Advice From a San Diego Property Manager on Being a Tenant During the Pandemic – Because He’s One too

Originally posted April 1, 2020

By Friend of the OB Rag

Hi there, I’m your property manager. You probably think of me as “the landlord,” and more likely in even more unflattering terms – in most real estate fields it seems 80% of us are typically conspiring to make the other 20% look bad. I’m sorry about that, really, but please try to understand there are a few of us out there who want to do right by you.

I’m also a tenant, as are a lot of us managers. Some of us work for discounted rent in an owner’s building, but I rent my condo from a different owner whose properties I don’t manage. Being able to see things from both sides of the spectrum, I’m hoping my insight will prove helpful to at least a few people.

What do I do?

Just about everything that an owner doesn’t. I clean up and remodel vacant units to get them ready to rent, show them to you, and write up your lease. I collect your payments, use that money to pay the owner’s bills, and send whatever’s left to them. If your sink leaks, your refrigerator breaks, or you’re mad at your neighbor, you call me to come fix it. The office phone rings through to my mobile when I’m not at work, so I take your calls after hours and on weekends, too.

How do I get paid?

I collect a small percentage of the rent you pay each month before I send my owner a check. If I don’t collect rent on a unit, I don’t get paid. That’s usually not a problem, at any given point in time maybe one or two of my units are vacant and a few more are late on rent. It becomes a huge problem, however, if everyone stops paying. And quite frankly, that’s a real possibility.

In this case, my income drops to zero. But it doesn’t mean I get to stop working – your toilets are still going to clog, your garbage disposals will still jam, maybe even more often than before because you’ll be home a lot more using them.

I won’t be home. As much as I might want to self-isolate with my family, I’ve got a duty to you to go visit your apartments and houses, go to home improvement stores for parts, and come back to do the work that keeps your house functional and safe.

Some of you are still calling me because you’ve broken your toilet paper holder and want it re-hung – please don’t do that, not only do I not want to expose myself to you but you really don’t want to expose yourself to me – if emergency room doctors don’t have access to PPE you can damn well bet that I don’t. I’ve been out in public a lot more than any of us should be the last few weeks, so unless you’ve got a serious issue please be understanding if I tell you it’ll have to wait for a while, it’s probably better for your health anyway.

Aside from me and my zero-pay hazard duty, I’d also like you to consider my owners for just a second. Before doing that, let’s think about how we generally conceptualize “the landlord.” You’re thinking of a wealthy land baron, or some faceless corporation or real estate investment trust, fueled by millions or billions of ill-gotten stock market imaginary dollars, right?

“Fuck that guy!” you’re thinking. And with good cause – lots of rental property in this country are owned by villains who fit exactly that description, many of them certifiable slumlords like the Kushner Companies.

These aren’t my people. I manage small buildings and single-family homes, often places older owners have moved away from to rent out in order to supplement their Social Security income. Yes, they make a profit from renting their buildings out, but they aren’t and never have been rich. Instead of investing their retirement savings in corporate stocks, they’ve invested in places for people to live.

It’s easy to make a broad statement like “If you don’t have at least a year’s worth of income in your savings account you have no business owning real estate.” I’ve heard that one bandied about with frequency of late. But let’s be honest – unless you’re middle-aged or older and lucky enough to have a retirement account (with steep early withdrawal penalties), how likely is it that you’ve got more than a month or two worth of cash on hand (again, if you’re lucky to have even that much)?

This crisis is going to affect all of us profoundly. Please remember that you’re not alone when it comes to being scared in the days and weeks to come, and whether you feel sympathy for fellow humans or righteous schadenfreude at the failing of others know that a lot of your landlords are feeling just as much pain and trepidation as you are.

So, what do we do about this? Unfortunately that answer isn’t so simple, despite the twitterati insisting “Cancel all rent indefinitely!” succinctly ends everyone’s problems.

Last month the City of San Diego, and then the entire state, declared a moratorium on evictions related to unpaid rent as relates to COVID-19 losses. That’s a start, but it doesn’t go nearly far enough. For the latest on what’s going on locally, the San Diego Housing Commission has a helpful primer: https://www.sdhc.org/evictionban/

First, and you need to understand this if you’re a tenant who’s about to skip a rent payment, your rent is still due! The eviction moratorium only means you can’t be evicted for not paying, it doesn’t mean you don’t have to pay eventually.

Information is still coming in piecemeal, but from my understanding at present under the San Diego ordinance (language still not finalized as of March 31), you’ll have six months after the state of emergency is lifted to make up all back rent.

How’s that work? Suppose your rent is $1500, and the emergency declaration lasts until August. You decide not to pay anything, meaning you skip rent in April, May, June, and July. You’re now $6000 in the hole, and you not only have to start paying rent again in August, you have to average an extra $1000 a month on top of your regular rent until next January to come current or you could still face eviction.

Oakland is the only city with clearer guidelines I’ve seen to date – they’re saying you can never be evicted for back rent during the emergency, but they’re not saying that landlords can’t eventually come after you for the balance due. And I’ll note that having managed property all across California, Alameda County is one of the most tenant-friendly municipalities that exists.

Another caveat that isn’t easily conveyed in news snippets is that you’ve got to prove that COVID-19 is somehow responsible for your inability to pay.

I’ll take a note from your employer saying your hours have been reduced or that you’ve been laid off when you come to me asking for break on rent, but you might have to meet a more stringent documentation requirement if your landlord isn’t me and you don’t want to pay. Be ready for that.

Also, if you’re still getting your full pay to work from home, remember a global pandemic isn’t an excuse to cash in at the expense of people who are really suffering, and the courts probably won’t be on your side when push comes to shove. But if you’re the type of person who just hates going to the office and still does your job, you may be able to make a strong case that you never needed to be there in the first place; unfortunately that’s not a part of this argument.

Now, let’s suppose that your owner gets a forbearance on their mortgage. What’s that mean? Basically, whatever they owe gets tacked onto the end of their loan – so if they get to skip four payments, they might end up making up an extra six at the end of the loan to cover the interest that keeps running. Not a big deal, because they’ll ostensibly still have tenants paying rent to cover the mortgage even then. But it’s not like they’re getting a free pass, they’re just getting more time to pay while their lender gets to collect extra interest in the long run.

Meanwhile, their bills don’t stop coming. Most owners pay their tenants’ water bills, and outside the city (or in buildings with more than four units) they pay the trash bills too. There’s also property tax, which may be delayed but not canceled. And if you’ve got any common areas like a courtyard or pool, they still have to pay maintenance people to take care of that (even if the pool is closed for the time being). There are also electricity bills for common areas or, in some cases, those may even cover your apartment – your owner might get an extension on paying them, but they’re still going to have to cough up money someday.

With all of this, we’ve forgotten that small owners, the kind I work for, don’t have a huge cash reserve. They’re relying on rent to cover their own bills. That $1200/person one-time check the government is promising might help them float through one more month, but in the long run it’s not going to do them any more good than it does you, and I’m sure knowing you’ll get one payment, one time only, isn’t making you feel super secure right about now.

If we’re going to expect an extended hiatus from rent, not only do we need an ongoing source of income for tenants, we need an ongoing source of income for everyone (means test this if you must, but I’d prefer any such testing be retroactive in the form of a tax penalty for the truly rich on next year’s return).

Ack, what a mess. What to do? Everyone is going to come down on this differently, but here’s my take.

For now, I can afford to pay my rent, so I’m going to pay it. If the worst case scenario comes true and income from my job falls to zero, I’m going to pay what I can. My own landlord still has to pay HOA dues on my condo, plus insurance and property taxes. I hope what I’ll be able to pay will cover that, that he’ll get forbearance from his lender to skip a mortgage payment, and that government stimulus will make up for most of the money he’s losing from me not being able to pay what I owe.

If the current trends hold, I’m still going to owe whatever I don’t pay, if not now then eventually. By paying a little bit now, it reduces the amount I’m on the hook for later. If the rules change (and they’re changing every few days at this point), I’ll look for more relief in the future and trust that my landlord, because I’m keeping a line of communication wide open with him, will likewise share whatever relief he’s receiving.

Final note: I’m conditioning all of this on your property owner being a living, breathing human who relies on you as much as you do on them. I’m asking, as a human, that you have sympathy for other humans, and to realize that just because someone may have inherited property, or spent their life working to acquire it, they’re not necessarily evil. If you’ve got a “burn it to the fucking ground” mentality about our current state of affairs, please make sure you live in some mega-complex or your property is part of some massive portfolio of assets held solely for greed. If that’s the case and you’re willing to stake your financial future on sticking it to your owner, more power to you.

To get through this, we need a lot more than a freeze on rents and mortgages – we need a true social safety net that’s going to prop up every living and breathing person. We need a health care system that provides equal access to all of us, rather than one that’s means-tested and denies life to those of us who don’t have the means to buy it. We need comprehensive, systematic reform, not the status quo or a slight tweak that marginally improves a few lives but leaves most of us out in the cold. For all of these things I’m hopeful, but not optimistic. And please, if you’re my tenant and paying rent is a problem, call me – I promise we’ll work it out. If it’s not, please don’t take food out of my kid’s mouth for the sole purpose of smug self satisfaction.