It’s not a great time to venture into a restaurant business.
At least that’s how Steven Kresena viewed things last week as he watched all restaurants and bars closed as ordered by Mayor Steve Adler of Austin, Texas. This is in an effort to prevent the spread of the COVID-19. Steven was supposed to open his restaurant, Ovenbird, this month in South Congress.
His girlfriend on the other hand, has been displaced from work at an expensive restaurant, Odd Duck. The couple do not know how long their $500 a week budget left from Steven’s unopened restaurant could last them.
“Financially, I’m freaking out,” Steven said. “Can we pay rent this month and if so, can we do it the month after that?”
To add to their already worrisome financial situation, the couple received a message from their apartment’s management saying:
“The coronavirus pandemic in no way changes your legal obligations to pay your rent,” says the message that was shared in a local radio station, KUT.
It was “heartless,” Steven said.
A spokesperson from Ely Properties said the letter was never intended to seem inconsiderate. They were unaware of the couple’s financial challenge and that they will be working “case-by-case basis” with the tenants.
Steven, who said he was diligently paying his rent, expected some empathy.
“It’s not like we’re looking to skate by here. But some kind of a payment plan or a deferral of some kind (would have been nice),” he said.
Renters struggle the hardest
More than 50% of residents in Austin are renting and tend to earn lower than homeowners. Most of them work in the service industry and low-wage, no-work-no-pay jobs. As establishments close for the meantime, their financial struggle is real.
To put it into perspective, renters are the ones to wrestle the hardest in the middle of this virus crisis.
Meanwhile, Travis County courts will postpone eviction hearings and on Thursday, City Councilors voted to hold up filings of evictions. This gives the tenants 60 days before a legal action for the unpaid rent fees can be taken against them.
As KUT has gathered, deferrals in rents and other payment agreements have already been offered by some rental companies.
Communicate properly with tenants
Austin Apartment Association’s executive vice president, Emily Blair said that landlords should talk to their tenants.
“Communicate expectations. (Make) sure that residents are in the know about what is happening on their property.”
The government ordered mortgage companies to be lenient with homeowners. But landlords most likely won’t benefit much as traditional borrowers would, hence it is harder for them to give leniency to their renters.
This is actually troublesome to small-time landlords with less potential profits.
Liza Wimberley and her sister have tenants renting in their three houses and a fourplex in Austin. Some of them must have lost incomes including that of a teacher and a fitness instructor, after schools and gyms have closed.
“We’re bracing ourselves for the emails to start: ‘We can’t make rent,’” Liza said.
Payment plans and agreements
While the Texas Apartment Association has suggested that landlords offer payment plans, they never actually gave an example of what it looks like or how it’s done.
One renter shared a copy of the payment plan with KUT: First, he has to apply for “all governmental benefits or subsidies.” Once approved, he can then pay only 30% of their rent for the month of April and the difference will be divided and added up to the rent for May and June.
Experts advise renters to make payment in full if they can and if they need to have a payment plan, it should be in writing.
BASTA (Building and Strengthening Tenant Action) project director, Shoshana Krieger, said: “We have heard from tenants a lot of rumors circulating that they don’t need to pay April rent, that there’s a moratorium on rents. That is not the case and that could put families at more risk if they are not paying their rent.”
A tenant named James Donnelly is receiving only less than half of his salary after they have cut working hours at Radio Coffee and Beer.
So he wrote to Roscoe Properties hoping to get a flexible payment agreement only to be reminded of the rent in due.
The reply said: “Rent is expected at this time to be paid as normal.”
Roscoe Properties, on Wednesday, told KUT, that they have already cascaded a new message to the tenants about payment plans for those who lost wages.
Still, James is unsure of the long-term impact of the current situation to him.
“Some of these places aren’t going to reopen up,” he said. “And it’s a hell of a time to try to find a job.”