Leaked Zoom meeting reveals landlords concerned over staff 'decimation' and optics of 'stepping' on tenants | News | Chicago Reader

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Leaked Zoom meeting reveals landlords concerned over staff 'decimation' and optics of 'stepping' on tenants

As tenant calls for rent freezes grow louder amid the pandemic, Chicago landlords contemplate their options.

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Among the thousands, perhaps millions, of Zoom video-chat meetings that transpired across the locked-down country on March 26, one was convened for Chicago landlords. Some 150 participants tuned in throughout the session, including corporate property managers, mom-and-pop operators, and even former 49th Ward alderman Joe Moore. Two local groups representing landlords, the South Side Community Investors Association and the Neighborhood Building Owners Alliance, called the meeting for south-side landlords in particular to discuss the impact of the novel coronavirus pandemic. In a recording of the meeting obtained by the Reader, investors, property managers, and representatives from groups such as the Chicago Association of Realtors, Community Investment Corporation, and Chicagoland Apartment Association shared their concerns and strategies to deal with rent losses.

"I would not prepare for this to be over in a week or two," said Eiran Feldman of InSite Realty, a multifamily landlord with properties mostly in South Shore who moderated the meeting over the video-chat service. "Management companies and property owners are on the front line of what's going on and we're an essential service. So I think it's very critical to educate ourselves on what are the dos and don'ts and make sure to keep our staff safe and also our families."

Feldman also highlighted the potential effect of the virus on building management workers. "We want to make sure our staff doesn't get wiped out," he said. "You see how sometimes this virus hits in clusters and if it hits one person in your staff and you're not protected it could hit the rest of your staff and then you're talking about decimation of your business. We all know that good help is hard to find, so all of a sudden you lose a couple of people on your staff—it could really put you back in a very critical time."

Another landlord on the call, Sandeep Sood of Nautilus Property Management, said he'd instituted safety protocols for workers at his buildings. "We scaled back nonemergency work orders. Instead we're working on maintenance and health and safety repairs," he said. "I split up my staff so people aren't working together as much. I prohibited group lunches which they typically like to do." Sood added that it's been impossible to stock up on masks, gloves, and surface cleaners.

The landlords also discussed how to communicate with tenants in an empathetic manner, even as they faced potential rent losses. "Now it's even more critical to make sure the tenants don't feel that you're just stepping on them," Feldman said. "I can tell you we're doing wellness calls and just going around and calling a batch of tenants every day to make sure everybody's OK."

He encouraged the others to do the same, as well as consider suggestions published by landlording influencer Brandon Turner at biggerpockets.com. Turner's five-point plan advises landlords to have a plan, empathize with tenants, explain that rent is still due, inform them about their options (such as filing unemployment claims or paying with a credit card), and if all else fails to institute an "emergency rent deferral program," allowing tenants to pay whatever they can and agreeing to repay the rest in installments over several months. Turner cautioned, however, that tenants shouldn't be told about the program as an option before the landlord is totally sure that they can't come up with full rent.

As the first of the month approached, and more than 130,000 Illinoisans filed unemployment claims, tenants across Chicago began to receive notices from landlords and property management companies that seemed to be following Turner's suggestions. Some reminded tenants that their rents make buildings habitable: "Our building [sic] must continue to be fully functional and provide essential services for the residents. This requires a dependable stream of rent," wrote Cagan Management in an e-mail to tenants.

Others, like TLC Management Company, reminded tenants that property management workers' livelihoods depend on these rents: "The people at your community are dedicated to serving you and your building," the company wrote in an e-mail to tenants. "Any delay or non-paying of your rent will cause great hardship to them, which we all do not want."

"It is tempting, in moments of panic, to adopt a 'get mine' first strategy, and let others fend for themselves," wrote Mac Properties in an e-mail as its tenants in Hyde Park reportedly contemplated a rent strike. "We have developed a procedure for residents unable to pay rent due to extreme situations such as job loss or business closure to contact us. We will work with each resident individually, according to personal circumstance."

Some landlords offered suggestions for tenants for finding needed funds. "Please look into unemployment or parents or relatives to help make ends meet," A. Saccone & Sons wrote to tenants in an e-mail. "We ask that you all explore all options available such as unemployment insurance, the hopefully-to-come federal payments as well as alternative employment in 'Essential Business and Operation'. Some major companies have put out calls for employees. Amazon and Walmart are two examples," Evanston-based Newgard Partners wrote in a letter to tenants.

The $2 trillion stimulus package passed by the federal government last week includes aid targeting property owners, such as interest-free mortgage payment forbearance (which won't hurt borrowers' credit histories) and foreclosure moratoriums. There are eviction protections for tenants, too, but all of these measures apply only to properties financed by federally backed loans or to federally subsidized housing. Direct cash assistance from the government could still take weeks to arrive. Though no eviction court proceedings or enforcement will occur in Cook County through at least May 18, landlords can still file eviction cases. Even if cases are ultimately dismissed, these filings can hurt tenants' future ability to rent and show up on their credit histories. For many renters, however, these risks seem minor compared to homelessness.

Last week, signs calling on tenants not to pay their rent appeared on deserted streets and on social media. "Tenants keep your rent, Landlords keep your distance," some declared, depicting a person with a face mask inscribed with the words "Rent Strike." Online tool kits began to circulate to help people organize tenant councils in their buildings and formally request reductions or suspensions of rent charges. A virtual town hall convened by the Autonomous Tenants Union drew more than 6,000 views and four hours of testimonials from renters who've lost income due to government-mandated isolation.

The years-long campaign to lift the statewide ban on rent control has attracted renewed attention, too. More than 16,000 people have signed a petition demanding the city enact a rent freeze and activists have called on Governor J.B. Pritzker to use his executive authority to repeal the 1997 Rent Control Preemption Act, reminding him that he voiced support for lifting this ban while campaigning in 2018.

"There's currently in state law a moratorium on rent control so that's not something that under an executive order I can overturn," Pritzker said in his daily press conference on Tuesday. Lifting the ban would still require legislative action in both houses of the Illinois General Assembly, which is currently not in session. The governor did remind landlords that they could expect lawsuits for trying to evict health-care workers at this time. During her press conference on Wednesday, Chicago Mayor Lori Lightfoot asked landlords to show "grace" and forgive April rents "if at all possible."

The tone of landlords' messages, as well as the assumption that tenants can easily get other jobs or have relatives whom they can ask for help, has riled up many renters around the city.

"A lot of landlords are e-mailing us the same things," said Kal Jazeera, a comedian and teaching artist who recently lost all the freelance gigs they rely on for income and is co-organizing a rent strike in Edgewater with filmmaker Jordan Rome, who's now unemployed after being laid off from an Old Town restaurant. "Our landlords are acting like this is easy money, but I've been on unemployment before and it took like three weeks just for my application to be processed, let alone for me to get a check." Jazeera added that currently the state is so overwhelmed with claims that the Illinois Department of Employment Security's website keeps crashing and it's nearly impossible to get through to the agency on the phone. Landlords' expectations are "pretty unrealistic," they said. "Like someone who's clearly never had to apply for government assistance."

Rome said she's unable to pay rent for April and is willing to risk an eviction filing on her record because she has no other choice. "At this point I don't have time to worry about that," she said. "Despite any federal relief that may be coming or that the city is providing, it's still not sustainable. People's studio or one-bedroom is $800–$900, plus any bills, any food, all those expenses are going to put people in a really tough position."

Jazeera lives in a four-flat and has a landlord whose identity they didn't want to disclose. After organizing with their neighbors (some of whom have also lost their income) they sent a letter to their landlord "to say, here's our situation: we ask that you waive April 1 rent, freeze all late fees, pledge not to file any evictions, and a guaranteed option to renew our lease." The last demand was made to protect tenants from having to move during the pandemic, they explained.

The landlord's response "was not good," Jazeera said. "He went for the divide-and-conquer approach: everyone's situation is different, everyone talk to me individually, but rent is still due." Jazeera said the neighbors intend to continue negotiating with the landlord as a group.

There have been reports of smaller landlords offering rent breaks to their tenants and it's not clear how many rent strikes are being attempted around Chicago. It will take a few days before court records about new eviction filings become available. Some of the landlords in the March 26 Zoom meeting were already anticipating organizing efforts like Rome and Jazeera's.

"The advocates that are more on the fringe of the usual rent control discussions that we monitor on a daily basis as part of our SHAPE Illinois campaign are calling for rent strikes," Tom Benedetto, a lobbyist for the Chicagoland Apartment Association, said during the meeting. Though he dismissed the potential popularity of this idea he advised the group to "be on the lookout for that kind of messaging and send me an e-mail if you're hearing anything from your tenants in particular about those rent strikes or rent abatements."

As the meeting concluded, Kris Anderson of the Chicago Association of Realtors reminded the landlords that optics are more important than ever at this time. "We're concerned about calls for rent strikes and rent abatement," he said. "Depending on one or two bad apples or a Block Club article about one guy that's hardhanded with his tenants, this might get traction. There's discussions at the city level about things such as tenant protections and that includes giving people more than their standard 30 days to move out and maybe extending that to 60 or 90 days. That would include things like relocation fees. None of this is in writing, none of this is codified, none of this is introduced as of today, but when you talk to your fellow landlords tell them: you do not want to be the poster child for this legislation moving forward. Show compassion in these circumstances."   v

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