Never Let a Good Crisis Go To Waste


Tough times can bring out the best and the worst in people. Sometimes it can be difficult to distinguish between the two.

Such is the case with the COVID-19 emergency. We’ve all lived the story – the exponential spread of the virus combined with a sudden contraction of the economy as businesses closed and people fled to the safety of their homes. The impact on the economy has been both dramatic and immediate. Entire industries have shut down or been severely weakened. Unemployment has zoomed from around 3.5% to something between 15-20% in a matter of weeks.

Many of the people who have been most hurt by this crisis are the same people who were the least prepared to withstand the shock. These are the waiters and bartenders, flight attendants and hotel workers. They are disproportionately young, minorities and immigrants, both documented and undocumented. Many lived paycheck to paycheck before the crisis hit. Once that paycheck disappeared, there was little to fall back on when rent came due.

And come due it did. In Illinois, Governor Pritzker issued his stay-at-home order on March 20th, one of the first states in the nation to do so. Most others quickly followed. Even before March had finished, the job losses were coming fast and furious, leaving vast numbers of people with no income and April rent due in a matter of days.

Unemployment claims for the week of March 15th were 282,000. One week later, they were more than 3.3 million. They more than doubled the week after that and have remained in the millions each subsequent week through April 19. In the five weeks between March 22 and April 19, almost 26.5 million people have filed for unemployment with the likelihood that this number will keep rising in the weeks ahead.

The sudden collapse of large parts of the economy created panic across the country. It didn’t take long for opportunists of all stripes to realize that the situation could be put to good use. There is nothing like a good crisis and the paralyzing fear it creates to get people’s attention, and to give your agenda a boost.

The first wave of infections took hold in the country’s biggest cities – many of the same cities with the highest costs of living and the highest rents. So it is hardly surprising that legions of the suddenly unemployed – many who rent rather than own their homes – would look with desperation to anyone who could offer the promise of financial relief.

Many of the people who have been most hurt by this crisis are the same people who were the least prepared to withstand the shock.

As always, the biggest expense – and therefore, the lowest hanging fruit – is monthly rent. As soon as the crisis hit, tenant activists were already clamoring for rent strikes, rent forgiveness and their standard playlist of other Progressive agenda items – all at the property owner’s expense.

In Chicago, the first substantive demand after general calls for rent strikes and rent forgiveness was for Governor Pritzker to use his emergency powers to rescind the state-wide ban on rent control. To date, Pritzker has maintained that he lacks the authority to strike down this ban, accurately claiming that it is a matter for the Legislature to consider. It is also true that Pritzker ran on an agenda that supported lifting the rent control ban. How long he will be willing or able to withstand activists’ demands to use his emergency powers remains to be seen, especially if the crisis lingers and deepens.

On April 3, The Reader published a story with the headline, “Leaked Zoom meeting reveals landlords concerned over staff ‘decimation’ and optics of ‘stepping’ on tenants” with a cover photo of a Zoom display featuring our own Mike Glasser, President of RPBG, in the upper-left corner.

This is the favored playbook of many Progressives and pro-tenant groups. It is always the helpless tenant pitted against the all-powerful and uncaring property owner – David against Goliath. As the headline unsubtlety reminded us, property owners are only worried about the “optics” of our treatment of tenants, not the tenants themselves.

There is nothing like a good crisis and the paralyzing fear it creates to get people’s attention.

Most recently, freshman Alderman Matt Martin, 47th Ward (Ravenswood and Lincoln Square) introduced an ordinance that would allow tenants to forego rent payments during the stay at home order. Tenants would then have 12 months to repay rent after the stay at home order has been lifted.

Never mind that leases rarely exceed 12-months, and that most tenants will be long gone by the time the 12-month grace period expires and deferred rent comes due. Never mind that landlords have bills of their own to pay and will be hard pressed to get their mortgages, real estate taxes, utility bills and maintenance expenses waived or deferred. These inconvenient facts do not fit the easy narrative of the tenant as victim, and the rich property owner as aggressor. (As of this writing, the ordinance is going nowhere. It has been relegated to the Rules Committee where it will sit until and unless Alderman Martin can find more support for his proposal.)

Tenants and property owners agree – the economic fallout has been unprecedented and the sudden increase in joblessness is nothing short of shocking.

In fairness, no one pretends that the crisis is anything other than what it is – a very real, very severe and very scary, once-in-a-lifetime event with serious economic consequences. Tenants and property owners agree – the economic fallout has been unprecedented and the sudden increase in joblessness is nothing short of shocking.

While acknowledging the trauma and shock the newly unemployed are experiencing, we must also remember two things as we collectively figure out how to get through this health and economic crisis.

 

 

The fact is that many property owners and tenants have already shown great concern and empathy for each other. Far from the callous property owner image being foisted on the public by The Reader, certain politicians and their enablers, most property owners have worked incredibly hard in recent weeks to accommodate the deluge of tenants with previously good payment histories who are now suddenly, through no fault of their own, unemployed. Any attempt by far-left Aldermen or other government officials to dictate the terms of rent relief just opens the door to massive tenant abuse and puts property owners in jeopardy of much more serious financial consequences.

If this is what Progressives and activists believe justice looks like, we will see you in court.

Most property owners have worked incredibly hard in recent weeks to accommodate the deluge of tenants with previously good payment histories who are now suddenly, through no fault of their own, unemployed.

Cook County and the state of Illinois have both enacted eviction moratoriums that will last at least until the current shelter in place order is rescinded. In Chicago, tenants already benefit from the very considerable protections afforded them by the CRLTO. The piling on by left-leaning interest groups may get attention and votes, but will not solve the problem of the sudden economic calamity we are all facing. If anything, these actions are likely to exacerbate it.

Individual solutions for each tenant’s unique situation are far more likely to be successful than the “one size fits all” model espoused by the so-called social justice warriors. Many tenants are still working, or still working part-time. Others are able to dip into savings or call on a parent or a friend to help with rent. The federal government has also passed legislation making record-breaking sums of money available to individuals, small businesses and the hardest hit industries. The whole point of this intervention is to help people get through the current crisis. It is not unreasonable to expect tenants to apply some of these funds to monthly rent.

The piling on by left-leaning interest groups may get attention and votes, but will not solve the problem of the sudden economic calamity we are all facing.

And, yes, property owners can and should help good tenants out when and where they are able to do so. This will depend on the circumstances of both the tenant and the property owner. Some property owners can afford to be more generous while others cannot. Some tenants have long track records of timely rent payments and years of accumulated good will. These are the tenants that every property owner will want to accommodate. Others have spottier payment histories and will not be given the same consideration.

We don’t know how long the current crisis will last. We can’t predict what calls for rent relief, rent control or any of the myriad other wish-list items demanded by activist will get enacted during the difficult months ahead. What we do know is that these activists have been pushing for many of these measures for years and will not hesitate to use the fear and pain caused by this crisis to their advantage – to push their agendas, and push them hard.

And, yes, property owners can and should help good tenants out when and where they are able to do so.

We must counter the divisive and unfair portrayals of property owners that these activists are constantly advertising to the general public. Look no further than The Reader article for proof of this tired old stereotype. We must fight base, emotional appeals with facts and reason. We are fortunate that, at least during the first weeks of this crisis, both the Mayor of Chicago and the Governor of Illinois have responded with balance and reason to activists’ inflammatory language and harmful demands.

We must push back on any attempt by these groups to frame the argument, or claim the moral high ground. What they propose is blatant divide and conquer politics at its worst, playing off popular anger and feelings of marginalization to advance an agenda that will ultimately hurt the very people they claim to support.

These activists have been pushing for many of these measures for years will not hesitate to use the fear and pain caused by this crisis to their advantage.

If lower rent is their aim, they will already get some of what they want now that the COVID-19 virus is reeking economic havoc on the housing market. Lower demand and lower rents will surely be the outcome if this continues for much longer. Their misguided efforts to saddle property owners with additional costs of this emergency will only serve to further weaken the economy and make it harder for property owners to invest in, and maintain, rental housing in Chicago.

The Progressive Caucus of the Chicago City Council, tenant activists and other left-leaning interest groups see an opportunity in the current chaos to advance their anti-business, anti-capitalist agenda. They are true believers and see the current COVID-19 emergency as proof that the current system is unfair and must change.

The Progressive Caucus of the Chicago City Council, tenant activists and other left-leaning interest groups see an opportunity in the current chaos to advance their anti-business, anti-capitalist agenda.

We believe just as strenuously that the “solutions” they propose are thinly veiled attacks on a system that has created enormous wealth and high living standards for millions of people, a strong Democracy, and resilient institutions based on the rule of law.

Calls for revolution may have a romantic appeal, but rarely result in good outcomes. Meanwhile, most Americans want nothing to do with revolution. Most Americans want civility and stability. Joe Biden’s triumph over Bernie Sanders in the Democratic primaries is one piece of evidence backing up this contention.

Calls for revolution may have a romantic appeal, but rarely result in good outcomes.

As property owners, we must recognize how destabilizing the COVID-19 emergency has been and how deeply many of our countrymen have suffered. But we must also resist angry and emotional appeals to base fears and prejudices. Our best defense is to do what we do best – work with our tenants with compassion and good will to find reasonable solutions to any sudden financial difficulties, and to continue to operate our properties responsibly and professionally while remaining good citizens in our communities and our nation. If we do so, perhaps calls for revolution, like the COVID-19 virus itself, will loosen its grip on the populace.