Recently unemployed due to business shut-downs in response to the COVID-19 pandemic, a Manhattan man as well as a local renters’ advocacy group are calling for a statewide rent and mortgage holiday.
Area property managers, though, say such a large loss of revenue would have financial consequences that would not just harm their businesses, but their tenants as well.
Christopher Howard, who often goes by Howey, was the manager at the Radina’s Coffeehouse and Roastery in the College of Business building at Kansas State University before being furloughed after students were advised not to return following spring break and the university shifted to remote instruction.
“We went on spring break and I never came back,” Howard says.
The Navy veteran says he and his wife, now both on unemployment, have seen a drastic drop in their income and expect to take home between $1,200 and $1,400 per month. As a result, he says they’ll pay more than 50 percent and potentially as high as two thirds of their take-home pay on rent alone.
“We’d just got our tax returns, without having a little cushion there and without having some friends and family — my parents, friends of ours that are in Kansas City [and]places like that helping us out — we would be in a horrible spot,” says Howard.
Compounding that is the fact he and his family’s lease expires at the end of April and Rental Management Solutions (RMS), the property management company in charge of the Howards’ Heritage Ridge unit, opted not to renew their lease for the upcoming year — leaving Howard with 39 days to secure new housing. He says they moved quickly and found a new place at The Links, though at a higher cost per month, and that they had to front around $1,450 to get their foot in the door while still providing for their one-year-old.
Gov. Laura Kelly on March 17 signed issued an executive order halting evictions and mortgage foreclosures, but Kansas does not require landlords to permit tenants to remain in their units after a lease has expired.
Howard says he was not given a reason for his lease not being renewed. He acknowledges that’s well within the rights of RMS to do so, but says getting an explanation for the decision and better timing would have made the situation easier to handle.
“I’ve got to get people to help me move, finances just with being unemployed — there’s so many extra stressors because of this that I feel like there could have been another way to go about it,” he says. “In doing what they’ve done, it does seem a little bit like [they thought]hey, these people are asking maybe pertinent questions but very frequently and we just don’t want to deal with that anymore.”
Howard says he’s been adamant about calling for maintenance and requesting information about the chemicals used to spray for bugs in his unit out of concerns for his child’s safety, but doesn’t think he ever went too far. He does note that the police were once called to his unit after an “overly disgruntled individual” left a message with the property manager following an online post by Renters Together MHK about the family, but Howard says he never learned who made the call.
KMAN spoke with RMS Owner Travis Maurath who says it wouldn’t serve anyone any good to discuss Howard’s situation publicly.
“The management at [Heritage Ridge] makes decisions year-round about the stability of our residents and we made the decision months ago that we needed to make a change here,” Maurath says. “Sometimes there’s things that happen — and I’m not going to air anybody’s dirty laundry — that just make it to where it makes better sense for all parties to make a change.”
“We’re fulfilling our obligation, we assume they’re going to fulfill their obligation — we knew that unit was coming open, so it was put back in our future rental pool and it was re-rented. We’ve already got a new household that is intending on moving in there.”
Howard’s situation is not entirely unique, says Renters Together Organizer Brandon Irwin. Irwin says they’re getting an influx of calls from rental tenants concerned about how they’ll afford rent without their usual income, some of whom are being charged late fees despite their situation. He says what is expected of tenants in these circumstances is “cruel.”
“What we’re seeing is really just a magnification of all of the problems that existed before COVID-19 with our housing system,” Irwin says. “Half of the people in Manhattan couldn’t afford rent to begin with, we did have 450 homeless kids in our school system, we did have the highest rate of food insecurity before COVID-19 and now all of that is just being magnified and what’s the solution?”
Irwin, Howard and Renters Together are advocating for a rent and mortgage holiday as that solution. The item would need to be implemented at the state level, which Irwin says would pause rents and mortgages for tenants and property owners alike. He thinks the proposal, coupled with tax relief and other assistance programs for landlords, could be a win-win for both parties.
“Landlords are still demanding rent, banks are still demanding mortgage payments and it’s not hard to imagine what might happen and what is probably going to happen after that moratorium is lifted and all these people haven’t been able to pay rent,” Irwin says. “There’s going to be a tidal wave of eviction filings — and there is something we can do about that and that’s the rent and mortgage holiday and that’s probably going to be an executive order through the governor.”
Irwin and Renters Together have been calling on local landlords and elected officials to get behind the idea, but property managers say there’s more to the equation.
Brice Ebert, head of the Manhattan Landlord Association and Alliance Property Management vice president, says the situation involves a lot of intertwining factors. He raises concerns about how smaller banks and credit unions would handle such a loss of revenue, how property owners who rely on rent income to survive would cover living expenses as well as the time it would take for financial assistance to make it to those in need.
“It may take care of it or give a little breathing room in the short-term, but they’re just not going not let you pay taxes because we want to have police department, fire department, roads, all the schools, everything that goes where those tax dollars go,” says Ebert. “I think it has to take a real hard look at that, and to me at the end of the day, we as society have to be solution seekers and look at how do we work through this collectively together.”
Maurath echoed similar sentiments, saying the financial implications could trickle back to tenants if they couldn’t afford to keep the water on without their usual rent income. He says those calling for rent freezes lack knowledge about what goes on behind the scenes in the property management business, saying their expenses are not limited to mortgages.
“The mortgage is a small portion, in some cases, […] of the overall expense picture of the property,” Maurath says. “If a hundred percent of the rent doesn’t come in and we decide that that’s okay because the landlord doesn’t have to pay their mortgage either so it’s a wash, […] and we only use 30 percent of that rent to pay mortgages, we have other expenses.”
“Riley County and others are not saying never mind your real estate taxes, we accrue those every day of the year; we still have to provide insurance for the property, we still have to mow the yard and pay for the water,” he says. “My maintenance staff still has to get paid to fix broken framing and whatnot and they’re not going to work for free.”
Ebert says the proposal needs more exploration as it leaves open the potential for unintended consequences, noting that property management companies’ fees are also derived from the rents collected.
“I think there needs to be some, you know, back to getting the key players around the table to have a conversation,” he says. “Because everyone would bring a different — they’re looking at it through a different lens.”
In the meantime, both Ebert and Maurath say they’re trying to work with those in financial difficulty as best they can on a case-by-case basis and Ebert encourages all his colleagues to find amicable solutions with their tenants. Both RMS and Alliance have had few tenants unable to pay rent, are in good financial situations for the time being, and the two say if those in need communicate with their managers they’ll come together and create a plan without necessarily charging late fees while balancing tenant and property owners’ needs. That may include payment plans, working with students who have left town to end their leases early, or, as Ebert said, allowing tenants to stay on month-to-month depending on a unit’s demand.
“We want to be accommodating because none of this is done intentionally to any of us. That’s kind of the golden rule, you still got to be firm and fair,” Ebert says. “And just really that open communication is key.”
“If we know what’s going on, it’s a lot easier to navigate through it and then trying to [when]there’s no communication – it makes it difficult.”
Irwin, though, says not all landlords and property managers in Manhattan are making such accommodations. He, Howard and Renters Together continue to push for support for a rent and mortgage holiday.
“We’re trying to think about the solution in terms of business as usual and it’s not,” says Irwin. “We need to be doing something different.”