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Steve Thomas has operated as a small landlord on the South Side of Chicago for 25 years. Most of his tenants are single mothers living paycheck to paycheck and working low-wage jobs. With employers across the country implementing massive layoffs during the COVID-19 pandemic, most tenants who lose their jobs don’t have enough savings to cover next month’s rent, let alone the next several months’.
“I really don’t know where that leaves us, but I know it leaves us vulnerable,” Thomas said. “It leaves us all vulnerable.”
Thomas is worried about the future of his 18-person company, 5T Management, as well as the future of his tenants if his business shutters and a new investor unfamiliar with the area takes over his buildings. “If you start getting nothing but institutional owners in these predominantly low-income neighborhoods, it’s going to be problematic,” he said. “People who have money sitting on the sidelines could come in, buy deals, and force out the ma and pa landlords. You’d end up with a lot of fraud and a lot of people living in unsafe, unsanitary environments.”
The pandemic has spotlighted gaps in the housing safety net that left renters at risk long before this crisis and that will worsen as more people lose their jobs and face unexpected costs. But when tenants can’t pay their rents, they aren’t the only ones facing financial instability. Most landlords, especially smaller owners, operate on tight margins and can’t sustain a massive drop-off in rent payments for long. They could risk defaulting on their mortgages, missing insurance payments, or failing to pay city taxes—which, in turn, could destabilize the broader community.
That’s why policy solutions at the federal, state, and local levels need to keep the entire housing ecosystem in mind: when tenants can pay rent, landlords can maintain their rental properties, pay their underlying mortgage, and keep housing opportunities open for current and future renters.