The fact that people in Chicago and other major cities are protesting about rent and mortgage payments shouldn’t come as much of a surprise. Tens of millions of people are out of work and overwhelmed state unemployment insurance systems have run into major issues for people who are trying to apply. Also, the promised federal aid checks from the first stimulus package have been slow to arrive. (And, to be honest, a $1,200 check wasn’t going to pay the rent for very long for most urban dwellers anyway.) As a result, many of them are demanding that the government cancel all rent and mortgage payments for several months, at least until the economy is turned back on and they can hopefully get their jobs back. But how would that work?
The in cities across the country, protesters on Saturday came out in support of tenants who are struggling to keep a roof over their heads due to the coronavirus outbreak.
In Chicago, dozens of people took part in the National Day of Car Protests. A caravan drove to the parking lot of Our Lady of Mercy Catholic Church, in Albany Park, where demonstrators demanded a nationwide cancellation of rent payments for all tenants and small businesses, and mortgage payments for all homeowners, small landlords, and small businesses.
“It’s really ridiculous that we’re expected to pay when there’s this many closures. The government can do more, and they choose not to. We can have healthcare, we can have food, we can have education. We’ve learned that before the pandemic. They just don’t want to provide that stuff,” Ana Santoyo said.
While we’ve covered this before, it’s definitely worth taking a fresh look at the question. First of all, both the states and the federal governments have acknowledged that this is a serious issue and taken at least some steps to take the pressure off. Any property owner with a federally backed mortgage is eligible to have their payments deferred for several months. Many private lenders are also offering a similar deal even without a government order to do so.
As far as renters go, most cities have instituted a three-month moratorium on evictions. That doesn’t do much for the renters in terms of how they’re going to catch up on their back rent when the term expires, but at least it keeps them from being put out on the street for the time being.
What’s not being made clear is exactly what these protesters expect the government to do about the situation. I would hope that we haven’t yet reached the point where executive power during a time of crisis has extended to the extent where governors believe they can simply order landlords to offer their rental units for free for months on end or tell lenders that they’ll have to suck it up and forgive portions of loans.
In reality, the only thing the government (at any level) could do about this is agree to make your rent or mortgage payments for you. But before you begin cheering for that idea, consider that there are currently more than 10 trillion dollars worth of mortgages in this country requiring an average of nearly one thousand dollars per month in payments due. There are more than 44 million active rental households in the United States. (31% of them didn’t pay their rent in April.) Feel free to do the math yourself and figure out how much it would cost to cover all of those payments for three months, but it’s a mindboggling number.
And how would we determine who gets that sort of relief if it’s not just going to be offered to everyone? Some people didn’t lose their jobs. Many others either are collecting $1,000 or more per month from federally enhanced unemployment benefits, or they will be when the enrollment systems aren’t overwhelmed. Should they qualify to have their rent and mortgage payments simply forgiven? And if not, how is the government supposed to sort out who will or won’t be given this sort of aid?
I’m not saying there’s an easy solution to these problems. But our choices are to either allow an overreach of executive power that would crush landlords and lenders or somehow summon up magical money that will soon dwarf the country’s total GDP out of thin air. Neither is appealing.