As April 1 approached and millions of Americans were out of work, chatter built about how tenants would make rent — or maybe wouldn’t. Fliers posted around Philadelphia called for a “rent strike,” or a collective withholding to support those who couldn’t pay.
A citywide rent strike didn’t materialize by April 1. At the time, the Philadelphia Tenants Union, one of the most visible groups in the city for supporting tenants’ rights, hadn’t called for such an action.
May 1 could be different.
In mid-April, the Tenants Union officially urged tenants under the same landlord to organize, come up with collective demands for reduced or canceled rent, and be prepared to withhold their rent — whether they have the ability to pay or not — if those aren’t met.
The goal, Tenants Union member Mat Wranovics said, is to “politicize that nonpayment” and use a widespread rent strike to pressure local, state, and federal officials to cancel rent and mortgage payments for six months, with no debt accrued or back pay required.
“This is by no means a radical demand,” he said. “We’re in a radical situation.” Interest in collective tenant action and a citywide rent strike, he said, has “spiked dramatically.”
Some action has been taken to provide relief to renters and homeowners amid the economic crisis. Evictions in Philadelphia are on hold through at least June 1 as courts remain mostly closed. For federally subsidized housing and landlords with federally backed mortgages, evictions and foreclosures are paused through July.
But rent payments are still due, and striking is legally thorny. Renters have the right to a court process before they’re evicted, but tenants organizing a union or council don’t have legally protected bargaining rights in the same manner as labor unions.
Nationally, almost 90% of apartment tenants paid all or some of their rent for this month by April 19, according to a survey by the National Multifamily Housing Council. The percentage isn’t far off from payment rates in March and April of last year, which landlords attribute to their flexibility. Doug Bibby, the council’s president, said, “Residents are doing what they can to continue to meet their housing obligations.”
“I think we all quickly breathed a sigh of relief,” Timothy Henkel, principal and senior vice president at Pennrose in Philadelphia, said of fellow managers of rental properties. And then they looked toward May.
Millions of people who worked for at least part of March will not have worked at all in April. And it’s unclear whether economic relief will come in time to help tenants pay for May. Unemployment benefits are backlogged, stimulus payments haven’t reached everyone who is eligible, and debt collectors can intercept those stimulus checks. And not everyone struggling to pay rent is eligible for federal relief.
“The bottom line is, we’re all holding our breaths for May rent,” Henkel said. “The expectation is that collections go down. The question will be: by how much?”
The landlord-tenant ‘house of cards’
Pennrose owns a variety of multifamily properties for renters in public housing, market-rate housing, low-income housing, and low-income housing for seniors. Seniors have been the most stable tenants throughout the pandemic, Henkel said. Pennrose is most concerned about the ability to pay rent of working, low-income residents who live paycheck to paycheck.
As the pandemic drags on, the most vulnerable people will deplete what little savings they have and will have less to spend on essentials like food and rent, said Joshua Clark, an economist at the real estate website Zillow. Needs are especially dire for those paying more than a third of their income on housing.
“Support to renters is needed if this situation doesn’t rapidly improve,” Clark said.
He said he’s worried about the fate of both tenants and landlords, especially small rental operations with thin margins. “It’s a house of cards, really,” he said. “You start missing those payments, it becomes a real problem.”
Nationwide groups of landlords and renters continue to ask for federal rental assistance. The National Rental Home Council, which represents the single-family rental industry, is lobbying for a long-term, interest-free loan for renters.
Payment plans and waiving fees
New Jersey renters now can use their security deposits to offset rent, thanks to an executive order Gov. Phil Murphy signed Friday.
Some landlords have been verifying loss of income and putting tenants into payment plans, waiving fees for credit card and late payments, using security deposits or tenants’ last month rent, and, in some cases, reducing rent.
“All these things are short-term and Band-Aid approaches,” Henkel said.
And for now, most landlords aren’t raising rents for those who renew. “This is not the moment to be raising rents,” he said. “But they can’t stay flat forever, because expenses don’t stay flat forever.”
Working together to find reasonable solutions is in everyone’s best interest, landlords said.
Landlords “understand the sentiment” behind rent strikes, Henkel said. But the ability for property owners and managers to maintain, operate, and clean buildings; pay expenses such as utilities and insurance; and complete critical repairs depends on rent payments, he said.
“Those are the things at risk if there’s any kind of mass rent strike,” he said.
Most landlords want to work with their tenants, said Gary Jonas, president of the HOW Group, a property manager based in Conshohocken. For some tenants who have lost income, the company has reduced rent without requiring tenants to make up for it later and used the last month’s rent for those who can’t pay. The HOW Group has collected roughly 95% of the April rent from its residential properties.
“We’ve said to tenants, ‘Look, we’re in it together,’” he said. "People really do understand we get their situation, and we want to be part of the solution to relieve a little stress and have a plan everybody thinks is fair. … Our goal as an industry should be to help.”
Housing advocates have encouraged tenants to discuss their situations with their landlords before considering strikes. Some landlords also have been reaching out to tenants, calling to see whether they need payment plans, connecting them with resources, and sometimes providing computers and assistance to tenants to file for unemployment and other benefits.
Wranovics said tenants should organize with one another first, then consider a rent strike if a landlord refuses to negotiate with the group. The union has created a tenant organizing guide and connects tenants with each other, hosts video chat office hours and workshops, and collaborates with tenants unions outside of Philadelphia.
One of the groups the Tenants Union is working with is the New Age Tenants Council, a group of about 100 people who live in properties managed by New Age Realty Group, which leases and manages hundreds of units across the city.
In a letter sent last week to New Age, the Tenants Council said “mutual enemy” COVID-19 “has devastated our health, our communities, and our livelihoods.” The group asked New Age to pledge to not evict any tenants for the remainder of the pandemic, to grant rent reductions, and to negotiate “collective rents” with tenants in multiunit buildings.
Apollo O’Deorain, who lives in a New Age-managed building in West Philly, joined the Tenants Council in March after being furloughed from a job at a movie theater. There’s no official plan to rent strike yet, O’Deorain said, but it isn’t off the table. The group, also planning to organize with other tenants councils to pressure elected officials, wants to ensure the members of its council don’t withhold rent alone and risk eviction when courts reopen.
“Historically, collective organization has always worked out better,” O’Deorain said. “We see when tenants individually go to their landlords or property managers that the deals that are made are far less convenient for the tenants.”
Lance Rogers, a real estate attorney with Rogers Castor in Ardmore, represents New Age and said the group can’t unilaterally reduce rent, which is up to the owner of each unit. So far, New Age has received about 50 requests for assistance out of 900 tenants.
He said the group will work with tenants and owners individually to address financial hardship.
“There’s no way there’s a one-size-fits-all solution for the problem,” he said.