Landlords have had a tough time since the emergence of COVID-19 in the United States in early 2020. Thanks to never-ending eviction moratoriums, poorly executed tenant- and landlord-assistance programs, and a vast array of intrusive politicians, public-health officials, and other organizations into the “housing advocacy” space, many landlords are finding it increasingly difficult to figure out just what 2021 and, farther out, 2022 will look like. One thing we know: Rents are rising. What we do not know, however, is whether we will be able to collect them.
The most successful landlords and tenants have navigated the pandemic successfully by staying in constant communication and behaving responsibly and reliably when it comes to staying informed and following through on commitments. For example, plenty of our clients were able to continue operations at far better performance levels than the national averages because they worked with tenants to access assistance when it was available and figure out viable options when it was not. Of course, this meant that landlords and tenants were willing to put in the work to communicate clearly and constantly on an ongoing basis, which also improved the overall relationship.
Whether you have a good relationship with your current tenants or not, the fact remains that as 2021 progresses, rental rates around the country are rising. You will have to make decisions about whether to raise rates on existing tenants and new ones in the new year, and a number of tenants, themselves, report that they are preparing to fight this trend. For example, most cities have a benchmark amount that they permit rents to rise without notice – it may be 5 percent or less in most areas. Given that some markets (like New York City) have seen rents double as residents return after the pandemic exodus, landlords hoping to raise rents substantially may need to provide 30, 60, or 90 days’ notice. Failure to do so could prolong the period during which tenants continue to pay the lower rental rates.
Housing advocacy groups are also advising tenants to combat rising rents by demanding additional services or amenities in exchange for the higher rates. This is a strategy that could prove useful to landlords since it does not involve direct refusal to pay higher rates. If you are considering raising rents substantially on existing tenants, including some sort of additional security (video doorbells, for example), new appliances, or some sort of health-related service could be a way to help your tenants come to terms with the increase.