With COVID protections expiring, tenants are now facing big rent hikes
MICHEL MARTIN, HOST:
Here in the U.S., federal and state governments passed laws during the pandemic to protect financially strapped Americans from rent hikes and evictions. But now some of those laws and protections are coming to an end, which means that many Americans are now facing big jumps in their rent. We asked Paco de Leon about this. She writes a financial advice column for the lifestyle website Refinery29, where she recently offered some tips for readers facing rent hikes. Paco de Leon, thanks so much for joining us once again.
PACO DE LEON: Thank you for having me.
MARTIN: So we know that rents are going up around the country by about 14% year over year. That's according to data published by the real estate company Redfin last month. But renters in some cities like Austin, Texas, or New York City are facing even bigger jumps of, like, 30%, 35% or more. What are you hearing from readers? I know that there was one letter from a person facing a 30% hike who was just desperate. What are you hearing?
DE LEON: Yeah. There's a lot of folks who - you know, they found deals during the pandemic because, you know, all of these laws that you mentioned, they were kind of artificially pushing down rents. And, yeah, you know, a year later, landlords are, you know, faced with these laws expiring and market pressures pushing up the demand, which is further pushing up the rent rates. And so a lot of folks are struggling to kind of figure out how do they afford a 30% increase when they're barely just getting by?
MARTIN: Have you noticed any trends in the kinds of renters who seem to be most vulnerable to these rent hikes right now?
DE LEON: Certainly. I can give you some anecdotal information just based on what I've heard and what I'm observing. I mean, definitely folks who are in these market rate units where there isn't a cap and the laws where they're living don't have a cap - those are the folks who are going to be the most vulnerable in terms of the greatest percentage jump right now. But, of course, you know, younger folks, folks who are moving to a city and who are trying to establish themselves in careers and they're not earning as much so they're just kind of barely scraping by - those are going to be the folks who are most vulnerable to this rent increase.
MARTIN: So let's say your landlord says the rent is going to go up. Is there typically any room for negotiation?
DE LEON: I think there is, especially if you're dealing with kind of a mom and pop landlord and not some big, you know, company that's a management company. A lot of times, if you just open up the lines of communication respectfully and you're honest about your situation - and for me, when I approach negotiation, the very first thing I think about is the jump in rent in terms of percentage or dollar amount versus what you're paying now. And oftentimes, if we think about splitting the difference, that's a way for both parties to meet halfway. That way, the person renting, they're making a sacrifice by paying more, but also the landlord is making a sacrifice by accepting less. So that's one way.
Another way is, if you do have extra cash on hand and you are talking to your landlord to kind of understand their motivations and their situation, sometimes you can offer a bit more. So you can say I can pay the next three months upfront. That's another way. And if you do come to an agreement where you can meet in the middle or something like that, trying to sign a longer term lease, like a two-year lease - that way, it locks it in for both parties, and you don't have to deal with this whole negotiation rigmarole 12 months later.
MARTIN: Let's say you are a renter who has not yet seen an increase, but maybe you're looking around and thinking this might be coming. How would you advise this renter to prepare?
DE LEON: I mean, definitely understand the market. Know what you might be paying in the near future. And I recommend that people practice feeling that pinch. So what I would recommend is taking that additional rent money that you think you'll be paying and just pulling it out of your checking account and putting it into a savings account so that you can get used to that feeling of not spending that extra, you know, whatever you are going to be paying in rent. You'll be used to not spending that.
MARTIN: That was Paco de Leon. She writes a financial advice column for the website Refinery29. It's aimed at millennials, but anybody can read it and benefit from it. She also has a new book out called "Finance For The People: Getting A Grip On Your Finances." Paco de Leon, thanks so much for talking with us.
DE LEON: Thank you so much for having me.
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