#CoronaFuture: Rent Strikes

Rent strikes are next. I am surprised I haven’t heard much about them yet. Millions are being let go, fired or furloughed, formally or informally, and they can’t or won’t be able to pay rent. A few months ago, 40% of Americans said if they had an unanticipated $500 expense, they would not know how they could pay it. And now, as things slow down, people don’t spend, people don’t earn, people will stop paying rent. They will want to do it together in groups. Tenant’s rights groups and other organizers will set up those groups.

Municipalities will pass laws to prevent evictions but will landlords keep tallying retail retail rent and then when the coast is clear present bills to tenants totaling trillions? Might be tough to enforce. And if people stop or pause rent payments, why not stop or pause mortgages? What will that do to the balance sheets of banks? In some ways it is easier to say what can and can not happen while under the current crisis.

But at some point this crisis will subside or may actually, if we are lucky, be “over” in one form or another. That will be an extremely complex reckoning and reorganization with winners and losers. And the incentives are complex because it is not clear when the reckoning will come and if at that time it will have been smart to stop paying rent right now, or to hold on as long as possible; to keep it informal or to get it notarized.

Some will want to use this reckoning to favor the rich, some will want to use it to favor those who have little but debts, and the second group will be a much more numerous group. #RentStrike #CoronaFuture