Getting Through the Unemployment Pandemic
The number of new unemployment claims in the US continues at a brisk pace as you can see in the BLS chart below. This means renters will seek help for paying rent and we could see a big wave of renter rent payment defaults and tenant evictions.
The number of new Covid 19 infections, business financial aid received, and shutdown reports seems to be guiding the growth in layoffs. The effect will cascade through the rental markets. This increases risks for landlords, who may be better off creating a plan: help for tenants.
The 5 million per week unemployment benefits application rate is lagging behind the rate of new Corona Virus cases, so it could be we’re just now entering the worst phase of mass unemployment in the US (and in other countries).
The fact more businesses are reopening doesn’t mean there will be rehiring or customers to serve. We’re going to have to deal with more unemployment across the country.
How High Will Unemployment Rise?
Latest numbers point to 20%. These stats about people who won’t be able to pay their rent or buy food are the big news story going forward. For renters looking for financial help, see the Corona financial resource list below.
The lucky ones receiving benefits are only part of the Corona Virus unemployment picture. There are millions of of freelancers, independent contractors, landlords, part time food & hospitality workers, farm workers, musicians and others who won’t be filing for unemployment benefits. These tenants must be the focus of the next 3 months, a time when a storm of evictions is brewing.*
Food for Residents of Los Angeles
Concern About Evictions will Return Soon
Tenants were very concerned about evictions back in March as they looked ahead at a time they might not have a regular paycheck. Now May’s rent is due and June is next in 30 days. As unemployment deepens over the 2nd quarter, we’ll see more tenants looking for info on lease agreements, eviction law and eviction protection.
A Focus on Getting Funds & Food to Those without Resources
The focus on federal unemployment claims by the media isn’t helping us resolve this threat collectively. The media suggests unemployment claims are the issue, when those people at least have some income. A responsible approach instead is attention on those who need help and how funds can be distributed to them so they can pay their rent and acquire food.
Everyone needs food and shelter. Politically slanted news stories don’t shelter or feed anyone.
Bureau of Labor Statistics Reports
If you care about the stats, BLS reports that for the week ending April 18th, seasonally adjusted initial unemployment claims actually fell 810,000 from the previous weeks totals. The new figure is 4,427,000 new claims.
BLS says the largest increases in initial claims for the week ending April 11 were in Colorado (+58,246), New York (+50,250), Missouri (+10,668), Florida (+10,534), and North Carolina (+2,733). And the biggest decreases were in California (-263,342), Michigan (-166,347), New Jersey (-73,416), Georgia (-70,551), and Ohio (-66,874).
Government Needs Confidence and Optimism Too
The media hounds and abuses government who after all are only trying to deal with the pandemic fallout. That can actually contribute to short sighted decisions which threaten us in turn. The government needs to provide more aid assistance funds (they aren’t stimulus checks as one political party is calling them).
One of the most promising trends noticeable are cities offering up assistance to residents (e.g., Los Angeles), and there’s a growing focus on aid for small businesses. Besides hospitals, police, and food production, small businesses need to be supported too. They create the lion’s share of jobs and strength in communities everywhere.
Small business is the path out of this.
Small Business Should Come First
Small business is where the focus should have been from the start. Small business is in need and SMBs spend their money locally where it can be circulated for the best benefit of Americans.
While the media plays this as a political event, and anger simmers over the source of the outbreak, we all need to focus on what’s important — food and shelter. We can deal with politicians and the media later.
Focus on Finding Funds for the Next 3 Months
Tenants who access funds such as PPP, social assistance, or unemployment insurance to cover the next few months may get through this period with less trouble than expected. And for those who will lose their jobs, and who simply can’t pay their rent, they need help to find other accommodations.
There’s no time for confrontations, guilt or evictions. People need help.
Many tenants are already moving in with family, or will be once the pandemic eases. Students for instance will head back home to their parent’s homes. Some renters have resolved their rent vs buy decisions. They’re in the home buying market now and moving away from crowded cities. Vacancies could rise despite the housing crisis.
For landlords, a wave of evictions looms. Renters should be creative in finding ways to pay their current rent due and not letting their back rent get out of hand. If landlords receive sufficient rent to cover their financial obligations, they will be able to assist tenants who need some time to pay theirs.
Financial Help for Tenants
Economic impact payments – https://www.irs.gov/coronavirus/economic-impact-payment-information-center
PPP employer based payments
Federal Unemployment help page – https://www.usa.gov/unemployment
Assistance programs in Colorado – https://www.colorado.gov/pacific/cdle/more-assistance
Texas unemployment services – https://www.twc.texas.gov/jobseekers/unemployment-benefits-services
Rent help in Texas – https://tdhca.state.tx.us/texans.htm
Salvation Army assistance in Ohio – https://co.salvationarmy.org/CentralOhio/
United Way rent help – https://www.unitedway.org/my-smart-money/pages/how-to-cover-your-rent
California CalWorks – https://www.benefits.gov/benefit/1229
Pandemic Assistance in Pennsylvania – https://www.pa.gov/guides/responding-to-covid-19/#ForIndividuals
New York Temporary Assistance – https://otda.ny.gov/programs/temporary-assistance/
Food Assistance – https://www.usa.gov/food-help
National Low Income Housing Coalition programs for states – https://nlihc.org/rental-assistance
Massachusetts Rental Voucher Program – https://www.mass.gov/service-details/massachusetts-rental-voucher-program-mrvp
* This post expresses opinions of the author and does not necessarily reflect the views of ManageCasa Inc. it’s partners, associates, customers or investors.
ManageCasa property management software is built in the USA for landlords in New York, Chicago, Boston, Philadelphia, Charlotte, Cleveland, Dallas, Houston, Phoenix, Las Vegas, Seattle, Los Angeles, Miami, Tampa, Orlando, St Louis, Indianapolis, Denver, and cities across the US, Canada, Australia, UK and Germany.
Further reading: Property Management | Loans for Property Management Companies | Property Management Companies | Corona Virus Disinfection Tips | Portable Covid Foggers | Covid Disinfection | Rent Payment Tips for Tenants | Corona Virus Property Management | Property Management Software | Landlord Software | Property Management Companies | Property Management Chicago | Property Management Los Angeles | Property Management Hawaii | Property Management Denver | Miami Property Management | Boston Property Management | Phoenix Property Management | Property Management Software Comparison | Property Maintenance | Property Management Apps | CARES Act Website