meet those obligations to the extent possible.”