We're almost a full year into the COVID-19 crisis and so many individuals and businesses are months behind in their rent due to the effects of the pandemic. In this episode, Tunua sits down with three experts to chat about the timely topic of cancelling the rent and what steps we can take to provide rent relief to those in need.
Joining LISC LA for this conversation are:
** This episode was originally recorded in December 2020 **
In this episode we explore:
About our panel:
Tom DeSimone, CEO and President of Genesis LA. Genesis LA’s mission is to deliver financial solutions that advance economic and social opportunities in underserved communities. As President and CEO, Tom brings years experience to funding and implementing capital resources for work on much needed local community development.
Director of Community Economic Development of the Little Tokyo Service Center, Tak Suzuki. Tak is a veteran at the The Little Tokyo Service Center having spent 20 years serving the Little Tokyo community. Through his work at the LTSC he helps provide social services and community development focused on improving the lives of local individuals and families.
Rudy Espinoza is the Executive Director of Inclusive Action for the City, a leader in local community development with extensive experience in the field. At Inclusive Action, he leads the organization as they work to bring people together to build strong, local economies that uplift low-income urban communities through advocacy and transformative economic development initiatives.
Tunua 00:14
Hello again and welcome to the latest episode of The Changemakers LA podcast presented by LISC Los Angeles. The Changemakers LA podcast is a tribute to the people and places that work to make LA neighborhoods good places to live, work, and play.
Tunua 00:30
I'm Tunua Thrash-Ntuk, the executive director of the Local Initiative Support Corporation here in Los Angeles. In today's episode, we're going to cover a timely topic around what's happening around the phrase cancel the rent, what do we need to be concerned about, worried about, prepared for when it comes to the potential evictions crisis that could be looming for folks who have lost employment and are struggling during this covid 19 crisis.
Tunua 00:58
I've got a few friends around the microphone today who are going to you know, sort of dig into this topic. I want to thank Tom de Simone, CEO and president of Genesis LA for being part of this conversation. Welcome, Tom.
Tunua 01:12
And I'd like to welcome Tak Suzuki of the Little Tokyo Service Center. He's the Director of Community and Economic Development.
Tunua 01:19
And finally, we also have Rudy Espinoza. Rudy's the executive director of Inclusive action for the city.
Tunua 01:26
Thank you all for being here and for being able to quickly dive into this topic of cancel the rent and eviction. So I know I was recently on a panel at USC, but we were looking at the looming eviction crisis. We've got housing, stability moratoriums that are expiring, that have been extended, but could be expiring as soon as early next year.
Tunua 01:51
We've got mounting rents that continues to plague many of our families who are unable to catch up and pay back and yet we are within a system that, you know, looks at if what happens when someone doesn't pay rent, how does that impact the mortgage holder? And how does that impact our full economic system?
Tunua 02:10
So Rudy, I know that you've been working with a group of folks here in Los Angeles, who have really been grappling with this idea of let's cancel the rent, let's give families a break, and help them through this current crisis. Rudy, tell us a little bit about that work and what's happening right now.
Rudy 02:27
Yeah, thanks for having me Tunua and the LISC-LA team, I'm really happy to be here with everybody.
Rudy 02:31
Inclusive action is a CDFI. We're a lender. We provide micro loans to small businesses that can't get capital from other places but we also do advocacy and Tunua, one of the things that we've been grappling with over 300 organizations in this coalition called the Healthy LA Coalition.
Rudy 02:47
We've been grappling with the issue of the mounting debt that people are taking on because they can't pay their rent.
Rudy 02:55
A lot of the clients that we're working with small business clients are months and months behind in the rent now, because of the covid 19 pandemic and there are a lot of organizations in LA, that are mobilizing to raise awareness about this, this crisis that's taking place in front of us, and asking lawmakers to prepare plans on how we could suspend rent, cancel the rent, and also support mortgage holders.
Rudy 03:22
Mortgage holders and small mom and pop property owners that rely on the rent to make themselves whole as well and so there's a lot of organizations that are doing a lot of thinking about how can all levels of government support tenants in mom and pop landlords who really need help, they're impacted by a virus that happened to us that we had no part in creating.
Tunua 03:43
I mean, when I hear you say that, for some people, it might be abstract, but lose your job unexpectedly, you already don't have enough savings to weather $400 sort of emergency and now without income, you've got mounting rent, and no way of getting access to the kind of income that would allow you to catch up and even make a dent in what it is that you need to be able to accomplish to stay housed.
Tunua 04:11
So Tak you all like a little Tokyo Service center, you've got a portfolio of housing units, many of which I imagine are serving very low income families, some of whom are on fixed incomes, but others who are working in the service sector industry.
Tunua 04:27
What are you seeing in terms of sort of the mounting crisis as an owner and holder of mission based properties? What are you seeing in terms of family's ability to weather the storm right now?
Tak 04:38
Yeah, hi Tunua. Thank you for having me on. With regards to, you know, this issue of people getting behind the rent. It's a serious issue that we've been facing, you know, primarily over this entire year.
Tak 04:51
And even previous to this pandemic, you know, the issue of people being able to pay rent for quality housing has been an issue in particularly in in areas such as Los Angeles. What we're seeing in our portfolio is roughly about a 10% rent loss across our entire portfolio.
Tak 05:10
And, you know, the longer this pandemic will go on, we're essentially getting more requests associated with rent relief, rent forgiveness, some type of rent deferment, but, you know, I think for us, the biggest issue is what's looming ahead in 2021 and 2022.
Tak 05:28
Because, you know, right now with the eviction moratorium in place, and you know, not all organizations, or not all landlords are, you know, mission based organizations, like the Little Tokyo Service Center. So really, at the end of the day, I think we really need to start thinking out of the box, and we can't do business as we were doing prior to the pandemic.
Tak 05:51
A lot of our residents in our buildings are essential workers, or and, as you mentioned, are in the service sector. And as you know, the businesses are closing, again, here in Los Angeles, you know, we're definitely seeing a rise in anxiety, which is real.
Tak 06:07
So I think moving forward, like I think it's definitely important to have these types of conversations. And you know, I really do appreciate you Tunua and LISC, for facilitating this discussion to take place.
Tunua 06:18
Yeah, Tak. I mean, it's great to know that there are mission based developers out there who are doing their best to hold the line. But you know, even you all be on the mission, you got to be able to pay the mortgage and be able to maintain the housing for everybody. So it's impacting all of us.
Tunua 06:34
Tom, looking at Genesis LA, you all are a co leader and conspirator in trying to move capital to the places that needed most. And you know, right now, sort of this call for cancel the rent is not so easy for everybody to hear. What do you think people hear what are they grappling with? when they hear that term? Let's cancel the rent.
Tom 06:59
Yeah, well, thank you for having me. It's great to be with Rudy and Tak - good friends.
Tom 07:03
I think you bring up a great point to know that I think some of the messaging around this idea, in some ways, it's sort of someone has to make a sacrifice for someone else to be okay and I think we have to change that dichotomy a bit.
Tom 07:16
You know, when you hear cancel the rent, how does the landlord respond to that? How does the mortgage lender respond to that?
Tom 07:23
But we have to do something, the consequences of not doing something will be dire and much more costly to society, I think then, even everybody having to take a little bit for the team, so to speak.
Tom 07:35
But I do think the messaging is very important. All of this exists in an ecosystem and the ecosystem as a whole has to sustain itself.
Tom 07:44
Some folks, the lenders might have to defer. A landlord might, you know, have to give up a little bit of rent, maybe the tenant has to pay something a little bit back over a very long term.
Tom 07:53
But we do have to approach this, I think holistically, and at a national scale, if we're really going to get through this.
Tunua 08:01
Yeah Tom. I mean, you and I have talked a bit about this. And, you know, for many of these families, again, you know, folks just simply don't have the kind of savings to weather a very unexpected, dragging on COVID crisis, and leading to an economic crisis. So let's get into what we do next and where we go from here.
Tunua 08:23
We've seen a number of studies that show that if UCLA, for example, just put out a great study showing how in low income neighborhoods, especially black and brown neighborhoods, during the recession, the last time around, folks couldn't pay the mortgage and pay the rent, those units went to larger rates and LLC that scooped up properties and neighborhoods and thereby exacerbated this concept of not being able to own and afford in your own neighborhood.
Tunua 08:53
So gentlemen, let's get right to it, you know, where we go from here, Rudy, we've got the opportunity to let legislators know that it's important that we are there to stand in for families who need our help and support and isn't part of this so critical because if we don't do that, given our homelessness crisis, this is something that we've got to stand up for now, so that we don't pay for it even more, both in the human tragedy as well as from the financial standpoint.
Rudy 09:23
I think what you just said right now Tunua is really important, that it will be much more expensive for us as a society, if we don't do anything to support the families that are struggling and impacted by COVID-19.
Rudy 09:36
If we do have mass evictions, I think some scholars are saying 40 million people are struggling to pay the rent at the moment. That's a lot of people that's going to impact our economy.
Rudy 09:47
We did a study recently, at Inclusive Action that looked at the cost of eviction, and I think a lot of people don't know that it's not only the rent that's due, but it's also the cost of moving, the costs of maybe getting legal support, the cost storing your stuff, the cost of moving your kids to a different school system.
Rudy 10:04
There's all these different costs that are a burden on us and I think that if lawmakers were here listening, I would say that this is enough time for us to come up with a solution together.
Rudy 10:16
There's a lot of experts like Tak and Tom. I'm sure that if, if the President called Tom, I'm sure he'll pick up and say, Great, let's, let's let's brainstorm here and figure out how to get this done.
Tom 10:27
It depends which one Rudy, it depends which one.
Rudy 10:33
That's true. But I think what I find Tunua is that unfortunately, sometimes in the spirit of just trying to get things done fast, and trying to get to the press conference, we're not thinking thoughtfully about how to get things done.
Rudy 10:43
And there's people that have dedicated their careers to figuring out how to implement these type of relief systems and what I would tell legislators is let's make this a priority. Let's make sure that we're all aligned with the value that everybody should have a place to live and let's bring to the table the implementers that know how to get this done.
Tunua 10:49
I love it, we need to be operation warp speed for making sure that families stay in their homes, right and making sure that families are able to remain whole, and to be able to dig out of the debt that unfortunately, COVID-19 has caused for a lot of folks.
Rudy 10:56
And I think we could get it done. I think we could just like the vaccine companies are working day and night to figure out a vaccine, we could do the same thing for housing.
Tunua 11:25
Tak or Tom, I'm going to take one last, you know, quick comment from the two of you, and then I'm going to get ready to wrap up. Anything you want to add in terms of where we go from here. What's next?
Tom 11:35
Sure, I think right before we got on live, someone was saying, I think it was you Tunua, about some of the incentive payments that landlords were declining them because they could make more money if they replaced the tenant.
Tom 11:46
And I think, you know, just like the pandemic, and a tenant's ability to pay rent or inability to pay rent was was not of their doing. There shouldn't be anyone who's able to benefit from that consequence, right?
Tom 11:58
And so potentially to Rudy's point about legislation and how we deal with this, if we can take the incentives to not cooperate from the landlord and the lender side off the table, that there isn't a reward for not, if you were to replace a tenant, for example, the rent has to be what it was for the last tenant.
Tom 12:16
I think there are ways that we could disincentivize folks not coming to the table and help us get to a solution that is equitable for all.
Tunua 12:26
I love that. Yes, that's going to be super, super critical so Tak to get ready to close this out for today. I would say that as far as some of the where do we go from here?
Tunua 12:37
We've talked about the concept of canceled rent, who hears that and how they hear it and why. But behind that we've peeled back and looked at we've got real families who we are trying to maintain their livelihood and our goal is to make sure that happens.
Tunua 12:51
From a long term perspective, I do believe that homeownership still should be a pathway so that we can help people weather these kinds of storms, you can weather it a little better if you happen to be a homeowner, so giving more renters a chance to do that.
Tunua 13:04
But in the meantime, it's going to be critical that renters have representation. Rudy, you talked about making sure that we've got resources so that renters can protect themselves during this time.
Tunua 13:14
And we've talked about the fact that if we can help someone now, with $1, we could save up to $3.50 in the future in terms of additional cost, we have to share and bear as a society because people are not housed well.
Tunua 13:31
We've talked about the need for tenant relief, so pools of money that are available for tenants but we also recognize that there are small landlords and owners who also need support, but we want to make sure that we compel them to pay responsibly, right Tom?
Tunua 13:46
So that if there is a chance to be able to benefit that they're responsible in how they're benefiting and that they're compelled to do so.
Tunua 13:54
So with that I'll close this out for today in terms of our quick conversation around how do we solve the crisis of the looming eviction and what it means to call for the cancelling the rent.
Tunua 14:05
I want to thank Rudy, Tak and Tom for joining me as part of this really timely and important conversation. Your thoughts and insights were super valuable.
Tunua 14:14
This episode of changemakers la was made possible by our partner JP Morgan Chase. If you'd like to learn more about how we support place based initiatives for Housing and Economic Development, lending at LISC LA, please visit us online at www.lisc.org/Los- Angeles.
Tunua 14:33
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