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Community Members Rally for Rent Fairness Amid 'Complex' Situation

by on May 01, 2020 9:55 PM

It's the first of the month, and for about 48 million Americans, that means rent is due.

But amid a record surge in unemployment resulting from the COVID-19 crisis across Pennsylvania and around the country, many won't be able to pay. Centre County has had more than 3,400 initial unemployment claims in the past four weeks.

That's why about two dozen vehicles lined up Friday night in a parking lot on Beaver Avenue with signs calling for "rent fairness" before  processing in a short loop around downtown State College. Organizers also put together sanitized care packages for unsheltered residents, including tents, sleeping bags, blankets, tarps, socks, hats, backpacks, sunscreen, hand sanitizer and masks. Tents were also placed atop cars and on sidewalks as a symbols for the cause.  

The car rally was organized by Centre County COVID-19 Community Response (4CR), a coalition formed to provide aid and support to local community members impacted by the crisis. They are asking local property owners and managers to promise not to evict tenants or charge late fees, grant payment extensions upon request and to negotiate in good faith with tenants who request discounts or rent suspension until the pandemic has ended.

“One of the largest needs we've encountered through our efforts is the need for housing security,” 4CR member Bailey Campbell said. “Many are unemployed or unable to pay bills and this includes rent. We are asking local landlords to put people's minds at ease by publicly agreeing to our Fair Rent Pledge.”

About one-third of all renters in the U.S. could not afford to pay in April, according to the National Multifamily Housing Council.

Centre County COVID-19 Community Response organized a car rally for rent relief on May 1, 2020 in downtown State College. Photo by Ben Jones | StateCollege.com

It's a complicated situation, and one with no immediate solution. Millions of renters nationwide will be unable to pay again this month. Property owners have mortgages, taxes, utilities and other operating expenses that still need to be paid. While some federally-backed mortgages are eligible for deferrals and renters in government-supported housing have been extended some protections from evictions, there has been no broad relief for either renters or mortgage holders.

4CR has recognized that predicament as well, previously calling on local governments to urge state and federal representatives to enact a moratorium on mortgage, rent and utility payments. Centre County's municipalities have no authority to mandate eviction moratoriums or rent freezes, but State College Borough Council did pass a resolution on April 20 urging a statewide moratorium on evictions through at least May 31.

"It’s complex and we’re all in it together," Borough Councilman Evan Myers told StateCollege.com last month, adding that he recognizes the challenges facing both renters and owners. "We’re human beings and we need to be humane. Therefore that’s the starting point we all should come from, that we need to work together; we need to reach accommodations with each other. We need to be humane about it. The world has changed. We have to change as well. If we don’t, the fabric of society will rip apart."

As it stands the state Supreme Court's moratorium on evictions expires on May 11. Pennsylvania Attorney General Josh Shapiro and the Pennsylvania Apartment Association have called on landlords to suspend evictions until July 15.

The issue of rent relief has been a source of friction between some tenants and landlords since the time business and school closures began in March.

A group of Penn State students and parents petitioned property managers to offer some form of rent relief, citing multiple concerns. One is that students who pay their own rent with a limited income would face hardship as they lost part-time jobs. Some had parents who lost jobs. And then there were students who abided by the university's request not to return to State College after spring break and believe they deserve some manner of relief on their rent payments, even though property managers say the apartments are open to use.

"Everyday I hear the same story from different people. People are scared. A month ago this was unthinkable. Yet here we are," said parent Robyn Kusner, one of the organizers of the petition. "We have stated from the start that we understand we are in legally binding leases.  And we aren’t looking to take income away from landlords who depend on rents for their families. But I’ve said this before, there is an expectation that the landlords have no interruption to their income stream when the rest of us are and that’s ludicrous."

Kusner said the ultimate goal is "a negotiation that provides relief to every renter in a real way."

Parent Sharon Mayer said she would continue to meet rent obligations and that she would first like to see relief for people who have lost their jobs. But she believes property owners and managers need to work with all tenants.

"We’re not looking screw these people or get out of what we signed on for, but in the pandemic people have lost their jobs," she said. "People are sick. We were directed to leave and we did what we were asked.... Rent forgiveness would be great, but is that going to happen? No. We are looking for some kind of relief, whether it’s discount, deferment. If they could take something off the rent."

Mayer has two children who are student renters, one in a property managed by Associated Realty and another in an apartment owned and managed by Herlocher Properties. She lauded Sharon Herlocher for personally reaching out to all tenants to find out what kind of situations they are facing.

Herlocher told StateCollege.com last month that she wanted to find out who was experiencing financial hardship and work out temporary deferrals where possible. But she said there are bills that must be paid and noted there was no substantial provision for mortgage holders in the federal coronavirus relief bills.

"I wanted to talk to everybody to find out where there was true need. We're lucky we can do that," Herlocher said. "I'm most worried about tenants that don't have a parent to call. We all want to help those in dire need. Everybody wants to come out of this on the other end. We want tenants to come out OK and owners to not lose their buildings."

The State College area is home to numerous property management companies and exponentially more property owners, all of whom face different circumstances. Some have offered relief in a variety of ways.

Some property managers suspended late fees. Barry Myers, the former AccuWeather CEO who owns several dozen rental units in State College and Bellefonte, reduced all of his tenants' rent by 10 percent starting in April and continuing throughout the crisis. His brother, AccuWeather founder and chairman Joel Myers, separately owns the Westside Village Apartments and offered his tenants forgiveness of the final month of rent in July or a discount if they paid the remaining months.

"I can't speak for anyone else. It's tough on everyone. There are still mortgages to pay and maintenance and all the other expenses," Joel Myers said. "But it is a hardship on students and we are trying to do something for them."

(Borough councilman Evan Myers is the brother of Joel and Barry Myers but is not involved in either of their real estate ventures.)

On the commercial front, the Friedman family's State College Downtown Properties did not charge locally-owned business tenants rent for the month of April.

Property management companies, meanwhile, are tasked as go-betweens when tenants seek rent accommodations.

Associated Realty Property Management has been frequently mentioned by the Penn State renters group. The company, however, does not own the units it manages and works with more than 300 different owners.

"Every request is forwarded to the owners," ARPM President Mark Bigatel told StateCollege.com in April. "Every one has a different financial situation. We understand that. Some are able to do something. Some have a first and second mortgage… and they can’t. We relay every request to the owner and try to get a timely response."

For many of the owners ARPM works with, the units they own are investments for the future that they are still paying for now.

"A lot of our owners are 'ma-and-pa' owners that have one or two units that will eventually help with their retirement when their mortgage is up. Most of them have mortgages," Bigatel said. "Even the large single owners that have many units, many of them have these large mortgages to provide these new buildings."

But despite the perception that property owners aren't willing to help, Bigatel said, many have have offered different kinds of relief.

"Some owners have asked if it’s a verifiable hardship... If it is a verifiable hardship, like someone lost their job or their time’s cut — and we’ve had several requests like that — these owners are bending over backwards to do whatever they can do," Bigatel said. "Everyone we’ve talked to has tried to be as helpful as they can be."

Some larger buildings will offer "a small rebate" to tenants because of a reduction in utility costs. One owner of an apartment building, which Bigatel described as "a new property with a huge mortgage," had to close its gym and study lounge, so reduced rent by 10 percent.

A tenant of one non-student property lost her job and the owner reduced rent by 50 percent until she finds a new one, Bigatel said. In a similar situation, another property owner reduced a tenant's rent by 50 percent for April and if the tenant's circumstances remained the same, the owner planned to defer 50 percent a month.

"That’s what he could do with his mortgage and he took it down to where he was breaking even," Bigatel said. "Most of the people who own these places don’t make a lot of money. I think there’s a perception out there that these owners make a lot of money. I think a lot of them are trying to break even on their mortgage, taxes and insurance."

Kusner said that while petitioners don't want to see family owners hurt by offering rent relief they can't afford, she has discovered through property record searches a number of units owned by individuals and corporations who are likely in a position to offer help. 

Local property managers and owners, meanwhile, have held conference calls to discuss challenges and different ways of providing relief.

"We’re trying to figure out what other people have done and has worked for them that can help tenants while still staying afloat," Bigatel said.

Bigatel and Herlcoher said landlords have referred student renters facing difficulties to the Penn State Student Care & Advocacy Emergency Fund, which also helps to verify hardships.

The fund has recently been bolstered by a $100,000 gift from Helen and Edward Hintz, a $50,000 gift from Sue Paterno and, this week, a $50,000 gift from a group of local property owners and managers that includes ARPM and Herlocher, among others.

Penn State also received $55 million from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, half of which is earmarked for emergency grants to students to pay for expenses incurred related to COVID-19 disruptions, including course materials, technology, food, housing, health care and childcare. 

Penn State spokesman Wyatt DuBois also said the university has advocated for reasonable accommodations for students and families with hardships.

"We understand how difficult this issue is for our students and their families," he said. "The university has worked with local authorities, landlords, and student leaders, where it can, and will continue to do so, to encourage strategies to minimize the impact on students. We have requested that landlords be reasonably flexible, especially with extraordinary experiences and extraordinary needs in this unprecedented time.

"Ultimately, these leases are separate contracts and leases between landlords and tenants that the university cannot control. If needed, students can reach out to Student Legal Services for advice."

Bigatel, whose company also has raised thousands of dollars for the State College Food Bank, said he understands it's a situation that affects many people — from the renters and owners, to the municipalities and school districts that rely on property taxes, to the employees of banks and utility companies.

"It affects the whole community," he said. "We’re all working together on this. It’s an unprecedented time and I wish there was a definitive answer."

No definitive answer and no uniform relief has led to mounting worries for renters who have lost their jobs. In March, State College resident Jeremy Swarm lost his job at a downtown hotel where he has worked for the past five years. His wife has had her income reduced as her freelance work dried up. He said he applied for three or four jobs a day every day for weeks but never got a call back, and his first unemployment check was for $300. Now he's worried about how he'll pay rent.

Swarm said in a statement provided by 4CR that renters and landlords need help.

"The landlord told us there wouldn't be any late fees, which helps, but he didn't offer any other concessions like waived or reduced rent," Swarm said. "If there is not some kind of widespread relief for renters and landlords, I'm afraid my landlord will soon be asking me to pay my rent in full, including back rent.

"What I wish that policymakers would understand is that housing is not a luxury, it’s not optional. We don’t have a vacation home in the Hamptons, we rent a 500-square-foot apartment in State College. That’s all we got, and we’re trying not to lose it." 



Geoff Rushton is managing editor for StateCollege.com. Contact him at [email protected] or find him on Twitter at @geoffrushton.
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