COVID Left Landlords with More Money and Renters with Less

By PRCC Research, March 6, 2022

For the last two year, landlords consistently protested the eviction moratoriums that protected renters from displacement during the pandemic. Arguing that they would suffer financially if they couldn’t kick out tenants who stopped paying rent, landlords rallied against vital tenant protections across the country.

However, a recent study debunks the myth of the hard-hit pandemic-era landlord. The study authors demonstrate that landlords experienced initial financial losses in April and May of 2020 but, on the whole, landlords’ profit margins recovered quickly. In fact, the study indicates that landlords had 25-30% more cash on hand by June 2020 than they did in June 2019, before the pandemic.

This new analysis shows that landlords have been able to rake in profits by taking advantage of federal programs to defer mortgage payments and reducing maintenance on their rental properties. By June 2020, landlords had minimized their expenses by 25%, and rental payments had widely rebounded from the dip in the first months of the pandemic. Landlords lowered expenses while rental revenues continued to stream in, causing their profits to rise to new levels.

Vox reporter Jerusalem Demsas points out that while deferred maintenance and mortgage payments will have to be paid in the future, there are still billions of dollars in federal aid that landlords can apply for directly to cover back rent if their tenants qualify.

In Philly, where nearly half of residents are renters, over one third of landlords reduced maintenance during 2020, meaning that while renters overwhelmingly continued to pay their rent, the quality of their housing may have declined as landlords put off repairs. Landlords disproportionately put off maintenance in low-income neighborhoods and neighborhoods of color during the pandemic, increasing the likelihood that low-income renters and people of color experienced substandard housing and exacerbating existing housing injustices.

Simultaneously, rents have risen during the pandemic in Philadelphia, threatening the housing stability of Philly renters. Contrary to the narrative that landlords acutely suffered during the pandemic, evidence indicates that renters bore the real brunt of pandemic economic crises.

Apartment associations and lobbyist groups like HAPCO oppose rent control on the grounds that profit margins are already too thin for landlords, and to limit rent increases in any way would cause them to go out of business. Yet these numbers clearly show that even when landlords have an influx of cash, they will still increase rents on their tenants – on average 11% just in the last year, during a pandemic.

With affordable units in such short supply, renters have few options but to accept rent increases, becoming more and more rent burdened as these increases eat up more of their paychecks. We need rent control to address this power imbalance. Rent Control empowers tenants to reject unfair rent increases. It gives us more control over our housing and stabilizes families and entire communities. We need universal rent control in Philadelphia now!