The uncertainty that has spread even more rapidly than the COVID-19 virus itself has led to drops in the stock market, businesses closing with no knowledge of when or if they’ll be able to open again and many individuals feeling insecure about the immediate future. If you were living paycheck to paycheck prior to the spread of the coronavirus, you’re likely feeling an even greater sense of anxiety about the current situation.
While many salaried and office positions have transitioned to remote work fairly seamlessly, many Americans living on hourly wages in service roles are finding themselves, if not completely unemployed, underemployed and receiving less income than they did previously.
For the week ending March 21, the U.S. Department of Labor reports that nearly 3.3 million Americans filed new claims for unemployment insurance. For the week prior, 282,000 unemployment insurance claims were filed.
With or without an unemployment check, or even a potential stimulus check from the federal government, many renters are concerned about how they will make rent at the start of April, let alone for future months, in addition to providing food and possible health care for sick loved ones.
In some cases, local and state governments have put a moratorium on eviction filings, particularly while courts are closed to help prevent further spread of COVID-19. Many sheriffs' departments have issued notice that they will refuse to carry out lockout proceedings while social distancing and shelter-in-place orders are in effect. The U.S. Department of Housing and Urban Development has stopped evictions for HUD housing.
But you may not live in housing that falls under HUD’s jurisdiction, and you may not live in a state or county where evictions have stopped. If you can’t pay rent during the coronavirus pandemic, here’s what you should do:
- Check your lease.
- Contact a lawyer.
- Work out a payment plan.
- Look out for government rulings that apply to you.
Check Your Lease
As you should when you run into any issues with a landlord, first examine your lease to see what the landlord expects if you find yourself unable to pay rent, and if there is any leeway based on the circumstances. You may find that it lays out an official process in the event of unemployment or other incident.
“I highly doubt (leases) address pandemics, but that’s sort of a first-stop shop if they want to know their rights as a tenant,” says Jeffrey Friedman, partner and shareholder at the national law firm Hall Estill, and based in Denver.
Some leases may include an “act of God” clause that address natural disasters or major events that could not be reasonably prevented. It’s not clear if unemployment due to pandemic falls into this category in every case, but it may be worth exploring with an attorney to potentially seek a stay in rent for a brief period of time.
Contact a Lawyer
Before speaking with your landlord or property manager, it is in your best interest to speak with an attorney to get a better grasp of your rights as a tenant and the best phrasing to use when you let your landlord know that paying rent on time or in full isn’t possible. A tenant rights organization may also be able to provide you with free legal advice – you can typically find a local group that serves your area through a simple online search.
Friedman recommends checking on your state’s bar association website, as many offer information on tenants' rights and can help you find an attorney who may be able to help. “It’s also a nice way to find attorneys who are willing to do the work pro bono,” he says.
Work Out a Payment Plan
The next step – and one that should be done in a timely manner – is to speak with your landlord and see if a new plan can be established. You may be able to suspend payments for the time being, and slowly pay back unpaid rent once local businesses have opened again to allow you to find income. In other cases, half of your monthly rent could be forgiven to ease the burden.
While some landlords may able to forgive rent to all tenants, it’s not possible for many others. Landlords may work with individual tenants on a case-by-base basis.
“Some solutions the government might provide, and others … we’ll continue to work with our residents as issues come up,” says Jeff Amengual, chief operating officer of DMG Investments, a New York City-based company that owns student housing, apartments and condominiums throughout the U.S.
In its communication to members about the coronavirus, the National Multifamily Housing Council encourages property managers and landlords to work with residents facing financial problems to establish a new payment plan as well as waive late fees or other administrative costs over the next month, as additional fines would just exacerbate financial issues for those facing income loss now.
The NMHC advises that any agreement should be made in writing and signed by both parties. If any late fees are waived, be sure those details are included in the agreement.
[Read: How Much Rent Can I Afford?]
Look Out for Government Rulings That Apply to You
HUD announced on March 18 that it placed a moratorium on all evictions and foreclosures for the next 60 days, taking residents of HUD housing into mid-May. While this does not apply to all housing, the Consumer Financial Protection Bureau’s endorsement of the action is aimed to encourage other low-income housing providers and private landlords to take similar steps.
Many states and counties throughout the U.S. have also stopped evictions and foreclosures, either as a targeted measure to prevent a boom in homelessness or simply because courts are closed. A temporary moratorium on evictions, however, means you need to take action now to either pay rent or come to an agreement with your landlord to prevent an eviction filing as soon as the moratorium is lifted.
Keep a close eye on new measures at the federal and state government levels that may provide you with more options. Congress has approved a stimulus package that includes:
- A one-time payment of $1,200 for individuals with an adjusted gross income of $75,000 or less, $2,400 for married couples with an adjusted gross income of $150,000 or less, and an additional $500 for each child in the household.
- Those collecting unemployment will also receive an additional $600 per week for the next four months.
- Independent contractors and gig workers, like Uber drivers, will also be eligible for federal aid.
- Landlords with federally backed mortgage loans on their rental properties are not permitted to carry out an eviction due to failure to pay rent for 120 days. They are also not to collect late fees or penalties in the same time period.
If you receive stimulus funds, it’s reasonable for your landlord to expect that some will go toward rent, though it worth having an honest conversation about other necessary expenses to make sure you're not expected to put the entire check toward rent.
The added details about eviction and late fees, however, will give you additional time to seek legal advice, work with your landlord and hopefully get back on your feet.
America’s Affordable Housing Crisis
There wasn’t a county in the U.S. where a minimum wage worker clocking in 40 hours a week could afford to rent a two-bedroom apartment in 2019, according to a report by the National Low Income Housing Coalition.
Lack of affordable housing has become a national issue, branching further than cities known for their high cost of living, such as New York and San Francisco.
In its 2019 Best States rankings, U.S. News determined which states offer the most affordable housing based on a Moody’s Analytics analysis, which compares a state’s median housing price to the median family income and mortgage interest rates. Each state has a housing score; 100 means that a family with a median income has exactly enough income to qualify for a mortgage on a median-priced home. A score above 100 means that a family has more than enough income to do so, assuming a 20 percent down payment.
Here are the top 10 states:10. South Dakota
10. South Dakota
(Education Images/Universal Images Group/Getty Images)
Housing score: 212.4
South Dakota’s housing score far surpasses the national average of 165.9.
Learn more about South Dakota.9. Michigan
(Getty Stock Images)
Housing score: 212.8
Michigan has the country’s fifth-lowest cost of living, according to the 2019 Best States rankings.
Learn more about Michigan.8. West Virginia
8. West Virginia
(Brett Ziegler for USN&WR)
Housing score: 214.5
The median gross rent in West Virginia was $711 per month from 2014 to 2018, according to the U.S. Census Bureau.
Learn more about West Virginia.7. Oklahoma
Housing score: 214.7
Oklahoma also ranks highly – No. 2 – for its cost of living in the 2019 Best States rankings.
Learn more about Oklahoma.6. North Dakota
6. North Dakota
Housing score: 216.3
North Dakota has one of the nation’s lowest poverty rates at 10.3%. The national average is 13.4%, with some states’ poverty rates reaching nearly 20%.
Learn more about North Dakota.5. Nebraska
(Getty Stock Images)
Housing score: 219.7
Nebraska has one of the best GINI index scores in the 2019 Best States ranking, meaning that it is one of the states with the most income equality.
Learn more about Nebraska.4. Pennsylvania
Housing score: 221.1
The median family income in Pennsylvania averaged $59,445 from 2014 to 2018, according to the U.S. Census Bureau.
Learn more about Pennsylvania.3. Indiana
Housing score: 221.3
The median gross rent in Indiana was $807 per month from 2014 to 2018, according to the U.S. Census Bureau.
Learn more about Indiana.2. Ohio
Housing score: 236.7
The median household income in Ohio averaged $54,533 from 2014 to 2018, according to the U.S. Census Bureau.
Learn more about Ohio.1. Iowa
(Dave Kettering/Telegraph Herald/AP)
Housing score: 246.8
Iowa ranked No. 1 for the 2019 Best States affordability ranking, which considers both housing affordability and cost of living.
Learn more about Iowa.States With the Most Affordable Housing
States With the Most Affordable Housing
- North Dakota
- West Virginia
Corrected on March 31, 2020: An earlier version of this story incorrectly stated the approved stimulus for unemployment benefits. Those collecting unemployment will receive an additional $600 per week for four months.
She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at email@example.com.