In America’s big cities there have long been complaints that the rent is unaffordable. Nationally, apartment rent has increased by 150% in the last ten years. Middle-income Americans were already struggling to pay rent before the global pandemic.
Is a housing crisis imminent?
Coronavirus has multiplied the struggle for both renters and landlords not only in cities but across the entire country. While 16 million Americans have filed for unemployment benefits over the last three weeks, many have fallen behind on rent payments.
These workers still need housing and landlords still need the rental income but with so many coming up short all across the country a housing crisis is brewing. With more than 1/3 of homes in the US being rentals, landlords are being forced to make concessions that some cannot afford.
Landlords and tenants alike are looking to Congress to step in and help divert a rental market disaster.
For renters, the CARES Act has suspended evictions and property foreclosures for 60 days. However, when this moratorium expires experts fear that the homeless population, especially in big cities, will skyrocket.
Housing experts also predict that rent prices will drop significantly following the coronavirus pandemic. Vacation rentals are already taking a big hit, as quarantine measures have eliminated pleasure travel.
Other rental properties will be vacated as renters move in with family members, become homeless or in the best-case scenario, are able to purchase homes while interest rates are low.
Millions of renters were unable to make their rent payments in April. It is expected that even more will struggle to pay in May.
Some renters are banding together in rent-strikes and are pushing for rent forgiveness during the pandemic. But mortgage payments on properties will still need to be made, even if deferred, so rent forgiveness is a hard pill to swallow for landlords.
Landlords and tenants will need more help than the CARES Act provides to avoid a monumental housing crisis in the coming months.
As the coronavirus pandemic seemingly has peaked in the US, Americans are looking forward to a return to normalcy. But that will not be as simple as it sounds as renters and landlords look for viable solutions to stay afloat.