Rent! (2020): How COVID-19 Impacts Tenants

Amid the COVID-19 health crisis, many workers and business-owners are expecting to see their income dwindle. Not landlords, though. 

While the federal government has taken the admirable step to implement universal income insurance for those who have lost their jobs due to COVID-19, they have inadequately addressed housing-related issues. 

The federal government has taken steps to help homeowners. In Canada’s COVID-19 Economic Response Plan (CERB): Support for Canadians and businesses, the government promises to provide “increased flexibility for homeowners facing financial difficulties to defer mortgage payments on homeowner CMHC [Canada Mortgage and Housing Corporation]-insured mortgage loans. CMHC will permit lenders to allow payment deferral beginning immediately.”

Nothing has been federally mandated in the Economic Response Plan, however, to address tenants’ rent payments.

Some provincial jurisdictions have addressed the question of tenants who may lose income due to COVID-19. For instance, Premier Brian Pallister announced that Manitoba is putting a halt to the enforcement of evictions (unless they are due to a security risk).The province is also temporarily halting any rent hikes as of April 1.

While Pallister called his support plan for tenants and landlords a “balanced solution”, the power dynamic  between landlords and tenants is far from balanced.

Tenants who have experienced a loss of income due to COVID-19 have to consider that money gone, while landlords still expect their revenue to remain constant (regardless of the employment status of their tenants). Even if rent payments are delayed, they are expected to be paid – with arrears.

The promised four CERB payments of $2,000/month will certainly help Canadians who have been laid off, but due to the sheer volume of applications and the 10-day waiting period, most laid-off workers will have forgone income for about a month in the interim. 

This is a serious problem for tenants. According to a recent report by the Canadian Centre for Policy Alternative (CCPA) entitled “The Rent Is Due Soon”, 3.4 million Canadian households that rely on wages or self-employment income are tenants. Nearly half (46%) of those 3.4 million households have less than one month of employment income in savings (according to 2016 data).

As such, many Canadian tenants will find themselves behind on their rent payments this month while waiting for the government aid to kick in. Additionally, they will have to pay arrears on these late payments, becoming further indebted. Utility bills, which are often not included in rent payments to landlords, will also need to be paid.

Even when the CERB payments kick in, $2,000/month may not be enough for single-parent households – even those living in one-bedroom apartments. 

The recommended percentage of your monthly household income dedicated to rent or mortgage payments should not exceed 30%. According to the CMHC, the average rent in Winnipeg at the end of 2019 was $957 for a one-bedroom apartment, $1,223 for a two-bedroom apartment and $1,543 for an apartment with three or more bedrooms. Assuming that one person receives $2,000 monthly, rent would exceed 30% in any of these cases.

At his press conference last Tuesday Pallister emphasized that the COVID-19 pandemic state of emergency “isn’t a rent holiday.”

Rather than exhibit sympathy for tenants who may go into debt as a result of their job loss, Pallister wanted us to all remember the many “mom and pop” landlords who “need” the income to stay afloat, without mentioning the many wealthy landlords or large rental companies in the city.

According to Pallister, unemployed Manitoban tenants have to dip into their savings or, if they have not saved up, become indebted to their landlords. 

This isn’t to say that sympathetic landlords do not exist in this crisis – many rental companies and private landlords are working with their tenants to come to private arrangements. The problem is that there are no government-mandated concessions that landlords must make – tenants are subject to the degree of compassion their landlords are willing to concede to them. 

No matter how understanding or agreeable a landlord is, they have a disproportionate amount of power over their tenants who are struggling to get by in turbulent, uncertain times, and can rely on the government to ensure their stream of revenue remains uninterrupted, regardless of the debt people may incur as a result.

Tenants are expected to have savings when many are living paycheque to paycheque, small businesses are still expected to pay rent despite a slowdown or complete halt of revenue, but landlords, be they large rental companies or private “mom and pop” operations, are not expected to internalize any loss due to the COVID-19 pandemic. 

The CCPA is recommending the federal government implement rent subsidies and exempt unemployed low-income households from rent in government-owned and non-for-profit housing through transfers to municipal governments. The organization is also recommending that landlords should be treated as businesses, having access to aid packages rather than expecting regular rent payments, to contribute their share and absorb partial losses. Read the CCPA’s report here.

Make Poverty History Manitoba has also advocated for the provincial government to ensure that no tenant experiences utility disconnections at this time. 

All levels of government need to work together to create a logical support plan for tenants – one that is not “balanced”, but equitable. This crisis provides an apt opportunity for provincial and federal governments to re-examine the landlord-tenant relationship and the organization of housing in Canada. Adequate housing is a basic right and should be treated as such.