Rent strikes imperil housing providers – and can impact residents who need assistance

Residents across Washington State who are impacted by the economic fallout of COVID-19 are understandably worried about paying rent. With one-third of renters paying partial or no rent in April, and rising unemployment, it’s reasonable to expect that this number will increase in the coming weeks. We are encouraging all housing providers to do their part to work together with their residents during this difficult time. We recommend housing providers waive late fees, create flexible payment plans with their residents, and help residents connect to government and non-profit resources that can help make ends meet. Many are actively doing this across the state.

We will get through this if we work together, take advantage of available resources, and call on government to provide even more support by way of emergency rental assistance.

Calls for Rent Strikes Don’t Help

In these unprecedented times, calls for rent strikes are particularly counterproductive and irresponsible. Rental income gives housing providers the flexibility to work out special agreements and payment plans with truly impacted neighbors. Additionally, apartment community and maintenance staff are classified as essential workers at this time. Apartment community residents will be harmed if ongoing maintenance, emergency repairs, resident engagement efforts and other critical onsite functions decline or cease. Small landlords could risk losing their properties if they don’t receive rent to cover their mortgage and taxes.

At a time when community leaders should be providing hope and working aggressively to get resources into residents’ hands, calls for rent strikes make it seem like elected leaders and policy advocates are throwing their hands up instead of proposing actual solutions that help renters. Vilifying property owners who are working on the front lines to keep people housed -- without being able to depend on rental payments -- is unfair, and detrimental to Washington’s goals of saying safe and healthy at home.

If residents can pay rent, they should. Those who have the means to pay, but choose not to, are harming their apartment community and making an intentional decision to put the working-class jobs maintaining these communities at risk. Our government leaders are responsible for reinforcing this message to ensure current protections against eviction are not abused by those with the means and security to pay.

Where Does Rent Go?

It is a misconception that housing providers enjoy large margins on rental properties. The reality is they will be unable to keep rental homes on the market in the absence of rent payments. Here is the breakdown of the application of a dollar of rental income:

• 10% of rent is spent on improvements like roof repairs and heating upgrades.
• 39% of rent pays the mortgage.
  • Special note: With roughly two-thirds of apartment mortgages backed by private lenders, and therefore ineligible for mortgage forbearance via the CARES Act; mortgage defaults for small- and mid-size housing providers jeopardize the housing of all residents and our housing supply.
• 27% of rent covers payroll for employees who maintain the property, utilities, and insurance.
• 14% of rent goes to property taxes, which finance critical budget items like teachers and emergency services.
• 9% of rent is returned to the owners of the property.

Without rental payments, homes will fall into disrepair, go into foreclosure and be removed as a rental housing option altogether, and lead to layoffs of essential staff members and maintenance teams. A rent strike only adds to the economic harm that COVID-19 is already inflicting on our local economy and ability to provide essential services to the residents of Washington.

We Need Rental Assistance Now

While many of us want to help our community right now, rent strikes are irresponsible when considering the long-term health of rental housing in our state. These proposals avoid common sense solutions to address the needs of all those that provide positive economic contributions to our local economy.

There is a proven way to help residents cover rent and their expenses while protecting our vital housing: emergency rental assistance. We are encouraging government at every level to invest in rental assistance to support those impacted by COVID-19 and help maintain our vital housing infrastructure and everything it supports.