As I See It: A Rent Strike Would Make a Bad Situation Worse

 

Mike Glasser, RPBG President
Spring, 2020
(reprinted from Crain’s Chicago Business, April 25, 2020)

 

Some housing advocates are urging all renters, regardless of their financial circumstances, to forego paying rent during this crisis.

As housing providers who are Chicagoans who own or manage many of the city’s small and midsized neighborhood rental properties, we are acutely aware of the financial stress our building residents are experiencing due to the fallout from the coronavirus.

The overwhelming majority of Chicago’s housing providers are empathetic to the tremendous strain this crisis places on many of our residents and their families, and we want to help our tenants—who are often our neighbors—so they can continue to live in their homes.

Nevertheless, some housing advocates are calling for a citywide rent strike, urging all renters, regardless of their financial circumstances, to forego paying rent during this crisis.

Such an action will make a bad situation considerably worse.

First, such an action would cripple property owners’ ability to defer or abate rent for those who are most in need. Like most small businesses, apartment owners operate on tight margins. If those who can pay their rent choose not to, property owners will lack the financial resources to assist those who truly cannot pay.

Second, debt service comprises only a small portion of a building’s operating costs. In Chicago, property taxes are the number one operating expense for most owners. The city, county and our schools depend primarily on property tax revenue. If building owners can’t pay their taxes due to a loss of rental income, our local governments will face even greater challenges.

Rental revenue also covers the cost of maintaining, cleaning and keeping apartment buildings safe and habitable. These costs are higher during a pandemic, due to the increased cleaning measures and the need for PPE to protect staff who go into tenants homes to make repairs. Rent also pays for building-wide utilities, such as water and sewer fees, garbage and recycling collection.

Finally, rents pay for the wages of other workers like maintenance, housekeeping staff and local contractors, such as plumbers and electricians. If rent checks disappear, so too will the paychecks of thousands of hard-working Chicagoans.

Rather than treat each other as adversaries, building owners and housing advocates should unite to urge the federal government to provide cash assistance to both renter and homeowner, and low-cost loans to support small and medium-sized businesses, including neighborhood building owners and managers. This is the kind of 8nancial relief we need to see us through this crisis.

We are all in this together, so let’s all work together.

 

Mike Glasser is president of the Neighborhood Building Owners Alliance (NBOA) an organization of over 600 community-based housing providers that advocates on behalf of neighborhood building owners associations.