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April 15, 2020  

What Happens When a Third of U.S. Tenants Don’t Pay Rent?

April 15, 2020

The COVID-19 crisis is ravaging nearly every aspect of the economy, very much including the housing sector. Data tracked by the National Multifamily Housing Council found that nearly one-third of residential tenants didn’t pay rent in April. Even before the pandemic, says James Brasuell, managing editor at Planetizen, Americans “were straining to cover the high cost of housing…creating a pressure point in the economy that was, according to reports, booming.”

[Pre-existing] trends were stressing the housing markets and the millions of renters in the country before stay-at-home orders gutted the employment market. On April 1, with millions of Americans suddenly unemployed, and a public health crisis weeks, or potentially months, away from its expected peak, U.S. renters owed a collective $22 billion for rent, according to analysis by CoStar.

During the crisis, many tenants have lost income or lost their jobs outright. While some cities and states have allowed tenants to defer rent payments, those tenants face the prospect of having to make up missed payments before the economy is back on its feet.

Brausell’s recent article “Rent Crisis Deferred” is the subject of this week’s episode of Upzoned. Host Abby Kinney, a planner at Gould Evans in Kansas City, and Chuck Marohn, founder and president of Strong Towns, discuss how the housing market is responding to massive non-payment, and it is rippling throughout the rest of the economy. They explore why much-lauded “market responsiveness” is not always a happy thing, the historical roots of our volatile housing system, and what happens when a volatile system seeks equilibrium. They also discuss a few ideas (like a debt jubilee) that have been floated to respond to the crisis.

Then in the Downzoned, Abby and Chuck take a break from recommending media and offer their “Quarantine Chronicles,” including family walks, bike rides, and the experience of cutting one’s own hair.

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