Question

There is a movement in our country to prevent landlords from evicting tenants for non-payment of rent owing to the pandemic. 1. Is this a good idea? Why? 2. How many months should a family be allowed to live in an apartment or a house without paying rent? 3? 6? 12? “As long as it takes for the family to get back on its feet”? WHY???? 3. About 90% of all landlord-tenant agreements are private sector transactions—no direct involvement by our government…… Should landlords be compensated by our government (federal, state, or local) for the lost rent? Why? How much? One third of the lost rent? One half? Two thirds? ALL of it???? Why? 4. If landlords were not compensated at all, how could this affect entry in to the rental housing market by future landlords, in theory? (I HATE TO TELL YOU THIS: this may not be our last pandemic. In 1957, an influenza epidemic killed 110,000 Americans WHO WERE ALREADY SOMEWHAT ENGAGED IN SOCIAL DISTANCING OWING TO THE POLIO SCARE----SJMN, 3\21\20)

Answer 1

1. Covid-19 pandemic has rattled the economies around the world. The governments across the countries are trying to keep the economy floating while succesful vaccine for pandemic is worked upon. Closure of most of the businesses has led to millions of job losses in the country. The government has also used fiscal space available to support families by providing cash transfer, and other measures. However, millions of those who have lost jobs are in no position to pay rent to their landlords and landlords have started evicting tenants for non-payment of rent.

Economically speaking, landlords are right in evicting tenants for non-payment of rent, however, ethically speaking, they should allow some time, such as three months at least to the tenants to arrange for payment of rent if they can. Only after giving them a minimum duration of three months time, should they ask their tenants to leave.

For the time, if tenants are not evicted by landlords, government should make transfer payments equivalent to 1 / 3rd of total rent payable, so that landlords, who are also dependent on earnings from rent, can look after their spending needs.

If landlords are not compensated, they would have no incentive to add or to build new houses, as well as to maintain the current units of houses which will lead to drastic shortage in number of housing units supplied. Therefore, new entry of landlords in housing markets would be negatively impacted due to non-compensation for their lost rent.